"[L]abour union lobbies and their political friends have decided that the ideal defence against competition from the poor countries is to raise their cost of production by forcing their standards up, claiming that competition with countries with lower standards is “unfair”. “Free but fair trade” becomes an exercise in insidious protectionism that few recognise as such."
Jagdish Bhagwati,
"Obama and Trade: An Alarm Sounds," Financial Times. January 9, 2009.
Welcome to "Free Trade, Free Markets: Rating the Congress." This interactive web site allows users to examine how Congress and its individual members have voted over the years on bills and amendments affecting the freedom of Americans to trade and invest in the global economy. The web site includes votes previously examined in a series of Cato studies published from 1999 through 2005, as well as more recent votes. We would welcome any feedback on how the web site could be made even more useful.
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Permanent URL: http://www.freetrade.org/congress?tab=introduction | Printer-friendly version
Traditionally free trade has meant the lowering and eventual elimination of barriers to trade between nations. In the course of debate, those who favor free trade are characterized as internationalists. Pulling U.S. policy in the opposite direction are the protectionists, sometimes known as isolationists, who want to raise or at least maintain trade barriers and oppose trade expansion. But that simple, one-dimensional analysis disguises the true nature of the trade debate.
As a new, Democratic Congress begins to put its stamp on U.S. trade policy, the choice before members of both major parties will not be between engagement and isolation but between the free market and government intervention. The guiding question should be whether U.S. policy favors a free international market by advancing free trade and rejecting government intervention such as export and agricultural subsidies, or whether it favors intervention by not only maintaining and raising barriers to trade but also various subsidies.
Thus the real policy choices before Congress are not the two traditional paths of engagement or isolation but four paths. Through their votes on legislation, members of Congress can
1) oppose both trade barriers and trade subsidies,
2) oppose barriers and favor subsidies,
3) favor barriers and oppose subsidies, or
4. favor both barriers and subsidies.
By considering those four policy alternatives, this biannual study of congressional voting offers a more accurate and useful way of measuring how Congress as a whole and its individual members vote on issues affecting American involvement in the global economy. It analyzes 13 major votes in the House during the recently concluded 109th Congress and another 11 in the Senate affecting both trade barriers and trade subsidies. It then classifies members of Congress according to their degree of support for an international market free from the distorting effects of barriers and subsidies. The purpose of the study is to articulate a higher standard for free trade, and to measure the performance of the most recent Congress according to that standard.
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Despite all the hype about globalization and the supposed universal triumph of free-market policies, governments around the world continue to intervene in the flow of goods, services, people, and capital across international borders. That widespread intervention takes two basic forms: tax and regulatory barriers aimed at discouraging certain types of commerce, and direct, taxpayer subsidies aimed at encouraging or discouraging other types of commerce.
Trade Barriers
Trade barriers reduce global wealth by denying people and nations the ability to specialize in what they do best. Barriers protect higher-cost domestic producers from lower-cost competition abroad, raising domestic prices and drawing capital and labor away from industries that would be more competitive in global markets. Barriers to trade across international borders prevent producers from realizing the full benefits from economies of scale. By reducing competition, they stymie innovation and technological advances, reducing an economy's long-term growth.
Global tariff and nontariff barriers have fallen remarkably in the last 60 years, first among the richer, industrialized countries and more recently among those that are less developed. China is the most spectacular example of the latter. But barriers remain stubbornly high worldwide against free trade in agricultural products, textiles and clothing, and many basic services such as insurance and air travel. Those barriers cost hundreds of billions of dollars a year in lost wealth and keep hundreds of millions of people in poverty.
U.S. trade barriers continue to impose real costs on the U.S. economy despite postwar progress toward liberalization. The U.S. government maintains high, anti-consumer barriers to trade against such manufactured products shoes, clothing, watches, tableware, and textiles, and farm goods such as sugar, peanuts, cotton, dairy products, beef, canned tuna, frozen fruit and fruit juices. Other import barriers impose higher costs on U.S. producers, such as those against shipbuilding, softwood lumber, ball and roller bearings, pressed and blown glass, and coastal maritime shipping (through the Jones Act), jeopardizing jobs and production in import-consuming industries. Meanwhile, discriminatory antidumping laws 'protect' consumers and import-using industries from the benefits of competition and lower prices.
Trade Subsidies
Global commerce is further distorted by widespread use of subsidies aimed at promoting certain kinds of trade, investment, and domestic production. Those subsidies encourage overproduction of domestic agricultural products, through farm price supports, and exports and overseas investment in less-developed countries, through such agencies as the Overseas Private Investment Corporation and the Export-Import Bank. Indeed, many supporters of lower trade barriers look kindly on such subsidies because they seem to promote economic activity at home and 'engagement' in the global economy. But both kinds of intervention—barriers and subsidies—reduce our national welfare and curb the freedom of Americans to spend and invest their resources as they see fit.
Subsidies reduce national welfare by directing resources to less-efficient uses, substituting the judgment of government officials for that of private actors in the marketplace. Export subsidies such as those extended by the U.S. Export-Import Bank can raise demand for exports produced by the small number of U.S. multinational companies that benefit from its loans. But the increased production spurred by the extra exports raises costs for other, less-favored export industries competing for the same labor, capital, and intermediate inputs. They also crowd out unsubsidized exporters as foreign buyers bid up the price of U.S. dollars on foreign exchange markets to buy the more attractive, subsidized U.S. exports. Export subsidies also impose a higher burden on taxpayers.
Equally damaging to global trade and welfare are domestic subsidies to agriculture. Those subsidies encourage overproduction and the flooding of world markets with commodities sold at below their actual cost of production. Artificially lower world prices then discourage production in countries, typically the less-developed ones, where the costs of production are naturally lower. The biggest losers from the subsidies are taxpayers and consumers in rich countries and producers in poor countries.
Subsidies further undermine an efficient and open global economy by tainting the cause of liberalized trade. Advocates of subsidies imply that American companies can compete in an open global economy only if the playing field is 'leveled' by aggressive export promotion programs aimed at huge multinational corporations—as if free trade were inherently unfair unless offset by selective subsidies. Support for subsidies reinforces mistrust of the free market, reducing rather than encouraging support for free trade. International economic subsidies feed suspicions on the left and the right that free trade is just another form of corporate welfare.
Trade restrictions and subsidies are prompted by the same basic assumption: that Americans acting freely in the global marketplace cannot be trusted to spend their money in ways most beneficial to our national interest. That misconception leads to the policy error of thinking that government must therefore intervene, through either subsidies or restrictions, to produce an outcome different from what the market would create if left alone.
The Free-Trade Matrix:
No Barriers, No Subsidies
True supporters of free trade and free markets oppose not only protection but also market-distorting subsidies. That means the choice for policymakers is not merely between engagement in the global economy, subsidies and all, and isolation from it. The real choice is among four contrasting approaches to international economic policy: lower trade barriers without subsidies, lower barriers with subsidies, higher barriers with subsidies, and higher barriers without subsidies.
Combining trade barriers and trade subsidies as measures of free trade creates a two-dimensional matrix for evaluating public policy toward the free market and the international economy. That matrix allows a member's voting record to be classified in one of four broad categories rather than on the simplistic one-dimensional scale with free trade at one pole and protectionism at the other. (See Figure 1.) According to the matrix, members of Congress can be classified in one of four categories:
Free Traders
Free traders consistently vote against both trade barriers and international economic subsidies. The end result of their votes is to enhance the free market and the ability of Americans to decide for themselves how to spend their money in the global marketplace. This group opposes legislation restricting the choice of goods and services Americans may buy voluntarily—whether apparel from Guatemala, shoes from Vietnam, trucking services from Mexico, or vacations in Cuba—and opposes the forced expatriation of tax dollars through export subsidies, overseas investment guarantees, and government-to-government bailouts. Members of this group can lay rightful claim to the title of free traders because they support trade that is free of all types of government intervention, whether in the form of barriers or of subsidies.
Internationalists
Members of this group generally vote for trade liberalization but also support subsidies that they believe promote the same end. Their touchstone is not economic freedom but U.S. participation in the global economy through both expanded trade and direct government participation in the form of export subsidies and government-to-government loans. Internationalists are pro-trade, favoring the reduction of import barriers as generally good for the economy and even world peace, but they also believe the global economic system cannot work in America's interest without U.S. taxpayer subsidies.
Isolationists
This category includes members of Congress who tend to vote against reducing trade barriers and also oppose international economic subsidies. They can reasonably be called isolationists because they tend to oppose expanded American involvement in the global economy, whether through voluntary transactions or taxpayer subsidies. Isolationists show respect for their constituents as taxpayers by resisting tax-financed subsidies, but they question their judgment as consumers by restricting their freedom to buy, sell, and invest freely in the global marketplace.
Interventionists
Members of this group consistently support government intervention at the expense of the free market—favoring both subsidies and trade barriers. They tend to oppose bills and amendments that would lower trade barriers, as well as those that would cut or eliminate trade and investment subsidies. Interventionists reject the judgment of Americans twice, first by denying them full liberty to spend their private dollars beyond our borders and then by seeking to divert public tax dollars for export promotion and government-to-government bailout packages.
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The 110th Congress considered 21 major bills and amendments in 2008-09 affecting the freedom of Americans to engage in international transactions. Below are descriptions of trade-related votes on the 2007/2008 farm bill, a ban on Mexican trucks in the United States, free trade agreements with Peru and Colombia, the Cuban trade embargo, the Andean Trade Preferences Act, visas for low-skilled workers, visa-waiver travel to the United States, and the bailout of two U.S. automobile producers.
Not all of those votes offer a pure test of support for free trade and international competition, but each represents a reasonably clear attempt to either expand or restrict the freedom to trade. The descriptions are not intended to provide a definitive argument for or against the legislation, but only to explain why, from a free-market perspective, the vote either hinders or promotes free trade as defined in the "Free Trade, Free Markets" study. Where available, sources are cited that provide more detailed arguments. (See Table 1 for a summary of House votes and Table 2 for a summary of Senate votes.)
The final section classifies individual members of Congress according to how they voted in the 110th Congress on legislation affecting the freedom to trade.
| Table 1 | ||||||
|---|---|---|---|---|---|---|
| Major House Votes on Trade, 110th Congress | ||||||
| Roll | Free Trade | Final | % Voting Free Trade | |||
| Trade Barrier Votes | Date | Call # | Position | Vote | GOP | Dems |
| Bar Mexican Trucks from U.S. Roads | 5/15/2007 | 349 | No | 411-3 | 1% | 1% |
| Defund Visa Waiver Program | 6/15/2007 | 484 | No | 76-347 | 69% | 93% |
| Andean Trade Preferences Act | 6/27/2007 | 583 | Yes | 365-59 | 90% | 82% |
| Expand Farm Exports to Cuba | 7/27/2007 | 749 | Yes | 182-245 | 9% | 71% |
| Reduce Sugar Protection | 7/27/2007 | 751 | Yes | 144-282 | 46% | 23% |
| U.S.-Peru Free Trade Agreement | 11/8/2007 | 1060 | Yes | 285-132 | 92% | 48% |
| Suspend Colombia FTA Vote | 4/10/2008 | 181 | No | 224-195 | 97% | 4% |
| Defund Mexican Truck Program | 9/9/2008 | 575 | No | 395-18 | 8% | 1% |
| All Trade Barrier Votes | 58% | 47% | ||||
| Trade Subsidy Votes | ||||||
| Reduce Agricultural Subsidies | 7/27/2007 | 747 | Yes | 117-309 | 23% | 32% |
| Reduce "Loan Deficiancy" Payments | 7/27/2007 | 750 | Yes | 153-271 | 62% | 14% |
| Reduce Subsidies for Cotton Production | 7/27/2007 | 752 | Yes | 175-251 | 29% | 52% |
| 2008 Farm Bill | 5/14/2008 | 315 | No | 318-106 | 48% | 6% |
| 2008 Farm Bill Veto Override | 5/21/2008 | 346 | No | 316-108 | 48% | 6% |
| GM and Chrysler Bailout | 12/10/2008 | 690 | No | 237-170 | 82% | 9% |
| All Trade Subsidy Votes | 48% | 20% | ||||
| Source: Library of Congress, thomas.loc.gov/home/rollcallvotes.html | ||||||
| Table 2 | ||||||
|---|---|---|---|---|---|---|
| Major Senate Votes on Trade, 110th Congress | ||||||
| Roll | Free Trade | Final | % Voting Free Trade | |||
| Short Description | Date | Call # | Position | Vote | GOP | Dems |
| Eliminate Temporary Worker Program | 5/22/2007 | 174 | No | 31-64 | 96% | 38% |
| Cut Temporary Workers Visas | 5/23/2007 | 175 | No | 74-24 | 44% | 4% |
| Defund Mexican Truck Pilot Program | 9/11/2007 | 331 | No | 75-23 | 47% | 0% |
| Peru Free Trade Agreement | 12/4/2007 | 413 | Yes | 77-18 | 98% | 64% |
| All Trade Barriers Votes | 71% | 26% | ||||
| Farm, Nutrituion and Bioenergy Act of 2007 | 12/14/2007 | 434 | No | 79-14 | 23% | 7% |
| Food and Energy Security Act of 2007 | 5/15/2008 | 130 | No | 81-15 | 27% | 4% |
| Food and Energy Security Act Veto Override | 5/22/2008 | 140 | No | 82-13 | 24% | 4% |
| All Trade Subsidy Votes | 25% | 5% | ||||
| Source: Library of Congress, thomas.loc.gov/home/rollcallvotes.html | ||||||
•Ban Mexican Trucks on U.S. Roads The expansion of trade between the United States and Mexico has been hampered by regulations that restrict cross-border trucking. Under provisions of the North American Free Trade Agreement, qualified trucking providers from Mexico would be allowed to deliver goods within the United States after the year 2000, and U.S. trucking companies would be allowed to deliver goods within Mexico. Although the agreement and subsequent regulations specifically address safety concerns, Congress has so far refused to implement the agreement, under pressure from organized labor in the United States. For an analysis of the Mexican trucking issue, see http://www.freetrade.org/node/107 and http://www.freetrade.org/node/818.
On May 15, 2007, the House voted 411-3 (Roll Call Vote 349) to approve the Safe American Roads Act of 2007 that effectively prohibits the Secretary of Transportation from granting a motor carrier domiciled in Mexico authority to operate beyond U.S. municipalities and commercial zones on the U.S.-Mexico border.
On September 11, 2007, the Senate voted 75-23 (Roll Call Vote 331) to approve an amendment by Sen. Byron Dorgan that would deny funding for a pilot program that would allow Mexican trucks to begin serving U.S. destinations.
On September 9, 2008, the House voted 395-18 (Roll Call Vote 575) to prohibit the Secretary of Transportation from authorizing any Mexican motor carriers form operating anywhere inside the Untied States beyond the commercial zones along the U.S.-Mexican border.
•Temporary visas for low-skilled workers The American economy continues to create hundreds of thousands of net new jobs each year for low-skilled workers, while the supply of native-born Americans who have traditionally filled those jobs, typically those without a high school education, continues to shrink. Yet are immigration system offer no legal channel for a sufficient number of foreign-born workers to enter the country to fill those jobs, resulting in a significant inflow of illegal immigrants. In May and June of 2007, the Senate considered legislation to expand opportunities for low-skilled foreign-born workers to join the U.S. workforce legally. For analysis of immigration reform, see http://www.freetrade.org/issues/immigration.html.
On May 22, 2007, the Senate voted 31-64 (Roll Call Vote 174) against an amendment by Sen. Byron Dorgan (D-ND) that would have eliminated the Y-1 temporary worker visa from a comprehensive immigration reform bill (S. 1348).
On May 23, 2007, the Senate voted 74-24 (Roll Call Vote 175) to approve an amendment by Sen. Jeff Bingaman to cap the annual number of Y-1 visas in S. 1348 at 200,000, significantly below the number in the original bill.
•Funding for Visa Waiver Program The U.S. government currently allows travelers from 27 countries to enter the United States without a visa. Participants in the program include Japan, Australia and the nations of Western Europe. The program allows visitors to stay in the United States for up to 90 days for tourism and business travel. According to federal studies, the program stimulates increased tourist spending and other economic activity without compromising homeland security. For more on the program, see http://www.freetrade.org/node/577.
On June 15, 2007, the House voted 76-347 (Roll Call Vote 484) against an amendment by Rep. Tom Tancredo (R-CO) to eliminate funding for the visa waiver program.
•Andean Trade Preference Act 2007 Congress enacted the Andean Trade Preference Act in 1991 in an effort to promote market-led growth in Bolivia, Colombia, Ecuador and Peru as an alternative to the illegal drug trade. The act allows duty-free access to the U.S. market for 5,600 products, including a range of agricultural commodities and textile and apparel products of particular export interest in those countries. Such unilateral preferences allow farmers and other producers in the Andean countries to receive higher prices for their exports, stimulating production and income growth in those countries. The ATPA was expanded under the Trade Act of 2002, and was due to expire on June 30, 2007.
On June 27, 2007, the House voted 365-59 (Roll Call Vote 583) to approve an extension the ATPA through February 29, 2008. On June 28, 2007, the Senate approved the bill without amendment by unanimous consent.
•Expand Farm Exports to Cuba For almost half a century the U.S. government has maintained an almost total embargo against trade with, travel to, and investment in Cuba. The embargo was implemented shortly after Fidel Castro took power in 1959, but the embargo has failed to change the policies or nature of the island country's communist government. With the fall of the Soviet Union in 1991, any national security argument for the embargo came to an end. While the embargo remains in place, Congress did vote in 2000 to allow limited sales of food and medical supplies to Cuba. For analysis of U.S. policy toward Cuba, see http://www.freetrade.org/issues/cuba.html.
On July 27, 2007, the House voted 182-245 (Roll Call Vote 749) to reject an amendment sponsored by Rep. Charles Rangel (D-NY) that would have relaxed rules on cash sales of U.S. farm products to Cuba. The amendment would also have allowed direct transfers between Cuban banks and U.S. banks and visas to be issued to conduct activities related to purchasing U.S. agricultural goods.
•Repeal sugar protection The federal government supports the domestic price of sugar through a system of import quotas. The result is that American cane and beet sugar producers are guaranteed about 85 percent of the domestic market, while domestic consumers pay two to three times the world price for sugar. The result has been an annual loss to consumers of more than $1 billion, and the loss of thousands of manufacturing jobs in the confectionary and other sugar-consuming industries. The 2008 farm bill actually increased government support for domestic sugar producers. For more on the cost of the sugar program, see http://www.freetrade.org/node/31 and http://www.freetrade.org/node/694.
On July 27, 2007, the House voted 144-282 (Roll Call Vote 751) against an amendment offered by Rep. Danny Davis (D-IL) that would have deleted the sugar program from the Farm, Nutrition, and Bioenergy Act of 2007.
•U.S.-Peru Free Trade Agreement Like previously enacted bilateral and regional agreements, the U.S.-Peru Free Trade Agreement will eventually eliminate almost all tariff barriers between the two countries. Specifically, the agreement will immediately eliminate tariffs on more than two-thirds of U.S. exports to Peru, and phase out remaining barriers within 15 years, while expanding access to services markets. Imports from Peru already face minimal tariffs in the United States because of existing trade preference programs, but the U.S.-Peru FTA would lock in market access and guarantee reciprocal access for U.S. exporters. The agreement would also deepen U.S. ties to a relatively friendly Latin American country. For more information on the benefits of bilateral and regional FTAs, see http://www.freetrade.org/node/66 and http://www.freetrade.org/node/64.
On November 8, 2007, the House voted 285-132 (Roll Call Vote 1060) to approve legislation implementing the U.S.-Peru FTA as negotiated. On December 4, 2007, the Senate voted 77-18 (Roll Call Vote 413) to approve the U.S.-Peru implementing legislation.
•TPA/Colombia Suspension Passed in 2002, Trade Promotion Authority (TPA) allows the U.S. president to submit trade agreements to Congress for an up-or-down vote without amendment. Every U.S. president since Gerald Ford has been granted some form of "fast track" authority, which has proven to be an indispensable tool for enacting trade-expanding agreements. In April 2008, President Bush requested that Congress vote on the U.S.-Colombia Free Trade Agreement under the terms set by the 2002 TPA statute. The agreement would eliminate almost all barriers to trade between the two countries. The agreement would increase U.S. exports to Colombia by more than $1 billion and would strengthen U.S. ties to a democratic ally in South America. For more on the U.S.-Colombia FTA, see http://www.freetrade.org/node/839.
On April 10, 2008, the House voted 224-195 (Roll Call Vote 181) to change the 2002 TPA law to indefinitely postpone a vote on the U.S.-Colombia FTA as submitted to Congress.
•2007-08 Farm Bill For more than 80 years, the U.S. government has intervened in agricultural production through subsidies and trade barriers aimed at propping up prices and production of certain favored crops. Such policies can cost Americans an estimated $40 billion a year as consumers and taxpayers. They also drive up costs for domestic food-processing companies, and drive down global prices, hurting poor farmers abroad and complicating efforts to open export markets abroad through trade negotiations. Before the House approved a proposed 2007 farm bill in July 2007, it considered several amendments to scale back interventionist farm programs that distort production and trade. The Senate approved the final bill in December 2007. In May 2008, both chambers passed the conference report reconciling the two versions, and then both chambers overrode a presidential veto. For analysis of the trade impact of U.S. agricultural policy, see http://www.freetrade.org/issues/agriculture.
On July 27, 2007, the House voted 117-309 (Roll Call Vote 747) against an amendment by Rep. Ron Kind (D-WI) that would have reduced agricultural subsidies by tightening income eligibility and payment limits.
On July 27, 2007, the House voted 153-271 (Roll Call Vote 750) against an amendment by Rep. John Boehner (R-OH) that would have effectively lowered "loan deficiency payments" to subsidized farmers.
On July 27, 2007, the House voted 175-251 (Roll Call Vote 752) against an amendment by Rep. Mark Udall (D-CO) to reduce the direct payment rate for cotton by two-thirds of a cent.
On December 14, 2007, the Senate voted 79-14 (Roll Call Vote 434) to approve final passage of the Farm, Nutrition and Bioenergy Act of 2007. (The House version of the farm bill contained tax provisions that were unrelated to farm and trade policy, making the bill unsuitable for inclusion in this study.)
On May 14, 2008, the House voted 318-106 (Roll Call Vote 315) to agree to the conference report of the Farm, Nutrition and Bioenergy Act. On May 15, 2008, the Senate voted 81-15 (Roll Call Vote 130) to approve the same conference report.
