Mark Vaile, <?xml:namespace prefix = st1 ns = “urn:schemas-microsoft-com:office:smarttags” />Australia's trade minister, is in town this week asking an uncomfortable question: “Will the Bush administration live up to a promise it's been making for nearly two years and finalize a Free Trade Agreement with Australia?” <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” />
Conventional wisdom says this can't be done in an election year, given that Australia is a major agricultural exporter and that President Bush and congressional Republicans won't want to risk losing votes in important Middle West and Southern farm states. But if the Bush administration makes the effort, it just may find that freeing up farm trade can be a winning political issue.
As good a friend as Australia is to the United States, count on GOP vote-counters to note that, even when it comes to international affairs, “All politics is local.”
Conventional wisdom is the enemy of progress, though, and it is too often used to run defense strategies and to deflect uncomfortable questions. In this case, the question we should be asking is whether trade—both exports and imports—can be just as good for American politicians as it is for American citizens. The answer just may surprise you.
The obvious local issue when considering a trade agreement with Australia is farming. Australian farm products are highly competitive, and the Bush administration and Congress would have to accept that, under the terms of a free trade agreement, farm imports from Australia would almost certainly rise.
Among the most susceptible agricultural sectors is the U.S. sugar industry, which has drawn a proverbial line in the sand against the accord. It claims an agreement with Australia, like the Central American Free Trade Agreement that the administration has tabled in Congress, “will destroy the U.S. sugar industry.” With much of the sugar industry based in the key presidential battleground state of Florida, Beltway insiders assume no challenge could reasonably be mounted against that opposition.
That assumption has new relevance, though, in light of failed attempts by the Bush administration to protect the U.S. steel industry from similar global competition. In that move, the president sought to shore up political support in steel-producing states, but did more damage to U.S. steel consuming industries in those same states and other parts of the country. The possible gain of a few steel producer votes came with a substantial cost: the probable loss of many more votes from steel users and consumers.
The same dynamic is at work when it comes to agriculture. Thanks to sugar import restrictions alone, for example, U.S. consumers pay 2 to 3 times the world price for sugar and far more for innumerable other packaged food products than they should. While that protectionism made politicians on both sides of the partisan aisle the friends of big sugar producers, it has cost thousands of lost jobs in food production companies in just the past few years and contributed to plant closings by what once were mainstays of the U.S. candy industry. Fannie May and Brach's closed production facilities in Illinois, and Kraft shuttered a Lifesaver plant in Michigan, all just last year.
You would think the loss of those jobs and the burden of consumers paying too much for food would be a compelling local issue on their own, but when the political consultants point out consumers aren't an organized lobby, the conventional wisdom snaps back.
So, will the administration decide local politics makes a Free Trade Agreement with Australia an impossible sell to Americans? If so, that would be an unconscionable mistake. With this trade treaty on the line, the White House has a golden opportunity to make both an enlightened and a parochial case for free trade—appealing to both the Republican Party's traditional base and the politically moderate suburban voters Mr. Bush attracted four years ago with his view of a Compassionate Conservatism.
In the wake of the September 11, 2001, terrorist attacks, the Bush administration has argued that free trade is among the best ways to improve global economic development and foster peace among disparate cultures. Nations tied together economically, the thinking goes, will be less likely to wage war against one another.
Australians have been sounding that note too, hoping to persuade the White House that America owes the Aussies a favor. Australian Prime Minister John Howard was among the first foreign leaders to provide troops for U.S.-led invasions of Afghanistan and Iraq, even though neither was popular at home. Now, the Australians have asked a favor of the Bush administration and found the response more than a little disappointing.
Of course, repaying those debts is not what drives politics in Washington. But members of Congress ought to find some way to win support for the Australian trade agreement on the grounds it will strengthen the relationship with one of the United States' most reliable global partners.
More importantly, President Bush and congressional Republicans need to make the compassionate case for free trade. High food prices impact low-income households the most, so promoting global competition is one of the best things our government could do to improve the well-being of American families.
And let's not forget those jobs. Boosting job growth in the run up to November's election will be far easier in an economy that isn't hemorrhaging established jobs in the food industry.
If the United States hopes to be taken seriously when making the case for a better world based on democratic and free market values, finalizing the Australian Free Trade Agreement would be a good place to start. After all, if the U.S. and Australia cannot put aside short-term political calculations and agree to provide the benefits of open trade to their consumers and businesses, the rest of the Bush administration global liberalization efforts don't stand much of a chance.