Presidential race may be decided by states that have lost most jobs

Trade issues fuel politicking

Posted: Monday, November 10, 2003

WASHINGTON Presidential politics and free trade seldom mix well.

President Bush pushes open-trade pacts abroad, sometimes to reward allies for help on Iraq. At home, he is acting to protect steel companies and other U.S. industries.

''Anytime any of our citizens wants to work and can't find a job, it says we've got a problem,'' Bush tells American audiences.

A trans-Atlantic showdown looms this week on steel tariffs Bush imposed in March 2002. Also pending is Europe's potential retaliation against the United States over special tax breaks for American companies that operate abroad. In addition, the GOP-led Congress is moving toward economic penalties against Chinese products, with lawmakers citing what they contend are Beijing's unfair trading practices.

The loss of 2.7 million American factory jobs since Bush took office is casting a long shadow over the 2004 presidential election.

Political analysts of all stripes suggest the race could come down to a half dozen states, including those in the Midwest that have lost the most manufacturing jobs.

But the president is not the only one doing a Texas two-step on trade. So are his Democratic rivals, to varying degrees. The result is a flurry of proposals that may curry voter support but draw criticism as protectionist.

At a recent debate, Rep. Dick Gephardt of Missouri boasted that he unlike his opponents had voted against both the North American Free Trade Agreement and trade preferences for China.

Many labor leaders contend such pacts have stolen jobs from Americans and handed them to low-paid foreign workers. Gephardt wants the World Trade Organization to establish an ''international minimum wage.''

Former Vermont Gov. Howard Dean and Sen. John Kerry of Massachusetts have backed away from their earlier support of NAFTA. Dean would renegotiate parts of it with Mexico to offer more protection to U.S. workers. Ohio Rep. Dennis Kucinich would withdraw completely from NAFTA.

Sen. John Edwards of North Carolina wants a higher tax rate on U.S. companies that move production overseas. Retired Gen. Wesley Clark of Arkansas says he favors liberalized trade, but also wants agreements that raise labor and environmental standards.

Sen. Joe Lieberman of Connecticut sees himself as a free-trader. But he would give Japan, China, South Korea and Taiwan 90 days to stop ''manipulating'' their currencies or face stiff U.S. tariffs.

In Asia last month, Bush pressed the leaders of Japan and China to allow their currencies to rise naturally against the dollar, which would make U.S. goods cheaper there. He met with little success.

''The administration needs to grow some backbone,'' Sen. Charles Schumer, D-N.Y., told Treasury Secretary John Snow at a recent Senate hearing on the currency dispute.

The dilemma facing both parties is that low prices on imports may threaten American manufacturing jobs, but have benefited American consumers and helped to keep U.S. inflation low.

It's not a new predicament. U.S. manufacturing jobs have been declining steadily since 1979.

Politicians must learn to ''steer through the minefields'' and avoid protectionist measures that might wind up hurting all U.S. consumers, said Jack Kemp, the 1996 GOP vice presidential nominee.

''I don't think in 30 years in politics I ever supported an increase in tariffs as a way of protecting jobs,'' said Kemp, who long represented a Western New York district in the House and was housing secretary in the first Bush administration.

The WTO is to vote today on a U.S. appeal of its ruling that Bush's steel tariffs violated its rules. European Union officials say they will move quickly with retaliatory sanctions against certain U.S. products if the WTO rules their way.

The White House is considering lifting the tariffs, but remains under heavy political pressure from steel producing states mainly Ohio, West Virginia and Pennsylvania to keep the tariffs in place.

''I'm concerned ... that trade is not on a level playing field, so this administration is spending a lot of time to make sure that trade is a two-way street, that it's fair, that it's open,'' Bush told a business audience in Alabama last week.

Republican pollster Frank Luntz suggests that trade protection is a ''huge issue for those whose jobs are in jeopardy,'' but almost a nonissue for those who benefit from the lower-cost imported goods, ''which is about 85 percent of America.''

''Americans are inherently free traders. We don't want tariffs, we don't want taxes, we want products as cheap as possible,'' Luntz said. Still, he said, ''We also believe our leaders don't negotiate tough enough. And we want leaders who will fight for our products and our jobs across the globe.''

Reconciling those often-conflicting objectives is the hard part, Democrats and Republicans alike agree.

Tom Raum has covered Washington for The Associated Press since 1973, including five presidencies.

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