On May 21, 2008, the House voted 316-108 (Roll Call Vote 346) to override a presidential veto of the Farm, Nutrition and Bioenergy Act. On May 22, 2008, the Senate voted 82-13 (Roll Call Vote 140) to do the same.
•General Motors and Chrysler Bailouts America's automobile market has been highly integrated in the global economy. More than half the cars bought by Americans each year are made by foreign-owned automobile companies, while most foreign-name brand cars sold here are made in foreign-owned plants located in the United States. One third of American automobile industry workers are not employed by the Big Three automakers but by affiliates of foreign-owned automakers. Federal financial support for GM and Chrysler distorts the domestic automobile market by artificially promoting production during a time when demand is slack because of the recession. Federal auto bailouts offer unfair support to two companies at the expense of foreign producers in the U.S. market. For more information on subsidies for U.S. automakers, see http://www.freetrade.org/node/917 and http://www.freetrade.org/node/425.
On December 10, 2008, the House voted 237-170 (Roll Call vote 690) in favor of the Auto Industry Financing and Restructuring Act, which would have authorized up to $14 billion in "bridge loans" to General Motors and Chrysler.
By analyzing how members of Congress voted on those major trade issues, we can determine who in the 110th Congress supported free trade and who favored government intervention. Members were deemed to exhibit a consistent pattern if they voted at least two-thirds of the time either for or against trade barriers and trade subsidies. Those who voted consistently against both trade barriers and subsidies were classified as free traders. Those who voted against trade barriers and for subsidies were classified as internationalists. Those who voted for trade barriers and against subsidies were classified as isolationists. And those who voted for trade barriers and for subsidies were classified as interventionists. Members were rated only if they participated in at least half of the surveyed votes.
Genuine free traders, according to the definition of this study, were as rare in the 110th Congress as they have been in previous congresses. Of the 429 members who voted on more than half the roll call votes identified in this study, only 15 consistently opposed both trade barriers and trade subsidies. Only 5 voted as internationalists, opposing barriers but favoring subsidies. Another 4 voted as isolationist, voting for barriers and against subsidies. Composing by far the largest category, 69 voted as interventionists, favoring both trade barriers and subsidies. The rest of the House, 338 members, had mixed voting records that did not show a consistent pattern.
Of the 15 free traders in the 110th Congress, 13 were Republicans and 2 Democrats. The most consistent free trader in the House was Jeff Flake, a four-term Republican from Arizona. Rep. Flake opposed trade barriers and trade subsidies on every vote he cast in the 110th Congress. Rejecting barriers and subsidies on every vote but two were Judy Biggert (R-IL), John Campbell (R-CA), Joseph Pitts, (R-PA), F. James Sensenbrenner Jr. (R-WI), Christopher Shays (R-CT), and Thomas Tancredo (R-CO). Other free traders were Eric Cantor (R-VA), Michael Castle (R-DE), Jim Cooper (D-TN), Vernon Ehlers (R-MI), Darrell Issa (R-CA), Daniel Lungren (R-CA), Mike Pence (R-IN), and Adam Smith (D-WA).
The five internationalist included three Republicans and two Democrats. The most consistent were Henry Cuellar and Charles Gonzalez, both Democrats from Texas. The other internationalists were John Boozman (R-AR), Kevin Brady (R-TX), and Donald Manzullo (R-IL).
The rarest birds of all in the 110th Congress, according to our methodology, were the isolationists. Only four members of the House voted consistently in favor of trade barriers and against trade subsidies: John Duncan Jr. (R-TN), Clifford Stearns (R-FL), Jane Harman (D-CA), and Virgil Goode Jr. (R-VA).
By far the largest group in the 110th Congress was the Interventionists. Among the 67 members who voted consistently to restrict and subsidize trade were 57 Democrats and 10 Republicans. The most consistent interventionists on trade was John Spratt Jr. ( D-SC), who voted in favor of trade barriers and subsidies at every opportunity. Voting as interventionists on every vote but one were Robert Aderholt (R-AL), Jason Altmire (D-PA), Phil Hare (D-IL), Walter Jones Jr. (R-NC), Jim Marshall (D-GA), Mike McIntyre (D-NC), Steven Rothman (D-NJ), Louise McIntosh Slaughter (D-NY), and Bennie Thompson (D-MS). Also among the interventionists were Peter DeFazio (D-OR) Patrick Kennedy (D-RI), Dennis Kucinich (D-OH), George Miller (D-CA), and James Oberstar (D-MN).
The freedom to trade was a contentious issue in the 110th Congress, often dividing the House along partisan lines. House Republicans voted against trade barriers 51 percent of the time compared to 41 percent on average among Democrats. The divide was deeper on trade subsidies, which Republicans voted against 48 percent of the time compared to 20 percent for Democrats.
Republicans overwhelmingly supported the trade agreement with Peru and proceeding to a vote on a similar agreement with Colombia, while Democrats narrowly opposed the Peru agreement and overwhelming opposed a vote on the Colombia agreement. A solid majority of Republicans voted to reduce agricultural "loan deficiency payments" while an even larger majority of Democrats opposed the reduction. Democrats strongly favored subsidized loans for General Motors and Chrysler, while Republicans were almost as strongly opposed. More than two-thirds of Democrats voted to expand agricultural exports to Cuba, while more than nine out of ten Republicans were opposed.
On a more bipartisan note, members of both parties voted overwhelmingly in favor of the Andean Trade Preferences Act, against defunding the Visa Waiver Program, and in favor of ending a pilot program that allowed certified Mexican trucks to deliver goods inside the United States.
Among the 98 Senators who voted on more than half the roll call votes considered in this study, 9 voted as free traders, 24 as internationalists, 2 as isolationists, and 31 as interventionists. Another 32 had mixed records that defied classification.
Of the 9 free traders in the Senate, all were Republicans. The most consistent were Robert Bennett (R-UT), Jim DeMint (R-SC), Judd Gregg (R-NH), Chuck Hagel (R-NE), and Richard Lugar (R-IN), who voted against trade barriers and subsidies at every opportunity. Also among the free traders were Pete Domenici (R-NM), Jon Kyl (R-AZ), Lisa Murkowski (R-AK), and John Sununu (R-NH).
Among the 24 internationalists in the Senate, 21 were Republicans, 2 Democrats and 1 and independent. Compiling pure voting records as internationalists were Christopher Bond (R-MO), John Cornyn (R-TX), Larry Craig (R-ID), Kay Bailey Hutchison (R-TX), Trent Lott (R-MS), Mel Martinez (R-FL), and Joseph Lieberman, an independent from Connecticut who caucuses with the Democrats. Also voting as internationalists in the 110th Congress were Mitch McConnell Jr. (R-KY), the current minority leader in the Senate, Edward Kennedy (D-MA), and Ken Salazar (D-CO).
The two isolationist senators in the 110th Congress were from the same party and the same state. Jack Reed and Sheldon Whitehouse, both Democrats from Rhode Island, voted in favor of trade barriers and against trade (read agricultural) subsidies on all seven Senate votes included in this study.
Democrats dominated the ranks of the interventionists, accounting for 30 of the 31 senators who voted consistently in favor of trade barriers and subsidies. Sixteen senators compiled perfect interventionist voting records, voting at every opportunity to maintain barriers against immigrant workers, Mexican trucks, and trade with Peru as well as subsidies for agricultural production. The senators with the most consistent interventionist records in the 110th Congress were Joseph Biden Jr. (D-DE), Barbara Boxer (D-CA), Sherrod Brown (D-OH), Robert Byrd (D-WV), Robert Casey (D-PA), Hillary Rodham Clinton (D-NY), Christopher Dodd (D-CT), Byron Dorgan (D-ND), Russell Feingold (D-WI), Tom Harkin (D-IA), Patrick Leahy (D-VT), Claire McCaskell (D-MO), Majority Leader Harry Reid (D-NV), Debbie Stabenow (D-MI), Jon Tester (D-MT), and Bernie Sanders, an independent from Vermont.
Partisan divisions in the Senate were the sharpest over trade barriers. In the four votes affecting trade barriers, Republican senators voted for lower barriers an average of 71 percent of the time compared to 26 percent among Democrats. Republicans voted for lower trade subsidies 25 percent of the time compared to only 5 percent among Democrats. Republicans were significantly more likely than Democrats to support the creation of a temporary worker program for low-skilled immigrants. Although majorities in both parties opposed continuing the pilot program that allowed certified Mexican trucks on to U.S. highways, the Republican minority in favor of the program was far larger than the paltry 4 percent of Democrats who supported it. On trade-distorting agricultural subsidies, Democrats voted almost universally in favor, while a quarter of Republicans — still a small minority by any measure — voted against the same subsidies.
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During the 109th Congress, members had numerous opportunities to vote on legislation affecting trade barriers, and five other opportunities affecting trade subsidies. In the House, this study identified 13 major bills and amendments with a direct impact on the freedom of Americans to trade with people in the rest of the world, and on 3 that directly affected the level of subsidies doled out by the federal government to promote exports or discourage imports. In the Senate, the study identified another 9 key bills and amendments that directly affected barriers to international commerce, and 2 that involved subsidies for domestic producers facing international competition.
Not all of those votes offer a pure test of support for free trade. By its nature, the legislative process produces compromise legislation that, while aimed primarily at reducing or increasing barriers or subsidies to trade, can also contain relatively minor provisions that would have an ambiguous or contrary impact on free trade.
Each of the bills, amendments and the letter described below represents a reasonably clear attempt to either expand or restrict the freedom to trade. The descriptions are not intended to provide a definitive argument for or against the legislation, but only to explain why, from a free-market perspective, the vote either hinders or promotes free trade as defined above. Where available, studies and articles are cited that provide more detailed arguments. (See Table 1 for a summary of House votes and Table 2 for a summary of Senate votes.)
•China Currency Tariff. A major criticism against U.S. trade with China is that China's pegged currency gives its exporters an "unfair" advantage in the U.S. market. In practice, China has been moving toward a more flexible currency regime while its economy continues to become more open to international trade and investment. An amendment introduced in the 109th Congress would have imposed a steep 27.5 percent tariffs on imports from China if its government does not move rapidly toward a more flexible currency. Passage of such a measure would punish millions of Americans consumers with higher prices while jeopardizing American exports to our fastest growing major export market.
On April 6, 2005, the Senate voted 33-67 (Roll Call Vote 86) to reject a motion to table (reject) an amendment by Sens. Charles Schumer (D-N.Y.) and Lindsey Graham (R-S.C.) that would have imposed steep tariffs on imports from China if its government did not reform its currency regime.
•WTO Withdrawal. The World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, have promoted global trade liberalization through successive rounds of multilateral trade negotiations. The WTO provides an institutional framework that discourages governments from backsliding on their commitments to liberalization and encourages the rule of law through impartial dispute settlement. The GATT and the WTO have facilitated lower global trade barriers against manufactured goods, contributing to a continuing increase in global trade volumes. Increased trade has helped to raise living standards in the United States and other nations that have opened themselves to the international economy. Some opponents of the WTO, while supporting free trade in general, believe the WTO is a threat to U.S. sovereignty, but the WTO possesses no authority of its own to compel members to conform to its rulings. A provision in the Uruguay Round Agreements Act, passed by Congress in 1994, guarantees opponents of the WTO an opportunity every five years to vote on a withdrawal resolution.
On June 8, 2005, the House voted 86-338 (Roll Call Vote 239) to reject H.J. Res. 27, which would have withdrawn the United States from the agreement establishing the World Trade Organization.
•Cuba Trade and Travel. The United States has maintained a comprehensive economic embargo against Cuba for more than four decades in an unsuccessful effort to oust the communist government of Fidel Castro. The 109th Congress considered legislation to loosen the embargo by granting Americans greater freedom to visit and export to Cuba. The almost total embargo has failed to achieve its policy objective of overthrowing the Cuban government or of even modifying its oppressive rule. American citizens have paid the price of that failure in lost economic freedom to trade, invest, and travel. The embargo has deprived Cuban citizens of economic opportunity while giving the Cuban government a handy excuse for the failures of its socialist economic system.
On June 29, 2005, the Senate voted 60-35 (Roll Call Vote 167) in favor of a an amendment by Sen. Byron Dorgan (D-N.D.) to the Interior Department appropriations bill to ease travel restrictions to Cuba. The motion required a two-thirds majority under suspension of the rules and thus failed to pass.
On June 30, 2005, the House voted 208-211 (Roll Call Vote 345) to reject an amendment by Rep. Jim Davis (R-FL.) that would have denied funds to the U.S. Treasury Department to enforce the ban on travel by U.S. citizens to Cuba.
On June 30, 2005, the House voted 169-250 (Roll Call Vote 348) against an amendment offered by Rep. Charles Rangel (D-NY) that would have denied funding to enforce the general economic and trade embargo against Cuba.
•Punish Companies that Incorporate "Offshore." Companies should be free to base their operations in locations that best serve their customers and shareholders, whether in the United States or in other countries. And Congress should spend taxpayer dollars wisely by awarding contracts to providers that can offer the best value for the public. Congress should not use its procurement process to punish companies that are incorporated in other countries because of differing tax systems or other legitimate business concerns. In 2005, Congress considered an amendment to prohibit use of funds in an appropriations bill "to enter into any contract with an incorporated entity where such entity's sealed bid or competitive proposal shows that such entity is incorporated or chartered in Bermuda, Barbados, the Cayman Islands, Antigua, or Panama."
On June 30, 2005, the House voted 190-231 (Roll Call Vote 351) to reject an amendment by Rep. Rosa L. DeLauro (D-CT) that would have banned the awarding of federal contracts with companies located in alleged "tax havens."
•Foreign Investment in the United States. A free and open economy should welcome foreign investment. Investment in the United States allows foreign-owned companies to serve American customers most directly, and to earn competitive returns in the world's largest market. For the U.S. economy, foreign investment means lower interest rates, creation of well-paying jobs, and the introduction of innovative technology and business practices. The 109th Congress considered legislation that would bar certain foreign investment in "sensitive" sectors such as energy, port management, and domestic airline service. The bills targeted politically sensitive investments even though the federal government already has established a process to examine and potentially block investment proposals that pose legitimate national security concerns.
On June 30, 2005, the House voted 333-92 (Roll Call Vote 353) to deny funding for executive-branch approval of the Chinese National Offshore Oil Company's proposed purchase of the U.S. oil company UNOCAL.
On March 15, 2006, the House rejected, by a vote of 38-377 (Roll Call Vote 43), an amendment that would have allowed the United Arab Emirates-based company Dubai Ports World to acquire ownership of a company that manages the operation of several U.S. ports.
On June 14, 2006, the House voted 291-137 (Roll Call Vote 283) to bar an increase in the allowable share of foreign ownership of U.S.-based airlines.
On March 16, 2006, the Senate voted 44-55 (Roll Call Vote 53) against a bill that would have mandated a study of foreign ownership of U.S. Treasury bills.
•Dominican Republic-Central American Free Trade Agreement (DR-CAFTA). DR-CAFTA eliminated or will phase out tariffs on almost all two-way trade between the United States and the Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, and Nicaragua. The agreement liberalizes a significant amount of trade and also represents an important foreign policy initiative to a group of countries that have achieved significant economic and political reforms in recent years. The 109th Congress approved DR-CAFTA, arguably the most import free trade agreement since the North American Free Trade Agreement passed Congress in 1993.
On July 28, 2005, the House voted 217-215 (Roll Call Vote 443) to approve DR-CAFTA.
On June 29, 2005, the Senate voted 61-34 (Roll Call Vote 169) in a procedural vote to limit debate on DR-CAFTA and to proceed to a final vote.
On July 28, 2005, the Senate voted 55-45 (Roll Call Vote 209) to approve final passage of the agreement.
•Protect "Trade Remedy" Laws. America's antidumping law is itself an example of "unfair trade." The law unfairly targets foreign producers for engaging in practices--price discrimination and selling at below average total cost--that are rational, routine, and perfectly legal when followed in our domestic market by U.S. companies. Antidumping duties hurt domestic consumers and downstream industries by discouraging vigorous price competition in the U.S. market. The U.S. law hurts U.S. producers as other countries increasingly follow the U.S. government's lead by turning their own antidumping laws against U.S. exports. For all those reasons, the U.S. government should seek to curb the use and abuse of antidumping laws through World Trade Organization agreements. An amendment offered in the Senate in 2005, if it had become law, would have forbid U.S. negotiators from agreeing to any reforms to U.S. anti-dumping laws in the current Doha Round.
On September 15, 2005, the Senate voted 39-60 (Roll Call Vote 232) to reject an amendment by Sen. Byron Dorgan (D-N.D.) that would have barred any changes in U.S. trade remedy law.
•U.S.-Bahrain and U.S.-Oman Free Trade Agreements. The government of Bahrain has cooperated with the United States in its efforts to combat global terrorism. It has also liberalized its economy and trade regime relative to other Middle Eastern countries. Although two-way U.S. trade the small Persian Gulf country is not significant compared to the $13 trillion U.S. economy, the FTA the U.S. government negotiated with Bahrain is an important part of the administration's effort to strengthen economic and trade ties with more moderate Middle Eastern countries. Like the U.S.-Bahrain FTA, a free-trade agreement negotiated with Oman strengthens U.S. economic and foreign-policy ties to a relatively friendly Middle Eastern country.
On December 7, 2005, the House voted 327-95 (Roll Call Vote 616) to approve the U.S.-Bahrain FTA. On December 13, 2005, the Senate approved the agreement by unanimous consent.
On July 20, 2006, the House voted 221-205 (Roll Call Vote 392) to approve the U.S.-Oman FTA. On September 19, 2006, the Senate voted 63-32 (Roll Call Vote 250) to approve the agreement.
•Restrict International Payments for Internet Gambling. Federal law selectively prohibits certain types of gambling activities. With the rise of the Internet, gambling services have become international. Global trade rules allow governments to regulate gambling, but in a way that is non-discriminatory toward foreign-based providers. The 109th Congress considered legislation that would prohibit any individual from accepting, in connection with the placing of bets or wagers to or from the United States: (1) credit, or the proceeds of credit; (2) electronic funds transfers; (3) checks, drafts, or similar instruments; or (4) the proceeds of any other form of financial transaction as prescribed by Treasury regulations and would impose fines and/or prison terms of up to five years for violations. The bill, which became law in October 2006, exempts certain domestic gambling activities and thus discriminates against foreign operations.
On July 11, 2006, the House voted 317-93 (Roll Call Vote 363) to pass the Unlawful Internet Gambling Act.
•Scan 100% of Incoming Shipping Containers. The U.S. government must protect the United States from terrorist attacks in ways that do not needlessly jeopardize the nation's economic health. An amendment to the Port Security and Improvement Act would have required that 100 percent of all shipping containers entering the United States be screened for nuclear materials within four years. The requirement would have imposed a huge cost on U.S. trade without significantly enhancing national security. Containers entering the United States already must pass through a layered security system that involves scanning, inspections and extensive cooperation with major foreign ports.
On September 14, 2006, the Senate voted 61-37 (Roll Call Vote 248) to table (reject) an amendment by Sen. Charles Schumer (D-N.Y.) to H.R. 4954 that would have required all incoming containers to be scanned within four years of passage.
•Vietnam Permanent Normal Trade Relations. Although still ruled by the Communist Party, Vietnam has rapidly liberalized its domestic economy and its trade and investment policies. As a result, it has become one of the fastest growing countries in the developing world. Vietnam reached a milestone in its reforms in 2006 when it joined the World Trade Organization. For U.S. exporters to enjoy non-discriminatory access to the Vietnamese market, the U.S. government needed to establish permanent normal trade relations with Vietnam by lifting trade restrictions imposed by the Cold War-era Jackson-Vanik amendment. The 109th Congress voted on legislation to repeal the Jackson-Vanik restrictions and grant Vietnam permanent normal trade relations.
On November 13, 2006, the House voted 228-161 (Roll Call Vote 519) in favor of a bill to extend permanent normal trade relations to Vietnam. Under expedited procedures, the bill required a two-thirds majority for passage. PNTR for Vietnam was later approved as part of the Miscellaneous Tariff Bill (see below).
•Miscellaneous Tariff Reductions and Trade Preference Extensions. The General System of Preferences (GSP) unilaterally reduces tariff barriers to imports from less developed countries, thus promoting economic growth and poverty reduction. The Andean Trade Preferences Act (ATPA) reduces tariffs on most goods imported from four South American countries--Columbia, Peru, Ecuador, and Bolivia. In the same legislative package that extended the GSP and ATPA programs, the 109th Congress considered legislation to suspend or cut duties on more than 500 products, such as chemicals and manufactured goods that are not made in the United States.
On December 8, 2006, the House voted 212-184 (Roll Call Vote 539) to approve H.R. 6406, a wide-ranging bill that included miscellaneous tariff reductions, permanent normal trade relations with Vietnam, extension of trade preferences under the GSP and the ATPA, and creation of new trade preferences for Haiti. On December 9, 2006, the Senate voted 79-9 (Roll Call Vote 279) to approve the bill.
•Eliminate Sugar Support Program. The federal sugar program benefits domestic producers through a system of subsidized price support loans and quota barriers against imported sugar. The program forces American consumers to pay prices far above those in world markets for sugar and sugar-containing products. It also hurts U.S. producers, such as bakeries and candy-makers, that use sugar in their final products. The program is a classic example of protectionism, benefiting a small group of producers at the expense of consumers and the nation's overall economic health.
On June 8, 2005, the House voted 146-280 (Roll Call Vote 234) to reject an amendment by Rep. Earl Blumenauer (D-OR) that would have reduced the sugar program.
•Market Access Program. Market Access Program funds are distributed by the U.S. Department of Agriculture to promote the sale abroad of goods containing U.S. agricultural products. Like other export subsidies, the MAP program does not promote trade in general but favors some exporters--in this case those using U.S. farm produce in their final products--over others. By doing so, the program helps to underwrite the foreign advertising and marketing costs of some of the largest U.S. multinational corporations.
On June 8, 2005, the House voted 66-356 (Roll Call Vote 235) to reject an amendment by Rep. Stephen Chabot (R-OH) that would have eliminated the Market Access Program.
•Export Financing Appropriations. Export-Import Bank Funding and Reauthorization. The Export-Import Bank provides subsidized incentives for U.S. exporters to sell in markets where competing foreign exporters are also subsidized or where the risk of nonpayment would otherwise be too high. However, most U.S. exporters who benefit from the Export-Import Bank subsidies do not face subsidized foreign competition, and nations that provide the most aggressive export subsidies do not enjoy faster export growth than nations that subsidize less. In the United States, export subsidies do not significantly expand total exports but instead shift exports toward the small percentage of U.S. companies that qualify for the subsidies. Thus the Export-Import Bank delivers no net benefit to the U.S. economy and distorts rather than promotes trade and investment.
