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How McCain's Trade Policies Would Have Affected the U.S. Economy

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John McCain

John McCain (Source: Scott Olson/Getty Images)

What Is John McCain's Position on Free Trade?:

McCain is a staunch proponent of free trade. He has two main proposals:Lower Barriers to Trade - McCain would engage in more Free Trade Agreements (FTA's) to level the global playing field and increase enforcement of existing trade agreements. He supports both pendng FTA's with Colombia and South Korea. He wants to enforce an existing agreement within NAFTA to open up the U.S. to the Mexican trucking industry. (Source: On the Issues)
  • Make American Workers More Competitive - McCain admits that free trade leads to a loss of American jobs. His response is to retrain workers so they will be more competitive in the global marketplace. He proposes an overhaul of the unemployment insurance program to achieve this purpose. He also emphasizes increased education and a school voucher program. (Source: JohnMcCain.com)
    McCain Opposes Subsidies- Although not officially part of his trade platform, McCain has vowed to fight one of the key obstacles to the Doha round of the World Trade Organization agreement - U.S. farm subsidies. These programs, originally designed to help Depression-era families keep their farms, now subsidize corporations who have, in turn, put U.S. family farms out of business.

    Developing countries are afraid that, under the agreement, low-cost, subsidized U.S. farm products will flood their markets, and put them out of business. Until the U.S. significantly reduces these subsidies, further progress on this important multi-lateral trade agreement is effectively dead in its tracks. (Source: USA Today, "Bill includes billions in farm subsidies," May 15, 2008; Gourmet, "Betting the Farm," April 2008)

    How Would It Impact the Economy?:

    Passage of the FTA with Colombia would support President Uribe, whose war against drug cartels has lifted 10 million Colombians out of poverty in the last five years and resulted in 2007 GDP growth of 6.6%. Colombia is on the border with Venezuela, whose President Chavez is a critic of the U.S. and an important supplier of oil. The Colombia FTA would remove tariffs for U.S. goods exported into Colombia, currently at 35%. This would assist 8,000 small businesses, and level the playing field, since the U.S. lifted tariffs on Colombian imports in 1991. (Source: USTR, Colombia Free Trade Agreement).

    Passage of the FTA with South Korea would be the largest since NAFTA. It would support this long-time ally in our efforts to end North Korea's nuclear program. Trade with South Korea in 2006 was $75 billion, and could increase to $100 billion within a few years. It would eliminate 94% of tariffs between the two countries, especially benefiting the auto, textile and service industries. It would immediately eliminate tariffs on $1 billion worth of agriculture exports to South Korea. (Source: USTR, "KORUS FTA Briefing Book")

    Opening the borders to Mexican trucks could cost some Teamsters jobs, since Mexican truck-drivers typically earn a third less ($7 an hour). However, this competition would also lower the price of food and other transported items. (Source: NYTimes, Court Bars Mexican Trucks, January 17, 2003)

    Elimination of farm subsidies would save taxpayers $307 billion a year, and substantially help lower the $500 billion a year budget deficit. It would also remove the key obstacle to the Doha WTO trade agreement, which would add $500 billion a year to the U.S. economy in exports. (Source: USA Today, Bill Includes Billions in Farm Subsidies, January 17, 2008; Foreign Affairs, The Stakes of Doha,December 2005)

    What Trade Issues Is McCain Missing?:

    During his long tenure in public office, McCain has covered in one way or another most important trade issues.

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