Nickdfresh
10-17-2006, 07:36 AM
FOCUS: CANDIDATE JACK DAVIS
Davis' zealotry about trade confronts economic reality
Congressional hopeful's bid for simple fairness is on a collision course with global complexities
By JERRY ZREMSKI and ROBERT J. McCARTHY
News Staff Reporters (http://www.buffalonews.com/editorial/20061016/1049479.asp)
10/16/2006
Jack Davis says China is "taking our jobs and stealing our industries."
Jack Davis vows to "fight to cancel all free-trade agreements" if the voters of the 26th Congressional District send him to Washington.
But what are the odds of Congress actually doing what he wants?
"Zero," said Eliza Patterson, a Washington lawyer who specializes in international trade and teaches at Columbia University. "It won't happen. I've never even heard a member of Congress seriously suggest that."
And what would happen if the United States were to withdraw from the North American Free Trade Agreement and the World Trade Organization?
"It would be a devastating blow to the American economy," said Christopher Wenk, director of international trade policy at the National Association of Manufacturers.
Trade experts, though, stress that this doesn't mean Davis would be singing solo if he were elected. In fact, they say, similar positions are held by a significant contingent in Congress that's likely to grow if Democrats take control in November's election.
Davis would be at one extreme of that contingent, which would likely stymie any efforts at new trade deals while finding itself unable to do very much about the old ones, they say.
Economists, public policy experts and political scientists agree that the politics of trade is far more nuanced than Davis' stand on the issue.
The candidate, who is leading in the polls against Republican Rep. Thomas M. Reynolds of Clarence, would pull the United States out of NAFTA and the WTO.
Davis makes no secret of his disdain for the way China floods the U.S. marketplace with cheap goods.
"They're exporting their unemployment, they're taking our jobs and stealing our industries," he said. "Somebody's got to wake up in Washington, and I want to go there and wake people up."
Seeking "balanced trade'
The candidate says his solution is simple.
"I'm going to Washington," he said, "and I say to China, "You want to do business in the United States? You buy something from the United States. I don't care what. But if, at the end of a period of time, you're not buying enough from the United States as we're buying from you, you're going to increase that tariff until you do have balanced trade.' "
Wouldn't this all result in higher prices?
"Yeah," Davis said. "But just ask [voters]: Where's your child going to work? What kind of job is your child going to have. The people who understand the problem really don't mind paying a little more."
What does he tell Wal-Mart, the retail giant with a voracious appetite for low-cost Chinese goods?
"I have a problem with Wal-Mart in that they've driven American suppliers out of business and they have no loyalty to American manufacturers and . . . American workers," he said. "They're putting Americans out of work."
With the idea of always being lower in cost, Davis said, Wal-Mart has driven prices down and destroyed U.S. companies. "Having a lower price is not the same as having a good-paying job," he said.
Still, the Reynolds campaign has painted Davis' tariff proposals as just another form of taxation because consumers would pay higher prices. Spokesman L.D. Platt said Sunday that the congressman has always believed in free but fair trade and a level playing field to open markets for American goods.
"One-fifth of the manufacturing jobs in this area are tied to export," Platt said. "Jack's 20 percent or more tax-hike plan not only increases taxes on consumers but puts people out of work."
Experts say that it is theoretically possible to end the nation's involvement in free-trade pacts but that any such attempt would run headlong into a stark political reality: While sentiments against current trade agreements appear to be growing, both political parties are unwilling to embrace a dramatic turn toward protectionism.
Many Republicans reflexively favor free trade with no strings attached.
"The politics of this are complex because the Democratic Party is split on trade," said Ron Hira, professor of public policy at Rochester Institute of Technology and author of a book called "Outsourcing America."
Experts said congressional Democrats are divided into three camps on the issue. About a third sides with Republicans. Another third wants trade deals to include protections for the environment and labor rights. The other third is protectionist, favoring tariffs to keep manufacturers on U.S. soil.
And even that protectionist contingent seems reluctant to take bold steps on the trade issue. For proof, look at what has happened to two of the more protectionist measures introduced in Congress in recent years.
A bill introduced by Rep. Marcy Kaptur, D-Ohio, would require the president to take action against any country that has a trade surplus of $10 billion or more with the United States. Only 20 of the 435 current House members have signed onto that bill.