On June 28, 2005, the House voted 393-32 (Roll Call Vote 335) in favor of H.R. 3057, the Foreign Operations and Export Financing Appropriations Bill, which includes funding for the Export-Import Bank. On November 14 2005, the House voted 358-39 (Roll Call Vote 569) to pass the final conference version of the bill.
•Byrd Amendment on Antidumping Duties. In 2000, Congress enacted the Continued Dumping and Subsidy Offset Act, which distributes antidumping duties collected by the U.S. government to the companies that filed the original antidumping petitions against their foreign competition. The so-called Byrd amendment, named after its sponsor, Sen. Robert Byrd (D-W.Va.), encourages continued abuse of America's flawed antidumping laws. It has also been found in violation of U.S. obligations in the World Trade Organization against subsidies for domestic industry. The 109th Congress voted to eliminate the law as part of a larger budget bill, but not before the Senate voted in a non-binding amendment to instruct conferees to the conference committee to keep the law intact.
On December 15, 2005, The Senate voted 71-20 (Roll Call Vote 354) to approve an amendment by Sen. Mike DeWine (R-OH) in support of the Byrd Amendment. Congress later approved elimination of the Byrd Amendment as part of S. 1932, the Deficit Reduction Omnibus Reconciliation Act of 2005.
•Strike "Emergency" Farm Spending. Congress appropriates nearly $20 billion annually to support U.S. agriculture, including direct production subsidies to dairy and grain farmers. In addition to support through the 2002 farm bill, Congress periodically appropriates "emergency" spending for specific sectors. Subsidies for farmers unfairly redistribute income, distort agricultural markets, and diminish the ability of the U.S. government to negotiation lower trade barriers abroad. In the 109th Congress, the Senate considered a modest amendment to strike a provision that provides $74.5 million to states based on their production of certain types of crops, livestock and or dairy products, which was not included in the Bush administration's emergency supplemental request.
On May 3, 2006, the Senate voted 37-61 (Roll Call Vote 108) against an amendment by Sen. John McCain (R-AZ) that would have cut $74 million in additional spending for agricultural subsidies.
The 109th Congress considered more than two dozen major bills and amendments affecting the freedom of Americans to engage in global commerce, providing ample opportunity to determine who supports free trade and who favors government intervention. Members were deemed to exhibit a consistent pattern of voting if they voted two-thirds or more of the time either for or against trade barriers and trade subsidies. Those who voted two-thirds of the time or more against both trade barriers and subsidies were classified as free traders. Those who voted two-thirds of the time against trade barriers and for subsidies were classified as internationalists. Those who voted two-thirds of the time for trade barriers and against subsidies were classified as isolationists. And those who voted two-thirds of the time for trade barriers and for subsidies were classified as interventionists.
Real free traders were a rare species in the 109th Congress. Of the 432 members who voted on more than half the roll call votes identified in this study, only thirteen consistently opposed both trade barriers and trade subsidies. Another 62 voted as internationalists, opposing barriers but favoring subsidies. A baker's dozen carried the banner of isolationist, voting for barriers and against subsidies. Another 110 House members voted as interventionists, favoring both trade barriers and subsidies. The balance of House members, 221 in total, had mixed voting records.
Of the 13 free traders, 11 were Republicans and 2 Democrats. The most consistent free trader in the House was Jeff Flake, a three-term Republican from Arizona who opposed trade barriers and trade subsidies on every vote he cast in the 109th Congress. Among the most consistent free traders were Jeb Hensarling (R-TX), Vernon Ehlers (R-MI), John Shadegg (R-AZ), and Patrick Tiberi (R-OH). Rounding out the category were Vito Fossella (R-NY), John Linder (R-GA.), James Matheson (D-UT), Jim McDermott (D-WA), Tom Petri (R-WI), Tom Price (R-GA), Jim Ramstad (R-MN), and Ernest Istook (R-OK).
Among the 62 Internationalists, 52 were Republicans and 10 Democrats. The two most consistent internationalists in the 109th Congress were Bill Thomas (R-CA) and Don Young (R-AK), who each voted against trade barriers and in favor of subsidies on every vote they cast but two. Among the internationalists were the new Republican Majority Leader John Boehner (R-OH), David Dreier (R-CA), Michael Oxley (R-OH), Vic Snyder (D-AR), William Jefferson (D-LA), Roy Blunt (R-MO), Kathryn Harris (R-FA), James Moran (D-VA), Adam Smith (D-WA) and Gregory Meeks (D-NY).
Like free traders, isolationists were another rare species. Of the 13 members who consistently favored trade barriers and opposed subsidies, 7 were Republicans and 6 Democrats. The most consistent isolationist House member in the 109th Congress was Tom Tancredo (R-CO), a four-term member who is running for the U.S. presidency. Rounding out the isolationists were John Hostettler (R-IN), John Duncan (R-TN), William Lipinski (D-IL), Christopher Smith (R-NJ), Michael Fitzpatrick (R-PA), John Tierney (D-MA), Gwen Moore (D-WI), Cynthia McKinney (D-GA), Frank LoBiondo (R-NJ), Edward Markey (D-MA), Julia Carson (D-IN), and Mark Green (R-WI).
By far the most crowded category in the 109th Congress was Interventionists. Among the 110 members who voted consistently for trade barriers and trade subsidies were 85 Democrats, 24 Republicans, and 1 independent. The most consistent interventionists in the House was Mike McIntyre (D-NC) who voted in favor of subsidies and barriers at every opportunity, followed by John Barrow (D-GA), who voted as an interventionist on every vote but one. Other interventionists include Duncan Hunter (R-CA), who is also running for president, Bernard Sanders, the independent socialist from Vermont who is now a U.S. Senator, John Spratt (D-NC), John Murtha (D-PA), Collin Peterson (D-MN), chairman of the House Agricultural Committee, Sherrod Brown (D-OH), now a U.S. Senator, Jesse Jackson Jr. (D-IL) Patrick Kennedy (D-RI, and Dennis Kucinich (D-OH) another presidential aspirant.
Free trade proved to be a partisan issue in the 109th Congress. House Republicans voted against trade barriers 54 percent of the time compared to 37 percent on average among Democrats. The divide was less sharp on trade subsidies, where Republicans voted against subsidies 24 percent of the time compared to 16 percent for Democrats. The sharpest differences were on the Dominican Republic and Central American Free Trade Agreement (DR-CAFTA), and the U.S.-Oman FTA, which Republicans supported overwhelmingly and Democrats opposed even more so. Partisan differences were also sharp on whether to curb federal contracts with offshore companies, and whether to bar opening U.S. airlines to greater foreign investment, with Republicans favoring lower barriers to trade and investment.
On Cuba, the partisan divide was equally wide, but the two parties changed places: Democrats overwhelming favored lower barriers to trade with the communist-run island nation on the two votes included in this study, while Republicans strongly favored keeping the almost five-decade-old trade embargo in place. Solid bipartisan majorities in both parties favored keeping price supports in place for the domestic sugar industry.
Among the 99 Senators who voted on more than half the roll call votes considered in this study, 18 voted as free traders, 21 as internationalists, none as isolationists, and 26 as interventionists. Another 34 had mixed records that defied classification.
All 18 free traders were Republicans. The most consistent were Jim DeMint (R-SC), Chuck Hagel (R-NE), John Kyl (R-AZ), Richard Lugar (R-IN), and John McCain (R-AZ), who voted against trade barriers and subsidies at every opportunity. Also among the free traders were Mitch McConnell (R-KY), now the GOP minority leader, William Frist (R-TN), former majority leader, and Sam Brownback (R-KS), who along with John McCain is seeking the U.S. presidency.
Among the 21 internationalists in the Senate, 16 were Republicans and 5 Democrats. Robert Bennett (R-UT) compiled the purest voting record in the category, opposing trade barriers and favoring subsidies at every opportunity. Voting as internationalists on every vote but one were Maria Cantwell (D-WA), Thad Cochran (R-MS), Kay Bailey Hutchison (R-TX), Trent Lott (R-MS), Patty Murray (D-WA), Gordon Smith (R-OR), Ted Stevens (R-AK), Norm Coleman (R-MN), and Mel Martinez (R-FL). Also among the internationalists was Max Baucus (D-MT), chairman of the Senate Finance Committee.
Just as Republicans dominated the free trader and internationalists categories, Democrats dominated the interventionists, where all 26 were members of the party. The senators with the most interventionist voting records were Frank Lautenberg (D-NJ), who voted in favor of trade barriers and subsidies at every opportunity, and the current Senate majority leader Harry Reid (D-NV) and Joseph Biden (D-DE), another presidential candidate, who each voted as interventionists on every vote but one. Other prominent interventionists in the previous Congress were Hillary Rodham Clinton (D-NY), John Kerry (D-MA), Charles Schumer (D-NY), Evan Bayh (D-IN), presidential primary candidate Christopher Dodd (D-CT), Robert Byrd (D-WV), and Byron Dorgan (D-ND).
Partisan divisions over trade were even deeper in the Senate than in the House during the 109th Congress. On the nine votes affecting trade barriers, Republican senators voted for lower barriers 79 percent of the time compared to 37 percent among Democrats. Republicans voted for lower trade subsidies 50 percent of the time compared to only 6 percent among Democrats. The sharpest divisions were over a study of foreign ownership of U.S. debt, 100 percent scanning of incoming containers, and the U.S.-Oman FTA, where large majorities of Republicans voted against barriers and large majorities of Democrats voted in favor. On allowing Americans to travel freely to Cuba, the parties reversed their roles, with 91 percent of Democrats favoring greater freedom from barriers compared to a majority of Republicans who opposed.
Permanent URL: http://www.freetrade.org/congress?tab=108th | Printer-friendly version
During the 108th Congress, members had numerous opportunities to vote to reduce trade barriers but only two opportunities to reduce trade subsidies. In the House, members voted on 11 bills and amendments with a direct impact on the freedom of Americans to trade with people in the rest of the world, and one amendment directly affected the level of subsidies doled out by the federal government to promote exports. In the Senate, this study identified 10 key bills and amendments that directly affected barriers to international commerce and one "vote" (a signed letter) that involved subsidies for domestic producers facing international competition.
Not all of those votes offer a pure test of support for free trade. By its nature, the legislative process produces compromise legislation that, while aimed primarily at reducing or increasing barriers or subsidies to trade, can also contain relatively minor provisions that would have an ambiguous or contrary impact on free trade.
Each of the bills and amendments and the letter described below represents a reasonably clear attempt to either expand or restrict the freedom to trade. The descriptions are not intended to provide a definitive argument for or against the legislation; their intent is only to explain why, from a free-market perspective, the vote either hinders or promotes free trade as defined above. Where available, studies and articles providing more detailed arguments have been cited. To further illustrate congressional attitudes toward trade barriers and subsidies, some comments made by members of Congress during floor debates appear in the accompanying boxes.
•Miscellaneous Tariff Reductions and Laos NTR. The Miscellaneous Trade and Technical Corrections Act of 2004 is the kind of unilateral free trade Congress should practice more often. It suspends duties on hundreds of specific imported goods, including chemicals and dyes, textile machinery, railway passenger cars, and "a replica of the Liberty Bell imported from the Whitechapel Bell Foundry of London, England, by the Liberty Memorial Association of Green Bay and Brown County, Wisconsin," while refunding duties paid on certain previously imported goods. It also establishes "normal trade relations" with Laos, allowing imports from that small Southeast Asian country to enter the United States under the same duties that apply to all but two other countries.5
On March 5, 2003, the House voted 415 to 11 (Roll Call Vote 45) to pass the Miscellaneous Trade and Technical Corrections Act. On November 19, 2004, the Senate approved a final version of the bill by a vote of 88 to 5 (Roll Call Vote 214).
•Computer Export Controls. Since 1998 Congress has imposed export controls on so-called supercomputers, defined as those that process above a certain speed, measured in millions of theoretical operations per second (MTOPS). An amendment was offered in the House that would have made it easier for the administration to raise the MTOPS ceiling to reflect the ever-changing definition of a supercomputer. Industry critics of the existing rules claim that the limits are too restrictive and succeed only at hindering U.S. computer exports to countries such as China. Meanwhile, the controls do nothing to protect our national security because computing power has become such a low-cost commodity in the global economy.
On May 22, 2003, the House voted 207 to 217 (Roll Call Vote 219) to reject an amendment by Reps. David Dreier (R-CA) and Zoe Lofgren (D-CA) that would have relaxed restrictions on computer exports and directed the administration to find an alternative to using MTOPS as the criterion.
•Urge EU to End GMO Ban. For several years, the European Union has enforced an almost total ban on the importation of genetically modified foods (also known as genetically modified organisms, or GMOs). The EU justifies the ban on food safety grounds, even though GMO products grown and exported by American farmers have proven to be perfectly safe for human consumption and indeed have been consumed in the United States for a decade or more with no negative effects on public health. The EU's restrictions of GMOs hurt U.S. farm exporters and arguably violate World Trade Organization agreements that prohibit members from using food safety rules as disguised trade barriers. The United States has filed a case in the WTO against the EU's restrictions on GMOs.6
On July 10, 2003, the House voted 339 to 80 (Roll Call Vote 256) in favor of a resolution urging the Bush administration to challenge the EU's trade-distorting restrictions on agricultural and food biotechnology.
•Burma Trade Sanctions. The government of Burma is one of the most politically and economically oppressive regimes in the world. It has harassed, jailed, and killed political opponents and kept the country largely isolated from the world economy. To express its opposition to human rights abuses in Burma, the 108th U.S. Congress overwhelmingly approved targeted sanctions against Burma's rulers and a virtual ban on imports from Burma to the United States. Although well-meant, such sanctions seldom work. In fact, their impact will fall most heavily on the people we are trying to help by depriving them of what limited opportunity they may have had to earn higher wages by exporting to global markets or working for foreign-owned companies that typically pay higher wages and offer better working conditions. As oppressive as the current Burmese regime is, it poses no direct security threat to the United States. A better approach to promoting human rights in such countries as Cuba, China, and Burma would be to encourage more trade and economic liberalization.7
On July 15, 2003, the House voted 418 to 2 (Roll Call Vote 361) to approve the Burmese Freedom and Democracy Act of 2003, which, among other things, prohibits the importation of any Burmese products to the United States. The next day, on July 16, 2003, the Senate voted 94 to 1 (Roll Call Vote 280) to pass the same bill.
•Chile FTA. The U.S.-Chile free-trade agreement eliminates barriers to trade between the two countries, covering 87 percent of trade upon its implementation in 2004 and remaining goods during phase-in periods ranging up to 12 years. The agreement breaks new ground in opening up opportunities for U.S. service exports such as telecommunications, engineering, express delivery, and retailing. The U.S. - Chile FTA recognizes Chile's aggressive trade and economic reforms of recent decades, which have transformed it into Latin America's most stable and prosperous economy while strengthening its democracy.8
On July 24, 2003, the House voted 270 to 156 (Roll Call Vote 436) in favor of the United States–Chile Free Trade Agreement Implementation Act. On July 31, 2003, the Senate voted 65 to 32 (Roll Call Vote 319) in favor of the agreement.
•Singapore FTA. The U.S.-Singapore free trade agreement establishes free trade between our two countries by virtually eliminating remaining barriers to trade in goods and services upon implementation in 2004. Exceptions are imports to the United States of beef, dairy products, and sugar, and those barriers are phased out in 10 years. The agreement should please those who demand "a level playing field," with Singapore agreeing to eliminate every one of its remaining barriers to U.S. goods "on the date this Agreement enters into force." The agreement also contains strong protections for the $30 billion of U.S. direct investment in the Southeast Asian city-state, which is already one of the world's most open and prosperous nations.9
On July 24, 2003, the House voted 272 to 155 (Roll Call Vote 432) to approve the United States–Singapore Free Trade Agreement Implementation Act. On July 31, 2003, the Senate concurred by a vote of 66 to 32 (Roll Call Vote 318).
•Cuba Travel and Remittances. The United States has maintained a comprehensive economic embargo against Cuba for more than four decades in an unsuccessful effort to oust the communist government of Fidel Castro. The 108th Congress considered legislation to loosen the embargo by granting Americans greater freedom to visit and to send remittances to Cuba. The almost total embargo has failed to achieve its policy objective of overthrowing the Cuban government or of even modifying its oppressive rule. American citizens have paid the price of that failure in lost economic freedom to trade, invest, and travel. The embargo has deprived Cuban citizens of economic opportunity while giving the Cuban government a handy excuse for the failures of its socialist economic system.10
On September 9, 2003, the House voted 227 to 188 (Roll Call Vote 483) in favor of an amendment by Rep. Jeff Flake (R-AZ) that would prohibit the use of funds by the U.S. Department of the Treasury to enforce the ban that prevents U.S. citizens from traveling freely to Cuba. That same day, the House voted 222 to 196 (Roll Call Vote 484) in favor of an amendment by William Delahunt (D-MA) that would prohibit Treasury from using funds to enforce restrictions on how much money Americans can send through remittances to nationals of Cuba or Cuban households. On October 23, 2003, the Senate voted 36 to 59 (Roll Call Vote 405) against a motion to table (i.e., kill) an amendment by Sen. Byron Dorgan (D-ND) that would have prohibited funds from being used to enforce the travel ban to Cuba.
•Country-of-Origin Labeling. The 2002 farm bill required that a country-of-origin label (COOL) be stamped on meat, fish, peanuts, and produce imports starting in the fall of 2004. Implementation of the requirement was suspended by Congress because of concerns that it is really a disguised form of protectionism. Such labeling adds regulatory costs that do nothing to protect consumer health and safety and thus unnecessarily raise the cost of food for American families. This provision of the law will make it more difficult for the United States to resist demands by the European Union that all genetically modified organism products from the United States be labeled, even though such products have been proven safe in study after study. Mandating country-of-origin labeling unnecessarily interferes with trade, leading the world in a direction that will harm the American farmer.11
On November 6, 2003, the Senate voted 36 to 58 (Roll Call 443) against a motion to table an amendment by Sen. Tom Daschle (D-SD) that directed Senate conferees to reject any limits on the use of funds to implement COOL requirements for imported meat or meat products. A vote in favor of the motion to table the amendment was in effect a vote against country-of-origin labeling.
•Foreign Outsourcing Restrictions. A new trade issue before the 108th Congress was "foreign outsourcing"—the importation of services to the United States or the relocation of production facilities from the United States to other countries. Two attempts were made in the U.S. Senate to curb outsourcing. One was an amendment by Sen. Christopher Dodd (DCT) to forbid certain agencies of the federal government from contracting for services with companies that would provide the work from overseas. Another was an amendment by Sen. Byron Dorgan (D-ND) to raise taxes on U.S. companies that produce goods abroad for sale in the United States and would require companies to notify employees and the Department of Labor when jobs will be moved offshore, including the number of jobs affected, the destination of the relocated production, and reasons for the relocation.12
On March 4, 2004, the Senate voted 70 to 26 (Roll Call Vote 32) to approve the Dodd amendment to restrict certain federal agencies from outsourcing certain kinds of work. On May 5, 2004, the Senate voted 60 to 39 (Roll Call Vote 83) to table the Dorgan amendment that would have discouraged private-sector outsourcing.
•Australia FTA. The U.S.-Australia free-trade agreement will eventually eliminate barriers to almost all trade between the two developed countries. The agreement eliminates barriers to trade in industrial products and commercial services. It immediately eliminates or phases out protection of politically sensitive agricultural products, with the glaring exception of Australian sugar imports to the United States, which will continue to be restricted by quota. The agreement also cements U.S. ties to an important ally in the war against international terrorism.13
On July 14, 2004, the House voted 314 to 109 (Roll Call Vote 375) to approve the United States–Australia Free Trade Agreement Implementation Act. On July 15, 2004, the Senate voted 80 to 16 (Roll Call Vote 156) to approve the bill.
•Morocco FTA. The U.S.-Morocco free-trade agreement reduces tariffs and other trade barriers between the two countries beginning on January 1, 2005. More than 95 percent of bilateral trade will become duty-free upon implementation, and protection of other, more politically sensitive items will be phased out during the next nine years. Although the FTA will have minimal impact on the U.S. economy, it serves an important foreign policy interest by encourage more economic openness and reform in a moderate Muslim-majority country.14
On July 21, 2004, the Senate voted 85 to 13 (Roll Call Vote 159) to approve the United States–Morocco Free Trade Agreement Implementation Act. On July 22, 2004, the House voted 323 to 99 (Roll Call Vote 413) to approve the same act.
•Foreign-Born Doctors. Many rural areas in the United States lack an adequate number of physicians to serve the health care needs of residents. Through various visa programs, including programs that encourage those doctors to practice in "underserved" rural areas, Congress has allowed qualified foreign-born doctors to practice in the United States. By allowing Americans to import the medical services of qualified foreign doctors, the program helps to provide more affordable and readily available health care in the United States.
On November 17, 2004, the House voted 407 to 4 (Roll Call Vote 533) in favor of a motion by Rep. James Sensenbrenner (R-WI) to provide a two-year extension of a program that allows foreign nationals who graduate from medical school in the United States to stay in the country if they agree to practice medicine for three years in specified, mostly rural areas.
•Byrd Amendment on Antidumping Duties. In 2000 Congress enacted the Continued Dumping and Subsidy Offset Act, which distributes antidumping duties collected by the U.S. government to the companies that filed the original antidumping petitions against their foreign competition. The so-called Byrd amendment, named after its sponsor, Sen. Robert Byrd (D-WV), encourages continued abuse of America's flawed antidumping laws. It has also been found in violation of U.S. obligations in the World Trade Organization to curb subsidies for domestic industry.15 On February 3, 2003, 70 members of the U.S. Senate signed a letter declaring that they would oppose any efforts to repeal the Byrd amendment. Although the letter does not represent a formal vote in favor of the Byrd amendment, signing it does represent support for a law that promotes unfair barriers to trade and subsidies U.S. companies that compete in global markets.
•Market Access Program Limits. Market Access Program funds are distributed by the U.S. Department of Agriculture to promote the sale abroad of goods containing U.S. agricultural products. Like other export subsidies, the MAP program does not promote trade in general but favors some exporters—in this case those using U.S. farm produce in their final products—over others. By doing so, the program helps to underwrite the foreign advertising and marketing costs of some of the largest U.S. multinational corporations.
On July 13, 2004, the House rejected, by a vote of 72 to 347 (Roll Call Vote 368), an amendment by Rep. Steve Chabot (R-OH) that would have amended the Agriculture Department and Rural Development Appropriations bill for fiscal year 2005 to prohibit federal funds from being used to carry out activities in the Market Access Program.
