Legal Commentary

It was probably always a pipe dream to think that any cross-aisle coalition favoring free trade could survive the extraordinary levels of political polarization that currently afflict our government. But I confess to nursing a fond and naive hope that Obama's 2008 posturing on trade was merely political theater. Obama, after all, was an academically inclined guy with a penchant for modest egalitarianism, and it is simply indisputable among the economically literate that our reducing our trade barriers to imports from the developing world would increase the welfare of the world's poorest citizens. True, such imports might lower wages here -- but that's what generous trade adjustment assistance is for. A smart Democrat like Obama could create a grand coalition by reducing tariffs but devoting the revenue from increased economic activity to higher spending on job training, unemployment benefits, and infrastructure investment. Everyone -- business, labor, and the developing world -- wins.

My hopes for such a deal are now being being eroded faster than one can say "Smoot-Hawley." Last month, Congress allowed both the Andean Trade Preferences Act (ATPA) and the 2009 version of Trade Adjustment Assistance to expire. The consequence is that U.S. tariffs on imports from two Andean nations (Colombia and Ecuador) are set to increase, while job training assistance for workers displaced by foreign imports will decline, with severe effects on economically declining areas like Detroit.

The unraveling of the TAA-ATPA deal might be the harbinger of larger political trends that place free trade more generally in jeopardy. Obama's delay on sending the Colombia Free Trade Agreement, over Senator Max Baucus's objections, suggests that, despite his economic literacy, Obama is throwing his lot in with the anti-free trade wing of the Democratic Party in order to placate union supporters. Sadly, the Tea Party members of Congress hate trade with developing nations as much as unions, albeit because of their usual anti-foreign paranoia rather than the unions' simple economic short-sightedness.

Whatever the reasons, I suggest that the foot-dragging on the Columbia Free Trade Agreement is a policy that only an economic Luddite or a right-wing xenophobe could love. It hurts the developing world and destroys the opportunity for bipartisan cooperation.

What is the case against the Colombia Free Trade Agreement? The unions argue that Colombia has not done enough to stop anti-union violence. But they do not offer any argument that high U.S. tariffs against Colombian imports will somehow benefit Colombian unions. Indeed, there is no such argument to be made. To the extent that high U.S. tariffs throw workers in Colombia out of work by shutting down Colombian business that export good to the United States, Colombian unions are hurt, not helped: High unemployment in Colombian lowers demand for labor and, thus, Colombian unions' bargaining power. Preventing cut-flower growers from sending blossoms to the United States will only insure that more unemployed scabs (thrown out of the cut-flower business by our economic paraochialism) will stand ready to replace striking Colombian unionists. Moreover, there is no reason to believe that the Colombian businesses that survive our trade barriers will somehow be more pro-union or less prone to using violence against their workers.

Why punish every producer, even the unionized ones that eschew anti-union violence, for the Colombian government's failure to stop right-wing militias? If American unions care so much about stopping anti-union violence in Colombia, then why do they not advocate a more targeted sanctions policy, barring imports from specific Colombian businesses that do not practice fair labor practices?

One should not blame the unions alone for the demise of free trade: Although the AFL-CIO opposes both the South Korea free trade agreement (despite robust South Korean unions) and the Central American Free Trade Agreement, there are pockets of labor support for some trade deals: The United Auto Workers and United Food and Commercial Workers both supported the South Korea deal.

Every bit as pernicious as union intransigence is right-wing xenophobia about foreign trade. Tea Party folks denounced the South Korea trade deal as a violation of U.S. sovereignty, so it is unlikely that Obama can expect much help from the freshmen Republicans. Moreover, these Tea Party types will predictably oppose the expansion of trade adjustment assistance that is essential for making free trade a distributionally just expansion of American welfare rather than a one-sided benefit for trade winners.

Where does this leave free trade? My best guess is that free trade will be hostage to the vagaries of bilateral deals in which pro-trade coalitions are cobbled together from alliances between importers of foreign goods and exporters to foreign markets pried open by trade deals. This does not mean that such deals will never occur. But it does suggest that the deals will mostly bypass the developing world that needs them the most. In particular, free trade unilateralism like the ATPA, where the United States unilaterally opens its markets to struggling developing nations to improve their welfare, is probably a lost cause.

Those on the Left who purport to care about the welfare of the developing world ought to deplore this change in the political climate. In particular, the academic Left ought to muster a bit of political courage to speak truth to union power and denounce trade policies that leave the developing world's economy shackled in poverty. (And please, please, please do not repeat the untrue claim that respectable economists have ever defended U.S. tariff barriers as a boon to the developing world. Even trade contrarians like Joseph Stiglitz argue that the developing world would benefit from the United States' unilaterally lowering of its trade barriers).

As for my fellow conservatives: Shame on all of you who cry for higher tariffs. You claim to distrust the State and yet support statism -- high tariffs, the Wall, ICE brutalities -- whenever its victims happen to be foreigners. This is not libertarianism: It is autarky of the nastiest nationalist variety.

And to those two or three people out there who still care about the international trading system, my condolences.