Mitt Romney has certainly been making some pleasant noises about fixing America's trade mess, whose $500 billion a year deficit is probably the biggest unsung reason our economy isn't turning around. But does he really mean what he says? I've looked at the evidence here, here, here, and most recently here.
In response to my last article on the subject, I got a number of responses I'd like to share. One very well-known Republican figure whose opinion I sought out wrote me:
While I am for Romney and find it imperative the Republicans capture the government, I think some of these folks look upon free-trade as handed down on Sinai, which it is unconscionable to contradict. Don't know what is going to change them. How long did it take for the [19th-Century British] Corn Law Cobdenites to wake up? They never did. The just rode free trade ride down to second-class status.
A respected bipartisan activist on trade issues wrote me:
I have never been as optimistic about Romney as you are. The GOP constituencies are in control, not the leadership and not Romney.
Romney's pledge on China is to declare them a currency manipulator and no more. He could do that and we'd have no change because there is no remedy that accompanies that declaration. His trade lawyer surrogate from [law firm] Kelley Drye punted on an actual remedy for currency manipulation saying they wanted to "keep their options open."
His other tough-on-China language is enforcement, which Obama is doing and I suspect will continue regardless.
The Club for Growth, the U.S. Chamber [of Commerce] and the Koch Brothers are in control. They oppose balanced trade policies. The Tea Party is compromised by those groups and aren't organizationally motivated by economic issues, even if they agree with us.
A close colleague of mine knows the Romney camp people on trade and he believes that former USTR [U.S. Trade Representative] Carlos Gutierrez might have been somewhat friendly to our views, but of course not totally. But Gutierrez is not on the inside. Romney keeps a very tight group of insiders and a very tight leash on the outer tiers of surrogates/representatives/staff.
There is no strong constituency in the GOP to make positive change happen re: trade. Manufacturers are the obviously pro-Romney constituency but they prioritize taxes and regulation, which, of course, are not nearly as powerful as eliminating the trade deficit in terms of producing jobs, wealth and competitiveness. They agree on trade reform but don't prioritize it enough to demand change from the GOP legislators.
Obama has a stronger constituency supporting a tough China policy and tough trade policies because of the fair trade and labor wing. But, as you mentioned, that was not enough. The Rubinites, Big Business and the State Department globalists control the agenda, viewing China as a "frenemy" (Friedman was right on that) and foreign policy either controls the diplomacy or prevents the economics from taking a front seat.
Given that Obama's very specific promise as a 2008 candidate to support a bill on countervailing duties for currency manipulation was not kept -- in light of the specificity of the promise plus the constituent pressure -- I don't believe Romney will do any more than the minimum and will certainly not get "tough on China" because he does not have specificity and more importantly does not have the constituency.
The upside is that the trade community -- even our opponents -- is generally in agreement that China needs to be reined in. That may help, but it's hard to overcome the constituency power of the Club for Growth, Wall Street, the U.S. Chamber, etc., who spend a lot of money to help the GOP to get elected, and are proven effective in electioneering.
Fair enough. Similarly, a Republican operative who supported someone else during the primaries wrote me the following:
The only guy who actually -- reasonably -- addressed the thing this election cycle was Rick Santorum, who responded to a question at the Detroit Economic Club in the primaries. He said that markets, not central bankers, should set currency rates.
Romney's bloviating about "getting tough" on China is all for show for OH and PA swing states. He won't risk a trade war or a shut off of their loans to the USA, not when there's already tension in the South and East China Sea among China, Japan, and the Philippines.
I've watched Mitt Romney for over six years now, and I sort of paid attention to him as governor. He doesn't mean anything he says. The only agenda Mitt Romney has is to make Mitt Romney president.
Take a close look at his record and you'll see that there is no "there" there. He might keep the promise, he might not -- but it won't come about because of what he said on the campaign trail.
Simply put, Mitt Romney is a political charlatan. He'll say anything he needs to say to get himself elected.
The aforementioned individuals are just a sample of the wider range of people I've been sounding out on this issue, people who know enough about trade to hold an informed opinion and who aren't so partisan as to be reflexively pro- or anti-Romney just because he's the Republican nominee. Most of them, as noted, haven't exactly been impressed.
Frankly, Mitt Romney needs to double down on his tepid promises on trade if he expects to get any mileage out of the issue. He needs to run hard enough on it to create the public perception that he's made commitments which it would be politically costly not to live up to. Obviously, no words said in a campaign can bind an elected official absolutely once elected, but they can create public expectations that are costly to disappoint. Thus they can increase a candidate's credibility going into the election. Look at the price Obama has paid for running as the Messiah and then turning out to be a fairly ordinary liberal president. Look at the price George Bush I paid for violating his "read my lips: no new taxes" pledge. Making some real visible marks on the issue -- perhaps in the upcoming debates -- could persuade a lot of Americans who like Romney's promises on trade but are unsure he'll keep them.
If Romney expects to win the presidency by offering the American people a government that will stand up for their economic interests against economic rivals abroad, he can't expect to do it on the cheap.
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