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.
Permanent URL: http://www.freetrade.org/congress?tab=methodology | Printer-friendly version
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.
Permanent URL: http://www.freetrade.org/congress?tab=110th | Printer-friendly version
So far during the 110th Congress, members of the House and Senate have voted on several bills affecting subsidies and barriers to trade. Below are descriptions of bills and amendments related to the 2007/2008 farm bill, a ban on Mexican trucks in the United States, a free trade agreement with Peru, the Andean Trade Preferences Act, visas for low-skilled workers, and visa-waiver travel to the United States.
Not all of those votes offer a pure test of support for free trade, but each represents a reasonably clear attempt to either expand or restrict the freedom to trade. A complete list of major trade votes and an analysis will appear after the close of the second session of the 110th Congress.
•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.
•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.
•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.
•The 2007 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 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. 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 144-282 (Roll Call Vote 751) against an amendment offered by Rep. Danny Davis (D-IL) that would have reduced government protection and subsidies for the domestic sugar industry.
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 list.)
Permanent URL: http://www.freetrade.org/congress?tab=109th | Printer-friendly version
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.
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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 m
