More Good News from Africa

Thomas PM Barnett links to a great article in the Washington Post about the growing middle class in Africa.

This is the stuff that I really think McCain is good at, though he does not talk about it nearly enough. As an unabashed free trader, his approach offers more hope for the growing economies of Latin America and Africa than does Obama's completely protectionist approach.

The irony is that Obama, with his Kenyan heritage, is more hostile in his policy prescriptions to Africa's aspirations than old white Republican McCain.

Obama and McCain on Trade

I wanted to examine free trade accords not only their own, but in the context of the larger foreign policies put forth by candidates Obama and McCain.

Put simply, the differences could not be more stark. McCain is an avowed free trader, while I have yet to find a free trade accord that Obama has not opposed! In this respect, he represents a great departure from former President Clinton, who bucked heavy union pressure to get NAFTA passed through Congress.

There has been much activity recently with regard to free trade. CAFTA, the Central American Free Trade Accord, was narrowly passed on a party-line vote in 2005 with 217 Congressmen (mostly Republicans) voting for, and 215 (mostly Democratic) Congressmen voting against.

The US-Peru Trade Promotion Agreement was signed on April 12, 2006 and is currently being implemented.

Sadly, since my Democrats took over the majority in the House and Senate with the mid-term elections of November 2006, all progress toward further free trade agreements has stalled. Speaker Pelosi has frozen votes on the Colombia Free Trade Accord, and is obviously in no hurry to approve the South Korea-US Free Trade Accord or the Panama Free Trade Accord.

This stance, which Senator Obama sadly champions, is a betrayal of our close friends and allies. In the case of Central America, Panama and Colombia in particular, to oppose the free trade accords with those nations after the decades of hard work they've done to reduce the violence of their various civil wars is just inexplicable. Especially since the Democrats always championed the "soft power" of economic engagement with those nations, in contrast to the hawkish policies of the Reagan 80s they so criticized.

It's all part of a dangerous trend where the U.S, the greatest beneficiary of and champion of free trade, is turning away from that pillar of our success just as the rest of the world is coming around.

Senator Obama can pander to the reactionaries of right and left from Pat Buchanan to Lou Dobbs to Michael Moore all he wants. It's one of the many reasons he's lost my vote, and for his unstinting support of free trade Senator McCain has yet again earned my vote.

Obama's advisor is defense counsel for Panamanian official indicted on charges of murdering an American soldier

I can't believe I missed this! In the course of researching my next post on McCain's and Obama's contrasting positions on free trade, I came across this from ABC's Jake Tapper:

Greg Craig, a senior foreign policy adviser to Obama, is a partner at the big-shot DC law firm Williams & Connolly. There Craig represents Pedro Miguel González.

González is president of the Panamanian Legislature and is also under indictment in the U.S. for murdering U.S. Army Sgt. Zak Hernández in 1992.

Several paragraphs later, there's this from Obama:

"Until that situation is resolved, we cannot support any trade agreement with Panama," Obama wrote.

Craig also represents Carlos Sánchez-Berzaín, the Bolivian Defense Minister who has been accused in a federal lawsuit of "crimes against humanity" because of his alleged role in the suppression of labor union riots in 2003 that resulted in the deaths of 67 people.

This would be hilarious, if it were not so serious. In essence, Obama is saying that his advisor gets a pass, and Panama takes the fall, because of this case.

It's just another case of Obama protecting his personal cronies while giving the cold shoulder to this country's vulnerable allies, from Iraq to Colombia to Georgia to Panama.

The Imminent Decline of Chavez and Company

Andres Oppenheimer in the Miami Herald noted recently that Chavez's radical populist friends in Latin America are not doing as well as they say they are:

In Venezuela, Chávez's popularity has plunged, as growing numbers of Venezuelans are suffering from a 30 percent inflation rate, massive corruption and nepotism (about two dozen Chávez relatives hold senior government jobs). They also resent a president who gives away petro-dollars from the country's recent oil bonanza in ego-boosting trips abroad.

In Bolivia and to a lesser extent in Ecuador, opposition forces are displaying growing resistance to these countries leaders' efforts to become presidents for life.

In Argentina, President Cristina Fernández de Kirchner's populist government lost its aura of invincibility when Congress -- led by her own vice president -- overturned a key government bill to further tax soybean exports. Political winds in Argentina are beginning to blow away from pro-Chávez populism and move toward the center.

And here is his bottom line, which really shows who is shrinking poverty in Latin America (hint, it's not Chavez):

In sheer numbers, Latin America's pragmatic-democratic bloc -- led by Brazil, Mexico, Colombia, Peru and Chile -- already accounts for more than 80 percent of the region's economy, and more than 90 percent of its foreign investments.

This falls right in line with Thomas Barnett's observation that, when it comes to shrinking the Gap, foreign direct investment (FDI) is what it's all about. But to get the FDI flowing into your country, you need a) security and b) an investment-friendly environment.

