As I should have mentioned in my previous post, the House and Senate are likely to vote on the Farm Bill conference report tomorrow.

The bill, an abysmal one that carries a price tag of roughly $300 billion, will likely pass easily in the Senate, where an earlier version of the bill sailed through the chamber last year in a 79-14 vote.

So the questions over the possibility of an override center mainly on the House, which will likely see a closer vote, but not by much.

If House Republicans are unable to secure enough votes to sustain a veto, it would signify a remarkable failure of their leadership, especially of House Minority Leader John Boehner. Boehner has publically opposed the bill, but - along with House Minority Whip Roy Blunt - has refused to actively push his Republican colleagues to do the same.

An article in today’s The Hill notes:

[L]obbyists said members were being told to “vote their districts,” meaning they could support the measure without fearing any consequence from leadership.

What’s worse is that the bill probably could have been improved upon, much earlier in the process. The Republican leadership has full discretion over committee assignments. Instead of seating on the Agriculture Committee a balanced array of viewpoints, the House GOP leadership has chosen a collection of members that hail almost universally from farm-heavy districts and are greatly predisposed to support an increase in agricultural spending.

In fact, an informal vote count compiled by the office of Rep. Jeff Flake suggests that every single Republican member of the House Agriculture Committee is likely to support the Farm Bill tomorrow.

What would the bill look like if Rep. Flake or another critic of current farm policies was a member of the committee? Sure, one member can have only so much impact on a committee of 46. But at least that would give taxpayers a voice at the table.

Further to my quasi-post on the farm bill Friday, I may have been premature in my enthusiasm. According to an article [$] today in Congress Daily, the ranking member of the Senate Finance Committee Charles Grassley (R, IA) is confident that Congress will be able to override the President’s threatened veto:

Grassley expects the White House will not push Republicans to sustain the expected veto. If Bush does push support for the veto, cautioned Grassley, he should expect “very weak loyalty in the Congress from his own party.” Bush has said that some Republicans in safe seats who represent districts without agriculture might not worry about offending anti-hunger advocates by turning down the bill’s $10 billion increase in nutrition programs. Grassley said today that such a scenario is the only way he could envision the White House getting enough House support to sustain a veto.

The full conference report, in all its glory, available here for the strong-of-stomach.

Also alarming: the conference report apparently includes language that would nullify a federal appeals court decision under the Freedom of Information Act that has done so much (via the great Ken Cook at the Environmental Working Group) to shed light on these egregious subsidies. See here.

Cato Unbound’s May edition discusses the resource curse. Numerous studies confirm that countries rich in natural resources tend to be poor in property rights, individual liberty, and the rule of law. Is this just a deep, and deeply depressing, feature of the world we live in? Or can wealthier countries (which make up the market for most of these resources) and international institutions somehow intervene to alleviate or even lift the resource curse?

Philosopher Leif Wenar opens up the discussion by charging that you — yes you — are almost certainly the recipient of stolen goods, resources that clearly shouldn’t have belonged to the dictators who first sold them. Wenar then offers a simple but provocative solution to the resource curse, one that will hold kleptocracies responsible for their thefts.

The discussion will feature Cato senior fellow Andrei Illarionov, the former chief economic advisor to Vladimir Putin;  journalist and historian John Ghazvinian, author of Untapped: The Scramble for Africa’s Oil; and Washington University political philosopher Christopher Wellman, an expert in matters of international justice.  Could Wenar’s proposal succeed?  What are the obstacles along the way?  What else, if anything, can developed countries do to end the resource curse?  Be sure to check out Cato Unbound throughout the week, as discussion develops over one of the most pressing humanitarian issues of our time.

Excellent.

Suppose you work for a company experiencing phenomenal revenue growth. Most of that growth is attributable to rapidly increasing sales to new customers with potentially limitless demand for your products.

Then the CEO unveils next year’s strategic plan, which includes actions likely to offend and financially injure those new customers, causing them to take their business elsewhere and jeopardizing your company’s future.