A measure by Rep. Michael H. Michaud, D-Maine, would go even further, forcing a temporary import surcharge whenever the U.S. trade deficit gets too big. Not one of his colleagues has co-sponsored that measure.
The bottom line?
"Even if Democrats take control of Congress, trade won't get shut down," said Nicole Venable, director of international trade and global competition at the U.S. Chamber of Commerce.
Experts says the outlook is unclear for a series of relatively minor trade issues that will come before the lame-duck Congress in November.
Rethinking "fast track'
Prospects look somewhat bleak for the major trade issue of 2007: renewal of the president's "fast-track authority" to negotiate new trade deals.
Fast-track authority gives the president the right to make trade deals that Congress must either pass or reject without any tinkering. Congress has reauthorized fast-track authority almost continuously since 1974, but trade experts don't expect that to happen again when the current authority expires next June 30.
"Democratic control makes fast-track authority much less likely," said Kevin Kearns, president of the U.S. Business and Industry Council, which is sharply critical of current trade policies and their impact on U.S. manufacturers. "I could see them waiting out the issue until after the 2008 election."
Experts said they see Davis as part of a strong Democratic chorus against giving Bush that power. But they have mixed views about how effective he would be in Washington as a voice of change in U.S. trade policies.
Some say he would be advocating a radical protectionist agenda that could do great damage. Closing the borders would dramatically increase prices on any number of consumer products such as food and clothing, Wenk said.
Meanwhile, it would damage America's standing worldwide at a time when its reputation is not exactly thriving, added Christopher L. Holoman, a professor of political science at Hilbert College.
But Davis' radical stand does not necessarily mean he would be ineffective. Kearns said Davis - owner of a company in Newstead that makes silicon carbide heating elements - would be one of the few factory owners in Congress, meaning he could be a strong voice advocating measures to keep U.S. manufacturing strong.
And Holoman, a self-described free-trade Democrat, acknowledged that Davis could contribute to the debate.
"He gives voice to a position that's not well-represented in Congress," Holoman said. "So if he wins, that position begins to gain some legitimacy."
e-mail: jzremski@buffnews.com.
and rmccarthy@buffnews.com.
Davis' zealotry about trade confronts economic reality
Congressional hopeful's bid for simple fairness is on a collision course with global complexities
By JERRY ZREMSKI and ROBERT J. McCARTHY
News Staff Reporters (http://www.buffalonews.com/editorial/20061016/1049479.asp)
10/16/2006
Jack Davis says China is "taking our jobs and stealing our industries."
Jack Davis vows to "fight to cancel all free-trade agreements" if the voters of the 26th Congressional District send him to Washington.
But what are the odds of Congress actually doing what he wants?
"Zero," said Eliza Patterson, a Washington lawyer who specializes in international trade and teaches at Columbia University. "It won't happen. I've never even heard a member of Congress seriously suggest that."
And what would happen if the United States were to withdraw from the North American Free Trade Agreement and the World Trade Organization?
"It would be a devastating blow to the American economy," said Christopher Wenk, director of international trade policy at the National Association of Manufacturers.
Trade experts, though, stress that this doesn't mean Davis would be singing solo if he were elected. In fact, they say, similar positions are held by a significant contingent in Congress that's likely to grow if Democrats take control in November's election.
Davis would be at one extreme of that contingent, which would likely stymie any efforts at new trade deals while finding itself unable to do very much about the old ones, they say.
Economists, public policy experts and political scientists agree that the politics of trade is far more nuanced than Davis' stand on the issue.
The candidate, who is leading in the polls against Republican Rep. Thomas M. Reynolds of Clarence, would pull the United States out of NAFTA and the WTO.
Davis makes no secret of his disdain for the way China floods the U.S. marketplace with cheap goods.
"They're exporting their unemployment, they're taking our jobs and stealing our industries," he said. "Somebody's got to wake up in Washington, and I want to go there and wake people up."
Seeking "balanced trade'
The candidate says his solution is simple.
"I'm going to Washington," he said, "and I say to China, "You want to do business in the United States? You buy something from the United States. I don't care what. But if, at the end of a period of time, you're not buying enough from the United States as we're buying from you, you're going to increase that tariff until you do have balanced trade.' "
Wouldn't this all result in higher prices?
