After several years of openly pushing Americans for a change in Washington, Europe may have second thoughts, especially on trade. The EU’s trade commissioner has kept watch on the campaign rhetoric from Hillary Clinton and Barack Obama and sees disaster on the horizon. Peter Mandelson told the BBC that the protectionist policies of both campaigns would be a disaster for the global economy:
Peter Mandelson, European trade commissioner, has said the protectionist stances taken by the US presidential candidates risk taking the world trading system back by decades.
In an interview with the BBC’s Hardtalk programme to be broadcast on Thursday, Mr Mandelson said: “It is irresponsible to be pretending to people you can erect new protection, new tariff barriers around your economy in this 21st century global age and still succeed in sustaining peoples’ living standards and jobs. It is a mirage and they know it.”
Mr Mandelson declined to say which candidates he had in mind, but the context made it clear he was referring to Democrats Hillary Clinton and Barack Obama “You match the rhetoric. I am not going to do that.”
Both Democrats have raced to the populist Left after John Edwards flamed out of the race, and their rhetoric centers on a new isolationism. Democrats accuse the Bush administration of being the incarnation of Herbert Hoover on economics, but ironically champion the same kind of blindness that led Hoover to turn a possibly containable financial collapse into the Great Depression. His protectionist policies, intended to protect American jobs, instead melted down the entire global economy as nations quickly erected their own barriers of tariffs in response.
Mandelson sees the same result coming from just the threat of implementing tariffs and barriers. It forces nations to position themselves for American economic hostility, which reduces capital investment here and abroad. Mandelson says that the rhetoric from Obama and Hillary could set back trade relations by decades, especially if one of them wins the election.
Many people assume that the Democrats will become less protectionist in the general election. In fact, Obama’s adviser Austan Goolsbee made a trek to the Canadian consulate in Chicago to assure Georges Rioux that Obama was just engaging in some election-season pandering and didn’t want to renegotiate NAFTA. Obama had to distance himself from Goolsbee and insist that he was telling voters the truth on the stump. That sounds like we will get a lot more NAFTA dancing and attacks on trade agreements in the fall, and actual protectionism if Obama wins the general election. Mandelson will find himself busy with damage containment, and not looking forward to it now.