If you work in almost any goods-producing industry in Indiana or North Carolina, the above is not hypothetical. It is precisely what you confront if either Senator Clinton or Senator Obama becomes the next president.

You see, both candidates profess deep skepticism about international trade. Both plan to halt new trade agreements and to force our partners to renegotiate existing deals. Both support provocative, unilateral actions that would ultimately hurt American producers, consumers, and investors. And both insinuate that our trade partners are untrustworthy adversaries.

But Indianans and North Carolinians should recognize those trade partners as something different – like their fastest-growing customers.

Indiana’s producers shipped $26 billion worth of goods to foreign customers in 2007, which was 14 percent more than the year before and 80 percent more than in 2001. Since 2001, the state’s exports have grown at a rate one-third faster than U.S. exports overall.

North Carolina’s producers shipped $23 billion worth of goods to foreign customers in 2007, which was 10 percent more than the year before and 59 percent more than five years ago.

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Not content with a protected near monopoly of the domestic market, American sugar producers are demanding that Congress make their pot of subsidies and protection even sweeter.

Chairman of the House Agriculture Committee, Rep. Colin Peterson (D-Minn.), is pushing language in the latest proposed farm bill that would raise domestic price supports for sugar and mandate that sugar imports be used for ethanol production.

His proposals would virtually lock in an 85 percent share of the U.S. market for domestic sugar beet and cane growers, even though a number of foreign countries can grow sugar more cheaply than most American growers. And by the way, did I mention that Rep. Peterson’s district is among the nation’s top producers of sugar beets?

The Bush administration, to its credit, opposes Peterson’s changes in the farm bill. The sugar industry, of course, loves the idea. A spokesman for the pro-protection American Sugar Alliance told this morning’s Wall Street Journal, “We have an administration that seems more interested in supporting foreign producers, than producers right here in America.”

Notice the sugar industry doesn’t mention American consumers. U.S. agricultural policies should not be about favoring “our” producers over “theirs,” but about advancing such national interests as freedom, prosperity, and a more peaceful world. As we’ve explained in detail at the Center for Trade Policy Studies, the U.S. sugar program favors American sugar producers primarily at the expense of the rest of America. American families pay higher prices at the store, while U.S. producers that use sugar as an input — bakeries, food processors, restaurants, candy makers, etc. — incur higher costs because of our sugar program.

As we read daily in the newspaper about soaring food prices, this Congress is the verge of passing a farm bill designed explicitly to raise domestic food prices.

Arizona’s law requiring employers to use the federal government’s “E-Verify” system to check workers’ immigration status has employers there “confused by the law’s requirements and ‘terrified’ at the prospect of losing their business licenses if they run afoul of its provisions,” according to a local chamber of commerce official.

My recent paper on electronic employment verification calls it “Franz Kafka’s solution to illegal immigration.”

I recently had the opportunity to conduct a pair of briefings for congressional staff regarding electronic employment eligibility verification. A pair of bills are vying for the attention of Congress these days. I suggested in my recent paper, “Electronic Employment Eligibility Verification: Franz Kafka’s Solution to Illegal Immigration,” that Congress should ignore both. Indeed, it should eliminate “internal enforcement” of immigration law entirely.

One of my co-briefers provided staffers with some interesting information pertaining to the idea of building a regulatory contraption for automatic nationwide verification of workers’ identity and immigration status. He was a representative of SSA workers from the American Federation of Government Employees, National Council of SSA Field Operations Locals.

The programs slated to go national under these proposals would compare data about new workers (and in some cases, existing workers) with databases at the Social Security Administration and the Department of Homeland Security. When the data didn’t match, workers would receive what is called a “tentative nonconformation.” With the 4.1% error rate in SSA files (as found by its Inspector General), that’s a lot of tentative nonconfirmations going even to law-abiding American citizens. A higher percentage of the time, naturalized citizens would get them, too, as government data about them is even more error-prone. Bad government data is just one source of error.