"Yeah," Davis said. "But just ask [voters]: Where's your child going to work? What kind of job is your child going to have. The people who understand the problem really don't mind paying a little more."
What does he tell Wal-Mart, the retail giant with a voracious appetite for low-cost Chinese goods?
"I have a problem with Wal-Mart in that they've driven American suppliers out of business and they have no loyalty to American manufacturers and . . . American workers," he said. "They're putting Americans out of work."
With the idea of always being lower in cost, Davis said, Wal-Mart has driven prices down and destroyed U.S. companies. "Having a lower price is not the same as having a good-paying job," he said.
Still, the Reynolds campaign has painted Davis' tariff proposals as just another form of taxation because consumers would pay higher prices. Spokesman L.D. Platt said Sunday that the congressman has always believed in free but fair trade and a level playing field to open markets for American goods.
"One-fifth of the manufacturing jobs in this area are tied to export," Platt said. "Jack's 20 percent or more tax-hike plan not only increases taxes on consumers but puts people out of work."
Experts say that it is theoretically possible to end the nation's involvement in free-trade pacts but that any such attempt would run headlong into a stark political reality: While sentiments against current trade agreements appear to be growing, both political parties are unwilling to embrace a dramatic turn toward protectionism.
Many Republicans reflexively favor free trade with no strings attached.
"The politics of this are complex because the Democratic Party is split on trade," said Ron Hira, professor of public policy at Rochester Institute of Technology and author of a book called "Outsourcing America."
Experts said congressional Democrats are divided into three camps on the issue. About a third sides with Republicans. Another third wants trade deals to include protections for the environment and labor rights. The other third is protectionist, favoring tariffs to keep manufacturers on U.S. soil.
And even that protectionist contingent seems reluctant to take bold steps on the trade issue. For proof, look at what has happened to two of the more protectionist measures introduced in Congress in recent years.
A bill introduced by Rep. Marcy Kaptur, D-Ohio, would require the president to take action against any country that has a trade surplus of $10 billion or more with the United States. Only 20 of the 435 current House members have signed onto that bill.
A measure by Rep. Michael H. Michaud, D-Maine, would go even further, forcing a temporary import surcharge whenever the U.S. trade deficit gets too big. Not one of his colleagues has co-sponsored that measure.
The bottom line?
"Even if Democrats take control of Congress, trade won't get shut down," said Nicole Venable, director of international trade and global competition at the U.S. Chamber of Commerce.
Experts says the outlook is unclear for a series of relatively minor trade issues that will come before the lame-duck Congress in November.
Rethinking "fast track'
Prospects look somewhat bleak for the major trade issue of 2007: renewal of the president's "fast-track authority" to negotiate new trade deals.
Fast-track authority gives the president the right to make trade deals that Congress must either pass or reject without any tinkering. Congress has reauthorized fast-track authority almost continuously since 1974, but trade experts don't expect that to happen again when the current authority expires next June 30.
"Democratic control makes fast-track authority much less likely," said Kevin Kearns, president of the U.S. Business and Industry Council, which is sharply critical of current trade policies and their impact on U.S. manufacturers. "I could see them waiting out the issue until after the 2008 election."
Experts said they see Davis as part of a strong Democratic chorus against giving Bush that power. But they have mixed views about how effective he would be in Washington as a voice of change in U.S. trade policies.
Some say he would be advocating a radical protectionist agenda that could do great damage. Closing the borders would dramatically increase prices on any number of consumer products such as food and clothing, Wenk said.
Meanwhile, it would damage America's standing worldwide at a time when its reputation is not exactly thriving, added Christopher L. Holoman, a professor of political science at Hilbert College.
But Davis' radical stand does not necessarily mean he would be ineffective. Kearns said Davis - owner of a company in Newstead that makes silicon carbide heating elements - would be one of the few factory owners in Congress, meaning he could be a strong voice advocating measures to keep U.S. manufacturing strong.
And Holoman, a self-described free-trade Democrat, acknowledged that Davis could contribute to the debate.
"He gives voice to a position that's not well-represented in Congress," Holoman said. "So if he wins, that position begins to gain some legitimacy."
e-mail: jzremski@buffnews.com.
and rmccarthy@buffnews.com.