The 108th Congress provided ample opportunities for members of the House and Senate to either oppose or support trade barriers. Unfortunately, there was only one clear opportunity in each chamber to oppose or support trade subsidies. Although more votes are preferable to fewer when categorizing members, the one vote does provide at least an imperfect indicator of who is more favorable toward the broader definition of free trade articulated in this study.
Members were deemed to exhibit a consistent pattern of voting if they voted two-thirds or more of the time either for or against trade barriers and trade subsidies. Those who voted two-thirds of the time or more against both trade barriers and subsidies were classified as free traders. Those who voted two-thirds of the time against trade barriers and for subsidies were classified as internationalists. Those who voted two thirds of the time for trade barriers and against subsidies were classified as isolationists. And those who voted two-thirds of the time for trade barriers and for subsidies were classified as interventionists.
As in previous Congresses, only a small minority of House members voted as free traders. Of the 432 House members of the 108th Congress who voted on at least half of the bills or amendments rated in this study, 25 voted consistently to reduce trade barriers and trade subsidies. Another 157, by far the largest category, voted as internationalists, consistently opposing trade barriers but supporting trade subsidies. Only 2 voted consistently as isolationists, favoring trade barriers and opposing subsidies. Another 16 voted as interventionists, consistently supporting trade barriers and subsidies.16
Of the 25 free traders, 22 were Republicans and 3 were Democrats. The only House member to vote against subsides and barriers at every opportunity was Rep. Jeff Flake, a second-term Republican from Arizona. Voting for free trade on every vote but one were Reps. Michael Castle (R-DE), Susan Davis (D-CA), Vernon Ehlers (R-MI), Jim Ramstad (R-MN), Christopher Shays (R-CT), Chris Van Hollen (D-MD), Donald Manzullo (R-IL), Vito Fossella (R-NY), and Mark Udall (D-CO). Among the other free traders was House Majority Leader Tom DeLay (R-TX).
Of the 157 internationalists in the House, 84 were Republicans and 73 were Democrats. Rep. Nancy Johnson (R-CT) voted against trade barriers and for subsidies in every vote she cast. Another 53 members voted as internationalists on every vote they cast but one. Among the higher-profile internationalists in the 108th Congress were Minority Leader Nancy Pelosi (D-CA), Minority Whip Steny Hoyer (D-MD), ranking Ways and Means Committee member Charles Rangel (D-NY), Reps. Cal Dooley (D-CA),William Jefferson (D-LA), the late Robert Matsui (D-CA), Jim Kolbe (R-AZ),Ray LaHood (R-IL),Phil Crane (R-IL), David Dreier (R-CA), Katherine Harris (R-FL), and Michael Oxley (R-OH).
The two House isolationists in the 108th Congress were both Democrats from New Jersey, Reps. Robert Andrews and Bill Pascrell.
Of the 16 interventionists, 10 were Democrats, 5 were Republicans, and 1, Bernard Sanders of Vermont, was an Independent. The two most consistent interventionists were Wilson Goode (RVA) and Walter Jones (R-NC), who voted to support trade barriers and subsidies with every vote they cast but one. The other interventionists were Robert Aderholt (R-AL),Corrine Brown (D-FL), Gene Green (D-TX), Alcee Hastings (D-FL), Robin Hayes (R-NC), Gerald Kleczka (D-WI), William Lipinski (D-IL), Frank Pallone (D-NJ), Steven Rothman (D-NJ), Pete Stark (D-CA), Charles Taylor (R-NC), Nydia Velazquez (DNY), and Lynn Woolsey (D-CA). (See Appendix A for a full list of members in each of the four categories.)
The partisan divide in the House on trade was noticeably smaller in the 108th Congress than in the previous Congress. On the 11 votes affecting trade barriers, House Republicans voted for lower barriers 67 percent of the time and Democrats 62 percent of the time (Table 1).That compares with a 60 to 43 percent divide in the 107th Congress. On the one vote on a trade subsidy, the Market Access Program, small minorities in both parties— 28 percent of Republicans and 6 percent of Democrats—voted against the subsidy.
The closeness of the overall averages hides sharp divisions on particular trade votes. On both the Chile and Singapore free-trade agreements, about 88 percent of House Republicans voted for lower trade barriers compared with 37 percent of Democrats. The division on the Australia and Morocco FTAs was less stark but still significant, with about 90 percent of Republicans supporting those agreements and 60 percent of Democrats. The difference was equally wide, but in the opposite direction, on commercial ties with Cuba. About 90 percent of Democrats in the House voted to effectively lift restrictions on traveling and sending remittances to Cuba, while three-quarters or more of Republicans voted to keep the restrictions in place. (See Appendix B for a complete list of House members and their individual votes.)
Of the 99 senators who voted on more than half of the measures rated in this study, 24 voted as free traders in the 108th Congress. They consistently opposed trade barriers while withholding their endorsement of trade subsidies by not signing the Byrd amendment letter. Another quarter voted as internationalists, opposing trade barriers but supporting the trade subsidy. And 15 voted as interventionists, supporting both trade barriers and subsidies. None voted as an isolationist.17
Of the quarter of the Senate that voted as free traders, 22 were Republicans and 2 were Democrats. The most consistent was Sen. John Sununu (R-NH), who voted against trade barriers and subsidies on every vote he cast. Opposing barriers and subsidies on every vote but one were Sens. Wayne Allard (R-CO), Sam Brownback (R-KS), and Pat Roberts (RKS). Among the other free traders were Senate Majority Leader Bill Frist (R-TN), Sens. John McCain (R-AZ), Chuck Hagel (R-NE), Lincoln Chafee (R-RI), and Maria Cantwell and Patty Murray, both Democrats from Washington State. Of the 24 internationalists, 15 were Republicans and 9 were Democrats. The purest of the subspecies were Sens. Robert Bennett (RUT), Ben Nighthorse Campbell (R-CO), and Michael Enzi (R-WY), who voted against trade barriers and for subsidies on every vote they cast but one. Voting as internationalists on every vote but two were Thad Cochran (R-MS), John Warner (R-VA), Mark Pryor (D-AR), Conrad Burns (R-MT), John Breaux (D-LA), and Zell Miller (D-GA). Also among the internationalists were Sens. Max Baucus (D-MT), the ranking minority member on the trade-law-writing Finance Committee, and former presidential candidate Joe Lieberman (D-CT).
Of the 15 interventionists, 13 were Democrats and 2 were Republicans. The most consistent were Harry Reid (D-NV), the new Senate minority leader; Robert Byrd (D-WV); Russ Feingold (DWI); and John Edwards (D-NC), last year's Democratic vice presidential nominee. Each of them supported trade barriers and subsidies on every vote they cast but one. Among the other interventionists were Byron Dorgan (D-ND), Tom Harkin (D-IA), Richard Shelby (R-AL), Lindsey Graham (R-SC), and now-retired Ernest "Fritz" Hollings (D-SC). (See Appendix C for a complete list of Senate members.)
Voting on trade was even more partisan in the Senate than in the House. On average, Republican senators voted against trade barriers 71 percent of the time compared with 46 percent for Democrats, while 53 percent of Republicans opposed the subsidies contained in the Byrd amendment compared with only 6 percent of Democrats (Table 2). The differences were especially wide on the Singapore and Chile free-trade agreements, the Byrd amendment letter, country-of-origin labeling, and foreign outsourcing, where Republicans were far more likely to oppose trade barriers or subsidies, and travel to Cuba, where it was the Democrats who were far more likely to oppose barriers. (See Appendix D for a complete list of senators and their individual votes.)
This is the fourth Congress that has been examined according to the Cato Institute's free trade matrix.18 Combining the votes from all four studies plus three other major trade votes allows us to discern which members of Congress have displayed a consistent voting pattern over a period spanning more than a decade. This and the previous three studies have analyzed the 105th through the 108th Congresses, covering the years 1997 through 2004. In addition, the combined analysis also includes House and Senate votes in 1993 on the North American Free Trade Agreement; in 1994 on the Uruguay Round Agreements Act that established the World Trade Organization; and in 1996 on the so-called Freedom to Farm Act, which, temporarily at least, reduced U.S. agricultural subsidies. In all, we can identify 38 trade barrier votes in the House during that period and 18 trade subsidy votes. In the Senate during that same period, we can identify 38 trade barrier votes and 9 trade subsidy votes.
The combined ratings include all members of the 108th Congress who also cast votes in the same chamber in a previous Congress. This survey of a decade of votes includes 380 House members and 90 senators.
In the House, 11 members, all Republicans, voted consistently as free traders in all the votes included in this analysis since 1993. The most consistent free trader was Jeff Flake (AZ), who opposed trade barriers in 95 percent of votes he cast and subsidies in 100 percent of his votes. The other free traders during that time were John Shadegg (AZ), Philip Crane (IL), Charles Bass (NH), James Ramstad (MN), Jim DeMint (SC), Thomas Petri (WI), Patrick Toomey (PA), John Linder (GA), and Nick Smith (MI). (See Appendix E for a complete list of House member ratings since 1993.)
In the Senate, as in the House, 11 Republican members voted consistently as free traders during that time span. The most consistent free trader was Don Nickles (OK), who opposed trade barriers in 89 percent of votes he cast and subsidies in 100 percent of his votes. The other free traders in the Senate during that time were Lincoln Chafee (RI), Sam Brownback (KS), John Ensign (NV), Richard Lugar (IN), Jon Kyl (AZ),Wayne Allard (CO), George Voinovich (OH), John McCain (AZ), Judd Gregg (NH), and Mike DeWine (OH). (See Appendix F for a complete listing of Senate member ratings since 1993.)
Another 107 House members voted consistently as internationalists during the past decade, 66 Republicans and 41 Democrats. The most consistent internationalists were John Boozman (R-AR), Thomas Osborne (R-NE), Samuel Graves (R-MO),Timothy Johnson (RIL), Charles Gonzales (D-TX), Baron Hill (DIN), Heather Wilson (R-NM), Ruben Hinojosa (D-TX), and Cal Dooley (D-CA). In the Senate, 15 members voted consistently as internationalists in the past decade, 10 Democrats and 5 Republicans. The truest to form were Zell Miller (D-GA), Mary Landrieu (D-LA), John Breaux (D-LA), and Max Baucus (D-MT), who almost always voted against trade barriers and in favor of trade subsidies. Other notable career internationalists were former presidential candidates John Kerry (D-MA) and Joseph Lieberman (D-CT).
A small band of 5 House members, 4 Republicans and 1 Democrat, voted consistently as isolationists during the past decade. They were John Duncan Jr. (R-TN), Dana Rohrabacher (R-CA), Frank LoBiondo (R-NJ), Clifford Stearns (R-FL), and Robert Andrews (D-NJ). Only 2 senators, Jon Corzine (D-NJ) and Russ Feingold (D-WI), consistently favored trade barriers and opposed subsidies.
Gathered in the opposite corner from the free traders were 24 career interventionists in the House, 16 Democrats and 8 Republicans. The most consistent interventionist in the past decade was now-retired House Minority Leader Richard Gephardt (D-MO), who voted against trade barriers on 20 percent of the votes he cast and against trade subsidies on 12 percent. Joining Gephardt among the more hard-core career interventionists were Charles Taylor (R-NC), Gene Green (DTX), Don Young (R-AK), Eliot Engel (D-NY), Dale Kildee (D-MI), Alcee Hastings (D-FL), and Corrine Brown (D-FL).Other career interventionists in the House were Jesse Jackson Jr. (D-IL), David Obey (D-WI), Ileana Ros-Lehtinen (R-FL), Patrick Kennedy (D-RI), and John Spratt (D-SC).
In the Senate, all 7 career interventionists were Democrats. The most unwavering among them was now-retired Ernest "Fritz" Hollings (SC), who opposed trade barriers 16 percent and trade subsidies 22 percent of the time. The others were the new Senate Minority Leader Harry Reid (NV), former vice presidential nominee John Edwards (NC), Byron Dorgan (ND), Patrick Leahy (VT), Robert Byrd (WV), and Mark Dayton (MN).
Judging from the findings of this study, changes in Congress brought about by the November 2, 2004, elections do not signal a sharp change in the direction of U.S. trade policy. Because Republican members are more likely to vote for lower trade barriers and subsidies, the strengthened GOP majorities in the House and the Senate likely portend a Congress that will be slightly more friendly to free trade.
In the House, 41 members of the 108th Congress will not be returning for the 109th. Deciphering what impact the new members will have on trade policy is a challenge in part because newly elected House members typically have no previous record of voting on trade issues. As a group, the 41 departed House members were somewhat more likely to have voted against trade barriers than returning members and slightly less likely to have opposed trade subsidies. But any net effect on Congress as a whole will depend, of course, on how their replacements vote on trade issues.
Among the more notable departures regarding trade policy were those of Reps. Cal Dooley (D-CA), a leading internationalist among the Democrats; former minority leader Richard Gephardt (D-MO), a leading interventionist; and Reps. Phil Crane (R-IL) and Patrick Toomey (R-PA), who were among the most consistent free traders.
The only significant leadership change in the House affecting trade will be the chairmanship of the Ways and Means Subcommittee on Trade, where Rep. Clay Shaw (R-FL) has replaced Rep. Phil Crane, who was defeated for reelection. During his 35 years in the House, Crane compiled one of the most consistent records for opposing both trade barriers and subsidies. In the major trade votes of the past decade, Crane opposed trade barriers 79 percent of the time compared with Shaw's 68 percent, and he opposed trade subsidies 82 percent of the time compared with Shaw's 39 percent. (See Appendix E for the combined ratings.)
The tea leaves are somewhat easier to read in the Senate, where 6 of the 9 new senators compiled voting records on trade in the House. The sharpest difference between an outgoing and incoming senator is in South Carolina. There, Jim DeMint (R), who compiled one of the most consistent free-trade records during his six years in the House (1999–2005), has replaced Ernest "Fritz" Hollings (D), who in his years in the Senate compiled one of the most consistent interventionist records. In North Carolina, Richard Burr (R), who had an inconsistent record as a House member, has replaced John Edwards, a consistent interventionist. In Oklahoma, Tom Coburn (R), who compiled a consistent record as an isolationist in the House, has replaced Don Nickles, a leading free trader.
Another significant change occurred in South Dakota. There, John Thune (R), a consistent internationalist during his time in the House, replaced Minority Leader Tom Daschle (D), who was somewhat more inclined to support trade barriers and subsidies during his time in Congress. As a consequence of that switch, the Democratic Party now has a new minority leader in the Senate, Harry Reid of Nevada, who has compiled a consistently interventionist record. In the past decade, Reid has voted for lower trade barriers 24 percent of the time compared with Daschle's 63 percent. That could signal that Reid will be less inclined philosophically to cooperate on trade liberalization with Republicans than was Daschle during his time in leadership.
In Georgia, retiring internationalist Zell Miller (D) has been replaced by Johnny Isakson (R), who also compiled an internationalist record during his time in the House. The same was true in Louisiana, where the retiring John Breaux (D) has been replaced by former House member David Vitter (R).
None of the other three new senators—Ken Salazar (D-CO), Mel Martinez (R-FL), and Barack Obama (D-IL)—has served in Congress previously, and thus those three have no voting record on trade issues. Statements on trade during the 2004 campaign are inconclusive. For example, Salazar told the United Stock Growers of America: "I am a strong proponent of free trade, but we must implement appropriate safeguards for agriculture, labor, and conservation interests. I would carefully consider all agreements before casting my vote." He also declared his support for the World Trade Organization as "essential to the current system of international trade."19 The senator Salazar has replaced, Ben Nighthorse Campbell (R), compiled an inconsistent record, opposing trade barriers on 46 percent of votes in the past decade and opposing trade subsidies on 44 percent of votes.
Mel Martinez also sounded the "I favor free trade, but . . ." theme in his campaign. On his official website he declared: "I support free trade measures that will create more jobs and provide new economic opportunities for Florida's workers. Trade must also be fair so that Florida's businesses and workers can compete on a level playing field in the global market." In pursuing free trade, he said Congress must "stand up" for such Florida farm sectors as sugar, citrus, and vegetables.20 The senator he has replaced, Bob Graham (D), was a borderline internationalist, opposing barriers on 64 percent of his votes and subsidies on 33 percent.
Barack Obama sounded less friendly toward free trade during his campaign than either Martinez or Salazar. While declaring that "free trade—when also fair—can benefit workers in rich and poor countries alike," Obama criticized the North American Free Trade Agreement with Mexico for lacking necessary "worker and environmental protections." He favors a "significant renegotiation" of both NAFTA and presidential trade promotion authority.21 Regarding trade with China, Obama believes the United States "should insist on labor standards and human rights" when negotiating on bilateral trade issues but that we should also avoid "triggering a trade war" that could cause instability in the Chinese economy with global economic consequences.22 Of the campaign positions of the three new senators who had not previously served in Congress, those of Obama stand in the sharpest contrast to the senator he replaced. During his one term in the Senate (1999–2005), Peter Fitzgerald (R) was a borderline free trader, opposing trade barriers 88 percent of the time and trade subsidies 60 percent of the time.
When examined individually and as a whole, changes in the 109th Congress point toward a continuation of the status quo in congressional attitudes toward free trade.
Creating a free and vibrant market for international trade requires more than eliminating tariff and nontariff barriers. It requires the elimination of export and production subsidies that distort trade, draw resources away from their best use, and leave the United States and its trading partners worse off.
Measured by this more comprehensive definition of free trade, the 108th Congress was a mixed success. On the positive side of the ledger, the House and the Senate enacted several modest but significant trade bills, including free-trade agreements with Chile, Singapore, Australia, and Morocco. Congress also passed a bill that unilaterally reduced tariffs on a grab bag of miscellaneous products. And in the category of the dog that didn't bark, Congress refrained from passing any bills that raised trade barriers or subsidies in a significant way.
On the negative side, the 108th Congress made no progress in reducing trade subsidies. Spending on the Export-Import Bank, OPIC, the IMF, and agricultural subsidies all escaped congressional scrutiny. Billions in trade subsidies continued to flow undisturbed. The House resoundingly defeated a motion to cut the Market Access Program, and 70 senators pledged to oppose any cuts in the direct producer subsidies doled out through the WTO illegal Byrd amendment. While a majority in Congress hesitates to impose sweeping new trade barriers, it does not hesitate to distort U.S. trade with a plethora of subsidies.
Members of Congress on both sides of the aisle should consider the cost of pursuing such an incoherent policy on trade. One cost is a tarnished U.S. image abroad. The lack of commitment in practice to free trade stands in contrast to the pronouncements members frequently make that they support the goal of free trade. America's political leaders complain incessantly that U.S. producers must compete in a world of "unfair" trade barriers and subsidies, while the U.S. market is open. But this study shows that very few members of Congress vote consistently for policies that would create an international market free of both distorting barriers and subsidies. Judging by the voting behavior analyzed in this study, most members of the U.S. Congress have no standing to criticize other governments for deviating from free trade.
Another cost is to U.S. taxpayers. Trade barriers rob Americans of income through higher prices. Trade subsidies rob Americans by driving up the cost of government, necessitating higher taxes or more government borrowing, or both. As Congress searches for ways to restrain spending and bring down a fiscal deficit that exceeded $400 billion last year, trade subsidies should provide an inviting target. Congress can save billions of dollars each year, remove distortions from the international economy, and improve America's image abroad.
Members of Congress who want to advance the cause of limited government, economic liberty, and prosperity at home and abroad should favor a consistent agenda of eliminating trade barriers and trade-related subsidies. Both protectionism and subsidies undermine the workings of the free market, substituting the judgment of politicians for that of millions of informed citizens cooperating in the international marketplace for mutual advantage.
When weighing policy toward the international economy, members of Congress do not need to choose between anti-trade, anti-subsidy isolationism and pro-trade, pro-subsidy internationalism. They can choose to vote for a coherent program to liberalize trade and eliminate subsidies—in sum, to let Americans enjoy the freedom and prosperity of a seamless free market undistorted by government intervention.
Trade Policy Analysis No. 28 (PDF)
Permanent URL: http://www.freetrade.org/congress?tab=107th | Printer-friendly version
During the 107th Congress, members had numerous opportunities to vote to reduce trade barriers and subsidies. In the House, members voted on 11 major bills and amendments with a direct impact on the freedom of Americans to trade with people in the rest of the world, and another 7 measures directly affected the level of subsidies doled out by the federal government to promote exports and subsidize domestic production. In the Senate, this study identified eight key bills and amendments that directly affected barriers to international commerce and another four that involved subsidies for domestic producers facing international competition.
Not all of those votes offer a pure test of support for free trade. By its nature, the legislative process produces compromise legislation that more closely resembles the proverbial sausages made of meat and meat byproducts than pure cuts of filet mignon. The process can produce bills that, while aimed primarily at reducing barriers or subsidies to trade, can also contain relatively minor provisions that would have an ambiguous or negative impact on free trade.
Each of the bills and amendments described below represents a reasonably clear attempt to either expand or restrict freedom to trade without the distortion of barriers or subsidies. The descriptions are intended, not to provide a definitive argument for or against the legislation, but only to explain why, from a free market perspective, the vote either hinders or promotes free trade as defined above. Where available, studies and articles providing more detailed arguments have been cited. To further illustrate congressional attitudes toward trade barriers and subsidies, some of the descriptions are accompanied by comments made by members of Congress during floor debates.
•Mexican Trucks on U.S. Roads. In the North American Free Trade Agreement signed a decade ago, the United States and Mexico agreed to open their markets to cross-border trucking, but the Clinton administration refused to implement the provision, citing alleged safety concerns. Since 1980 Mexican trucks have been banned from entering the United States, and U.S. trucks have been banned from Mexico. Despite the allegations of the Teamsters Union and other opponents, lifting the ban would not prevent the U.S. government from imposing the same, or even more restrictive, safety rules on Mexican trucks that are imposed on U.S. trucks. With 86 percent of U.S.-Mexican trade carried by truck, the ban was not only discriminatory against Mexican trucking but also imposed a regulatory tax on U.S.-Mexican trade.6
Both the House and the Senate voted on amendments regarding discrimination against Mexican trucks. On June 26, 2001, the House voted 285-143 (House Roll Call 193) in favor of an amendment sponsored by Martin Sabo (D-Minn.) "to prohibit use of funds to process applications by Mexico-domiciled motor carriers for conditional or permanent authority to operate beyond the United States municipalities and commercial zones adjacent to the United States-Mexico border." On July 27, 2001, the Senate voted 57-34 (Senate Roll Call 254) to table, or kill, an amendment by Sen. John McCain (R-Ariz.) that would have required that Mexican trucks be regulated the same as Canadian trucks, which are allowed to travel on U.S. highways. (See excerpts of the congressional debate in the following box.)
