On international trade, Mitt Romney's plan lacking on details
Mitt Romney’s proposal to create a new international free-trade area called the “Reagan Economic Zone” has provoked widespread mockery from both the left and right, for its seemingly gratuitous invocation of the 40th president.
But putting aside the cringe-worthy name, which seems like an abject appeal to the GOP base, the trade proposal deserves to be assessed on its merits. And right now, Romney has provided too few details to say whether it’s anything more than a gimmick.
Introduced as part the 59-point economic plan that Romney unveiled before last night’s Republican debate, the proposal would seemingly introduce a new, more exclusive version of the World Trade Organization restricted to countries that have “embraced free enterprise and open markets” in order to “codify the principles of free trade at the international level.”
Reading between the lines, the proposal is a clear jab at China, which Romney and many others accuse of hurting US manufacturers by manipulating its currency and imposing unjustified tariffs on US goods. Indeed, the next section of the plan begins in large capital letters: “CONFRONTING CHINA.”
Romney makes this point more explicitly in his USA Today op-ed where he explains that the Reagan Economic Zone will be “a mechanism for confronting nations like China that violate trade rules while free-riding on the international system.”
The perception that China is gaming the international trade system — and playing dutifully law-abiding Americans for chumps — is widespread among both parties: both Republicans and Democrats have clamored for a crack-down on Beijing’s behavior. The existing WTO itself was supposed to be the mechanism to enforce trade rules, but has proven itself toothless when it comes to China.
The problem is that such international organizations have a tendency towards infinite expansion that eventually makes them ineffective. The WTO originated with just a few Western allies after World War II, but exploded to 154 members. At present, the only nations that are not even observers in the process of joining are Eritrea, Somalia, Turkmenistan, and North Korea.
Getting, say, France (to say nothing of Nicaragua) to sign on to an international agreement named after Ronald Reagan would probably be an insurmountable enough challenge to sink the idea. But the real question is how Romney’s proposal, whatever it ends up being called, would be any more effective and immune from bloat than existing trade organizations. That’s what Romney has yet to explain.
Robyn Beck/AFP/Getty Images: Mitt Romney speaks during yesterday's Republican presidential debate at the Reagan Library in Simi Valley, Calif.
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