TRADE TROUBLES

WHEN the Bulletin interviewed the former Republican US Congress member Mark Kennedy during his recent visit to Majorca he placed considerable emphasis on the danger of America “moving protectionist and turning inward not outward” if either of the Democrat candidates for the presidency were to be elected. Mr Kennedy's views were echoed and amplified earlier this week by Peter Mandelson, the European Union's Trade Commissioner. Referring to proposals for reform of the North American Free Trade agreement (NAFTA) and other trade agreements which both Hillary Clinton and Barack Obama have advocated, Mr Mandelson said: “It's irresponsible to pretend to people that you can erect new protections, new tariff barriers, around your economy in this 21st century global age and still succeed in sustaining peoples' living standards and jobs. It's a mirage and they know it. The US has followed free-trade policies more or less consistently under both Republican and Democrat administrations since Jimmy Carter took the first major steps in the late-1970s. Ironically it was President Clinton, Hillary's husband, who pushed through the NAFTA deal that she is now proposing to renegotiate on the grounds that it is costing American jobs. It is possible to see the Clinton/Obama line as no more than a necessary electoral response to grassroots worries about unemployment but Mr Mandelson was right to warn that such advocacy can easily lead to “beggar-they-neighbour politics which will take us decades back in terms of trade growth.”