McCain on Trade

According to John McCain’s website:

Ninety-five percent of the world’s customers lie outside our borders and we need to be at the table when the rules for access to those markets are written. To do so, the U.S. should engage in multilateral, regional and bilateral efforts to reduce barriers to trade, level the global playing field and build effective enforcement of global trading rules.

It seems Senator McCain is a proponnent of free trade.  There is a great deal of consternation with regards to free trade, so for McCain to propose a reduction in barriers to trade, he must have good reason.  What are his motivations? Is Senator McCain an ardent free-trader or simply paying the subject lip service?

McCain the Free Trader

Not only is McCain a proponent of free trade, he is an ardent believer in America’s ability to compete in global markets.  His voting record is staunchly free trade, even in the case of China.  He voted for the establishment of permanent normal trade relations with the People’s Republic of China in H.R. 4444 in 2000.  He also, more recently, voted against a 27.5% tariff on Chinese products proposed in 2005 in retaliation for the “unfair” advantage of the “artificially low” peg of the Chinese currency, the renminbi, against the dollar.  A great deal of weight can be put on these two votes as a show of McCain’s advocacy of free trade, since it is almost fashionable to bash China.  This propensity to bash China stems from its share of the United States’ trade deficit being 32% in 2007, according to the U.S. Commerce Department.  What is absent from most of the rhetoric on China are the benefits trade with China brings in the form of lower prices.  In fact, two economists at Chicago, Christian Broda and John Romalis, catalogue the benefits that WalMart brings to Americans in the form of lower prices, which are not without controversy.  These low prices arise not only from WalMart’s notorious efficiency, but from its ability to obtain products at lower prices due to supply from Chinese companies.

In addition to China, McCain has voted on free trade agreements with Morocco, Australia, Chile, Singapore and Oman.  He supports the currently proposed free trade agreements with Peru and Columbia.  I could present several quotes of McCain in support of free trade, but talk is cheap, so I thought I would focus on his votes, which are not cheap.

However, McCain’s support for free trade is not absolute.  He has voted for restrictions on trade in cases where national security or humanitarian interests are at risk.  He voted in 1999 against lifting travel sanctions with Cuba.  He voted for the Burmese Freedom and Democracy Act of 2003, which imposed an import ban on Burmese products to the United States.

Bring it On

McCain is not a man to shy away from competition.  He believes that the United States should not shy away from competing in the global marketplace either.  In the Republican debate in Dearborn, Michigan in October 2007, McCain said (Ok, I’ll use a quote because talk means something sometimes, and debate talk is expensive.),

And by the way, I have a glass of ethanol every morning before breakfast. (Laughter.) But I still don’t support the subsidies, and I don’t think we need them. And I think we ought to have sugarcane-based ethanol into this country, and I don’t think that subsidies are the answer, because I’ll open up every foreign market to our agricultural products, who are the most productive and best and most effective agriculture in the world.

I think we can sum up McCain’s rationale in the following way: closing off markets to foreign firms will not help the United States.  Sometimes it has contributed to bringing about very disastrous periods in history, like the Great Depression.  If the United States is to remain a world leader, we must open our markets and those of other countries and compete to sell goods and services.  This will ensure that the United States engages the world and makes all people stakeholders in the stability and continued prosperity of the planet.

A rationale unmistakably originating from a sailor.