Anyway, when a tentative nonconfirmation is issued, employers are supposed to communicate this to the employee (not all do) and the worker is supposed to report to a Social Security Administration office or the Department of Homeland Security to clear the problem up. This is where the interesting new information comes in.

What would the process be like? Well, try calling your local SSA field office to find out. The SSA worker rep reported that 50% of those calls aren’t answered because field offices are too busy. Calls to the SSA’s national 800-number don’t go through 25% of the time.

It’s not just a phone problem. The agency currently has a backlog of 752,000 on disability rulings. That’s three quarters of a million people who aren’t getting an answer from SSA. It takes 530 days – a little under a year and a half – to get a disability ruling out of SSA.

In my paper, I wrote about the experience American workers would get at the Social Security offices when they went to clear up their tentative nonconfirmations:

Disputes of tentative nonconfirmations would not happen in lushly carpeted offices with marble columns, hot coffee, and friendly, attentive staff. The experience of American workers when they sought permission to work would be much more like their trips to the nation’s departments of motor vehicles, post offices, and dentists—long lines, unfriendly service, and painful procedures.

The SSA union rep assures me that SSA workers are friendly. Any perception of unfriendliness is due to overwork. Fair enough; I may have been slapdash in my writing about SSA employees. But a national electronic employment eligibility verification system would result in 3.6 million new visits to these folks, overworking them and eroding their courtesy even more. These visits, and administering tentative nonconfirmations at SSA, would cost $1 billion, according to the union rep.

Of course, an SSA employee union rep would happily take the money and add workforce to do whatever Congress wants. My preference is to save the money. Enforcement of our abnormally restrictive immigration law causes us to spend taxpayer money on undermining the productive economy. That shouldn’t make sense to anyone.

I’m sorry to bring bad tidings so close to the weekend, but apparently House and Senate conferees have reached agreement [$] on the broad outlines of a Farm Bill.

We will have to wait until Monday to get the full, disgusting details but broadly, we know this about the proposed bill:

• it will raise the target prices and loan rates for northern crops (i.e., wheat, soybeans, other feedgrains) beginning in 2010
• raise the sugar loan rate three-quarters of a cent
• include a sugar-to-ethanol program (whereby the USDA would buy sugar that would otherwise threaten the domestic minimum price and sell it, presumably at a loss, to ethanol plants)
• an additional $4 billion for conservation programs
• $10.361 billion extra for domestic and international food aid programs
• The bill also includes the new “permanent” disaster program (some thoughts on that here), albeit at $250 million less than the original $4 billion request

To pay for this, your representatives in Congress cut the $5.2 billion per year direct payments program (that is the program that pays farmers on the basis of past production and yields, regardless of what they produce now) by 2 percent per year for four years. Recall that the direct payments program, while an offence to taxpayers everywhere, is at least less trade distorting than the price-linked subsidies that the conferees have agreed to increase. And in the final year, when it really counts for purposes of planning future spending levels (i.e., the baseline), the direct payments will go back up again.

The one possible bright light at the end of this sewer-pipe: a presidential veto. No word from the administration on this latest deal, but it does not fit their past definition of an acceptable amount of reform and thus, assuming intestinal fortitude on the part of President Bush (I know, I know), would likely elicit a veto threat.

Happy weekend, everybody.

This presidential campaign has featured more than its share of misleading statements about trade and manufacturing. Nowhere has that been more on display than when the two Democratic candidates have been hustling for votes in what used to be the nation’s industrial heartland of Ohio and Pennsylvania.

On the eve of today’s crucial Pennsylvania primary, here is how the Boston Globe described a scene at a Hillary Clinton event in the western side of the state:

“We need to still be a manufacturing nation,” she said at a rally in downtown Pittsburgh yesterday, as a woman in the crowd shouted “Right on!” “I don’t think a country that doesn’t make things can remain strong and vibrant and leading in the global economy.”

