Trade games

In a recent opinion piece, The Democrats' Dangerous Trade Games, in the Wall Street Journal C. Fred Bergsten, who is the director of the Peterson Institute for International Economics, said the following about the actions of lawmakers in the US.

Meanwhile, our venerable House of Representatives, in the context of the Colombia agreement, has recklessly changed the rules for congressional action on trade legislation. By rejecting long-settled procedures that prevented congressional sidetracking of trade deals negotiated by presidents, the House has hamstrung U.S. trade policy and created the gravest threat to the global trading system in decades.

By effectively killing "fast track" procedures that guarantee a yes-or-no vote on trade agreements within 90 days, lawmakers in Washington, led by House Speaker Nancy Pelosi, have destroyed the credibility of the U.S. as a reliable negotiating partner.

Later Bergsten writes

The much more profound impact, however, is to remove the U.S. from any significant international trade negotiations for the foreseeable future. Current and former chief trade officials of three of the world's largest trading entities have told me that, since the House action, the U.S. has lost all credibility. In other words, the "time out" proposed for trade policy by one of the major presidential candidates – a central goal of the opponents of globalization – has already been called.

This can not be good news for the rest of the world. Trade negotiations need the support of the world's largest economy if they are to have any serious chance of success. The benefits for all countries, but in particular the poorest countries, of freer trade are huge but are put at risk by the US action. Bergsten notes

The multilateral trade system, including the highly effective dispute settlement mechanism in the World Trade Organization, will erode further and weaken our ability to tear down barriers in China, India and other large emerging markets.

Any form of protectionism by the US will harm both itself and the rest of us.