The World

There have been some “calm-down-lads-calm-down” interventions from sage voices in the blogosphere about the competitive mercantilism going on out on the campaign trail.

All well-made points and I’ve said much the same myself in the past. Note in particular that neither candidate has actually proposed anything that would have stopped Bain Capital offshoring some functions of the companies they were running, which makes the whole focus on the issue even more peculiar.

So: are we safe to toss the trade-bashing into the voluminous “empty campaign promises on trade” box and move on? Not so fast.

It’s true that Barack Obama hasn’t followed through on some of the more aggressive promises he made in 2008, including renegotiating Nafta (which his own people at the time reportedly said privately was just talk) and calling China a currency manipulator (see my earlier post linked above for why that in any case is a bark from a toothless dog).

But the last four years have seen the US really struggle to take a leadership role in world trade. It allowed sufficiently sweeping ‘Buy American’ provisions to be added to the stimulus bill, after which it had to negotiate a clarification agreement with Canada on the issue. It took more than two years to get three (fairly minor) pending bilateral deals through Congress. It had almost no flexibility to show in Doha, helping to condemn the poor old thing to death and it spent three years getting round domestic opposition and managing to issue guidelines for how it was going to negotiate bilateral investment treaties – an area in which the US lags seriously behind others.

All surely not unconnected with the toxic atmosphere around trade to which Mr Obama contributed during the election.

True enough, it has proceeded with negotiations in the Asia-Pacific and tried to set up a services trade agreement, but let’s wait and see what they produce (and particularly what concessions the US will be able to make to get them to happen) before entering them into the credit column.

Counterfactuals are always uncertain, but I find it hard to imagine that the persistent clamour of mercantilism on the campaign trail will make no difference at all to the tenor of the debate in Washington once the election is done.