Right on? Not exactly. Implied in Clinton’s remark is that manufacturing has been in decline and that we are in danger of becoming a nation “that doesn’t make things.”

One huge problem with her statement is that manufacturing output in the United States has continued to EXPAND in recent decades. According to the Federal Reserve Board, America’s factories produced 30 percent more in real output in 2007 than a decade earlier and three times more than in the 1960s.

And just what sort of things do Americans make? According to the U.S. Commerce Department, in 2006 U.S. factories produced:

• 4,522 complete civil aircraft and 12,299 complete civil aircraft engines.
• 87 million metric tons of raw steel and 113 million tons of shipped steel products.
• 11,260,300 cars and light trucks.
• 26,925,715 million computers (digital, analog, hybrid, and other).
• 11,966,177 household refrigerators and refrigerator-freezers.
• 9,993,990 washing machines.
• 7,654,882 water heaters (electric and non-electric).
• 7,402,333 dishwashing machines.
• 6,004,765 household gas and electric ranges.
• 1,399,938 clothes dryers.
• 1.93 billion square yards of carpet and rugs.
• 11.4 million short tons of chlorine gas, 8.9 million tons of sodium hydroxide, 4.7 million tons of hydrochloric acid, and another 2.6 million tons of commercial aluminum sulfate, sodium sulfate, finished sodium bicarbonate, and sodium chlorate.
• 1,537.7 million gallons of paints and allied products at $13.60 a gallon.
• $127 billion worth of pharmaceutical preparations (except biologicals).

The real beef of the Democratic candidates and their union allies is that all that stuff was made with fewer unionized workers than in years past. We can make more and better things with fewer workers because of soaring productivity.

Please remind me what’s so bad about that.

According to HealthLeaders Media:

South Carolina-based Companion Global Healthcare added three Singapore hospitals to its network. The deal now allows Americans access to medical and surgical services at ParkwayHealth operated hospitals at pre-negotiated, in-network rates lower than those of U.S. hospitals…

David Williams, consultant and cofounder of MedPharma Partners LLC[, notes,] “It may be a bit of a wake-up call to the local hospitals in South Carolina, putting them on notice that they are facing a broader set of competitors.”

More than one million members of Blue Cross Blue Shield and BlueChoice HealthPlan of South Carolina now have access to the three Singapore hospitals—Mount Elizabeth, Gleneagles, and East Shore—at preferred network rates. The hospitals are accredited by the Joint Commission International, the affiliate of The Joint Commission.

Competition is healthy.  (You know what?  That’s catchy.)

Yesterday in the Washington Post, AFL-CIO’s president John Sweeney rhetorically asked “How many murders are ‘acceptable’?” regarding the union killings that have been used as argument by Congressional Democrats to delay indefinitely a vote on the FTA with Colombia. “I can’t answer… with a number other than zero,” stated Sweeney.

That’s good posturing. Sweeney presents these killings—which have dropped by nearly 90 percent since President Alvaro Uribe took office—as a clear sign of violence against union activity in Colombia. However, the evidence shows otherwise.

In an op-ed last Friday in the Boston Globe, Edward Schumacher-Matos, a visiting professor for Latin American studies at Harvard University, writes that:

The number of convictions now being won in the union’s own cases reveals that perhaps one-fifth, and almost certainly less than half, of the killings had to do with unionism.

Of convictions won in 87 cases since the first one in 2001, almost all for murder, the ruling judges found that union activity was the motive in only 17, according to the attorney general’s office. The judges found 15 of the cases had to do with common crime, 10 with passion, and 13 with being guerrilla members [emphasis added. No motive was established in 16 of the cases.

The unions don’t dispute the judicial findings, and deep in their reports say that they, in fact, have no idea of suspect or motive in 79 percent of their cases going back to 1986. The killings, in other words, are isolated and not part of a campaign against unionizing.

As we can see, far from being a targeted campaign against union activity, the killings of union members in Colombia are mostly part of that country’s sad history of regular violence, which also affects teachers, politicians, journalists, etc.

