Obama and McCain diverge on globalized trade

But businesses such as this one add up to a lot of sales. US manufactured output has never been higher, and goods exports reached a record $1.7 trillion in 2007.

Imports, of course, are much larger. The last year that exports outweighed imports in the accounts kept by the Commerce Department was 1975.

But Mr. Griswold warns against the temptation to see another nation’s gain as America’s loss.
“It’s not a zero sum game,” he says. “We will prosper even more as consumers and workers around the world raise their incomes.”

If America has sound domestic policies, that will keep US living standards rising, he says. “We shouldn’t worry about the rest of the world catching up. This is profoundly in our interest .... We’re creating a global middle class. It’s reducing poverty around the world. It’s tying nations closer together ... which provides more stability and peace.”

Those nations, in turn, will buy more US goods and services.

But trade experts also say the decisions facing America are trivialized if reduced simply to a choice between “free trade” versus getting tougher on nations such as China.

Among the concerns some voice:

•America is competing with other nations to attract high-value industries and jobs, often against nations that violate current trade rules. The US retains high-tech leadership, but that lead cannot be taken for granted.

•As part of a huge global labor market, many Americans have seen downward pressure on wages. Although economists haven’t agreed on how to gauge the scale of this problem, it’s seen as one reason US incomes aren’t rising as fast as worker productivity.

•Service jobs as well as manufacturing jobs are increasingly subject to global competition. The “safe” service jobs today are ones that require direct human contact.

•However big its benefits, free trade depends in a democratic nation on the support of voters. So public attitudes matter, and concerns such as wage inequality may require new policies.
“We have to dramatically strengthen trade enforcement,” says Mr. Atkinson in Washington. “You don’t get political support for market opening [with other nations] until you have a better sense of trust ... that we’re not being played for suckers.”

It’s fine for China to be investing in world-class research universities, he says. To the degree that they become pioneers, their efforts should benefit the whole world. But he urges a battle against policies – in China and elsewhere – such as illegal export subsidies and intellectual property theft.

He also sees a structural problem in the global economy now, with too many nations relying on exports as their key strategy for growth.

That, coupled with America’s low internal savings rates, has helped to create gaping annual trade deficits.

Ultimately, such deficits are unsustainable, many economists say. A global rebalancing is needed, with many nations doing more to nurture domestic demand, while the US expands its export prowess, they add.

Part of the answer, Atkinson says, is not what other countries do but what the US does to stay competitive: national innovation policies such as tax incentives for corporate research, public-private research partnerships, and cultivating a high-skill workforce. Both McCain and Obama have some policies along these lines. Atkinson says he’d like some items from each campaign implemented, plus more.

Americans of all ages know something of the stakes and the challenges. Middle-aged auto workers have seen round after round of job cuts. In Toledo, long a center for auto parts and glassware, young people know that a factory job is no longer the ticket to a middle-class lifestyle – at least not on a high school education.

Aaron Hudson, a student at Owens Technical College in Toledo, is among those opting for a career choice that’s not heavily exposed to foreign competition.

After working in fast-food jobs, he’s looking for a solid career and is studying to go into physical therapy. “I want something ... that only I can do,” he says. “Human contact ... will never be erased.”

As he ponders whom to vote for, the economy is his top concern. For him, it’s important that America remain a global symbol of free choice and openness. But he doesn’t want that to mean that American factories get run out of business.

“We need to get some more pride,” he says. “Made in the U.S.A. You don’t hear that anymore.”

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