WSJ: Muddled and Maddening (trade)

Wall Street Journal ^ | September 13, 2004 | JAGDISH BHAGWATI

[OESY]

...There seem to be three arguments by Sen. Kerry's advisers that have prompted this sorry situation for the Democrats: First, that the Bush trade policy is no better; second, that electoral strategy requires that Sen. Kerry act like a protectionist, while indicating subtly... a likelihood of freer trade in the White House; and third, at odds with the previous argument, that the U.S. does indeed have to turn trade policy around toward some sort of protectionism (and restraints on direct investment abroad) if it is going to assist workers and reward the unions. Each argument is flawed.

- Mr. Bush is no better.... The truly disturbing sin of commission of the Kerry campaign, however, has been to surrender to the hysteria over "outsourcing." ...But all available estimates show that, so far, the offshore outsourcing of arm's length services has resulted in a loss of no more than 100,000 jobs annually. It is ludicrous to be alarmed by this minuscule number.... The net effect on jobs due to such outsourcing is almost certainly a net gain for the U.S.

Second, Sen. Kerry has muddled matters by confusing the outsourcing of services with the altogether different issue of direct foreign (i.e. equity) investment by U.S. firms....

Sen. Kerry went so far as to describe firms that invested abroad as "Benedict Arnolds." The silliness of this charge puts him in the same camp as Lou Dobbs....

• The Doha Round.... Where President Bush has articulated strong support for it, Sen. Kerry has ducked the issue....

[T]he large developing countries... see, correctly, the protectionist hand of lobbies, including unions, behind the demands for labor and certain environmental requirements....

• Can Kerry Turn Free Trader? In the end, Sen. Kerry cannot totally jilt his constituencies....

[OESY]

Mr. Bhagwati, University Professor at Columbia and Andre Meyer Senior Fellow at the Council on Foreign Relations, is the author of "In Defense of Globalization" (Oxford, 2004).