Hillary: timeout on trade deals
Clinton Breaks With Husband’s Legacy on Nafta Pact, China Trade By Kristin Jensen and Mark Drajem
March 30 (Bloomberg) — One of President Bill Clinton’s enduring
legacies was his hard-fought push for trade deals with Mexico and
China. His wife is heading in another direction.
Senator Hillary Clinton, the front-runner for the 2008 Democratic
presidential nomination, wonders why the North American Free Trade
Agreement is “continuing to drive hundreds of thousands, even
millions, of people from Mexico into our country,” she said in an
interview. “We just can’t keep doing what we did in the 20th century.”
Somewhere along the Clintons’ “bridge to the 21st century” — their
1996 campaign mantra — they parted ways on trade. Bill was a
champion of the global economy and prodded Congress to approve Nafta
in 1993 and China’s entry into the World Trade Organization in 2001.
Hillary, 59, says new deals may need to be put on hold pending a
review — an idea she calls “a little timeout.”
Comments like that align her with union members and anti-
globalization activists who say U.S. jobs are being sacrificed in the
name of free trade. Clinton has expanded her circle of advisers
beyond pro-trade associates such as former Treasury Secretary Robert
Rubin, 68, and Deputy Secretary Roger Altman, 60, her top economic
adviser, to include AFL-CIO officials and other free-trade critics.
`A Careful Line’
On the stump, she’s more skeptical about globalization’s benefits
than her husband was. She “is walking a careful line,” said Jeff
Faux, who supports the idea of a pause in trade deals and is the
founding president of the Economic Policy Institute, a labor-
affiliated research group in Washington. “There’s a difference
between Hillary and Bill on this.”
A moratorium on trade agreements — which would be used to beef up
labor and environmental protections and provide more aid for domestic
workers displaced by foreign competition — is backed by labor
leaders and some economists, who call it a “strategic pause.”
The idea was rejected by Altman and Rubin as detrimental to the
American economy at a forum in Washington last year. They didn’t
return telephone messages left at their offices.
Clinton’s positioning on trade reflects the changing nature of the
debate in the U.S., which increasingly focuses on concerns over
outsourcing and the shift of jobs to other nations such as China and
India rather than on the benefits of tariff reductions.
Grassroots Sentiment
It also — as with Republicans grappling over illegal immigration –
demonstrates the extent to which grassroots sentiment can alter
candidates’ platforms.
A Bloomberg/Los Angeles Times poll conducted in January found 39
percent of Democrats believe free trade hurts the economy; only 18
percent say it is a benefit.
Both parties agree that a backlash on trade helped Democrats in the
2006 elections. West Virginia Senator Jay Rockefeller, a Democrat,
said U.S. workers have been “so decimated” by unfettered
competition that “I think the American people understand they will
be hit by it.”
Clinton promoted her husband’s trade agenda for years, and friends
say that she’s a free-trader at heart. “The simple fact is, nations
with free-market systems do better,” she said in a 1997 speech to
the Corporate Council on Africa. “Look around the globe: Those
nations which have lowered trade barriers are prospering more than
those that have not.”
Praise for Nafta
At the 1998 World Economic Forum in Davos, Switzerland, she praised
corporations for mounting “a very effective business effort in the
U.S. on behalf of Nafta.” She added: “It is certainly clear that we
have not by any means finished the job that has begun.”
Clinton “is committed to free trade and to the growing role of the
international economy,” said Steven Rattner, a Clinton fundraiser
and co-founder of Quadrangle Group LLC, a New York buyout firm. “She
would absolutely do the right thing as president.”
There was little evidence of a protectionist tilt to Clinton’s trade
views during either her 2000 campaign or first years in the Senate.
She stressed issues such as homeland security and children’s health
care, and wasn’t a major voice in trade-policy debates.
As she began to gear up for a White House run, Clinton became less of
a free-trade booster and more skeptical about the payoff of
globalization.
Opposing Cafta
She voted against the Central American Free Trade Agreement in 2005,
saying the pact lacked strong protections for foreign workers and
that President George W. Bush was failing to enforce existing trade
laws.
She also joined her New York colleague, Senator Charles Schumer, in
backing legislation imposing trade sanctions on Chinese exports
unless the government in Beijing agreed to stop holding down the
value of the yuan. Last month, she sent a letter to Treasury
Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke
warning about China’s ownership of $350 billion of U.S. debt.
Clinton called on Paulson to adopt a proposal requiring a “plan of
action” to reduce U.S. deficits when foreign-owned debt exceeds 25
percent of gross domestic product or the trade deficit reaches 5
percent of GDP.
In 2006, Clinton helped lead efforts to condemn the purchase of U.S.
port facilities by DP World, a company based in Dubai, in the United
Arab Emirates. At the same time, her husband was offering advice to
Dubai’s leaders, the Financial Times reported.
To help allay suspicions that she’s been hijacked by free- traders
from her husband’s team, Clinton asked Thea Lee, the AFL- CIO’s
policy director, and Michael Wessel, who had been a top aide of Nafta
foe and former House Democratic leader Richard Gephardt, into
strategy discussions to debate pro-traders.
Negotiated by Bush
In her interview with Bloomberg, Clinton was careful to describe
Nafta as having been negotiated by the administration of President
George H.W. Bush “and then pushed through Congress in the Clinton
administration.”
Labor leaders, upset about job losses they blame on Nafta, remain
suspicious that she is too influenced by Rubin, the vice chairman of
Citigroup Inc. and an outspoken foe of protectionism.
“The Rubin wing of the Democratic Party is heading up policy
direction” for the Clinton campaign, said Leo Gerard, president of
the United Steelworkers. That’s “going to be an issue” with union
members, he said. “We don’t need more of the same.”
Clinton supporters such as Rattner, 54, say she’s trying to address
the underside of globalization as more U.S. jobs move offshore. “We
all have to be sensitive to the fact that there is collateral
damage,” he said.