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Global Education

Growing emphasis on global economy

By Denebola
Published: April 2008

By Alex Tolkin

One of the more surprising issues to emerge in the 2008 Democratic presidential campaign has been the debate over free trade agreements. Barack Obama has strongly criticized Hillary Clinton over her support for the North American Free Trade Agreement (NAFTA), a free trade agreement between the United States, Mexico, and Canada, only to be caught in a scandal when a Canadian diplomat revealed that Obama secretly promised to keep the treaty in place.
More recently, Clinton’s top political strategist, Mark Penn, resigned when it was revealed he was working on a free trade agreement with Colombia.
Americans are increasingly concerned about the effects increased free trade and globalization will have on their lives. A March 7 Wall Street Journal poll reported that a mere 25 percent of the country thinks that globalization has had a positive effect on the country.
Virtually all economists, however, believe that globalization is tremendously beneficial to the economy and that more free trade pacts should be encouraged. What explains this seemingly puzzling disconnect?
One major factor fueling anti-globalization sentiment is that the negative effects of globalization are far more visible than the benefits. Free trade agreements drive down prices for consumer goods and help US businesses at the cost of some jobs.
Most economists believe that the benefits vastly outweigh the harms to the point where far more jobs are created by the increased economic stimulus than are lost to foreign competition.
Americans, however, rarely think in terms of broad macroeconomic concepts. Rather, Americans see certain individuals lose their jobs and miss the hidden economic gains. Those who do lose their jobs are also far more vocal about globalization than the millions of Americans who benefit from it.
The current US economic downturn has only compounded the situation. Globalization is a simple, politically expedient concept that carries the blame of America’s current economic woes, regardless of whether that blame is correctly placed. The Democrats in particular have attacked globalization,   stopping President Bush’s attempts to pursue new free trade agreements since they won back Congress in 2006.
Unsurprisingly, both Obama and Clinton have taken advantage of this protectionist trend, and have come out strongly for revising existing free trade agreements while limiting the number of new ones. As the economy becomes a more and more important issue in the election, talk about trade is likely to increase.
The candidate’s policies once in office, however, may not match his or her rhetoric on the campaign trail. Even though expanding free trade may not be politically popular, most presidents understand that it is vital to US economic growth. Bill Clinton, who negotiated NAFTA, was an economic moderate while in office, and many expect Hillary to support similar middle-of-the-road policies. Obama’s statements to the Canadian diplomat regarding NAFTA indicate that he, too, would pursue a very different program than that which he suggests on the campaign trail.
Despite the wishes of the voters, the Democratic Party may be more willing to consider further free trade agreements with a Democrat in the White House. The Republican Party has been far more supportive of globalization. John McCain has a long history of supporting free trade deals, a record that some fear may be a liability in November.
In the end, the economy really dictates American attitudes towards globalization. In growth years, there is lukewarm approval. During recessions, the populace turns very hostile. The economic situation later this year will ultimately determine what role globalization will play in the race for the White House.

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