•Normal Trade Relations with China. Before China officially joined the World Trade Organization in December 2001, its trade status with the United States was subject to annual review under the Jackson-Vanik amendment to the Trade Act of 1974. Under that law, which was repealed for China with its entry into the WTO, the U.S. president needed to issue a waiver for Chinese goods to enter the United States under the normal tariff schedule. Without normal trade relations (NTR) with China, Americans would face drastically higher tariffs on most imports from China, raising the cost of living for millions of American families that benefit from goods imported from China. Those higher trade barriers would also have invited retaliation against American goods sold in China and would have set back efforts to raise the living standards and enhance the autonomy and human rights of Chinese citizens.7 Under the old rules, Congress could override the presidential waiver and revoke NTR with China by a two-thirds vote in both chambers.
On July 19, 2001, the House rejected H.J.R. 50, a motion to override the presidential waiver and repeal NTR status for China, by a vote of 169-259 (House Roll Call 255).
•Normal Trade Relations with Vietnam. After years of socialist isolation, the government of Vietnam has been gradually liberalizing and opening its economy. In 2000 the United States and Vietnam signed a bilateral trade agreement that guarantees U.S. exporters nondiscriminatory access to Vietnam's 80 million consumers. In return, the United States must grant Vietnam's exporters NTR, that is, the same access to the U.S. market that we extend to all but a handful of other nations. But because Vietnam is a communist country, the president must first grant it a waiver from the Cold War–era Jackson-Vanik amendment. If Congress were to override the waiver, NTR with Vietnam would be revoked, resulting in dramatically higher tariffs on imports from Vietnam. Thus a vote to override the presidential waiver would be a vote to impose high and discriminatory tariffs against imports from Vietnam. (The waiver also allows U.S. exporters to Vietnam to qualify for government subsidies through the Export-Import Bank, but those subsidies—as economically flawed as they are—are available for exports to virtually every other country with which the United States has established NTR. Those subsidies do not provide a justification for rejecting normal trade with Vietnam any more than they would justify the raising of tariffs against other nations where Export-Import Bank financing is available.)
On October 3, 2001, the Senate voted 88-12 (Senate Roll Call 291) to approve the presidential waiver of the Jackson-Vanik amendment for Vietnam. On July 23, 2002, the House voted 91-338 (House Roll Call 329) against a motion to disapprove the extension of NTR to Vietnam. A vote for the motion was a vote against NTR with Vietnam and for higher tariffs. (See excerpts of the congressional debate in the preceding box.)
•Country-of-Origin Labeling. The new farm bill will require that the country of origin be stamped on meat, fish, peanuts, and produce imports starting in the fall of 2004. This may sound like innocent consumer information, but it is really a disguised form of protectionism. It is an added regulatory cost that will do nothing to protect consumer health and safety and will raise the cost of food for American families. This provision of the law will make it more difficult for the United States to resist demands by the European Union that all genetically modified organism products from the United States be labeled, even though such products have been proven safe in study after study.8 Mandating country-of-origin labeling unnecessarily interferes with trade, leading the world in a direction that will harm the American farmer.
On October 4, 2001, the House voted 296-121 (House Roll Call 370) in favor of an amendment to require country-of origin labeling of perishable agricultural commodities by September 30, 2004.
•Antidumping Reform. America's antidumping law is itself an example of "unfair trade." The law unfairly targets foreign producers for engaging in practices—price discrimination and selling at below average total cost—that are rational, routine, and perfectly legal when followed in our domestic market by U.S. companies.9 Antidumping duties hurt domestic consumers and downstream industries by discouraging vigorous price competition in the U.S. market. The U.S. law hurts U.S. producers as other countries increasingly follow the U.S. government's lead by turning their own antidumping laws against U.S. exports.10 For all those reasons, the U.S. government should seek to curb the use and abuse of antidumping laws through World Trade Organization agreements.11 But the House and the Senate both voted by large margins in the 107th Congress to limit the ability of the administration to seek reform of U.S. antidumping law.
On November 7, 2001, as WTO members were about to meet in Doha, Qatar, to launch a new round of trade negotiations, the House voted 410-4 (House Roll Call 432) for a resolution stating that the president "should preserve the ability of the US to enforce its trade laws" while ensuring that "U.S. exports are not subject to the abusive use of trade laws by other countries." Although the resolution was correct to point out foreign abuses of antidumping law, it expressed reluctance to tackle similar abuses of U.S. law. On May 14, 2002, the Senate rejected 38-61 (Senate Roll Call 110) a motion to table the so-called Dayton-Craig amendment, which would have required a separate vote on any trade agreement provisions that would limit U.S. antidumping law. The amendment, which was eventually dropped in conference committee, would have radically compromised the president's ability to negotiate international curbs on the use and abuse of protectionist antidumping laws. On May 22, 2002, the Senate voted 60-38 (Senate Roll Call 123) to table an amendment that would have barred the negotiation of tariff reductions on imports that face antidumping or countervailing duties. The amendment, if enacted, would have unfairly punished U.S. consumers and foreign producers twice, first by imposing unfair antidumping duties and then by barring the reduction of statutory trade barriers on products targeted for antidumping and countervailing duties.
•Andean Trade Preference Act. This act allows imports from Columbia, Peru, Ecuador, and Bolivia to enter the United States at reduced tariff rates. In the version of the bill that came before the House in November 2001, those benefits were expanded to grant duty-free, quota-free access for textile and apparel imports from the Andean countries and to lower barriers further for imports from 24 Caribbean countries and 22 Sub-Saharan African countries.
On November 16, 2001, the House rejected 168-250 (House Roll Call 447) a motion to "recommit" the act back to committee with instructions to remove the additional tariff reductions from the bill. A vote for the motion was a vote for higher trade barriers.
•Trade Promotion Authority. Trade promotion authority (TPA), formerly called "fast track," commits Congress to vote up or down without amendment on trade agreements negotiated by the executive branch. Without TPA, which every president since Gerald Ford has been given, foreign governments would be reluctant to negotiate with the U.S. government knowing that Congress could pick apart any final agreement. While TPA itself does not lower trade barriers, it facilitates agreements in the WTO and elsewhere to lower barriers at home and abroad.12
On December 6, 2001, the House voted 215-214 (House Roll Call 481) to approve the House version of TPA. On July 26, 2002, the House voted 215-212 (House Roll Call 370) to approve the conference committee version of TPA contained in the Andean Trade Preference Act. On May 23, 2002, the Senate voted 66-30 (Senate Roll Call 130) to approve its version of TPA. On August 1, 2002, the Senate voted 64-34 (Senate Roll Call 207) to approve the final conference committee version of the Trade Act of 2002. (See excerpts of the congressional debate in the following box.)
•Labor Standards and Human Rights. One of the major debates in trade policy today concerns efforts to precondition access to the U.S. market on whether a foreign nation meets labor, environmental, and human rights standards as determined by the United States or international organizations. Advocates argue that such linkage is necessary to promote U.S. values abroad and to protect the rights of workers around the world. But officials from less-developed countries are rightly suspicious that those standards could be easily abused to impose trade barriers against the very goods their countries are most competitive at producing. Free trade is not in fundamental conflict with human rights and higher labor and environmental standards. In reality, by promoting economic development and a freer flow of ideas and people, sustained trade liberalization is typically associated with democratization and higher labor and environmental standards.13 To oppose linkage is not to put trade above other important values but to recognize that economic freedom complements both material development and a broad range of civil and political freedoms.
During its debate on TPA in May 2002, the Senate considered a series of amendments that would have placed various conditions on future agreements to lower trade barriers. On May 15, 2002, the Senate voted 54-44 (Senate Roll Call 112) to table an amendment offered by Sen. Joe Lieberman (D-Conn.) that would have authorized the imposition of sanctions against poor countries that seek to gain trade advantages by failing to enforce their domestic labor laws. On May 23, 2002, the Senate rejected, by a 42-53 vote (Senate Roll Call 129), a motion to table an amendment by Sen. Paul Wellstone (D-Minn.) to require that agreements covered by TPA promote human rights and democracy by including provisions that would require parties to those agreements "to strive to protect internationally recognized civil, political, and human rights." (See excerpts of the congressional debate in the following box.)
•Foreign-Born Doctors. Many rural areas in the United States lack an adequate number of physicians to serve the health care needs of residents. Under the J-1 visa program, qualified foreign-born doctors are allowed to practice in rural communities for two-year periods. In 2002 Congress considered a bill to expand the number of individual physicians that can be admitted under the state version of the program from 20 a year to 30 a year to meet the needs of rural communities across the country. By allowing Americans to "import" the medical services of qualified foreign doctors, the program helps to provide more affordable health care.
On June 25, 2002, the House voted 407-7 (House Roll Call Vote 254) to approve an extension and expansion of a bill to improve access to physicians in medically underserved areas by increasing the number of visas issued to foreign-born doctors.
•Cuba Trade and Travel. The United States has maintained a comprehensive economic embargo against Cuba for four decades in an unsuccessful effort to oust the communist government of Fidel Castro. The 107th Congress considered legislation to loosen the embargo by granting Americans greater freedom to trade with and travel to Cuba. The almost total embargo has failed to achieve its policy objective of overthrowing the Cuban government or of even modifying its oppressive rule. American citizens have paid the price of that failure in lost economic freedom to trade, invest, and travel. The embargo has deprived Cuban citizens of economic opportunity while giving the Cuban government a handy excuse for the failures of its socialist economic system.14
On July 23, 2002, the House approved an amendment 262-167 (House Roll Call 331) to repeal funding for enforcement of the travel ban to Cuba. A vote for the amendment was in effect a vote to repeal the travel ban. Later that day, the House voted 204-226 (House Roll Call Vote 333) against an amendment that would have denied funds to enforce any provision of the embargo. A vote for that amendment was in effect a vote to repeal the embargo entirely. (See excerpts of the congressional debate in the following box.)
Members of the 107th Congress had several opportunities to vote to cut subsidies for trade and domestic production of tradable goods. The bills and amendments determined funding for the Export-Import Bank; subsidies for sugar, wool, and mohair; and the colossal and trade-distorting Farm Security and Rural Investment Act of 2002.
•Wool and Mohair Subsidies. The federal government began subsidizing wool and mohair production in the 1930s out of concern that sufficient supplies be available to outfit American soldiers. That national security rationale, if it ever applied, has long since vanished with the development of synthetic fibers. Nonetheless, the U.S. government continues to subsidize production at a cost to taxpayers of $20 million per year. While not a direct trade barrier, the subsidy distorts trade by artificially stimulating domestic production and discouraging wool and mohair imports from countries where production costs are lower.
On July 11, 2001, the House voted 155-272 (House Roll Call 219) against an amendment by Rep. Anthony Weiner (D-N.Y.) that would have prohibited use of funds in the fiscal year 2002 Agriculture appropriations bill for payments to producers of wool or mohair for the 2000 and 2001 marketing years.
•Export-Import Bank Funding and Reauthorization. The Export-Import Bank provides subsidized incentives for U.S. exporters to sell in markets where competing foreign exporters are also subsidized or where the risk of nonpayment would otherwise be too high. However, most U.S. exporters who benefit from the Export-Import Bank subsidies do not face subsidized foreign competition, and nations that provide the most aggressive export subsidies do not enjoy faster export growth than nations that subsidize less. In the United States, export subsidies do not significantly expand total exports but instead shift exports toward the small percentage of U.S. companies that qualify for the subsidies.15 Thus the Export-Import Bank delivers no net benefit to the U.S. economy and distorts rather than promotes trade and investment.
On July 24, 2001, the House voted 47-375 (House Roll Call 261) against an amendment by Rep. Ron Paul (R-Tex.) to strike the entire Export-Import Bank subsidy appropriation with associated funding of $753 million from the Foreign Operations and Export Financing Appropriations bill. On June 5, 2002, the House voted 344-78 (House Roll Call 210) to reauthorize the Export-Import Bank through fiscal year 2006. The Senate reauthorized the Export-Import Bank by voice vote on June 6, 2002. (See excerpts of the congressional debate in the following box.)
•2002 Farm Bill. The Agriculture, Conservation, and Rural Enhancement Act of 2002 authorized farm programs that will cost U.S. taxpayers an estimated $170 billion during the next decade. While the bill does not directly raise trade barriers against agricultural imports, it does provide massive subsidies for the domestic production of corn, sorghum, barley, oats, wheat, soybeans, oilseeds, cotton, and rice. Those subsidies promote overproduction in the domestic U.S. market, driving down global prices and distorting global agricultural trade.16 The farm bill undercuts U.S. leadership in global agricultural trade talks at the WTO, complicating the task of reducing still-high trade barriers abroad to U.S. farm exports.
On October 3, 2001, the House voted 187-238 (House Roll Call 365) to reject an amendment by Rep. Nick Smith (R-Mich.) that would have cut subsidy payments by $1.3 billion a year by placing a cap on the amount of subsidy payments that could be made to individual farms in a given year. On February 7, 2002, the Senate voted 31-66 (Senate Roll Call 18) against a motion to table a similar amendment offered by Sen. Byron Dorgan (D-N.D.). On October 5, 2001, the House voted 291-120 (House Roll Call 371) in favor of its version of the farm bill, the Farm Security Act. On May 2, 2002, the House voted 280-141 (House Roll Call 123) to approve the final conference committee version of the Farm Security Act. On February 13, 2002, the Senate voted 58-40 (Senate Roll Call 30) to approve its version of the 2002 farm bill. On May 8, 2002, the Senate voted 64-35 (Senate Roll Call 103) in favor of the final version of the bill.
•Sugar Subsidies. The federal sugar program benefits domestic producers through a system of subsidized price support loans and quota barriers against imported sugar. The program forces American consumers to pay prices far above those in world markets for sugar and sugar-containing products.17 According to the U.S. General Accounting Office, the sugar program costs America's sugar-consuming families as much as $1.9 billion a year in higher real prices.18 The program is a classic example of protectionism, benefiting a small group of producers at the expense of consumers and the nation's overall economic health.
On October 4, 2001, the House voted 177- 239 (House Roll Call 367) to reject an amendment by Rep. Dan Miller (R-Fla.) that sought to reduce the sugar loan rates by 1 cent, increase the forfeiture penalty by 1 cent, and authorize the use of program savings for conservation and environmental stewardship programs to enhance the Florida Everglades ecosystem that has been damaged by intensified cane farming in the region. On December 12, 2001, the Senate voted 71-29 (Senate Roll Call 364) to table an amendment by Sen. Judd Gregg (R-N.H.) to phase out the sugar program by fiscal year 2006 and use the savings to fund nutrition programs.
The 107th Congress cast a large enough number of votes on trade barriers and subsidies to provide ample material for judging the performance of Congress and its individual members. Members were deemed to exhibit a consistent pattern of voting if they voted two-thirds or more of the time for or against trade barriers or trade subsidies. Those who voted two-thirds of the time or more against both trade barriers and subsidies were classified as free traders. Those who voted two-thirds of the time against trade barriers and for subsidies were classified as internationalists. Those who voted two-thirds of the time for trade barriers and against subsidies were classified as isolationists. And those who voted two-thirds of the time for trade barriers and for subsidies were classified as interventionists.
Of the 432 members who voted on more than half of the issues rated in this study, a mere 15 voted as free traders, consistently opposing trade barriers and trade subsidies. Another 70 members, the largest category, voted as internationalists, opposing trade barriers and favoring subsidies. At the opposite corner of the matrix in Figure 1 were 9 members who voted as isolationists, consistently favoring trade barriers while opposing subsidies. Another 36 members voted as interventionists, consistently favoring barriers and subsidies. The balance of House members had mixed voting records.19
Of the 15 free traders, 14 were Republicans and 1 was a Democrat. The most consistent of the free traders was Jeff Flake, a freshman Republican from Arizona, who voted against barriers and subsidies on every vote he cast but one. Charles Bass (R-N.H.) voted for free trade on every vote but two; and Richard Armey (R-Tex.), Judy Biggert (R-Ill.), Phil Crane (R Ill.), Jim Ramstad (R-Minn.), and John Sununu (R-N.H.) voted for free trade on every vote but three. The other free traders were Thomas Petri (R-Wis.), Jim DeMint (R-S.C.), Nancy Johnson (R-Conn.), Jim Moran (D-Va.), Constance Morella (R-Md.), Christopher Shays (R-Conn.), Pat Toomey (R-Pa.), and the new House majority leader, Tom DeLay (R-Tex.).
Republicans also dominated the internationalists, outnumbering Democrats by 58 to 12. The purest internationalists in their voting were Samuel Graves (R-Mo.), Ruben Hinojosa (D-Tex.), and Tom Osborne (R-Neb.), who voted against trade barriers and in favor of subsidies on every vote they cast but one. Voting as internationalists on every vote but two were Ken Bentsen (D-Tex.), Sonny Callahan (R-Ala.), Jo Ann Emerson (R-Mo.), Greg Ganske (R-Iowa),Wayne Gilchrest (R-Md.), Timothy Johnson (R-Ill.),Tom Latham (R-Iowa), George Nethercutt (R-Wash.), Jim Nussle (R-Iowa), Dennis Rehberg (R-Mont.), Charlie Stenholm (D-Tex.), John Tanner (D-Tenn.), William "Mac" Thornberry (R-Tex.), and Heather Wilson (R-N.Mex.) Also among the internationalists was Roy Blunt (R-Mo.), the new House majority whip.
Six isolationists were Republicans and three were Democrats. The most consistent in voting as an isolationist was John Duncan Jr. (R-Tenn.), who voted in favor of trade barriers and against subsidies on every vote he cast but one. Voting as isolationists on every vote but three were Frank LoBiondo (R-N.J.) and Dana Rohrbacher (R-Calif.). Voting as isolationists on every vote but four were Bob Andrews (D-N.J.), Bob Barr (R-Ga.), and Cliff Stearns (R-Fla.).
Democrats dominated the interventionists, outnumbering Republicans 24 to 12. The purist of the interventionists, voting for trade barriers and subsidies on every vote but two, were Charlie Norwood (R-Ga.), Gene Green (D- Tex.), James Traficant (D-Ohio), Corrine Brown (D-Fla.), Alcee Hastings (D-Fla.), and Patrick Kennedy (D-R.I.). Voting as interventionists on every vote but three were Lindsey Graham (R-S.C.), now in the U.S. Senate, Charles Taylor (R-N.C.), Carrie Meek (D-Fla.), Eliot Engel (D-N.Y.), Ileana Ros-Lehtinen (R-Fla.), Peter Visclosky (D-Ind.), Robert Wexler (D-Fla.), Sheila Jackson-Lee (D-Tex.), Mike McIntyre (D-N.C.), Michael Ross (D-Ark.), John Spratt Jr. (D-S.C.), and Walter Jones (R-N.C.). Other interventionists include the former and new Democratic minority leaders, Richard Gephardt (D-Mo.) and Nancy Pelosi (D-Calif.). (See Appendix A for a list of members in each of the four categories.)
Party affiliation mattered greatly when House members voted on trade. Republicans were far more likely to oppose trade barriers than were Democrats, although support for subsidies was about the same in both parties. On average, Republicans in the House opposed trade barriers on 60 percent of votes compared to 43 percent for Democrats. Republicans opposed subsidies on 31 percent of votes compared to a nearly identical 30 percent for Democrats. Even when controlling for years in office and region of the country represented, party affiliation was a strong factor in how members voted on trade barriers. A Republican House member was 15 percentage points more likely to vote against trade barriers than was a Democrat with the same seniority from the same region of the country.20
Partisan differences were starkest on lifting the ban against Mexican trucks on U.S. roads, with 62 percent of Republicans in favor and only 4 percent of Democrats; TPA was favored by almost 90 percent of Republicans and 12 percent of Democrats; and an amendment to end the embargo against Cuba was supported by 83 percent of Democrats but only 14 percent of Republicans. On subsidies, Republicans were far more likely to favor the end of funding for the Export-Import Bank—19 percent of Republicans favored that option vs. a minuscule 3 percent of Democrats—while Democrats were twice as likely to favor capping farm subsidy payments. (See Table 1.)
Years in office matter, too, although not as much as party affiliation. Members elected in 1996 or more recently were more inclined to oppose trade barriers than were those elected before then but were slightly more inclined to favor subsidies. Regression analysis reveals that, controlling for party affiliation and region of the country, a member's opposition to trade barriers declined by about 3 percentage points per decade served. Members from the Midwest, Southwest, Plains, and Pacific Coast were significantly more inclined to oppose trade barriers than were members from other regions, even after controlling for party affiliation and years in office, while those from the Midwest, Plains, South, and Southwest were significantly less inclined to oppose trade subsidies than were members from other parts of the country.21 (See Appendix B for a complete list of House members and their votes.)
Of the 99 Senators rated in this study, 22 voted as free traders, 12 as internationalists, 2 as isolationists, and 22 as interventionists. The other 41 senators had mixed voting records.22
All of those categorized as free traders were Republicans. Those with perfect free trader voting records were Sam Brownback (R-Kans.), Mike DeWine (R-Ohio), Phil Gramm (R-Tex.), Richard Lugar (R-Ind.), John McCain (R-Ariz.), Don Nickles (R-Okla.), Rick Santorum (R-Pa.), and Fred Thompson (R-Tenn.). Voting as free traders on every vote but one were Lincoln Chafee (R-R.I.), John Ensign (R-Nev.), Judd Gregg (R-N.H.), Chuck Hagel (R-Neb.), Jon Kyl (R-Ariz.), Mitch McConnell (R-Ky.), Pat Roberts (R-Kans.), Craig Thomas (R-Wyo.), and George Voinovich (R-Ohio).
The parties were more evenly represented among the internationalists, with seven Republicans and five Democrats. Compiling a perfect score in this category was Zell Miller (D-Ga.), who voted against trade barriers and in favor of subsidies on every vote he cast. Voting as internationalists on every vote but one were John Breaux (D-La.), Max Baucus (D-Mont.), Christopher "Kit" Bond (R-Mo.), and James Inhofe (R-Okla.).
The only two senators to vote as isolationists were both Democrats, Jon Corzine (D-N.J.) and Russell Feingold (D-Wis.). All of the 22 senators categorized as interventionists were Democrats. Those with the most consistent voting records were Ernest "Fritz" Hollings (D-S.C.), Jean Carnahan (D-Mo.), Daniel Akaka (D-Hawaii), Robert Byrd (D-W.Va.), and Patrick Leahy (D-Vt.), who voted as interventionists on all but one vote. Among the more well-known senators in this category were John Edwards (D-N.C.), considered a potential candidate for president in 2004,Deputy Minority Leader Harry Reid (D-Nev.), Hillary Rodham Clinton (D-N.Y.), and the late Paul Wellstone (D-Minn.). (See Appendix C for a list of senators in each of the four categories.)
