U.S. Congress Hypocritical on Free Trade

by Daniel T. Griswold

Daniel Griswold is associate director of the Center for Trade Policy Studies at the Cato Institute, www.cato.org, and author of the new Cato study, "Free Trade, Free Markets: Rating the 107th Congress."

February 13, 2003

Despite all the hype about globalization and the supposed universal triumph of free-market policies, governments around the world, including the United States, continue to interfere in the flow of goods, services, and capital across international borders. The U.S. Congress, despite its rhetoric, is a poor defender of free trade and the prosperity it can bring to consumers.

The widespread intervention in question takes two basic forms: barriers that discourage trade, and subsidies that encourage domestic production and exports. U.S. trade barriers remain high against trade in farm goods, textiles, and clothing, and unfair "antidumping" laws remain the protectionist weapon of choice for domestic industries that want to hobble their foreign competition.

Global commerce is further distorted by the 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 favor selected exporters through such agencies as the Export-Import Bank.

The 107th Congress passed major legislation to promote freer trade, the most important being trade promotion authority to allow the president to negotiate market-opening trade agreements. But 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.

In an analysis of congressional voting on trade, a new Cato study found that only 15 members in the House and 22 in the Senate voted more than two-thirds of the time in 2001 and 2002 against trade barriers and subsidies. The analysis was based on 30 votes on such matters as trade promotion authority, antidumping law, trade with Vietnam, Cuba, Mexico, and China, and subsidies for exports and for production of sugar, wool and other farm goods.

Members were labeled free traders if they consistently opposed both trade barriers and subsidies; internationalists if they opposed trade barriers and supported subsidies; isolationists if they supported trade barriers and opposed subsidies; and interventionists if they supported trade barriers and supported subsidies.

The most consistent free traders in the House were Jeff Flake (R-Ariz.), Charles Bass (R-N.H.), Richard Armey (R-Texas), Judy Biggert (R-Ill.), Phil Crane (R-Ill.), Jim Ramstad (R-Minn.), and John Sununu (R-N.H.), who is now in the Senate. Of the remaining House members, 70 voted as internationalists (58 Republicans and 12 Democrats), nine as isolationists (six Republicans and three Democrats), and 36 as interventionists (24 Democrats and 12 Republicans). The balance of House members had mixed voting records.

In the Senate, those with perfect free-trade voting records were Sam Brownback (R-Kan.), Mike DeWine (R-Ohio), Phil Gramm (R-Texas), Richard Lugar (R-Ind.), John McCain (R-Ariz.), Don Nickles (R-Okla.), Rick Santorum (R-Pa.), and Fred Thompson (R-Tenn.). Among the other senators, 12 voted as internationalists (seven Republicans and five Democrats), two as isolationists (both Democrats), and 22 as interventionists (all Democrats). The other senators had mixed voting records

Other key findings of the study:

• In the House, 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, Republican members opposed trade barriers on 59 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.

   

   

• The Senate was even more sharply divided along party lines than the House. Republican senators voted against trade barriers an average of 86 percent of the time compared to a 31 percent average among Democrats. Republicans voted against trade subsidies 62 percent of the time compared to 26 percent among Democrats.

   

   

• 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 also voted frequently in favor of trade subsidies.

   

   

• Changes in the House 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.

America's political leaders complain incessantly that U.S. producers must compete in a world of "unfair" trade barriers and subsidies, in contrast to the "open" U.S. market. But few members of Congress vote consistently for policies that would create a truly open market free of those barriers and subsidies. Based on their voting behavior, most members of the U.S. Congress have no standing to criticize other governments for deviating from free trade.