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Presidential Candidates Top Aides Outline Trade Policies

Representatives from the presidential campaigns of Senators Hillary Clinton, D-NY, John McCain, R-AZ, and Barack Obama, D-IL., discussed the views of their candidates on international trade, focusing on NAFTA and pending free trade agreements with Colombia, Korea and Panama. The Institute for Policy Innovation organized the event in order to address comments by the Democratic candidates that they would seek to renegotiate NAFTA and “opt out” of the agreement if they are not able to modify the agreement.

John McCain. Doug Holtz-Eakin, senior policy advisor for Sen. McCain’s campaign, stated that his candidate is committed to free trade and will resist all calls for protectionism and considers any demonizing of free trade as bad foreign policy. In response to Democrats’ recent comments on NAFTA, Holtz-Eakin said that modifying the the agreement would send the wrong signal to Mexico and Canada. McCain believes it would be unwise to make a unilateral attempt to open good faith agreements like NAFTA with two of the United States’ largest trading partners.

Holtz-Eakin stressed that trade decisions should not be based solely on the U.S. economy but examined in the broader context of foreign and domestic policy goals. Furthermore, he disputed the premise that trade is the primary cause of labor market issues, which he said are more the result of technological advances. He noted that McCain plans to address job losses by updating the system of unemployment insurance, training and by using local college programs to assist workers displaced by trade.

McCain would reject the use of labor and environmental issues to block trade, Holtz-Eakin said. His preference would be to monitor trading partners in order to determine if they are improving their standards, he believes this apporach would be far more effective than requiring labor and environmental standards in trade agreements.

Barack Obama. Daniel Tarullo, a senior advisor for the Obama campaign, emphasized that the Senator supports the globalization of trade and believes trade is a key feature of a market-based economy. That said, Senator Obama is not convinced that the trade policies pursued by the U.S. will provide strong, sustainable domestic growth. If elected Obama would review the principles of our trade policy and our approach to trade in order to determine who is realizing the greatest benefit from our policy and the impact U.S. trade policy is having on people.

Mr. Tarullo reaffirmed Senator Obama’s statements to require labor and environmental standards in Free Trade Agreements. Furthermore, Obama’s wants to address global imbalances in trade and the factors that contribute to the imbalance such as currency manipulation. Obama would also deal with potential trading partners differently by changing the negotiating process to make it more transparent to a larger a broader group of private parties.

With regard to NAFTA, Obama would contact Canadian and Mexican leaders to negotiate amendments to the current agreement for binding labor and environmental standards. Obama does not support pending FTAs with South Korea, Panama and Colombia, but voted for the Peru FTA because it contained a set of binding labor and environmental standards.

Hillary Clinton. Senior advisor for the Clinton campaign, Gary Gensler, stated that Ms. Clinton’s views trade from the point of view of middle-income Americans and she made it one aspect of her overall economic policy. Clinton believes regular assessment or trade agreements every five years are needed. A Clinton Administration would reevaluate all current FTAs. Senator Clinton deems U.S. energy policy is a important factor in trade and work to reduce U.S. oil imports by two-thirds by 2020.

Clinton is committed to making changes to NAFTA, Gensler said. The Senator specifically wants to add provisions mandating labor and environmental standards. She also wants to strengthen existing enforcement mechanisms in trade agreements and significantly increase enforcement staff at the Office of the U.S. Trade Representative. To address the problem of displaced workers due to overseas outsourcing of jobs, Clinton proposes expanding the Trade Adjustment Assistance program to include services and dedicating $10 billion over five years to aid workers who lose their jobs for any reason.

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