Posted on 01/04/2008 2:54:09 PM PST by NormsRevenge
NEW YORK (Reuters) - Thursday night's victories for Republican Mike Huckabee and Democrat Barack Obama in the Iowa presidential caucuses will bring increased attention to the candidates' trade proposals as they head off to New Hampshire for round two of the primary season.
The loss of U.S. manufacturing jobs in states with early primaries will probably influence voters and may have longer-term implications in the race.
Anxiety about the state of the U.S. economy, including a weak housing market and slowing jobs growth -- especially following Friday's anemic employment data -- is likely to influence voters' view of the U.S. role in the global economy, say experts on trade and manufacturing.
"In the early states -- Iowa, New Hampshire, South Carolina -- trade and globalization and anxiety about the future are top of mind for a lot of people," said Scott Paul, director of the nonpartisan Alliance for American Manufacturing.
Manufacturing is the No. 1 sector in those states' economies, where textiles and furniture have faced overseas competition.
The loss of 2,600 jobs at a Maytag plant in Newton, Iowa, was a sore spot in that state, said Paul, whose group promotes policies to bolster U.S. manufacturing.
"One of the reasons that's underappreciated -- why Huckabee has risen so dramatically -- is that among the Republican candidates, he alone has been able to identify with the economic anxiety people are feeling, and he's been able to articulate it," Paul said.
On Thursday, Huckabee, a former Arkansas governor and Baptist minister, and Obama, a U.S. senator from Illinois, won the caucuses -- the first test in the 2008 U.S. presidential campaign.
Taking Iowa had been the candidates' focus for the past few months, but by this weekend, upcoming contests will become more important. Thursday's results, though, have thinned the field of candidates and will force the survivors to more clearly define their positions.
"I hope there's not going to be protectionist pandering just because they're dealing with a nervous electorate on economic issues," said Manufacturers Alliance/MAPI economist Cliff Waldman said.
Issues ranging from war and terrorism to unsafe imported goods have fed anxiety about globalization, as they make voters more sensitive to its costs, Waldman said.
The integration of large developing countries like India and China into the world trading system, he said, means the U.S. economic landscape is different from that which influenced past presidential campaigns.
MIDDLE-CLASS MAELSTROM
None of the top-tier Democratic candidates has voiced support for protectionism -- using tariffs or other restrictions to protect domestic producers.
But candidates have suggested that their support of free trade comes with caveats.
Senator Hillary Clinton, who earned a disappointing third-place finish in Iowa, has said strong enforceable labor and environmental provisions must be part of the core text of every trade agreement.
Obama has said he shares some voters' frustration with trade deals and would step up enforcement of trade and product safety laws. Last month, he said he would halt imports of Chinese toys over safety concerns, before backing off.
"Expanding global markets can be a good thing, but only when we sign trade deals that put American workers first," Obama said in a December 26 letter to the Iowa Fair Trade Campaign.
John Edwards, a former U.S. senator from North Carolina who inched out Clinton for a second-place finish in Iowa, regularly blasts corporate power in his stump speeches and has said trade deals must help workers.
"I see the struggles of the middle class, the loss of jobs, the possibility of losing 30 million jobs over the course of the next decade ... and I take it personally," Edwards said in a stump speech in Manchester, New Hampshire, on Friday.
It's a compelling message for many voters.
"John Edwards is the guy who is about protecting jobs, stopping jobs from going overseas," said Joe Donahue, 45, of Derry, New Hampshire.
Steve Joyce, 51, of Framingham, Massachusetts, said: "There has to be a balance in trade. When you look at things like NAFTA, it's all jobs going overseas."
Such sentiment has recent echoes. In 2006, the Democrats won majorities in the U.S. House and Senate, in part because of candidates who ran on the position that trade is harmful, said Jagdish Bhagwati, author of "In Defense of Globalization" and a senior fellow at the Council on Foreign Relations.
A chilly reception in Congress helped kill two large overseas investments -- a takeover of Unocal by China's CNOOC and an effort by Dubai's DP World to buy U.S. ports.
FAIR OR FREE?
The next President is probably going to be a Democrat, said Bhagwati, who added that he or she may start 2009 indebted to some unions and other forces hostile to trade.
"(They) will have made so many promises, and there's so much infiltration in senior advisory positions, that these people will claim their just reward," Bhagwati said. "This is my worry."
By sounding skeptical about free trade, candidates like Edwards reflect some of the positions supported by proponents of "fair" trade, who advocate increased protections for workers, the poor and the environment, and want to strengthen Congress' role in reviewing trade agreements.
Republican hopefuls looking to differentiate themselves, like Huckabee, may try to woo swing voters from their party who like the Democrats' caution on trade.
Lori Wallach, director of fair trade advocacy group Public Citizen's Global Trade Watch, said: "Every time there's a public appearance, the issues of offshoring, unsafe products, stagnant wages, the diminishment of the middle class, always come up."
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