Free Trade and the Republican Debate

Something struck me as I watched the Republican debaters in Dearborn, Mich. No, it wasn’t the arrival of Fred Thompson to the dance. It wasn’t the strange inability of John McCain to hear Maria Bartiromo’s questions. It wasn’t the strange allure of Ron Paul’s neo-populist, neo-libertarian, neo-conspiracy-theory explanation of the carried-interest debate.

All of those points were notable. But to me, the most notable development was the drift of the Republican Party to protectionism.

I had witnessed the start of the protectionist movement during my time working in the House. It had become harder and harder to pass any trade bills over the last four years that I worked there. NAFTA was hard. CAFTA was a nightmare, costing the taxpayers untold numbers of bridges and other goodies. And even simple trade agreements, to places like Australia and Singapore, became harder to pull off.

Democrats have long been a protectionist party. They have argued that global trade hurts working Americans even in the face of historically low unemployment.

And now many Republicans are jumping to the protectionist side. In fact, a Wall Street Journal poll shows that six in 10 Republicans believe free trade has harmed the U.S. economy by reducing demand for domestic goods, wiping out American jobs and importing products that may be unsafe.

As John McCain and Rudy Giuliani gamely pointed out in the debate yesterday, erecting trade barriers could lead us to the days of Smoot-Hawley, better known as The Great Depression.

But this certainly isn’t where the voters are when it comes to the issue of trade. I was talking to a prominent Republican pundit the other day, and he told me that he was thinking of changing his mind on free trade.

The business community better take notice. Giant retailers (like Wal-Mart) better start paying attention. If the GOP joins the Democrats into protectionism, this nation will suffer.

Protectionist policies are really tax increases on consumers. When the government decides it will slap high duties on products coming in from overseas, it does two things. It brings more revenue into the government, so they can spend it on bigger government. And it increases the costs of those products, hurting consumers who rely on cheap prices to get by.