Free trade

Free traders are worried that unions will push Obama to adopt protectionist policies.

And the leaders of the G-20 should take note: Mr. Gerard and his fellow labor leaders are just getting started.

While labor’s opposition to free trade is nothing new, having an ear in the White House is. The Obama administration, though it says it supports free trade, has so far seemed more aligned with labor’s trade agenda than has any administration in decades.

Let's review the charges against labor:

- The steelworkers' union pushed Obama to impose tariffs on Chinese tires. A provision of the legislation that admitted China to the WTO allows the US to do this when there is disruption in an industry. If we're not going to enforce this provision, why was it included in the legislation? Furthermore, China imposes a slew of protectionist policies that affect US goods. Shouldn't we use the tools at our disposal to get them to eliminate these provisions?

- Unions want border adjustment taxes to be included in climate change legislation. If the US adopts a cap-and-trade system to regulate greenhouse gas emissions, US manufacturers will be at a disadvantage relative to manufacturers in China, India, and other countries without such a system. This is the main reason climate change legislation generates so much opposition. Compensatory tariffs would have the effect of raising the price of imported goods by the same amount as if the producing countries had signed onto cap-and-trade. As Paul Krugman argues, this makes perfect economic sense and it is legal under WTO. Also, by imposing a system in which Chinese manufacturers are subject to high prices for carbon emissions, yet the revenue generated by those restrictions goes to the US, imposing these border adjustments may be just the tool to encourage China to sign on to a global emissions reduction system.

- The steelmakers' union is pushing many individual trade cases. Well, China subsidizes many of its exports illegally. The Commerce Department imposes tariffs when it finds evidence of illegal subsidies.

After so many decades in which labor has taken it on the chin, I'm going to tolerate some push-back for awhile.