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.
Yeah yeah China is a currency manipulator, but the whole issue is the exploitation of cheap foreign labor which includes other countries not just China and Immigration.
Says it all
Money talks and talks and talks
When money is speech, a poor man can't get a word in edgewise.
I have not heard one word or promise from either party convention platforms that addresses the subject of balanced trade. It appears to me that both parties view this subject as taboo. Hope you can stir them up out of their obvious comatose state on this subject..
Both Romney and Obama are in favor of free trade, and that economically requires US businesses to use the least expensive labor available in any foreign nation in the world.
And the EPA is the main reason that the USA lost all of our basic industries and those millions of technically demanding jobs that paid more than flipping hamburgers.
The Steel, Tires, Electronics, Aluminum, Copper, Lead, Casting, Forging, Paper, and similar industries that employed millions of US citizens are gone forever, and those jobs are not coming back.
Existing environmental laws, and the anticipated costs of future environmental legislation that will be "piled onto" our remaining US located industries (that might elect to stay in the USA) are another factor causing the remainder of our US industries and US jobs to relocate to overseas locations.
Foreign environmental manufacturing costs are generally known.
I live in Houston and we are afraid that the proposed "Cap and Trade" will eventually be passed by the US congress, and then our remaining petrochemical industries will relocate to foreign countries and then they will lay off most all of their thousands of Houston employees as they close down their refinery businesses.
The major US corporations are investing their profits in the construction of factories in foreign nations with lower cost labor and lower cost EPA compliance as economically requires by the multitude of US FREE TRADE AGREEMENTS, instead of creating those jobs in the USA
He imports more stuff from Communist China than Walmart does !!! And he donates Millions to Republicans like Mitt Romney to make sure he can keep doing that and not have to open a Factory in the USA for Americans to make products for his stores. How many cheap Plastic Spoons does it take to add up to $500 Million is trade deficits ?
”I look for three things in hiring people. The first is personal integrity, the second is intelligence, and the third is a high energy level. But if you don’t have the first, the other two will kill you.”
In addition to cutting spending and increasing taxes, why doesn’t the USA also re-industrialize so that there will be a larger economy to create more NATIONAL WEALTH that could be available for the government to skim off and confiscate a big portion of that newly created NATIONAL WEALTH in the form of taxes to raise funds to pay for more bureaucratic government employee payrolls, government free benefits, government contracts and other government activities?
When electrical energy, taxes, environmental compliance cost are also only a tiny percentage of the US costs for the same items, then US businesses cannot afford to employ US citizens or even operate in the USA, except to retail foreign manufactured products to US consumers!
The foreigners are usually also better workers, do not complain, do not take sick days off, and are generally thankful for their employment.
International shipping costs are only a small cost factor with the current international containerized intermodal transportation systems of today.
US citizens continuously pay US dollars to people and companies in the industrial nations (through Wal-Mart, Home Depot, and the other imported/distributor/retailers) with US dollars to manufacture and supply the imported products that US citizens consume, instead of US citizens producing these products ourselves.
This creates a constant flow of US dollars from the USA to foreign industrial nations.
This process needs to be reversed before foreigners own everything of value in the USA.
The value of the Euro, Yen and Pound Sterling are also being destroyed by their respective government's deficit spending, trade deficits, anti-manufacturing and anti-wealth creation economic laws and environmental policies, just like the USA is destroying the value of the US Dollar.
If President Obama would pull a Bush and send down an Off Budget Item Request the Republicans would be all over it with Ear Marks and spending like crazy. Just like they did with Bush's Off Budget Items he use to pay for the Wars and keep the cost of Wars out of the Publics View,
http://www.mittromney.com/issues/trade
Trade
"...Every president beginning with Ronald Reagan has recognized the power of open markets and pursued them on behalf of the United States. George W. Bush successfully negotiated eleven FTAs, encompassing sixteen countries. He also had the vision to commence negotiations with a number of allies around the Pacific Rim to expand significantly the Trans-Pacific Partnership. All told, these agreements have enabled people across the world to come together and build a better future. Economists estimate that the agreements have led to the creation of 5.4 million new American jobs and support a total of nearly 18 million jobs. Looking beyond just our FTA partners, our total exports support nearly 10 million American jobs. These are not just jobs; they’re good jobs, paying significantly above average, and more than one-third are in manufacturing.
o Reinstate the president’s Trade Promotion Authority
o Complete negotiations for the Trans-Pacific Partnership
o Pursue new trade agreements with nations committed to free enterprise and open markets
o Create the Reagan Economic Zone..."