Chavez and his imitators are doing all they can to provide the reverse of the second requirement, and as seen with Chavez's support for FARC in Colombia he is doing his best to ruin the security aspect too. In the end, Chavez is only perpetuating the misery in his country and that of his allies, while the rest of Latin America moves on.

Postscript: All the above is worth considering in light of our Presidential candidates' differing trade proposals for Latin America, to which I'll return shortly.

Free Trade Helps Win the Tolerance War?

You know how sometimes you have a really good idea and then you read about that idea in the newspaper? Me neither. Heh.

Actually, Edward Gresser and Mark Dunkelman at the Wall Street Journal borrow one of my better brain-waves about free trade helping fight terror.

The idea I had was this: since our massive military aid packages to Pakistan and Egypt, to name but two countries, have not exactly made us beloved, why not try free trade accords with those countries? We have already done so with Jordan, but I am not aware of any other such accords with Arab and/or Muslim countries.

Gresser and Dunkelman argue along the same lines:

Towels, for example, are Pakistan's top export. Each container full of towels exported to the U.S. brings in enough income to employ about 500 Pakistanis. But while Pakistani towels are subject to a 7.5% tariff, competing towels from the Dominican Republic or Costa Rica -- both of which benefit from the Central American Free Trade Agreement -- come in duty-free.

Likewise, luggage made in Indonesia is subject to a tariff that can rise to 22%, but competes with tariff-free suitcases manufactured in Mexico. Lebanon, which exports preserved fruits and vegetables, must compete with similar duty-free items exported from Peru.

Unlike Senator Obama, I am for free trade along with Senator McCain. We have already made great gains in securing economic and political stability in Central America and Peru with the CAFTA and Peru free trade accords, respectively, and we should do the same with the Muslim world.

So who do you think we should begin with, if you agree with the sentiments expressed here? I nominate: Afghanistan and Pakistan (together, as a package deal), Egypt, Iraq and Indonesia. Seems like a good beginning to me.

Free Trade and Farm Subsidies -- Obama vs. McCain

The EU is one of the slowest to extend true free trade to Africa, and has been very resistant to reduce its farm subsidies in particular.

Unfortunately, the EU has also taken to making sure the tariff barriers to outside countries go over higher as they integrate more new countries like Poland into the EU itself. In France and Germany, there is ridiculous fears over "Polish plumbers" taking away jobs, so the EU tends to deal with this by making sure tariffs on goods coming from outside the EU are high.

Contrast this with the US, which recently was pushing for a global reduction in tariffs on farm goods, as well as a global reduction on farm subsidies, which in this country overwhelmingly favor the small number of large corporate farms and NOT, as their supporters would have you believe, the small family farms.

In that respect, support for the most 2008 Farm Bill was a vote in favor of a bill where 80% of the money goes to the top 20% wealthiest corporate farm interests. It was more about courting those wealthy farmers in Indiana and Illinois and Iowa than about really helping hard-pressed small farmers. And it certainly wasn't about helping feed people outside of the United States!

Don't take my word for it, Google "Farm Bill 2008" and follow the links and decide for yourself. But here's one essay from economist Greg Mankiw I found instructive:

http://gregmankiw.blogspot.com/2008/05/farm-bil...

It it worth noting that McCain voted against this pork-fest, and Obama voted for it.

Similarly, there is a debate in this country over switching to ethanol and away from gasoline as a means to achieving the dual goals of emitting less CO2 and also sending less money to those lovely Saudis, Iranians and Venezuelans who dig us so much. Not to mention just spending less money on filling up one's car!

Brazil has gone from having 3% of their new cars being flex-fuel in 2003, to 70% of their new cars being flex-fuel in 2006! Brazil has done this by investing heavily in cheap, plentiful sugar-based ethanol, so Brazil has now effectively achieved the elusive goal of being energy-independent.

But, because of the corn-growing ethanol lobby here in the U.S., there is a huge tariff on the import of sugar-based ethanol that amounts to 54 cents a gallon! This is not about helping the American consumer -- rather, it is all about protecting the Iowa and Illinois corn ethanol farmers from competition. Again, as with the farm bill, Obama sides with the giveaway for Illinois and Iowa farmers over lower ethanol prices for all Americans. Google "sugar ethanol tariff" for the relevant links.

My point is, and I know I've wandered all over the place in getting here, is that the tariffs and protectionism of the sort favored by both the EU and Senator Obama do NOT favor the customers that are supposedly being protected, nor do they favor the exporters in Africa, Brazil and elsewhere who simply want to get access to the big markets in the EU and the U.S. The best way the U.S. could help African nations grow and prosper is to drop all the ridiculous tariffs we have on the very export goods that African nations send our way.

In this respect, the U.S. is better than the EU, but that's not saying much at all. We still need to be far better than we've been thus far. Sadly, for all his rhetoric Senator Obama stands squarely in the way of lowering tariffs on African goods exported to the U.S., whereas old white Senator McCain has been a staunch opponent of tariffs against foreign goods, and an equally strong foe of the giveaways to the bloated farm lobby here.

This was cross-posted at JackandJillPolitics.com