It’s time to get the facts straight in this debate.

My colleagues Gene Healy and Justin Logan catalogue some of Sen. John McCain’s less admirable policies below, but at the risk of being the skunk at the dinner party, today I have released a paper arguing that John McCain’s trade policy position is much preferable to that of either of the Democratic candidates.

Over his career in the Senate, McCain has been a consistent free trader, voting against increases in trade barriers 88 percent of the time, and against subsidy increases 80 percent. Senators Clinton and Obama, on the other hand, have only managed 31 (Clinton) and 36 (Obama) on tariffs and 14 (Clinton) and zero (Obama) on subsidies. (For all congresscritters’ trade votes, see here).

To his credit, Senator McCain has also avoided the easy and politically tempting practice of railing against trade deals on the campaign trail, including in Michigan where the political prize probably required it. Both the Democratic candidates, however, turned to an unseemly debate on who hated NAFTA the most in Ohio, and may be tempted to do so again while campaigning in Pennsylvania.

Expect the Democratic candidates’ rhetoric on trade policy to degenerate, by the way, as economic conditions worsen.

No words necessary.

Further to yesterday’s post, rather than have a vote on the U.S.-Colombia Free Trade Agreement within 90 legislative days (as set out by law), House Speaker Nancy Pelosi announced that she will change House rules to avoid having a vote on the agreement before the November elections. It’s not yet clear to me how that can be done, but such action will speak volumes about the rudderless Democratic Party.

Apparently, the leadership hasn’t decided whether supporting the agreement—supporting export opportunities, encouraging and deepening business ties, promoting investment in Colombia, supporting an ally in a hostile region, and preserving the value of U.S. credibility—is worth more votes than union money can buy.

If members of Congress don’t want to be held accountable to the electorate, they shouldn’t seek office in the first place. But as we’ve seen time and again, it’s never about good policy. It’s only about holding onto power. No wonder Americans have such contempt for Congress.

Mark Penn thought he could support the U.S.-Colombia Free Trade Agreement out of the right side of his mouth, while he opposed it out of the left. That controversy lost Mark Penn his firm’s contract with the Colombian government and his role with the Clinton campaign. Now it just may be metastasizing and moving up to Capitol Hill.

Congressional Democrats are getting hysterical over President Bush’s decision yesterday to send the U.S.-Colombia Free Trade Agreement up to the Hill for a vote. They claim that the president’s circumvention of protocol (not getting a final blessing from Congress first) now renders passage of the agreement virtually impossible.

The truth is that Congress was never going to give the administration an official green light and the president exercised the only real choice at his disposal.

But since when do Democrats cry for want of a successful trade agreement? I think there’s a little more to the story, which I address in this NRO oped today.

The long and short of it is that by sending the deal to Congress now, legislative intransigence before the November election is no longer an option. Democrats have 90 legislative days (until the end of September) to decide once and for all, in plain view of the electorate, the unions, the business community, and the international community, how they really feel about trade. The vote and the debate leading up to it could expose some deep fissures in the party, and could raise serious questions about America’s credibility and capacity to lead on matters of trade and economics.

I’ve been debating this topic with Robert Scott of the Economic Policy Institute on the Council on Foreign Relations website this week. We have very different perspectives.

The decision of Argentina’s president Cristina Fernández to raise the export taxes on grain producers has sparked protests all over the country, putting the country once again in international headlines. But punishing exporters is not the main story, it’s the economic mess that the last two administrations have created in that beautiful country.

The previous government of Nestor Kirchner–Fernandez’s husband–thought that he could devalue his way out of the crisis of 2001. Since that year, the Central Bank of Argentina has consistently applied a weak peso policy, which along with a massive increase in public spending, has resulted in runaway inflation. Last year, the Argentine peso was the only Latin American currency that didn’t appreciate against the U.S. dollar; in fact it depreciated slightly. The weak peso thus served as a subsidy to exporters, including the farmers now protesting the tax hike.

