A Bad Reversal on Trade

Presidents can end up endorsing policies that seem to contradict their core beliefs: Richard Nixon recognized China; Bill Clinton overhauled welfare. Now George W. Bush is following in their footsteps -- for the worse. Bush entered office a vocal supporter of more free-trade agreements. But ever since the 2001 recession, his administration has embraced protectionist measures that go beyond controversial steel tariffs and that have antagonized Europe, Asia and Latin America.

The steel tariffs are bad enough, increasing costs for small steel users in California and the Midwest. Appearing Tuesday at a lavish fund-raiser in Pittsburgh, Bush avoided the question of whether he would lift these tariffs, which have the European Union threatening to impose $2.3 billion in retaliatory duties. A World Trade Organization court declared the U.S. levies illegal Nov. 10, and Bush is said to be ready to lift them.

But White House protectionism isn’t affecting only Europe. In November, Bush sought favor with Southern textile producers by imposing a quota on bathrobes and bras imported from China. Free trade benefits both the U.S. and China. True, the U.S. trade deficit with China in 2002 was $105 billion. China, though, also has wooed U.S. firms like General Motors and Procter & Gamble to invest there. David Hale and Lyric Hughes Hale write in Foreign Affairs magazine that the “investment of American companies in China is worth more than $70 billion in contracts.” So can bra- and bathrobe-making be important enough to aggravate the Chinese with U.S. tariffs?

And what sense does it make for Bush to reverse his stump position about seeking a closer relationship with Latin America by fussing with hemispheric neighbors over agriculture? The administration correctly insists that the Latins guarantee intellectual property rights as the basis for a hemispheric free-trade agreement; this is a sound position for the globe’s main exporter of movies and software. The administration, in turn, must recognize the huge role agriculture plays for Latin Americans and give them a fairer shake. The Dominican Republic, for example, can produce sugar far more cheaply than can a subsidized U.S. sugar industry. U.S. consumers could get out of effectively paying twice for this commodity and others if Washington didn’t play to narrow interest groups. It’s also not helpful for U.S. Trade Representative Robert B. Zoellick to roil the region by trying to reach individual trade accords with Latin American nations, rather than tackling the harder task of concluding a hemispheric pact.

The administration should lift the steel tariffs, back off textile protectionism and return to its campaign position: Free trade benefits this country and should be pursued.