Under normal circumstances, U.S. presidents don't send trade deals to Congress for an up-or-down vote on ratification unless they already know the treaty in question is likely to pass. So Democratic Speaker of the House Nancy Pelosi's decision to manipulate House rules and block a floor vote on the Colombian Free Trade Agreement is partially understandable. Democratic Party leaders in both the House and Senate had made their opposition to the FTA clear, but Bush forged muleheadedly ahead anyway. So spare us the cries of outrage.
As might be expected in an election year that has boiled over on the topic of trade several times already, this latest flash point spawned yet another eruption of commentary in both the economics blogosphere and the mainstream media. Some of the highlights include Kevin Gallagher, a professor of international relations at Boston University, eviscerating the Colombian Free Trade Agreement on multiple counts in a Reuters column. (A quick synopsis: "It will hardly make a dent in the U.S. economy, looks to make the Colombian economy worse off and accentuate a labor and environmental crisis in Colombia.") An editorial in the Wall Street Journal argues the opposite, basically on the grounds that passage of the FTA will be good for Caterpillar, which sells lots of trucks and bulldozers to Colombia, but suffers from 15 percent tariffs.
Meanwhile Daniel Drezner, a professor of international politics at Tufts University, argues that passing the agreement would be good, because it would "lock in" U.S. policy. Right now most Colombian exports face no U.S. tariffs because of the provisions in the U.S.-Andean Free Trade Agreement, designed to give access to the U.S. markets in exchange for drug eradication efforts, but AFTA must be renewed every year. In response, Harvard's Dani Rodrik says that "lock in" isn't by definition always positive. Democratic countries often find that policy flexibility is a good thing.
Much of the debate is focused on ancillary issues that don't, at first glance, appear to have much to do with the economics of trade at all. The White House states at every opportunity that regional "security interests" hinge on passage of the Colombian FTA -- a formulation most observers take to be a reference to combating the nefarious influence of Venezuela's Hugo Chavez. As Rep. Dave Reichert, R-Wash., said in an Op-Ed for the Seattle Times, "Colombia stands tall as a beacon of democracy in the face of Chavez's anti-American policies and is a staunch ally in efforts to combat the drug trade." On the other side of the fence, Hillary Clinton echoes the platform of organized labor and says she opposes the deal because of the hundreds of murders of trade unionists that have occurred in Colombia in recent years.
We can peer more closely at any part of this bewildering array of arguments and quickly lose ourselves down a rabbit hole of ideology and economics. But most of the arguments about security and labor protections and careful parsing of who is more likely to benefit from passage of the FTA and who isn't are missing the point. This has nothing to do with the absolute economic merits or lack thereof of "free trade" and everything to do with pure, old-fashioned politics. Democratic congressional leaders would be quite happy to vote for passage of the Colombian Free Trade Agreement, if they are given what they want in return -- a substantial expansion of the Trade Adjustment Assistance act.
The dynamics of the showdown aren't that hard to understand. Popular anxiety over the state of the economy is mounting every single day. Democrats already control Congress and are likely to extend their majority. Voting no on the Colombian FTA isn't going to hurt any Democrat running for reelection in 2008, except possibly in Peoria, Ill., where Caterpillar still manufactures bulldozers.
Indeed, the opposite is true. Republicans campaigning for free trade agreements are trying to sled uphill this fall.
Which makes it all the more confusing to understand why Bush is pressing for a fight. Judged purely in realpolitik terms, the White House's insistence on forcing a floor vote without displaying a sincere willingness to negotiate with Democrats seems like a dumb move. What does the White House have to gain? If Bush was really concerned about security issues in Latin America or Caterpillar jobs or the sanctity of "free trade," he would cut a deal.
Isn't that what trade is all about, fundamentally? Making a deal that benefits both sides?
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