The Senate was even more sharply divided along party lines than the House. Republican senators in the 107th Congress voted against trade barriers an average of 86 percent of the time compared to a 31 percent average for Democrats. Republicans voted against trade subsidies 62 percent of the time compared to 26 percent for Democrats. When controlling for years in office and region represented, party affiliation remained a potent factor. A Republican was 51 percentage points more likely to oppose trade barriers than was a Democrat with the same seniority from the same region and 39 percentage points more likely to vote against trade subsidies.23
The votes that most sharply divided the parties were to allow Mexican trucks on U.S. roads, to bar tariff reductions for products facing antidumping duties, and amendments to condition trade liberalization on foreign labor and human rights standards, with Republicans more likely to favor lower barriers by margins that exceeded 75 percentage points. The one trade barrier vote where Democrats were more inclined to support lower trade barriers was to grant normal trade relations to Vietnam. (See Table 2.)
One explanation for the partisan divide on trade could be the narrow majority held by the Democrats during the last 18 months of the 107th Congress, which put a premium on party discipline in voting and raised the political stakes in anticipation of the 2002 elections. An additional explanation could be that Republican senators were more inclined to support the trade-promoting initiatives of a president of their own party and Democrats more inclined to oppose them for the opposite reason, exacerbating ideological differences between the two caucuses.
Regional affiliation mattered far less in predicting how a senator would vote, and years in office mattered not at all. Controlling for party affiliation and years in office, senators from the South and Southwest regions were significantly more inclined to vote against trade barriers, and those from the South more inclined to vote for subsidies than were senators from other regions. The popularity of the farm bill among Southern constituencies probably accounts for much of the support for subsidies among southern senators, although senators from the Midwest and Plains regions were more successful in resisting constituent pressure for subsidies than were their counterparts in the House. (See Appendix D for a complete list of senators and their votes.)
The most profound change in the 108th Congress toward trade will be the switch of Senate control from Democrats to Republicans. Given the sharp differences in how members of the two parties voted in the last Congress, Republican control of the leadership offices and committee chairmanships should make a noticeable difference in how the Senate handles both trade barrier and subsidy issues. Votes cast in the 107th Congress indicate that the new Senate should be more hospitable to a free trader agenda to lower barriers and subsidies.
At the top, the new Senate majority leader, Bill Frist (R-Tenn.), leans toward internationalist in his voting record. In the last three Congresses, he has compiled a nearly perfect record of opposing trade barriers, but he has also voted frequently in favor of trade subsidies. In 1997 he voted against a cut in funding for the Overseas Private Investment Corporation, and in 1998 he voted in favor of $18 billion in additional funding for the International Monetary Fund. In 2002 he voted for the final version of the trade-distorting farm bill and against an amendment to limit farm subsidy payments. The Democratic minority leader, Tom Daschle (D-S.D.), had voted consistently against trade barriers in the 105th and 106th Congresses but became much more inclined to support barriers in the politically charged 107th Congress. Trent Lott (R-Miss.), the former Republican leader, has voted consistently as an internationalist.
The change of chairman of the Senate Finance Committee may not make as dramatic a difference as party differences would indicate. Former chairman and ranking Democrat Max Baucus (D-Mont.) has compiled a solid internationalist voting record. He and the new chairman, Chuck Grassley (R-Iowa), both vote consistently against trade barriers, although Baucus is more inclined to support trade subsidies.
The turnover of individual senators also points to a more trade-friendly chamber. The 10 senators who retired or were defeated for reelection were as a group less inclined to oppose trade barriers than the senators who remained in Congress (51 vs. 58 percent), although they were slightly more inclined to oppose trade subsidies (45 vs. 43 percent). The Senate lost some of its most consistent opponents of lower trade barriers, such as Paul Wellstone, Robert Torricelli, Jesse Helms, and Jean Carnahan. Of the new senators with congressional voting records, Jim Talent (R-Mo.) voted as a free trader in the 105th Congress and as an internationalist in the 106th, in contrast to Carnahan's solid interventionist record in the 107th. John Sununu (R-N.H.) voted as a free trader in each of the last three Congresses, in contrast to the generally isolationist record of the Republican he replaced, Bob Smith. Former and new Sen. Frank Lautenberg (D-N.J.) was significantly more inclined to oppose trade barriers in previous ratings than was the senator he replaced, Robert Torricelli (D-N.J.). New Sen. Lindsey Graham (R-S.C.) has compiled an interventionist voting record similar to that of the now retired Strom Thurmond (R-S.C.), and, in the House, Saxby Chambliss (R-Ga.) compiled a record that was mixed on trade barriers and prosubsidy, broadly comparable to that of the senator he defeated, Max Cleland (D-Ga.).
In the House, a slightly larger Republican majority means no wholesale change in committee chairs, but both parties will see significant turnover in leadership. New House Majority Leader Tom Delay (R-Tex.) has consistently opposed trade barriers, but his record on trade subsidies is mixed. He voted as a free trader in the 107th Congress and as an internationalist in the 106th. Dick Armey (R-Tex.), the former majority leader, voted as a free trader in all three previous Congresses. Roy Blunt (R-Mo.), the new majority whip, has voted as an internationalist. The one trade-barrier issue on which DeLay and Blunt deviate from free trade is the Cuban embargo and travel ban. They sharply differ with each other on trade subsidies, with DeLay consistently voting against them and Blunt voting just as consistently in favor.
Changes in the Democratic leadership could portend a slight shift away from its hard-line interventionist pattern of the past. Nancy Pelosi (D-Calif.), the new minority leader, has been more inclined than former leader Richard Gephardt (D-Mo.) to oppose trade barriers, although her record in the 107th Congress still qualified her as an interventionist. In contrast to Gephardt, she voted for the Africa Growth and Opportunity Act in the 106th Congress and for defunding the Cuban embargo and travel ban in the 106th and 107th, although she voted against normal trade relations with Vietnam while Gephardt voted in favor. Similarly, Steny Hoyer (D-Md.), the new minority whip, has been more inclined to oppose trade barriers than the retired whip David Bonior (D-Mich.), who was one of the most reliable votes in the House against lowering trade barriers. Specifically, Hoyer differed from Bonior on trade with Cuba and Vietnam.
Unlike the Senate, there is virtually no difference in the House between the average voting record of the outgoing members and that of returning members. Among the 50 members of the 107th Congress who did not return to the 108th, the average support for lower trade barriers was 49 percent vs. 51 percent for returning members, and on trade subsidies it was an even less significant 30 percent vs. 31 percent.
On the basis of past trade votes and changes wrought by the 2002 election, the 108th Congress should be more hospitable to lowering trade barriers but no more so toward lowering trade subsidies. Congress remains sharply divided along partisan lines on trade barrier issues, but there are indications that House Democrats may be ready to reduce that gap. Unfortunately, members of both parties are equally reluctant to oppose trade subsidies, and the retirement of Dick Armey deprives the Republican leadership of one of its most principled advocates of trade free of subsidies and barriers.
Creating a free and vibrant market for international trade is about more than eliminating tariff and nontariff barriers. It requires the elimination of export and production subsidies that distort trade, draw resources away from their best use, and leave the United States and its trading partners worse off. Weighed on the scale of a more comprehensive definition of free trade, the 107th Congress was found wanting.
A minority of House and Senate members voted consistently in the 107th Congress to reduce either barriers or subsidies to trade, but only a handful voted consistently to do both. While Republicans are more likely to vote against barriers than are Democrats, they are just as prone as Democrats to favor subsidies. As long as so many members of both parties continue to support trade-distorting subsidies, free traders will be rare.
The 107th Congress did manage to enact trade promotion authority, a key piece of legislation that will enable the president to negotiate agreements in the future to lower trade barriers, bilaterally, regionally, and globally through the WTO. But TPA was achieved only after sharp partisan debate and amid setbacks on antidumping reform, Cuban trade and travel, and Mexican trucks. On trade subsidies, the 107th Congress was an unmitigated disaster. Congress approved the huge farm bill, continuing sugar, wool and mohair subsidies, and export subsidies through the Export-Import Bank.
The lack of commitment in practice to free trade stands in contrast to the pronouncements members frequently make that they support the goal of free trade. America's political leaders complain incessantly that U.S. producers must compete in a world of "unfair" trade barriers and subsidies, while the U.S. market is open. But this study shows that very few members of Congress vote consistently for policies that would create an international market free of those distorting barriers and subsidies. Judging by the voting behavior analyzed in this study, most members of the U.S. Congress have no standing to criticize other governments for deviating from free trade.
Members of Congress who want to advance the cause of limited government, economic liberty, and national prosperity at home and abroad should favor a consistent agenda of eliminating trade barriers and trade-related subsidies. Both protectionism and subsidies undermine the workings of the free market, substituting the judgment of politicians for that of millions of informed citizens cooperating in the international marketplace for mutual advantage.
When weighing policy toward the international economy, members of Congress do not need to choose between anti-trade, anti-subsidy isolationism and pro-trade, pro-subsidy internationalism. They can choose to vote for a coherent program to liberalize trade and eliminate subsidies—in sum, to let Americans enjoy the freedom and prosperity of a seamless free market undistorted by government intervention.
Trade Policy Analysis No. 22 (PDF)
Permanent URL: http://www.freetrade.org/congress?tab=106th | Printer-friendly version
The 106th Congress offered numerous opportunities for members to vote to reduce trade barriers and subsidies. In the House, members voted on nine major bills and amendments with a direct impact on the freedom of Americans to trade with people in the rest of the world. Another five measures voted on in the House directly affected the level of subsidies doled out by the federal government to promote exports and underwrite international investment. In the Senate, this study identified 15 representative votes on bills and amendments that directly affected barriers to international commerce. Unfortunately, no votes were offered in the Senate to cut obvious subsidies to international trade and investment.
Few of these votes offer a pure test of support for free trade. By its nature, the legislative process produces compromise, resulting in legislation that can be aimed primarily at reducing barriers and subsidies to trade but can also contain provisions that would have an ambiguous or negative impact on free trade. Each of the bills and amendments described below represents a reasonably clear attempt to either expand or restrict the freedom to trade without the distortion of barriers or subsidies. To further illustrate congressional attitudes toward trade barriers and subsidies, some of the descriptions include comments made by members during floor debate.
•Steel Quotas. After intense lobbying by the domestic steel industry and its unions, the House voted on March 17, 1999, for a bill that would enact sweeping quotas against imported steel. H.R. 975 would have directed the president, within 60 days of enactment, to curb the monthly volume of steel imports into the United States to a level not to exceed the average of monthly import volumes during the three years preceding July 1997. Under the legislation, imports would be cut by imposing a combination of quotas, tariff surcharges, and negotiated export restraints. The bill would have required the secretary of commerce to establish a program within 30 days that would require any person importing steel products to obtain an import notification certification before bringing any steel products into the United States. Steel quotas would have drastically cut the availability of foreign-made steel in the U.S. market, driving up prices, raising costs for consumers, and harming millions of workers in industries that use steel as a component of production.5
On March 17, 1999, the House voted 289-141 (House Roll Call 56) in favor of the steel bill. Three months later, on June 22, 1999, the bill died in the Senate, 42-57 (Senate Roll Call 178), falling 18 votes short of the 60 needed to end debate and force a final vote on passage.
Bill Archer (R-Tex.), then-chairman of the Ways and Means Committee and a consistent internationalist, told his colleagues on the floor of the House: "As usual, there is more to the story. There is a matter of steel users and manufacturers, both large and small. American workers in these steel-using industries, transportation equipment, industrial machinery, metal products, and construction, outnumber employment in steel producer companies by 40 to 1. In fact, I am deeply concerned, and I do not say this lightly, that this bill might threaten national security, because quotas will reduce steel products needed for military supply."6
•Cuba: Trade and Travel. The United States has maintained a comprehensive economic embargo against Cuba for four decades in an unsuccessful effort to oust the communist government of Fidel Castro. The 106th Congress considered legislation to loosen the embargo by granting Americans greater freedom to trade with and travel to Cuba. The almost total embargo has failed to achieve its policy objective of overthrowing the Cuban government or of even modifying its oppressive rule. American citizens have paid the price of that failure in lost economic freedom to trade, invest, and travel. For Cuban citizens, the embargo has deprived them of economic opportunity while giving the Cuban government a handy excuse for the failures of its socialist economic system.7
On June 30, 1999, the Senate voted 55-43 (Senate Roll Call 189) to table, or kill, an amendment by Sen. Christopher Dodd (D-Conn.) that would have repealed the ban against travel by Americans to Cuba. An amendment by Rep. Charles Rangel (D-N.Y.)5 to the Treasury and Government Operations Appropriations Act of 2001 would have prohibited spending any funds to enforce the embargo against Cuba. The House rejected the Rangel amendment on July 20, 2000, by a vote of 174-241 (House Roll Call 424). That same day, the House approved an amendment, 232-186 (House Roll Call 425), by Rep. Mark Sanford (R-S.C.) to block funding to enforce the travel ban.
Defending his amendment, Rep. Rangel asked why many of his colleagues were willing to vote for expanding trade with China and Vietnam but not with Cuba. "And so it just seems to me that we should not have a double standard. And no one is trying to help President Castro. From what I see, it does not appear to me that he is in need of food or medicine. But what we are saying is that the Cuban people should not suffer while we have seen that this man, Castro, has outlived nine or 10 United States presidents while we have been looking for change. And we should not use the denial of food and medicine and the denial of the rights of Americans to go where they want to go when they want to go just because we are concerned, and rightly so, about the conduct of this man in Cuba."8
•China: Annual NTR Renewal. Under the Jackson-Vanik amendment to the Trade Act of 1974, the People's Republic of China must receive an annual waiver from the U.S. president for its goods to enter the United States under the normal tariff schedule. Without the waiver, Americans would face drastically higher tariffs on most imports from China, raising the cost of living for millions of American families that benefit from the more than $80 billion worth of goods imported annually from China. Those higher trade barriers would also invite retaliation against American goods sold in China and would set back efforts to raise the living standards and enhance the autonomy and human rights of Chinese citizens.9 Congress can override the presidential waiver and deny China normal trade relations (NTR) with a two-thirds vote in both chambers. Every year, the administration routinely renews China's NTR status, followed by a futile effort in Congress to overturn the waiver.
On July 20, 1999, the Senate rejected S.J. Res. 27, a motion to disapprove the presidential waiver of NTR with China, by a vote of 12-87 (Senate Roll Call 213). The House voted twice in the 106th Congress on resolutions that would have revoked NTR with China: On July 27, 1999, the House rejected H.J.R. 57 by a vote of 170-260 (House Roll Call 338). On July 18, 2000, the House rejected an identical resolution, H.J.R. 103, by a vote of 147-281 (House roll Call 405).
•Food and Medicine Sanctions. For decades, the U.S. government has used economic sanctions as a tool of foreign policy, including sanctions against the sale of food and medicine to targeted countries. Sanctions rarely achieve their stated purpose of changing the nature or behavior of foreign governments. Instead, sanctions inflict economic damage on U.S. exporters and investors, by cutting them off from foreign markets and branding them as unreliable suppliers in the international marketplace. Sanctions also hurt the very people they are supposed to help, by depriving citizens of the targeted country the benefits of access to imports and investment from the United States.
On August 3, 1999, the Senate voted 28-70 (Senate Roll Call 251) to reject a motion to table (kill) an amendment by Sen. John Ashcroft (RMo.) that would require congressional approval before the president could impose any unilateral agricultural or medical sanctions on any country. (A vote against the motion to table was in effect a vote in favor of limiting the president's ability to impose food and medicine sanctions.)
•Sugar Protection. The federal sugar program benefits domestic producers through a system of subsidized price support loans and quota barriers against imported sugar. The program forces American consumers to pay prices above those in world markets for sugar and sugar-containing products. According to the U.S. International Trade Commission, repeal of the sugar program would add nearly $1 billion to national welfare and cut domestic sugar prices by 8.6 percent.10 The program is a classic example of protectionism, benefiting a small group of producers at the expense of the nation's consumers and overall economic well-being.
The Senate considered two amendments in the 106th Congress that would have shut down the sugar program: On August 4, 1999, the Senate voted 66-33 (Senate Roll Call 254) to table (kill) an amendment by Sen. John McCain that would have removed all funds for administering the program from the Agricultural, Rural Development, and Related Agencies appropriations bill for FY 2000. On July 20, 2000, the Senate voted 65-32 (Senate Roll Call 219) to table a similar amendment to the Agriculture appropriations bill for FY 2001.
During debate of the McCain amendment in 1999, Sen. Dianne Feinstein (D-Calif.) reminded her colleagues that the sugar program acts as a hidden tax on consumers: "Although the sugar program is considered a no-net-cost program because the government does not make payments directly to producers, it places the cost of the price supports on sweetener users—consumers and manufacturers of sweetener-containing products—who pay higher sugar and sweetener prices. What this means is that, unlike traditional subsidy programs, the funds don't come directly from the Treasury. Instead, the sugar program places the cost on consumers by restricting the supply of available sugar, which causes higher domestic market prices. This is our government program; it makes no sense."11
•Labor, Environment, and Human Rights. One of the major debates in trade policy today is whether to precondition access to the U.S. market on whether a foreign nation meets labor, environmental, and human rights standards as determined by the United States or international organizations. Advocates argue that such linkage is necessary to promote U.S. values abroad and to protect the rights of workers around the world. But officials from less-developed countries are rightly suspicious that those standards could be easily abused to impose trade barriers against the very goods their countries are most competitive at producing. Free trade is not in fundamental conflict with human rights and higher labor and environmental standards. In reality, by promoting economic development and a freer flow of ideas and people, sustained trade liberalization is typically associated with democratization and higher labor and environmental standards. To oppose linkage is not to put trade above other important value but to recognize that economic freedom complements both material development and a broad range of civil and political freedoms.
During its debate of the Africa Growth and Opportunity Act, the Senate considered several amendments that would have preconditioned greater access to the U.S. market on whether sub-Saharan African nations met certain labor and environment standards. On November 2, 1999, the Senate voted 57-40 (Senate Roll Call 347) to table an amendment by Sen. Ernest Hollings (D-S.C.) that would have required the negotiation of environmental side agreements with African nations before extending the act's trade benefits. On November 3, the Senate voted 66-29 (Senate Roll Call 352) to table an amendment by Sen. Russ Feingold (D-Wis.) that would have required that African nations conform to a number of labor-standard requirements before receiving greater access to the U.S. market. On September 12, 2000, the Senate rejected by a vote of 32-63 (Senate Roll Call 239) an amendment by Sen. Jesse Helms (R-N.C.) that would have denied permanent normal trade relations (PNTR) status to China until the president certifies that its government has ended systematic violations of human rights.
Former Sen. William Roth Jr. (R-Del.), speaking against the Helms amendment, explained why trade expansion and human rights are not in conflict: "I am as concerned about China's repression of its citizens as anyone in this Chamber. But I believe that in passing PNTR, Congress will actually take its most important step by far in fostering democracy and improving human rights in China. That's because by enacting H.R. 4444, we will permit Americans to fully participate in China's economic development, thereby opening China to freer flows of goods, services, and information. Ultimately, that opening will change China's economy from one based on central planning to one based on free markets and capitalism. Moreover, H.R. 4444 will create a special human rights commission that will expose, and suggest remedies for, China's abusive human rights practices. The forces unleashed by American and other foreign participation in China's market opening will help sow the seeds of democracy and human rights."12
•"Fair Trade." Efforts to reduce trade barriers have also been complicated by demands that trade be "fair." Fair trade can mean that imports from a particular country to the United States should face the same level of trade barriers as U.S. exporters face in that country. The flaw in the "reciprocity" argument is that it views lower trade barriers strictly as a benefit to the exporting country, when in fact the chief beneficiary is the country that liberalizes. We should not deny ourselves the benefits of lower trade barriers to our own market just because other countries have chosen to deny themselves the benefits of lower barriers to their markets.13 Fair trade can also mean erecting barriers against "dumped" imports—those sold in the U.S. market at below the average cost of production or below the average selling price in the home market. Again, such demands for fair trade ignore the economic benefits to the importing country of lower prices and increased competition. U.S. antidumping law forbids foreign producers from engaging in certain normal commercial practices that, when engaged in by domestic producers in the domestic economy, are legal, routine, and obviously beneficial to the overall economy.14
On November 2, 1999, the Senate voted 70-27 (Senate Roll Call 348) to table an amendment by Sen. Hollings that would deny lower trade barriers to any African country that did not reduce its own import tariffs to rates identical to those applied by the United States to imports from that country. On November 3, 1999, the Senate voted 54-42 (Senate Roll Call 350) to table an amendment by Sen. Arlen Specter (R-Pa.) that would have allowed U.S. producers to bring private suits against foreign producers selling goods in the U.S. market at allegedly dumped prices.
•Africa and Caribbean Basin Trade Liberalization. H.R. 434, The African Growth and Opportunity Act, lowers U.S. tariff and nontariff barriers to clothing and textile imports from sub-Saharan Africa and the Caribbean. Those unilateral trade liberalization provisions benefit U.S. consumers with lower prices and provide larger export earnings for some of the world's poorest countries. The bill was not, however, a pure vote on lower trade barriers. It directs the Overseas Private Investment Corporation and the U.S. Export-Import Bank to increase their activity in Africa. The "carousel" provision of the law directs the U.S. Trade Representative to periodically rotate the list of imported goods the United States has targeted in retaliation for failure of other WTO members to comply with dispute settlement rulings. Nonetheless, the bill contained significant net trade liberalization and was debated largely on its impact on trade barriers.15
The House approved the conference report on May 4, 2000, by a vote of 309-110 (House Roll Call 145). A week later, on May 11, 2000, the Senate concurred by a vote of 77-19 (Senate Roll Call 98). Speaking in favor of the final bill in the House, free trader Rep. Ed Royce (R-Calif.) told his colleagues:, "This conference report is a clear and important step in the right direction toward greater trade between the United States and Africa, and it moves us away from the odd policy of giving aid to Africa with one hand and shutting out what it manages to produce with the other. Let us move Africa away from aid to economic self-sufficiency. That is the spirit of this bill."16
•Computer Export Controls. Export controls damage American producers by denying them the ability to sell products profitably in foreign markets. Export controls on high-technology goods such as high-performance computers are especially damaging because American high technology products are so competitive in global markets. Controls have been justified in the past on national security grounds, but most U.S. high-tech exports can be effectively substituted for by foreign-supplied products of similar standards. Compounding the problem is that federal standards are routinely out of date and have been rendered irrelevant by technological advances.17
On May 18, 2000, the House voted 415-8 (House Roll Call 195) in favor of an amendment by Rep. David Dreier to shorten the waiting period for Congress to approve adjustments in the performance level that defines high-speed computers subject to export controls. On July 12, 2000, a companion amendment was approved by the Senate, 86-11 (Senate Roll Call 174).
