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By Birgit Matthiesen
"This morning, I learn that the Canadians are very unhappy with me."
- Representative Chris Murphy (D-Conn), Co-Chair of the Buy American Caucus, September 23, 2011
Mr. Murphy formed the Congressional Buy American Caucus in June 2010 along with his Republican colleague, Walter B. Jones of North Carolina. By some counts, there are more than 180 caucuses in the House this Congressional session. Caucuses have no legislative role – they are not legislative or oversight committees. But the fact that this caucus has been formed might lead one to wonder if the tide in Congress has indeed turned protectionist?
Back in 2006, 44 per cebt of Americans thought free trade agreements were good for the economy and only 35 per cent felt they were bad, according to a poll by the Pew Research Center. By November 2010, those polls showed almost the reverse. Support for free trade agreements then was at one of its lowest points in 13 years. At that time, their polling indicated that roughly 40 per cent of respondents thought international trade issues were bad politics for Republicans and the Tea Party. Only one-quarter of Republicans who agree with the Tea Party said that free trade agreements like NAFTA and the policies of the WTO have been a good thing for the United States, while 63 per cent said the opposite.
After a grueling mid-term election cycle, political pundits were quick to predict that the GOP, on trade issues, would be forced to appease their newly minted colleagues and come back to Washington and vote down the pending three trade pacts with Korea, Colombia and Panama.
In short – the political class predicted that America was closing its doors. Were they wrong?
A little over a year later, in a March 1, 2011, letter to President Obama, nearly every freshman Congressional member, many of whom associated with the Tea Party, expressed support for the three long-stalled trade pacts. Their letter began: "We write to you as new Republican members of the House of Representatives, who strongly believe that expanding trade will increase economic growth and create jobs here in the US. We stand ready to work with you to ensure that new opportunities are created for our farmers, manufacturers, service providers and workers by passing the three pending free trade agreements with Colombia, Panama and South Korea within the next six months. You have set a goal of doubling US exports by 2014. We applaud this initiative because we know that deepening economic ties with our trading partners will create badly needed jobs for Americans."
On October 12, 2011, Congress approved the agreements. Of the 87 Republican freshmen in the US House of Representatives, all but one them voted for Colombia and Panama. Seven House freshmen opposed Korea, but 80 voted yea. And over in the Senate Chamber, every freshman GOP Senator supported all three trade pacts. For the Korea pact alone, 37 Democrats registered their yes vote.
The vote count proved the pundits wrong and shows us that enough members on both sides of the aisle embrace the principles of free markets.
So if Congress has spoken so resoundingly for open markets, why and where all the noise about Buy American one might ask?
A look at the Senate Chamber might be enlightening. On October 20, 2011, Jeff Merkley, the junior Democrat Senator from Oregon, rose to introduce a Buy American amendment to a key funding bill for the US Department of Agriculture, the Food and Drug Administration and related agencies. Sixty votes were needed to pass the amendment. Fifty-five voted yea and 44 opposed the amendment. Of the 55 who agreed with Mr. Merkley, 49 were Democrats.
If we compare the Korea votes with the Merkely amendment votes, we find that 34 Democratic Senators voted for both.
By their votes, these Senators said they want to keep their cake and eat it too – open export markets abroad, but close their own against foreign competition.
There is an inexplicable disconnect in logic by those who say they support free trade while at the same time endorse make everything in America policies. What might be even more disheartening is that this disconnect doesn't come from some rogue freshman, but seasoned legislators. Senator John Kerry of Massachusetts voted for Merkley's Buy American amendment, but then said this of the Korea FTA: "These agreements make it clear that the United States will engage global partners on fair terms." His colleague, Carl Levin of Michigan, also supported trade with Korea: "It's high time we insisted on a different trade model that fights for a level playing field for American exports and American workers." He cast his yea vote on October 12. Eight days later, he voted for Merkley's Buy American provision.
Merkley's amendment received the majority of votes, but failed the 60-filbuster proof standard by only five. There are at least 10 other must-pass funding bills awaiting debate – each one another opportunity to insert a Buy American amendment. And now that the three FTAs have been taken care of, Congress and the administration will turn their attention to the Transpacific Partnership. We will hear more lofty speeches about fair trade and open markets. Let's hope Congress stays true to their own words.
Birgit Matthiesen is CME's special advisor to the president and CEO on US government relations. Birgit can be reached at birgit.matthiesen@cme-mec.ca.
