March 8, 2005

Democrats For Free Trade?

There are a few grownups left in the Democratic Party. Today in a WSJ Guest Editorial, former Clinton Staffers STUART E. EIZENSTAT and DAVID MARCHICK tell today's Democrats why they should support CAFTA.

Democrats should, however, support Cafta for two fundamental reasons: First, the agreement is deeply in our national interest and will create, not destroy, jobs. Second, if the Democratic Party wants to regain the White House and control of Congress, it has to take pro-growth, pro-jobs positions on key issues, including trade agreements.

Cafta follows the same template as the United States' free trade agreements with Australia, Singapore, Jordan, Chile, Morocco, Canada and Israel -- agreements which garnered substantial Democratic support. Cafta would also open markets to U.S. goods and services, lower tariffs, create transparent government procurement processes and adopt trade facilitation measures. In fact, exporters from Central America can already sell products in the United States at zero or low tariffs. Cafta lowers tariffs on U.S. products exported to Central America.

The implications of Cafta extend into regional geopolitics. The agreement would solidify the United States as the leading supplier of goods and services to Central America and the Dominican Republic at a time when China is making serious inroads as an investor and exporter in the Western Hemisphere. Late last year, for example, China's president announced with great fanfare plans to invest $20 billion in Latin America. The United States needs to maintain its leadership position in Central and Latin America -- and this agreement would help American exporters retain a competitive edge.

It amazes me that President Clinton gets so much credit for Reubenomics, which was an anomality, yet his party claims no credit for his breakthroughs on NAFTA, GATT, and China's introduction to the WTO. That's a great legacy that today's Dems are too willing to throw away.

Economics and Markets Posted by John Kranz at March 8, 2005 10:38 AM