So we actually have the Argentine government subsidizing and confiscating agricultural exporters at the same time, while creating inflation (which has led to price controls, bans on exports, and other economic beauties). And now, in response to the protests, the Fernández administration has announced new subsidies to farmers.

Only in Argentina.

Quite appropriately, today exposes another facet of the foolishness that is U.S. immigration policy. April 1st is the day each fiscal year when employers are allowed to begin filing petitions with the US Citizen and Immigration Services for highly skilled workers to be given what are known as H-1B visas. For the second consecutive year, the quota of these visas was reached on this first day of eligibility.

H-1Bs allow employers to hire foreign workers in certain professional occupations. They are good for three years and can be renewed for another three. Though an H-1B cannot lead to a green card, it’s still a pretty good deal.

The problem is that, even in this apparent economic downturn, there aren’t enough visas: Congress limits the number of annual H-1Bs grants, and that magic number has been set at 65,000 for five years now. Before that, and in response to the technology boom of the late ’90s, Congress temporarily raised the H-1B cap to 195,000. But that expansion expired in 2004, and the cap has been reached earlier and earlier each year since.

In 2005, that meant August. In 2006, May 26. Last year, by the afternoon of April 2, 2007 (April 1 was a Sunday), USCIS had received over 150,000 H-1B applications. Officials quickly announced that they would randomly select 65,000 petitions from all those the agency had received in the first two days of eligibility.

Last week, with demand for the prized work permits only increasing, the powers that be decreed that this year’s lottery would accept all entries received in the first five business days. USCIS simultaneously promulgated a rule prohibiting employers from trying to game the lottery by filing multiple petitions for the same employee.

As for the vast majority of employers and employees who will be out of luck, the immigration laws say, like so many “rebuilding” baseball teams this opening week, “wait till next year.” Except, in this case, next year means putting your business or career on hold until October 1, 2009—the day people who secure H-1Bs for fiscal year 2010 can start work.

If only this were all a bad April Fools’ joke.

Read more on this in the article I have up on National Review Online today.

With the revelation that the passport files of all three major presidential candidates were wrongly accessed, Sen. John McCain’s office issued the following statement:

The U.S. government has a responsibility to respect the privacy of all Americans. It appears that privacy was breached and I expect a thorough review and a change in procedures as necessary to ensure the privacy of all passport files.

Yes, the government does have a responsibility to respect our privacy, retaining as confidential the data it collects as a condition of our exercising the right to travel.

And all the presidential candidates might want to take a look at a recent State Department notice in the Federal Register. It would open passport files to:

• the Department of Homeland Security,
• the Department of Justice, including the FBI, the BATFE, the U.S. Marshals Service, and other components,
• the Internal Revenue Service,
• INTERPOL and other international organizations,
• the National Counterterrorism Center,
• the Social Security Administration,
• public and private employers,
• Members of Congress,
• contractors, and
• foreign governments.

So, yes, let’s talk about passport privacy!

A couple of interesting tidbits on trade:

• Here’s a great video of our friend, Rep. Jeff Flake (R, AZ), speaking about the decades-long embargo on Cuba and restrictions on the freedom of Americans to travel there. Congressman Flake spoke at a Cato event (scroll to about half way down the page) on Capitol Hill last year along with Congressman Charlie Rangel (D, NY). Cato’s Center for Trade Policy Studies has long argued for an end to the failed embargo on Cuba.
• The U.S. Department of Commerce yesterday released the 2007 trade deficit figure: $738.6 billion or 5.3 percent of GDP. It will no doubt come as a relief to the current account deficit (CAD) hawks to know that the CAD is down 9 percent on 2006, primarily due to higher export earnings (thanks, cheaper dollar) and an economic slowdown. More on the link between economic growth and the deficit here.

Another (fictitious) dispatch from my anonymous correspondent on the campaign trail:

LANCASTER, Pa. — Sen. Barack Obama told a crowd of enthusiastic supporters here that the North Korean concept of “Juche,” its stated policy of complete economic and social independence and isolation, is “intriguing” and worthy of further study as a possible antidote to the economic malaise of the state in recent years.