•China Permanent NTR. Arguably the most significant trade votes of the 106th Congress, or any other recent Congress, were those in the House and Senate to establish permanent normal trade relations with the People's Republic of China. Approving PNTR was a necessary step before the United States could enjoy the full benefits of China's entry into the World Trade Organization. Upon entry, expected sometime in 2001, the Chinese government has committed itself to dramatically lowering barriers against a wide swath of imports, including automobiles, insurance, financial services, and agricultural goods. China's entry into the WTO will benefit U.S. exporters, Chinese consumers, and the cause of domestic economic reform. It will also encourage progress on human rights by promoting the economic independence of the Chinese people and encouraging the rule of law within China.18
The House voted 237-197 (House Roll Call 228) on May 24, 2000, to approve H.R. 4444, the bill establishing permanent NTR with the People's Republic of China. The Senate approved identical legislation by a vote of 83-15 (Senate Roll Call 251) on September 19, 2000.
Sen. Sam Brownback (R-Kan.) argued that PNTR will be good for Americans exporters, but its most profound impact will be on China itself: "Granting Permanent Normal Trade Relations status to China will increase our exports to the world's most populous country. But, more importantly, bringing China into the WTO will put the PRC on a collision course with economic and political liberalization. Mr. President, China has been ruled by the Communist Party with an iron grip for more than 50 years. But WTO accession comes with a price. WTO accession will usher the forces of globalization into China in a very permanent way. Globalization will be good for China's economy because it will integrate China's economy into the world's economy. Globalization will also force the systemic reform of China's inefficient state-owned enterprises and banking system. But globalization will also have a much more profound effect on China. Globalization will force upon China the infrastructure necessary for greater political liberalization. Globalization will require China to have a stronger adherence to the rule of law and property rights. Globalization will create a stronger middle class in China that will demand greater freedom with which to enjoy their new position. Globalization will bring the Internet into tens of millions of Chinese homes, exposing the Chinese people to Western standards of political and religious freedom, and human rights."19
•Withdrawal from WTO. The World Trade Organization and its predecessor, the General Agreement on Tariffs and Trade, have promoted global trade liberalization through successive rounds of multilateral trade negotiations. The WTO provides an institutional framework that discourages governments from backsliding on their commitments to liberalization and encourages the rule of law through impartial dispute settlement. The GATT and the WTO have facilitated a dramatic fall in global trade barriers against manufactured goods, stimulating an equally dramatic increase in global trade volumes. Increased trade has helped to raise living standards in the United States and other nations that have opened themselves to the international economy.20 Some opponents of the WTO, while supporting free trade in general, believe the WTO is a threat to U.S. sovereignty, but the WTO possesses no authority of its own to compel its members to conform to its rulings.21
On June 21, 2000, the House rejected H.J. Res. 90, a measure that would have withdrawn the United States from the WTO, by a vote of 56-363 (House Roll Call 310). In support of the WTO, internationalist Rep. Douglas Bereuter (R-Neb.) told his colleagues: "The United States gains nothing from withdrawal from the WTO. We would, however, be at the mercy of other countries' desires to erect highly discriminatory and prohibitive tariffs and nontariff barriers against U.S. exports. The U.S. would not have access to the WTO dispute settlement mechanism to challenge these new barriers, but instead, we would only have limited and ineffective bilateral defenses. The U.S. would have no leverage at all in setting agendas for future trade and investment agreements, having unilaterally surrendered our seat at the table through withdrawal from the WTO."22
In response, isolationist Rep. Peter DeFazio (D-Ore.) said: "We are running a huge and growing trade deficit because American workers cannot and should not be competing with bonded child labor, with people who work in unsafe conditions, with people who work in factories where they dump the toxic waste out the back door. No, that is not what the U.S. represents, that is not what we want to drive the rest of the world to, and it is not what we should be driving our nation to."23
•Foreign-Born Workers. Just as the free movement of goods, services, and capital across international borders raises overall productivity, so to does the free movement of people. No sector of the U.S. economy has benefited more from an inflow of foreign-born workers than high-technology industries, especially the computer industry. Explosive high-tech growth has fueled a demand for highly skilled workers that has outstripped the supply of qualified workers in the United States. Without the ability to hire foreign-born workers, U.S. industry would be forced to curb production, export opportunities abroad would be lost, and potential new products and innovations would go undeveloped. Concerns that foreign-born workers depress wages and take jobs from "native" Americans in high-tech industries are contradicted by rising wage levels and historically low unemployment rates.24
On October 3, 2000, the Senate voted 96-1 (Senate Roll Call 262) to approve the American Competitiveness Act, a bill that raises the annual cap on H-1B visas for highly skilled foreign-born workers to 195,000 through FY 2003.
The 106th Congress offered several opportunities in the House for members to vote to cut subsidies for trade and foreign investment. The bills and amendments determined funding for the Export-Import Bank, the Overseas Private Investment Corporation, the Emergency Stabilization Fund, and the Market Access Program.
•Market Access Program Limits. Market Access Program funds are distributed by the U.S. Department of Agriculture to promote the sale abroad of goods containing U.S. agricultural products. Like other export subsidies, the MAP program does not promote trade in general but favors some exporters—in this case those using U.S. farm produce in their final products—over others.On June 8, 1999, the House voted 72-355 (House Roll Call 174) to reject an amendment by Rep. Steve Chabot (R-Ohio) to eliminate the Market Access Program.
In support of his amendment, Rep. Chabot told his colleagues: "The rationale behind this amendment is simple. Hard-working taxpayers should not have to subsidize the advertising costs of America's private corporations, yet this is exactly what the Market Access Program does. Since 1986, the Federal Government has extracted well over $1 billion from the pockets of American taxpayers and handed it to multimillion-dollar corporations to subsidize their marketing programs in foreign countries. In other words, the U.S. taxpayer is helping successful private companies and trade associations advertise their wares in foreign countries."25
•Exchange Stabilization Fund Limits. The Exchange Stabilization Fund was established in the 1930s to be used by the Treasury Department to intervene to stabilize the U.S. dollar against foreign currencies. In 1995 the Clinton administration used $20 billion from the fund to cobble together—without the need of congressional approval—an international bailout package for Mexico in the immediate aftermath of the collapse of the peso in December 1994. A strong argument can be made that the Mexican bailout set the stage for the far more serious financial meltdown in East Asia two years later by signaling to investors and policymakers alike that another bailout would be forthcoming if their investments proved unwise. This "moral hazard" encouraged excessive risk taking, setting the stage for other, even more expensive bailouts in East Asia through the International Monetary Fund.26
On July 15, 1999, the House rejected by a vote of 192-228 (House Roll Call 304) an amendment by Rep. Bernie Sanders (I-Vt.) to the Fiscal 2000 Treasury-Postal appropriations bill that would have prohibited any loan or credit from the fund to foreign countries in excess of $1 billion, unless Congress specifically approves the action by statute.
In defense of the ESF, Rep. David Obey (D-Wis.) told his colleagues: "I am very much an economic populist, but I am also a committed internationalist. . . . The use of the [Exchange] Stabilization Fund is not foreign aid. When the Exchange Stabilization Fund is used, it is used to try to stabilize the world economy, not to help another country but to defend our own country, to defend our own prosperity, to defend our own jobs."27
•OPIC and Ex-Im Bank Funding. The Overseas Private Investment Corporation charges private companies a fee to insure their investments abroad, often in places where the risk of failure is relatively high. The agency returns a nominal profit to the U.S. Treasury each year but still requires an annual appropriation of $32 million for administrative costs. The agency currently backs about $20 billion in projects overseas, exposing U.S. taxpayers to huge payments should those investments go bad. OPIC distorts the international flow of capital by steering investment dollars to projects and countries that a truly free, private capital market would deem too risky. It also discourages reform in less-developed countries by shielding policymakers from the full effects of their uneconomic policies.28 The Export-Import Bank provides subsidized incentives for U.S. exporters to sell in markets where the risk of nonpayment would otherwise be too high. Export subsidies do not significantly expand total U.S. exports but instead shift exports toward the small percentage of U.S. companies that qualify for the subsidies. OPIC and the Ex-Im Bank distort rather than promote trade and investment.
On August 2, 1999, the House voted 103-315 (House Roll Call 359) to reject an amendment by Rep. Robert Andrews (R-N.J.) to the FY 2000 Foreign Operations appropriations bill that would have prohibited the use of any funds in the bill for new projects by OPIC. On August 3, 1999, the House voted 58-360 (House Roll Call 361) to reject an amendment to the same bill by Rep. Ron Paul (R-Tex.) that would have prohibited new obligations or commitments by the Export-Import Bank, OPIC, and the Trade and Development Agency. On October 13, 1999, the House approved by a vote of 357-71 (House Roll Call 499) the reauthorization of OPIC through fiscal 2003.
Arguing against limits on OPIC, Rep. Bereuter told his colleagues: "With respect to the Andrews-Sanders-Sanford amendment, I would have to say that it hurts American competitiveness and benefits our foreign competitors. Most of our developing nations, like France, Germany and Japan, offer a comprehensive array of export and overseas investment support. They clearly understand the importance of such programs in supporting jobs and economic growth at home. The U.S. spends less per capita, as a percentage of GDP, and in dollar terms on supporting private sector investment in developing countries than any other major competitor country."29
In response, Rep. Paul challenged the internationalist members of the House who support OPIC and the Ex-Im Bank to reconsider whether subsidies actually promote free trade: "So I urge support for the amendment because, if we are serious about free trade, just please do not call it free trade anymore. Call it managed trade. Call it subsidized trade. Call it special interest trade. But please do not call it free trade anymore, because it is not free trade."30
Those major votes on trade barriers and trade subsidies can be used to determine the level of support in Congress for a policy of true free trade. Members who voted two-thirds of the time or more against both trade barriers and trade subsidies can be classified as free traders. Those who voted two-thirds of the time or more against trade barriers and in favor of trade subsidies can be classified as internationalists. Those who voted two-thirds of the time or more in favor of trade barriers and against trade subsidies can be classified as isolationists. And those who voted two-thirds of the time or more in favor of both trade barriers and trade subsidies can be classified as interventionists.31
The typical House member in the 106th Congress voted against trade barriers on 63 percent of votes surveyed and against trade subsidies on 22 percent of votes, characterizing the House as mildly internationalist. House Republicans were only marginally more inclined to vote against trade barriers than Democrats, 65 percent compared to 62 percent, but they were three times more likely to vote against trade subsidies, 35 percent compared to 11 percent.
Although the two parties were close in overall votes cast against trade barriers, party support swung widely from issue to issue. Republicans were far more likely than Democrats to vote against barriers on the issues of steel quotas and permanent normal trade relations with China, while Democrats were far more likely to oppose barriers to trade with Cuba. On trade subsides, Republicans were far more likely than Democrats to vote against them on all five of the votes tabulated. (See Table 1.)
Of the 433 House members whose voting records were analyzed, 26 fit the definition of a free trader. Another 212, or almost half the chamber's membership, voted as internationalists, 24 voted as isolationists, and 43 voted as interventionists. The remaining 128 members fell outside classification because their voting records showed no clear pattern of support for or opposition to trade barriers and subsidies. (See Appendix A for a list of members in each of the four categories.)
All 26 free traders in the House during the 106th Congress were Republicans. The most consistent supporter of free trade was Tom Campbell (R-Calif.), who voted against trade barriers and trade subsidies on every vote he cast. Close behind were John Linder (R-Ga.) and Matt Salmon (R-Ariz.), who each voted against barriers and subsidies on every vote cast but one. Voting for free trade on all but two votes cast were Richard K. Armey (R-Tex.), Steve Chabot (R-Ohio), Jim DeMint (RS. C.), Peter Hoekstra (R-Mich.), John Shadegg (R-Ariz.), John Sununu (R-N.H.), Susan Myrick (R-N.C.), Scott McInnis (RColo.), and David McIntosh (R-Ind.).32
Republicans also dominated among the isolationists. Of the 24 members of the House who voted most often in favor of trade barriers and against subsidies, 19 were Republicans, 3 Democrats, and 2 Independents. The most consistent isolationists were Bob Barr (R-Ga.), John J. Duncan Jr. (R-Tenn.), John N. Hostettler (RInd.), and Tom Coburn (R-Okla.), who each voted against trade subsidies at every opportunity and in favor of trade barriers at every opportunity but one. The next most consistent isolationists were Helen Chenoweth-Hage (R-Idaho), Howard Coble (R-N.C.), Dana Rohrabacher (R-Calif.), and Zach Wamp (R-Tenn.). The three Democrats who voted as isolationists were Mike McIntyre (N.C.), Peter A. DeFazio (Ore.), and Cynthia McKinney (Ga.). Also voting as isolationists were both Independents in the House, socialist Bernard Sanders (Vt.) and conservative Virgil H. Goode Jr. (Va.).
The two parties were more evenly represented among the near majority classified as internationalists. Of the 212 members who voted most often against trade barriers and for trade subsidies, 113 were Republicans and 99 Democrats. Of those, 14 voted against barriers and for subsidies at every opportunity. Those members with pure internationalist voting records were Judy Biggert (R-Ill.), Larry Combest (R-Tex.), John C. Cooksey (R-La.), Norman D. Dicks (DWash.), Calvin Dooley (D-Calif.), Anna Eshoo (D-Calif.), Chris John (D-La.), Nancy L. Johnson (R-Conn.), Ray LaHood (R-Ill.), Tom Latham (R-Iowa), Jim Leach (R-Iowa), Zoe Lofgren (D-Calif.), Jim McDermott (D-Wash.), and Adam Smith (D-Wash.).
The two parties were also more evenly represented among interventionists. Of the 43 members who voted most often for both trade barriers and trade subsidies, 24 were Democrats and 19 Republicans. Don Young (R-Alaska) was the only member who voted the interventionist line on every rated vote he cast in the 106th Congress, voting in favor of trade barriers on seven of seven votes and in favor of trade subsidies on three of three votes. The only member to vote as an interventionist on all but one vote was Patrick Kennedy (D-R. I.). Those voting as interventionists on all but two votes were Michael P. Forbes (D-N.Y.), House Minority Leader Richard A. Gephardt (D-Mo.), Frank Pallone Jr. (D-N.J.), Alan B. Mollohan (D-W.Va.), William Delahunt (D-Mass.), and Christopher H. Smith (R-N.J.). (See Appendix B for a complete list of House members and their votes.)
The U.S. Senate tended to vote against barriers to international commerce during the 106th Congress. On the 15 votes surveyed for this study, the typical senator voted against barriers 67 percent of the time. The partisan split was sharper than in the House, with the typical Republican senator voting against barriers 71 percent of the time and the typical Democrat 61 percent. The deepest divisions were over steel quotas, where Republicans opposed barriers by a margin of 72 percent compared to 40 percent for Democrats; enforcing environmental standards through trade agreements, where Republicans opposed barriers by a margin of 92 percent compared to 20 percent for Democrats; and travel to Cuba, where Democrats opposed barriers by a margin of 73 percent compared to 19 percent for Republicans. (See Table 2.)
Sixty members of the Senate in the 106th Congress voted two-thirds of the time or more against trade barriers, earning the characterization of either free traders or internationalists. Only nine members of the Senate voted against trade barriers one-third of the time or less when given the opportunity, earning the characterization of either isolationists or interventionists. (See Appendix C for a list of senators in each of the two categories.) Unfortunately for the purposes of this study, no votes were cast in the Senate during the 106th Congress that would allow a differentiation based on opposition to trade subsidies.
Of the 60 senators who most consistently voted against trade barriers, 42 were Republicans and 18 were Democrats. The most consistent opponents of trade barriers were John Chafee (R-R.I.), his son and successor Lincoln Chafee (R-R.I.), Richard Lugar (R-Ind.), and George Voinovich (R-Ohio), each of whom voted against trade barriers on every surveyed vote they cast. Opposing trade barriers on every vote but one were Sam Brownback (R-Kan.), Peter G. Fitzgerald (R-Ill.), Bill Frist (R-Tenn.), Slade Gorton (R-Wash.), Daniel Patrick Moynihan (D-N.Y.), Don Nickles (R-Okla.), Dianne Feinstein (D-Calif.), and William V. Roth Jr. (R-Del.).
Of the nine senators who voted most consistently in favor of barriers to trade, five were Republicans and four Democrats. The two top supporters of trade barriers in the Senate in the 106th Congress were Ernest Hollings (D-S.C.), who voted in favor of trade barriers on 13 of 15 votes cast, and Jesse Helms (R-N.C.), who voted in favor of barriers on 12 of 14 votes cast. The next most consistent supporters of trade barriers were Olympia Snowe (R-Me.), Jim Bunning (R-Ky.), Paul Wellstone (D-Minn.), Robert G. Torricelli (D-N.J.), Strom Thurmond (R-S.C.), Robert C. Smith (R-N.H.), and Robert C. Byrd (D-W.Va.). (See Appendix D for a complete list of senators and their votes.)
Support for free trade appears to cool the longer a member serves in the House. In the 106th Congress, House members elected since 1987 voted against trade barriers 64 percent of the time compared to 60 percent for those elected before 1987. Members elected since 1987 voted against trade subsidies 26 percent of the time compared to 17 percent for members elected before then. The same story was true among members elected since 1993, with newer members voting against barriers 66 percent of the time compared to 61 percent for more veteran members, and against subsidies 26 percent of the time compared to 21 percent for more veteran members. Whether the dividing line is 6 years in office or 12, the longer House members serve, the more inclined they are to support government intervention in trade.
In the Senate, the class divisions were less distinct. Senators elected since 1987 and those elected before then were equally likely to oppose trade barriers, voting against them 67 percent of the time. Senators elected since 1993 were slightly more inclined to oppose trade barriers (69 percent versus 65 percent) than were those elected before then.
Results of the 2000 congressional elections do not point to any sharp break from the previous Congress in voting on trade barriers and subsidies. The high reelection rate in the House means that more than 90 percent of its membership will be unchanged from the previous Congress. The 42 members of the 106th Congress who did not return to the 107th Congress voted against trade barriers with exactly the same frequency, 63 percent, as those members who did return. The departing members were slightly more inclined to vote against trade subsidies in the last Congress than were the returning members, 31 percent versus 23 percent. While both departing and returning members leaned toward an internationalist approach, the departing members were somewhat closer to (though still far short of) the free-trade ideal of consistently opposing barriers and subsidies.
In the Senate, the story is less encouraging for free trade. The 13 senators who did not return to the 107th Congress were significantly more inclined to oppose trade barriers than were the senators who did return. As a group, the departed senators voted against trade barriers 78 percent of the time in the previous Congress, compared to 65 percent for the returning senators. Among the group of departed senators were two of chamber's most influential advocates for trade liberalization, Sens. Roth and Moynihan, who were chairman and ranking minority member, respectively, of the Senate Finance Committee.
Only 1 of the 13 departed senators has been replaced by a House member from the 106th Congress. Spencer Abraham (R-Mich.), who voted against trade barriers 80 percent of the time, has been replaced by Debbie Stabenow (D-Mich.), who voted against trade barriers 56 percent of the time during her last term in the House. Retiring Sen. Richard Bryan (D-Nev.), who voted against trade barriers 57 percent of the time in the 106th Congress, has been replaced by Republican John Ensign. Ensign last served in the House in the 105th Congress, when he compiled a perfect isolationist voting record, voting for trade barriers and against trade subsidies at every opportunity.
Leaders of the two parties in the House remain deeply divided on trade. The top Republican leaders are either free traders or internationalists. House Majority Leader Richard Armey (R-Tex.) compiled a solid free trade voting record, while Majority Whip Tom DeLay (R-Tex.) voted as an internationalist, opposing trade barriers on 75 percent of tabulated votes and opposing subsidies on 20 percent.33 In contrast, the top two Democrats in the House, Minority Leader Richard Gephardt and Minority Whip David Bonior, both compiled solid interventionist voting records, favoring trade barriers and trade subsidies on two-thirds or more of their votes.
New chairmen have been installed in the House Ways and Means and Senate Finance Committees, the two panels that oversee trade legislation, but neither change signals a major departure from previous trade policy. The new Ways and Means chairman, Rep. Bill Thomas (R-Calif.), voted solidly internationalist. The retired chairman he replaces, Rep. Bill Archer (R-Tex.), voted just as frequently as Thomas against trade barriers but also opposed trade subsidies 40 percent of the time compared to none of the time for Thomas. Charles Rangel (D-N.Y.), the ranking minority member of the committee, also compiled a solid internationalist voting record in the past Congress. In the Senate, Charles Grassley (R-Iowa) replaces Roth as finance chairman. Like Roth, Grassley voted more than 80 percent of the time against trade barriers, parting with his predecessor only in his support of protection for domestic sugar producers. On the Democratic side, Max Baucus (D-Mont.) replaces Moynihan, parting with the retired senator only in his support for private antidumping suits.
On the basis of previous voting records, it seems unlikely the 107th Congress will veer dramatically from the previous Congress in its approach to international economic policy. Returning members in the House are just as likely to support trade liberalization as departing members. The Senate lost several prominent champions of open trade, but the returning senators as a group were inclined to support reduced trade barriers.
Debate over America's engagement in the global economy has been oversimplified into a battle between isolationists and internationalists, whereas the ultimate struggle is between those who support a truly free market and those who favor various forms of government intervention in the international marketplace.
Measured on this free-market scale, the 106th Congress was a mixed success. Several important bills to reduce trade barriers passed into law, and other bills and amendments that would have raised barriers ultimately failed. But Congress continues to consistently favor subsidies to trade and investment through such vehicles as OPIC, the Market Access Program, and the Export-Import Bank. Too few members of Congress apply a consistent philosophy of freedom and limited government when casting votes affecting how Americans participate in the global economy. In the House, a mere 6 percent of members could be counted on in the 106th Congress to say no to trade barriers and subsidies on at least two of three votes cast.
Members of Congress who want to advance the cause of limited government, economic liberty, and national prosperity should favor a consistent agenda of eliminating barriers to trade and trade-related subsidies. Protectionism and subsidies both undermine the workings of the free market, substituting the judgment of politicians for that of millions of informed citizens cooperating together in the marketplace for mutual advantage.
