Candidates tiptoe around trade

An unusual story from Bloomberg's Hans Nichols and Julianna Goldman this morning. Unusual how? Well, for starters, it treats trade as a complex issue with wide-ranging, and by no means uniform, consequences.

Democratic presidential hopefuls are tip-toeing around an inconvenient economic fact: Iowa and New Hampshire, the states hosting the 2008 campaign's first contests, benefit from free-trade policies that many residents nonetheless blame for lost jobs. Hillary Clinton, Barack Obama and John Edwards are seeking to avoid alienating workers from agriculture and other export- intensive industries while appealing to those from U.S.-focused businesses that have fallen behind, especially union members.

In the past I have accused presidential candidates from both parties of engaging in "Campaign Protectionism." I have also offered an explanation for the unsettling phenomenon of declining support for free trade in the U.S.. Namely, the benefits are disguised while the costs are highly visible. Opportunistic politicians have often exploited this perception gap to great advantage. Hillary Clinton, especially, has wavered on support for free trade, giving the appearance of a naked play for labor union votes. Along with Obama and Edwards, she opposed the U.S.-South Korea free-trade agreement. Now, in this Bloomberg report, some nuances emerge.

"You have winners and losers from trade,'' New York Senator Clinton said at a Dec. 13 debate in Iowa. People "are gaining because we're exporting,'' she said, while others have lost jobs.

The location of this remark is significant. Support for Edwards is strong in Iowa and he is known as a union favorite. Could this be the beginnings of a navigation back towards the center in anticipation a general election campaign?

Sometimes, as in New Hampshire, trade's 'winners and losers' live side-by-side, making it difficult to tailor the message to the audience. Moreover, the unique juxtaposition of the Iowa caucuses and New Hampshire primaries presents a difficult challenge to a candidate's desire for consistency. Nichols and Goldman cite poll numbers showing the two states are mirror images on free-trade: New Hamphire in favor, Iowa against.

WSJ: More bad news for free trade

Free trade sure could use a little good PR. This page one story in the Wall Street Journal underlines my fear that the election season will drive another nail into the free trade casket. Deborah Solomon and Greg Hitt document the growing ambivalence over trade in a state, Iowa, considered a "big winner from global trade."

...over the last couple of years, workers and voters in this blue-collar manufacturing outpost -- and throughout Iowa -- have grown decidedly downbeat about globalization. Trade has become such a hot subject that Democratic presidential candidates seeking support in Iowa's influential Jan. 3 caucuses are turning into trade skeptics, and the issue is splitting traditionally free-trade Republicans.

It's impossible to factor out how much of this trade skepticism can be attributed to Iowa's unique place in the US electoral calendar. But anti-trade sentiment is undeniably gaining steam nationwide despite reports that the falling dollar is stimulating exports. Peter Goodman, writing in the International Herald Tribune this week:

As the United States heads into what many economists predict will be a substantial economic slowdown, the success of U.S. companies in building sales in countries around the world may cushion the blow. It could help prevent the economy from slipping into a recession.

So which presidential candidate is prepared to make the argument that what the US needs is more trade, not less?