As a follower of Columbia University economist Jagdish Bhagwati, I was happy to read that a deal may soon be reached on three stalled free trade pacts. Closer look at the reporting, though, suggests the passage of the Colombia, Korea, and Panama free trade agreements may be far off. Which stands to reason. These days, free trade isn’t a winning issue — it’s a political liability.
For the past month, the White House has refused to sign off on agreements that don’t include a renewal of the Trade Adjustment Assistance program (TAA). But Republicans oppose TAA, and many won’t vote for an agreement that includes it. So the standstill probably will continue, because neither party has any political incentive to argue for expanded trade. Last year’s NBC/Wall Street Journal poll showing that 53 percent of Americans think free trade hurts the nation was a wake-up call. The recession and prolonged joblessness have led to a rise in protectionist sentiment, and no politician has stood up forthrightly to advocate for open markets and unrestricted trade. Nor is there a special interest group — a Patriotic Americans for Free Trade, say — that could launch a major television campaign to shape public opinion.
The result is a political impasse and an economic tragedy. No wonder the American economy is stuck in the doldrums. A pro-growth, pro-entrepreneurial agenda might be the solution to our problems. But it takes leadership to implement such policies, and leadership on trade is something that’s been sorely lacking in Washington.