South-Western College Publishing - Economics  
The Politics of Trade
Topic International Trade
Key Words Free Trade, Protectionism, and Trade Pacts
Full Article

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Reference ID: A161097046

News Story Several pending trade deals have won praise from both the Bush administration and from organized labor. The Democrats have brought forth trade proposals that would require future trade deals to protect the rights of workers, the environment and the right of trading partners to make cheap generic pharmaceuticals for use in their countries. All of these items had previously been resisted by the administration but now seem to be acceptable.

Charles B. Rangel, Democrat from New York, won approval of the proposals from the House speaker, Nancy Pelosi, and other leading Democrats by using language aimed at strengthening these rights while still trying to address some administration concerns.

Organized labor viewed the proposals as an improvement of the pending deals with Colombia, Panama, Peru, and a pact being negotiated with South Korea. The proposals were even welcomed by Susan C. Schwab, the United States trade representative.

"This is another step in what has been a good-faith effort in a continuing dialogue by all sides," Ms. Schwab said. She is expected to meet with Rangel and Representative Jim McCrery, a Republican from Louisiana, with a goal of reaching an agreement on the proposals.

Mr. Rangel said he hoped the negotiations would be successful. "There may be some things I don't know about that they won't like," he said. "But I don't know of any objections that can't be worked out. The thing is, everyone is pretty upbeat about this."

The normal division in trade negotiations comes from those interested in protecting American workers from cheap foreign labor and those interested in opening new markets for the goods they produce. The protectionists call for tariffs and other trade barriers while the others want to move toward free trade with all countries. Mr. Rangel is hoping to pull enough support from those persons that lie between the two extremes of protectionism and free trade.

"There's going to be a coalition vote for trade with moderates in both parties in support," he said. "We are not going to have an appeal to the extremes like we've had in the past. I think the moderates are going to give a larger vote than ever for trade."

Questions
Discussion Questions:
1. Discuss the common division between protectionists and free trade advocates when it comes to trade proposals.
2. Name and discuss two tools use to protect American workers from foreign competition.
Multiple Choice/True False Questions:
1. When it comes to protectionist sentiment with respect to trade, they favor:
  1. tariffs.
  2. quotas.
  3. both a and b.
  4. none of the above.
2. A tariff is a tax placed on goods and services going to another country.:
  1. True
  2. False
Source Steven Weisman, "Break Seen in Logjam Over Trade," The New York Times Online, March 28, 2007.
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