When weighing policy toward the international economy, members of Congress do not need to choose between anti-trade, anti-subsidy isolationism and pro-trade, pro-subsidy internationalism. They can choose to vote for a coherent program to liberalize trade and eliminate subsidies—in sum, to let Americans enjoy the freedom and prosperity of a seamless free market undistorted by government intervention.
Trade Policy Analysis No. 13 (PDF)
Permanent URL: http://www.freetrade.org/congress?tab=105th | Printer-friendly version
The 105th Congress voted on a number of bills and amendments directly affecting the freedom of Americans to engage in trade with people in the rest of the world. Among the more important pieces of legislation voted on were renewal of normal trade relations with China, authorization of fast-track authority for the president, a resolution calling for a one year ban on steel imports, a bill to lower barriers to imports from Caribbean countries, sanctions against foreign entities that engage in religious persecution, and reforms that would make it more difficult for Congress to impose sanctions in the future.
•Fast-Track Trade Authority. Officially titled the Reciprocal Trade Agreements Authorities Act, H.R. 2621 would have authorized the president to negotiate agreements with other nations to lower barriers to trade. Any agreement negotiated by the president would be subject to an up-or-down vote in Congress with no amendments allowed. If passed, so called fast-track authority would have provided momentum for negotiation of the Free Trade Agreement of the Americas, the proposed regional trade pact that would lower barriers to trade among 34 nations in the Western Hemisphere, including the United States. It would also have enhanced the ability of the United States to participate in multilateral negotiations through the World Trade Organization, beginning in 1999, to lower barriers worldwide to trade in services and agriculture.9
On September 25, 1998, the House voted 243 to 180 to reject H.R. 2621 and deny the president fast-track authority. On November 5, 1997, S. 955, a procedural bill that would have allowed a Senate floor vote on fast track, passed by a vote of 68 to 31. A vote against S. 955 was a vote to defeat fast track, while a vote in favor moved it closer to passage.
•Trade with China. The House voted twice in the 105th Congress to continue normal trading relations with China. Each year, under the Trade Act of 1974, the president is required to issue a waiver in order for China to qualify for "normal trade relations"10 with the United States. Congress can override the waiver by a majority vote in the House and Senate. Without normal trade relations, the average tariff level on goods imported from China would jump from 6 percent to 44 percent, dramatically raising costs for Americans who benefit from the $60 billion in goods imported from China annually. Higher trade barriers against China would also invite retaliation by China against U.S. exports and would set back efforts to raise the living standards and enhance the autonomy and human rights of millions of Chinese citizens.11 On July 22, 1998, the House voted 264 to 166 to reject the resolution to revoke normal trade relations with China.12 On July 17, 1997, the Senate voted 77 to 22 to reject a similar motion to repeal China's normal trade status.
•Steel Import Ban. Responding to pressure from domestic steel producers, the House voted 345 to 54 on October 15, 1998, for a resolution threatening a one-year ban on imported steel. The resolution called on the president to impose the ban if he found that foreign competitors were selling steel in the United States at "unfair" prices. Such a ban would be a boon to the domestic steel industry and its unions, but it would impose a heavy cost on the economy as a whole by driving up costs in far larger industries, such as the automotive sector, that use steel as an input of production. Besides hurting end consumers and other industries, a steel ban would invite retaliation against U.S. exports and undermine the rule of law in the global trading system. It would add to economic instability in Japan, Brazil, Russia, and other steel-exporting nations by denying them foreign exchange, adding to the global downturn that has already hurt American exporters. Although H.R. 598 was nonbinding, it was calculated to pressure the Clinton administration to take "aggressive action" against steel imports. It expressed a sentiment in Congress that is profoundly anti-trade and anti-consumer.
•Sanctions against Religious Persecution. Although watered down from earlier versions, H.R. 2431—the Freedom from Religious Persecution Act—would have imposed selective trade sanctions against countries that commit or condone religious persecution. It would also impose a sweeping ban on trade with Sudan because of alleged abuses there. While everyone can agree that religious persecution abroad should be opposed, trade sanctions have proven to be an ineffective and self-defeating tool for achieving U.S. foreign policy aims. Diplomatic pressure and private economic engagement produce better results without disrupting trade and harming U.S. interests. Nonetheless, the House voted 375 to 41 on May 14, 1998, to pass the Freedom from Religious Persecution Act.13
•Sanctions Reform. Sen. Richard Lugar (RInd.) proposed an amendment to the fiscal year 1999 agriculture appropriations bill that would place a number of restrictions on future economic sanctions imposed unilaterally by the United States. Sanctions have become a costly and ineffective tool of U.S. foreign policy, denying American companies export and investment opportunities abroad while failing to achieve stated foreign policy goals. Among other reforms, the Lugar amendment would impose a two-year sunset provision on future sanctions; grant more flexibility to the president to waive sanctions in the national interest; and ban restrictions on exports of food, medicine, and medical equipment. The committee recommending a sanction would be required to report on the specific objective of the sanction and how the proposed sanction would help to achieve that objective. The International Trade Commission would be required to report on the immediate and long-term economic cost of any new sanction proposal. The Lugar amendment would have encouraged a more deliberate and informed debate on future sanctions. The Senate rejected the Lugar amendment by voting 53 to 46 on July 15, 1998, to table it.
•CBI Parity. The United States–Caribbean Trade Partnership Act, H.R. 2644, would have lowered tariffs on selected imports from Caribbean and Central American exporters. The bill was originally intended to offer tariff "parity" to nations included in the Caribbean Basin Initiative. It would have lowered tariffs to help Caribbean exporters compete in the U.S. market against imports from Mexico and Canada that enter the United States duty-free under the North American Free Trade Agreement. The bill in its final form granted only partial tariff relief and contained a number of restrictions that fell short of true free trade. Nonetheless, the bill was still opposed by, among other interests, the domestic textile industry to thwart competition from lower cost Caribbean producers. Granting tariff parity to the small trading nations south of our border would have boosted economic development in a poor region of our hemisphere (made even poorer in 1998 by the ravages of Hurricane Mitch) while providing benefits to American consumers. On November 5, 1997, H.R. 2655 failed by a vote of 182 to 234.14
The 105th Congress also voted on several bills affecting the use of taxpayer dollars to subsidize international transactions. The bills determined funding for the IMF, Ex-Im Bank, OPIC, ESF, and the marketing of agriculture exports.
•IMF Funding. The Senate voted overwhelmingly to provide $17.9 billion in additional taxpayer resources for the IMF. The funding was provided despite the IMF's poor record on promoting economic growth and stability in recipient countries. Although the IMF is touted as a necessary defense against financial crises, IMF bailouts actually make future crises more likely by shielding investors and policymakers from the full consequences of their mistakes, thus inviting risky behavior and economically unsound policies. IMF loans short-circuit market signals in the global economy, delaying needed policy reforms (as in Russia) and socializing the risk of private investors. IMF loans distort rather than enhance the global market economy.15 On March 26, 1998, the Senate voted 84 to 16 in favor of the full IMF appropriation. The House did not vote directly on IMF funding in the 105th Congress, instead approving it through the $500 billion Omnibus Appropriations bill in October.
•Exchange Stabilization Fund Limits. The House did cast a vote on international bailouts of a different kind when Rep. Bernard Sanders, the Vermont Independent, offered an amendment to the 1999 Treasury/Postal appropriations bill. The Sanders amendment would have barred the secretary of the Treasury from using more than $250 million from the Exchange Stabilization Fund in any rescue package for foreign countries. The fund was established in the 1930s to be used by the Treasury Department to intervene to stabilize the U.S. dollar against foreign currencies. In 1995 the Clinton administration used $20 billion from the fund to cobble together—without the need of congressional approval—an international bailout package for Mexico in the immediate aftermath of the collapse of the peso in December 1994. A strong argument can be made that the Mexican bailout set the stage for the far more serious financial meltdown in East Asia two years later by signaling to investors and policymakers alike that another bailout would be forthcoming if their investments proved unwise. This "moral hazard" encouraged excessive risk taking, setting the stage for another, even more expensive bailout. A vote for the Sanders amendment would have at least reduced the opportunity for damaging U.S. intervention in the future. The amendment failed by a vote of 195 to 226 on July 16, 1998.
•OPIC Funding Cut. Both the House and the Senate considered amendments to cut taxpayer spending on OPIC. OPIC charges private companies a fee to insure their investments abroad, often in places where the risk of failure is relatively high. The agency returns a nominal profit to the U.S. Treasury each year but still requires an annual appropriation of $32 million for administrative costs. The agency currently backs about $20 billion in projects overseas, exposing U.S. taxpayers to huge payments should those investments go bad. OPIC distorts the international flow of capital by steering investment dollars to projects and countries that a truly free, private capital market would deem too risky. It also discourages reform in less developed countries by shielding policymakers from the full effects of their uneconomic policies. OPIC is not a protrade or pro-investment agency but a form of government intervention that distorts the market.16 In the House, an amendment by Rep. Ed Royce (R-Calif.) would have cut taxpayer funding by one-third. It failed on July 30, 1997, by a vote of 156 to 272. A similar amendment in the Senate, offered by Sen. Wayne Allard (R-Colo.) on July 16, 1997, failed by a vote of 35 to 64.
•Ex-Im Bank Funding. The House considered an amendment to eliminate funding for Ex-Im Bank, OPIC, and other programs that subsidize foreign trade and investment. Similar to OPIC, Ex-Im Bank provides subsidized incentives for U.S. exporters to sell in markets where the risk of nonpayment would otherwise be too high. Export subsidies do not expand total U.S. exports but shift exports toward the small percentage of U.S. companies that qualify for the subsidies. In that way, Ex-Im Bank distorts rather than promotes free trade. Sponsored by Rep. Ron Paul (R-Tex.), the amendment to zero out funding for Ex-Im Bank and OPIC failed on July 30, 1997, by a margin of 40 to 387.
•Market Access Program Limits. Market Access Program funds are used to promote the sale abroad of goods containing U.S. agricultural products. Like other export subsidies, the MAP program does not promote trade in general but favors some exporters—in this case those using U.S. farm produce in their final products—over others. An amendment proposed by Sen. Richard Bryan (D-Nev.) to cut funding for MAP from $90 million to $70 million was defeated in the Senate on July 23, 1997, by a vote of 59 to 40. An amendment offered in the House on July 24, 1997, by Rep. Stephen Chabot (R-Ohio) to eliminate the program failed by a vote of 150 to 277.
Examining how members of Congress actually voted on major trade and subsidy bills allows us to classify members according to the matrix developed above. Members who voted in favor of freer trade on a majority of trade votes and against subsidies on more than half of the subsidy votes are classified as free traders. If they tended to vote in favor of freer trade and also in favor of subsidies, they are classified as internationalists. Those who opposed a majority of the subsidies and also a majority of the trade-expanding initiatives are classified as isolationists. Finally, those who opposed the major trade initiatives while favoring trade subsidies are classified as interventionists.
In the 105th Congress, 249 members of the House, or 58 percent, earned the label interventionist," voting at least half the time against more open trade and against cuts in subsidies. Another 106 members, or 25 percent, fit in the internationalist category, voting at least half the time to reduce import barriers and to continue subsidies. Another 49 members, or 11 percent, were isolationists, voting at least half the time both to cut subsidies and to oppose trade liberalization. Only 25 members, or 6 percent, could be called free traders on the basis of their votes in the 105th Congress in favor of trade expansion and against subsidies. (See Appendix A for a list of members in each category.)
The center of gravity in the House on trade and subsidies is clearly in the interventionist quadrant. Overall, members of the House in 1997–98 voted in favor of trade expansion in only 33 percent if the major votes cast. On the four major votes on international economic subsidies, only 31 percent of the votes cast were against subsidies. Republicans were somewhat less interventionist; 43 percent of them voted for freer trade compared to 21 percent of the Democrats, and 42 percent of them voted to cut subsidies compared to 19 percent of the Democrats. In other words, the typical Republican in the 105th Congress, although tilting toward intervention, was still more than twice as likely to support trade liberalization and cuts in subsidies as was the typical Democrat (see Figure 2).
Republicans predominate among free traders, internationalists, and isolationists, while Democrats predominate among interventionists. All 25 of the free traders in the House were Republicans, while Republicans outnumbered Democrats 4 to 1 among both isolationists and internationalists. Among interventionists, Democrats outnumbered Republicans by more than 2 to 1.
No member of the House voted for less government intervention on all nine trade and subsidy votes. Of those missing only one vote, Rep. Phillip Crane (R-Ill.), chairman of the House Ways and Means Trade Subcommittee, voted to expand trade on all five major trade bills while voting to cut subsidies on three of the four measures surveyed. (See Figure 3 for selected House members.) Only four other House members—Tom Campbell (R-Calif.), Mark Sanford (R-S.C.), J. D. Hayworth (RAriz.), and John Shadegg (R-Ariz.)—voted to cut subsidies at all four major opportunities while voting to expand trade on four of the five major initiatives considered.17 (See Appendix B for the ratings and votes of individual members.) Of the one-half of House members who voted consistently to intervene in the international economy, 17 could be described as hardcore, opposing every major trade initiative while opposing every major amendment to curb subsidies. Most prominent among them is House Minority Leader Richard Gephardt (D-Mo.).
In the Senate the voting record on international economic issues during the 105th Congress was pro-subsidy, as in the House, but it also tended to be mildly pro-trade. More than half of the Senate's 100 members, a total of 55, compiled internationalist voting records that were generally pro-trade and pro-subsidy. Another 14 senators voted as isolationists, generally opposing both trade expansion and subsidies, while 19 tended to vote for intervention by voting against trade liberalization and in favor of subsidies. Only 12 senators earned the title of free traders by voting a majority of the time both for major pro-trade legislation and against subsidies (see Figure 4).
As a group, senators voted in favor of liberalized trade on 64 percent of the total votes cast on the three major trade bills considered and voted against subsidies only 30 percent of the time on the three major subsidy votes. Senate Republicans were only slightly more pro-trade than the Democrats, voting 65 percent of the time for more open trade compared to 62 percent for Democrats. The difference was wider on subsidies, where Republicans voted 36 percent of the time to cut subsidies compared to a rate of 24 percent for Democrats.
Only one member of the Senate, Wayne Allard (R-Colo.), voted consistently in favor of the free market on all six major trade and subsidy votes of the 105th Congress, scoring a perfect three on both the pro-trade and the antisubsidy scales. Five other senators were solidly in the free trader camp. Don Nickles (R-Okla.) voted against subsidies on all three occasions and in favor of trade on two of the three major votes. Sam Brownback (R-Kans.), Rod Grams (R-Minn.), Judd Gregg (R-N.H.), and Kay Bailey Hutchison (R-Tex.) voted in favor of trade liberalization on all three votes and against subsidies on two of the three.
Eighteen senators could be described as hard-core pro-trade, pro-subsidy, voting in favor of expanded trade on all three opportunities and in favor of all three subsidy measures. Another 28 senators were safely within the pro-trade, pro-subsidy box, missing only one vote to support either subsidies or trade liberalization. (See Appendix C for a list of senators in each category and Appendix D for the ratings and votes of individual members.)
Four senators—Russell Feingold (D-Wis.), Paul Wellstone (D-Minn.), Lauch Faircloth (R-N.C.), and Robert C. Smith (R-N.H.)—voted a solid isolationist line, opposing trade expansion and subsidies on every vote. Two senators—Carl Levin (D-Mich.) and Olympia Snowe (R-Maine)—were consistently interventionist, opposing all three trade initiatives while supporting all three subsidy measures.
Our analysis of trade votes in the 105th Congress does not indicate a sharp break between veteran legislators and more recently elected members. House members elected before the 1992 elections voted as a group almost exactly the same as those elected in the last six years, each group supporting trade by 33 percent of votes cast on the five major trade issues. The newer members were somewhat more skeptical of international subsidies, voting to cut them on 35 percent of the votes they cast, while veteran House members voted against subsidies only 25 percent of the time. Imposing a six-year term limit on House members would not, it appears, make a dramatic difference in how the House votes on trade, although it would probably erode support for subsidies.18
Sharper divisions can be found among the House members elected since 1992. Those elected in 1994 and 1995 were slightly more inclined to support trade liberalization than the House average (36 percent vs. 33 percent) and significantly more inclined to oppose subsidies (50 percent vs. 31 percent). Those elected in 1996 and 1997, in contrast, were slightly less inclined than the House average to support trade expansion (32 percent) and to oppose subsidies (25 percent). In fact, House members elected in 1996–97 were less than half as likely to vote against international economic subsidies as House members elected in 1994–95.
The 60 remaining members of the Republican class of 1994 scored slightly below the overall Republican average in their support for freer trade, voting pro-trade 39 percent of the time vs. 43 percent for Republicans overall. They were significantly more skeptical of subsidies than were other House members, including their fellow Republicans, opposing them on 55 percent of votes cast. Its majority opposition to subsidies places the GOP class of 1994 just inside the isolationist category.
In the Senate the trend is much the same. Senators elected before 1992 voted for expanded trade on 66 percent of votes cast, not much different from the 62 percent of pro-trade votes cast by senators elected since 1992. Newer senators were twice as likely to vote against subsidies, casting anti-subsidy votes 39 percent of the time compared to 20 percent for senators elected before 1992. The 11 Republican senators elected in 1994, like their counterparts in the House, were slightly less inclined to vote for trade liberalization than the Senate average but were significantly more inclined to oppose subsidies, voting 55 percent of the time for expanded trade and for cutting subsidies. Indeed, the average rating for the 11 members of the GOP class of 1994 places them just inside the free-trader quadrant.
Because of the historically high reelection rate in the 1998 midterm elections, fewer than 10 percent of the nation's 435 congressional districts will be represented by new members in the 106th Congress. As a group, the 39 members of the 105th Congress who will not be returning in January voted for freer trade 29 percent of the time and against subsidies 27 percent, both slightly below the overall House average. This means the average rating of returning House members is somewhat more pro-trade and anti-subsidy than the overall House average in the 105th Congress.
The post-election changes made by the Republican House caucus point to a majority leadership that is marginally more market friendly. New Speaker Dennis Hastert (R-Ill.) is a free trader, voting on three of four opportunities to cut subsidies and on three of five to reduce trade barriers. Although by tradition the departing speaker, Newt Gingrich (R-Ga.), seldom voted in the 105th Congress, he fit into the internationalist group, supporting fast track and IMF funding.
One other top GOP position saw a change in type. Rep. J.C. Watts Jr. (R-Okla.), the newly elected chairman of the Republican Conference, compiled a moderately internationalist voting record, supporting trade on three of five votes and opposing subsidies on two of four votes. The member he replaced, Rep. John Boehner (R-Ohio), voted pro-trade on only two of five opportunities and was zero for four on anti-subsidy votes. This means the House Republican Conference swapped an interventionist for an internationalist.
Among the top GOP House leaders who were reelected, Majority Leader and former economics professor Richard Armey (R-Tex.) compiled a solid record as a free trader, while Majority Whip Tom DeLay (R-Tex.) voted as an internationalist.
On the Democratic side of the aisle, Minority Leader Richard Gephardt (D-Mo.) and David Bonior (D-Mich.) are both solid interventionists, with Gephardt voting against trade initiatives and for subsidies at every opportunity we surveyed. Bonior deviated from the interventionist line only to support the proposed modest cut in the OPIC administrative budget.
One negative change for free trade will occur in the House Ways and Means Subcommittee on Trade, where a pro-trade, pro-subsidy internationalist, Robert Matsui (D-Calif.), will be replaced as the minority ranking member by an anti-trade, pro-subsidy interventionist, Sander Levin (D-Mich.). This change could make bipartisan cooperation on free-trade legislation even more difficult.
In the Senate, the 11 members who will not return for the 106th Congress voted in favor of expanded trade in 58 percent of votes cast, slightly below the overall Senate average, and scored 42 percent on the subsidy scale, slightly above the average. This means the average voting record of the 89 returning senators is even more pro-trade, pro-subsidy than the average of the 105th Congress.
Three retiring senators will be replaced by House members who served in the 105th Congress, allowing a comparison of their voting records on trade and subsidies. Pro-trade, pro-subsidy Republican Dirk Kempthorne of Idaho will be replaced by an anti-trade, antisubsidy Republican, Michael Crapo. In New York, voters cashed in an anti-trade, anti-subsidy Republican, Alfonse D'Amato, for an antitrade, pro-subsidy Democrat, Charles Schumer. In Kentucky, voters stuck with the same model, electing an anti-trade, pro-subsidy Republican, Jim Bunning, to replace Wendell Ford, a retiring Democrat of the same stripe.
The trend in both the Senate and the House is for newer members to be more inclined to cut subsidies but slightly less inclined to vote for freer trade. As an institution, Congress appears to be drifting slowly toward a more isolationist approach to international economic issues.
Debate over America's engagement in the global economy has been oversimplified into a battle between isolationists and internationalists, whereas the ultimate struggle is between those who support a truly free market and those who favor various forms of government intervention in the international marketplace.
Measured on this free-market scale, the 105th Congress was found wanting. The number of representatives and senators who voted most of the time in favor of free trade and against subsidies was disappointingly small. Too few members of Congress apply a consistent philosophy of freedom and limited government when casting votes affecting how Americans participate in the global economy. Only 25 members of the House and 12 of the Senate voted consistently to curb government intervention in our international economic relations.
By supporting free trade as well as subsidies, the members of Congress who vote as internationalists have unwittingly undermined support for U.S. engagement in the global economy. The subsidies they support—through the IMF, OPIC, Ex-Im Bank, and other conduits— have aroused the suspicions of voters without creating new support for freer trade. They may describe themselves as free traders, but their support for trade-distorting subsidies undermines their claim to the title. Members of Congress who want to advance the cause of limited government, economic liberty, and national prosperity should favor a consistent agenda of eliminating barriers to trade and trade-related subsidies. Protectionism and subsidies both undermine the workings of the free market, substituting the judgment of politicians for that of millions of informed citizens cooperating together in the marketplace for mutual advantage.
In The Wealth of Nations two centuries ago, the Scottish moral philosopher Adam Smith issued a warning to the politicians of his day that bears repeating:
The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.19
So when deciding U.S. policy toward the global economy, members of Congress do not need to choose between the anti-trade, antisubsidy isolationism of Pat Buchanan and the pro-trade, pro- subsidy internationalism of the Clinton administration. They can choose to vote for a coherent program to liberalize trade and eliminate subsidies—in sum, to let Americans enjoy the freedom and prosperity of a seamless free market undistorted by government intervention.
Trade Policy Analysis No. 6 (PDF)
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