Bob Davis is worried that if elected, Barack Obama may find it difficult to push the same sort of trade pacts as his predecessors. He couches his concern as a fear that Obama may "find it hard to govern as a free trader," but of course none of his predecessors governed as free traders, they governed as selective protectionists. Trade deals like NAFTA and CAFTA were designed to remove barriers to trade in manufactured goods, thereby putting manufacturing workers in direct competition with low-paid workers in the developing world. This not only put downward pressure on the wages of manufacturing workers, but on the wages of non-college educated workers more generally. These trade deals did little or nothing to remove the barriers that protect highly paid professionals like doctors and lawyers. There is no economic theory that shows protection for manufactured goods is more harmful than protection for highly paid professional services, so the concern expressed here seems to be that Obama may not pursue trade policies that redistribute income upward with the same vigor as his predecessors. It is also important to note that a major thrust of recent trade agreements has been to increase protectionists barriers in the form of increased patent and copyright protection. These forms of protection lead to enormous economic distortions, since they can raise prices several by several thousand percent above the competitive market price. In the case of patent protection for prescription drugs, the cost can also be in the form of lives, since many people in developing countries may be unable to afford the patent protected price for life-saving drugs. Strengthened patent and copyright protection are also inconsistent with free trade, although these measures do also have the effect of redistributing income upward.
--Dean Baker