The comment on Juche (pronounced “joo-CHEH”) came as a response to a question from a voter who expressed doubt that a repeal of NAFTA would help the region’s economy. Obama’s remark took the campaign’s message of economic nationalism and support for the weakened manufacturing sectors of the upper Midwest well beyond the rhetoric espoused by his Democratic primary opponent, Sen. Hillary Clinton.

“Trade is not helping the Pennsylvania economy get back its jobs,” Obama told the questioner. “And it may be time to quit tinkering with a system that stopped working a long time ago and get back to the basics.”

“Now we’re talking!” enthused Dean Baker, co-director of the Center for Economic and Policy Research, a D.C. think tank. “Someone finally had the guts to go all the way. Hallelujah!”

A spokesperson for the Obama campaign stressed that the senator was not articulating an official policy position but merely discussing aloud an idea that the campaign’s economic advisers have been contemplating for some time.

Obama said that his one reservation with such an economic system is that North Korea’s economy has struggled a bit in recent years. He attributed those struggles more to execution than policy, along with a rash of bad weather. Autarkic economic self-reliance, he averred, would provide a needed tonic to the U.S. economy and work especially well in the recession-plagued Midwest.

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A further development in the cross-border supply of gambling and betting services broke today when the European Union announced they would launch a formal investigation into the selective (and retroactive) prosecution of European gaming interests by US authorities.

This is yet another twist in the saga first brought to light by Antigua’s case against the United States in the WTO. That case (summarized here and updated here, here, here, and here) sparked a slew of indirectly related skirmishes, a plethora of “David vs. Goliath” headlines, and an unprecedented reaction from the United States to pick up their ball and go home. The various twists and turns of the dispute have provided ample fodder for trade junkies in the form of commercial and systemic issues: Does the WTO dispute settlement mechanism provide effective recourse for big as well as small members? How should WTO members respond when one of their cohorts wants to change the nature of the contracts between the parties? How do members balance their rights and obligations in the context of issues of public morals?

The questions look far from answered because if the EUs investigation proceeds, a new WTO case could be on the horizon. Although the EU and the United States came to a settlement in December over the United States’ wish to withdraw its commitment to open its market to the cross-border supply of gambling and betting services, the details of that settlement are sketchy. And the December deal pertains to compensation for the withdrawal of market access going forward: unless and until that deal is ratified by all WTO members (including those who are asking for compensation of their own), the U.S. obligations stand and so does the ruling that found the United States was in breach of those obligations.

In other words, while the United States might eventually be able to get away with changing its obligations to provide WTO members access to the lucrative U.S. gambling market, in the meantime their (discriminatory?) prosecution of offshore interests leaves them vulnerable.

Robert Lighthizer tries to make the case in this morning’s New York Times that conservative Republicans should all be pragmatic protectionists.

It’s telling that the op-ed column does not present one bit of evidence that trade barriers have actually made America a more free and prosperous country. His argument, rather, is one of name dropping: Many liberals, including Ted Kennedy, have “supported the advance of free trade” while many conservatives, including Ronald Reagan, have prudently deviated from “free-trade dogma.”

Lighthizer paints a misleading caricature of Ronald Reagan’s trade legacy. It’s true that Reagan bowed to protectionist pressure more often than he should have, but in his words and most of his deeds, he came down squarely in favor of free trade. As I noted in an op-ed published shortly after Reagan’s death in June 2004:

Reagan’s heart and head were clearly on the side of free trade. While president, he declared in 1986: “Our trade policy rests firmly on the foundation of free and open markets. I recognize … the inescapable conclusion that all of history has taught: The freer the flow of world trade, the stronger the tides of human progress and peace among nations.’

