Fear and insecurity in the current economic downturn could cause the U.S. to turn inward, damaging Washington state's vital international trade, U.S. Sen. Patty Murray said Friday.
Fear and insecurity in the current economic downturn could cause the U.S. to turn inward, damaging Washington state’s vital international trade, U.S. Sen. Patty Murray said Friday.
Many Americans blame global trade for job losses, and Congress has been growing more protectionist. Those sentiments, combined with anxiety about the future, could be dangerous for Washington, the most trade-dependent state in the nation, Murray, a Democrat, told the Washington Council of International Trade’s 13th annual conference in Seattle.
“This insecurity will begin to affect our trade policies, and we may see more people talk about walling off our country to protect us from competition,” Murray said. “I believe this would be disastrous.”
Murray said she plans to fight any efforts to close U.S. doors to trade. Protectionism helped turn the 1929 stock-market crash into the Great Depression, she said, while in this crisis, exports are helping prevent the U.S. economy from falling even further.
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Still a majority of Americans are not convinced — 65 percent believe globalization is bad job security, according to a survey Murray cited by the Chicago Council on Global Affairs.
Of Americans who think income distribution has become more unequal, 82 percent blame globalization and international trade. Only 24 percent backed the idea that free trade could help the U.S. remain competitive in the world.
Position in world
Americans see their position in the world falling, and they have lost trust in government to be a good advocate for their interests, said Anne Kim, a program director at Third Way, a nonprofit think tank.
“When people are worried about off-shoring, they see it as a symbol of general economic decline,” she said.
That makes it easier for messages of protectionism and isolationism to appeal to people’s emotions, instead of arguments by free-trade advocates that emphasize data, she said.
“There’s a deep yearning among the middle class for leadership that takes America back to the top,” she said.
U.S. views of trade are tied to legitimate concerns about the broader economic situation, noted U.S. Rep. Adam Smith, D-Wash. Wages for the middle class and working poor have stagnated while the costs of health care, energy, housing and higher education have all gone up dramatically.
No economic policy supporting international trade can work without a plan to address those burdens, Smith said.
At the beginning of the decade, trade was not providing much to the country’s growth, which was fueled by financial services and housing, said Ed Gresser, a project director at the Progressive Policy Institute. With those bubbles now burst, the pattern is shifting.
Trade may be seen as a bright spot in a bleak economic picture. “If we look at the growth pattern of the U.S. now, trade is really the only success story we can talk about,” he said. “A lot of manufacturers and farmers are finding overseas markets to compensate for a really awful situation we have at home.”
Critics of trade agreements have pointed to negative consequences for labor and the environment.
In response, the most recent trade agreements, such as those with Korea, Colombia and Panama, have included strong protections for environmental and workers rights, which can be enforced on par with other protections such as intellectual-property rights, Smith said.
Smith was asked how presidential candidate Barack Obama would approach trade if elected, given the candidate’s anti-trade rhetoric in the Democratic primary.
Smith said Obama’s remarks in Ohio and Pennsylvania bordered on “demagogy,” and they did not prove effective, since he lost both states. Smith said he thought Obama would likely take a more open view of trade in the future.
Even in states hit hard by factory closures, “people want something more than raging against the system,” he said.
U.S. trade agreements negotiated in 2006 and 2007 are not likely to be passed before a new administration.
U.S. Sen. Maria Cantwell, D-Wash., said passing the Korea-U.S. Free Trade Agreement is especially important for Washington state because it will eliminate Korea’s 24 percent tariff on imported cherries and also help sales of state wine, potatoes and wheat.
Cantwell said she also favors an agreement focusing on clean-energy technology, an area with rich opportunities for U.S. companies but an uneven playing field.
In China, the average tariff on solar hot-water heaters is 35 percent, she said. India charges a 25 percent tariff on wind-generation equipment, and Brazil imposes a 23 percent tariff on solar-energy cells. In the U.S., the equivalent import taxes are about 2 percent, Cantwell said.
Cantwell said she would press the next president to commit to a deadline for eliminating tariffs on clean-energy technology and work to build consensus in Congress to allow the pending trade agreements to move forward.
“It’s good for the U.S. economy and for the world’s environment,” she said.
Kristi Heim: 206-464-2718