In Defense of the National Economic Interest

Member Group : PA Family Institute

In Defense of the National Economic Interest

By Nathan R. Shrader

Amidst the good news this week that President Obama will no longer permit the Bush Administration’s dishonest, ham-fisted practice of submitting Iraq and Afghanistan war expenditures as "emergency" items rather than including them in the federal budget, American workers were dealt a blow on Obama’s previous commitment to renegotiate NAFTA. Americans were presented a watered-down "Buy American" provision in the final stimulus package which falls short of its potential.

Perhaps a short time table is necessary to illustrate exactly why American workers ought to be so very disenchanted:

February 25, 2008: Locked in a heated battle for votes in Rust Belt states hit hard by America’s imprudent trade policy, Obama ratcheted up attacks against Senator Hillary Clinton, wife of the president who served as NAFTA’s top cheerleader for eight years. John Ibbitson of Canada’s The Globe and Mail reported that both Democrat hopefuls began talking tough on NAFTA renegotiation. Specifically, Obama stated "I think we should use the hammer of a potential opt-out as leverage."

April 23, 2008: The New York Sun reaffirmed that Obama, if elected, would proceed with renegotiating or extricating the nation from NAFTA in order to enhance labor and environmental protections.

June 10, 2008: The International Herald Tribune, in a piece detailing the differences in trade policy between Senator John McCain and Obama cited McCain as the status quo candidate on trade issues, noting that "While Obama has talked of renegotiating the North American Free Trade Agreement, or NAFTA, McCain vowed that ‘in a time of uncertainty for American workers, we will not undo the gains of years in trade agreements.’"

October 7, 2008: During the second Obama/McCain debate in Nashville, TN, the floundering McCain accused Obama of supporting protectionism, even comparing his proposed policies to Herbert Hoover, the usual boogey man concocted by those enamored with spreading the free trade theology.

November 4, 2008: Obama is elected as 44th President and continues promising "change" for America.

January 29, 2009: The Washington Post reported that a rider was placed in the controversial $819 billion House-passed stimulus package barring "most foreign steel and iron from the infrastructure projects" proposed within the package. The so-called "Buy American" provision is projected to create or save at least three million jobs. Post writer Anthony Fiaola also reported that factories in numerous steel-producing states "are running at 45 percent capacity, with 40 percent of their workforce on furlough."

February 4, 2009: Senator John McCain, who ran for president under the slogan "Country First," continued to make us wonder which country he intended to put first by attempting to completely strip the stimulus package of any "Buy American" provision. Luckily, 65 U.S. Senators were able to muster the patriotic energy to crush McCain’s doctrinaire efforts to put foreign workers and companies first.

February 12, 2009: The stimulus package is signed by President Obama with a watered-down version of the "Buy American" provision, now stating that American-produced materials were to be used in such aforementioned projects as long as they live up to the standards of international trade agreements.

February 20, 2009: Upon making his first international trip since being elected, Obama visited with Canadian Prime Minister Stephen Harper. The Washington Post reported that Obama admitted that any efforts to renegotiate NAFTA or opt out of the agreement were now on hold, reassuring the Canadians that the "Buy American" provision would not lead to trade protection. Obama stated that "Now is the time where we’ve got to be very careful about any signals of protectionism."

February 22, 2009: The mild efforts put forth by the U.S. Congress and President to promote domestic industry vis-à-vis the stimulus plan brought a rebuke from Bejing, which is subsidizing her own manufacturing sector and recently issued a $586 billion stimulus program to ramp up domestic production. Luo Bingsheng, Vice Chairman of China Iron and Steel Association told that U.S. efforts to promote "Buy American" are "a violation of the rules of the WTO" and "an act of discrimination against steel products not from only China but other economies…".

In summary, within less than one full month of being sworn into office, President Obama has done the political two-step around NAFTA, opposing it and then supporting it. During the same period of time, a solid "Buy American" provision was placed into the stimulus package by the House, watered down in the Senate, accepted in a conference report by the House, and signed by Obama under the guise of preventing what Charles Krauthammer described in the Washington Post as an act which "would set off a ruinous Smoot-Hawley trade war."

Set it off? The war is already underway!

The Alliance for American Manufacturing reports that four million manufacturing jobs were crushed in the last nine years. 800,000 of these jobs vanished last year and 200,000 were depleted in January 2009 alone. The steel industry is operating at 45 percent capacity and the U.S. piled up a $700 billion trade deficit for 2007.

Is it not time to tell the U.S. Chamber of Commerce, John McCain, and the Krauthammers of the world that we are already engaged in a trade war that we are losing miserably? Is it not obvious that Red China is joining McCain and company in loudly protesting the "Buy American" provision because they fear waking the sleeping American industrial giant? Is Bejing not concerned since we imported $677 million in China-made steel in 2008 and now realize our mistake as more Americans line up to collect unemployment?

If now is not the time to protect American jobs and commit to protecting American workers and American industry, when will that time arrive? If standing up for the national interest has become a crime and now constitutes a trade war, perhaps it is time that we tell the WTO and Red China to prepare for a fight.

Nathan Shrader can be reached at [email protected]