It was the Reagan administration that launched the Uruguay Round of multilateral trade negotiations in 1986 that lowered global tariffs and created the World Trade Organization. It was his administration that won approval of the U.S.-Canada Free Trade Agreement in 1988. That agreement soon expanded to include Mexico in what became the North American Free Trade Agreement, realizing a vision that Reagan first articulated in the 1980 campaign. It was Reagan who vetoed protectionist textile quota bills in 1985 and 1988.

And Ted Kennedy as a free trader? His trade record is mixed, but on most votes in recent years, he has come down against trade liberalization. According to our new trade vote web feature, “Free Trade, Free Markets,” Kennedy voted against the Central American Free Trade Agreement, the Chile and Singapore FTAs, presidential trade promotion authority, and the 2000 African trade bill. He voted in favor of China currency sanctions, exempting anti-dumping laws from WTO negotiations and the trade-distorting farm bill now making its way through Congress. If that’s the record of a free-trader, then the term has lost any meaning.

Whether a conservative should support free trade ultimately turns on what THAT label means. If conservative means one who opposes change and wants to preserve the status quo, then free trade is probably not the right policy. But if conservative means one who favors individual liberty, free markets, limited government, and a more peaceful world, free trade is a grand slam.

A little ditty from an author who wants to remain anonymous:

NEW YORK — Senator Hillary Clinton vowed Tuesday that if elected president she would enact legislation that would give the New York Yankees a reprieve from what she characterized as the “unfair and exploitive” trading practices of the Kansas City Royals and Pittsburgh Pirates.

Clinton, a self-described Yankees fan, told an audience of supporters that the lower wages paid by the smaller-market clubs give the teams an unfair advantage over the Yankees, who are compelled to pay high salaries for the team’s superstar players. She vowed that upon assuming the presidency she would immediately ask for a “time out” for trades between the Yankees and the so-called “parasite” teams for five years, during which time Congress and Major League Baseball would study the harm done to the Yankees from these trades and construct a remedy that would protect the team.

She suggested that such protection should be extended to other teams as well, with the Dodgers, Mets, and Cubs among the teams that have been victimized in trades by rivals.

Clinton’s proposal was hailed by Yankees fans as a welcome first step toward correcting the imbalances in Major League Baseball that have hindered the Yankees’ efforts to remain competitive.

“Let’s face it, these teams continually manage to steal talented minor leaguers from us, some of whom eventually enjoy moderately successful major league careers,” said Michael Kumar, 26, a florist from Brooklyn. “As a result, we occasionally find ourselves wishing we had the players back that we traded to them. I’m tired of them conniving to weaken our teams in this way. It’s about time someone stopped this.”

(more…)

Four influential senators have written [$] to the French Ambassador to express their displeasure at France’s ongoing restrictions on genetically modified (GM) corn, warning that the issue could spark litigation.

America and the European Union have been at loggerheads over GM foods for years now, culminating in a dragged-out WTO dispute (summary available here) that was resolved with a partial-loss for the EU because they took too long to make a decision on allowing certain products into the european market, and because the EU didn’t base some of their restrictions on scientific evidence, as required under WTO rules. Now the victorious parties, including the United States, Canada and Argentina, are waiting for practical resolution and for trade to start flowing.

The French, however, are continuing to resist approving products made from agricultural biotechnology, ostensibly in the face of public opposition to the foods. French President Nicolas Sarkozy has spoken publicly in support of a ban on growing GM crops in France, and the French yesterday proposed scrapping the current EU approval process for genetically modified organisms in favour of tougher standards.

Enter the senators, who see what tougher restrictions would mean for GM-happy American farmers and are incensed at what they see as a flouting of trade rules. Ironically, among them is Saxby Chambliss (R-GA) who favors the continuing support of American cotton growers, even in the face of WTO rebukes for the manner in which that support is delivered. Similarly, Senate Finance Committee Chair Max Baucus (D-MT) has refused to countenance passing any trade deals unless and until he gets his way on trade adjustment assistance (you can see what I think of his ideas for TAA here).

Senator Obama isn’t the only member of that august chamber with two faces on trade.