Media Highlights

JUDY WOODRUFF, PBS Host: Daniel Griswold, I want to start with you on John McCain. First of all, how would you explain his overall position on trade?

Dan Griswold: He is strongly and unapologetically in favor of free-trade and his record supports that. He has supported all major free-trade agreements from nafta to cafta to the recent agreements with peru and other countries, and he really believes it. It's not a political calculation with him. He talks about how free-trade has strengthened America's ties to our allies starting with the cold war, and after world war ii, and also with mexico and Canada, with NAFTA, so it's a foreign policy issue with him as well, and while he acknowledges that trade has put some Americans out of work, it has given us a stronger economy, created opportunities for millions of Americans. It's good for america even though certain special interests oppose free trade.

JUDY WOODRUFF, PBS Host: So you don't see any wiggle room there on his part?

Dan Griswold: No. In fact, he's been asked about it, and he said it's a matter of principle and trust.

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JUDY WOODRUFF, PBS Host: So his [McCain's] views are simplistic, Daniel Griswold?

Dan Griswold: No, not at all. Free trade has served this country's interests over the years. It's given us a more prosperous economy. You know, since NAFTA passed in 1993, we've added 26 million jobs. The real compensation earned by American workers -- that's wages and benefits -- is up 23 percent. Manufacturing output is up 40 percent. This is a very good record. Now, jobs have gone down because, as Senator Obama said, basically because of automation -- the workers, manufacturing workers are still so much more productive.

And another thing trade has done -- and Senator McCain is very tuned into this -- is it has given us a more peaceful world. It has brought peace to places like East Asia. It certainly has to Western Europe. And so he sees -- and that's why he traveled abroad, I think, to show that trade isn't just about jobs at home and incomes at home, which I think it's delivered on, but it is about building foreign policy ties to our friends abroad.

JUDY WOODRUFF, PBS Host: So, Daniel Griswold, I hear a description where I think Thea Lee is saying he's more -- Senator Obama more sensitive to some of the complexities of trade in 2008 and beyond.

Dan Griswold: Unfortunately, I think he's more sensitive to special interests rather than the nation's overall benefit.  He's trying to have it both ways. If you read his book, he says positive things about trade in a general sense. Yet when the crunch comes, and there's an agreement on the table to expand trade with important allies, like the democracies in Central America, he finds a way to oppose it.  And it's based, I think, on flimsy reasons. The manufacturing jobs -- you know, we added 500,000 manufacturing jobs in the first five years after NAFTA. It's not trade that those jobs have disappeared; it's other factors in our economy.

JUDY WOODRUFF, PBS Host: How clear do you see Senator Obama's position?

Dan Griswold: He has muddied it, and I'm glad he has. He took an irresponsible position during the debate in Ohio in February where he said, quote, "We will use the hammer of an opt-out to get Mexico and Canada to agree to these labor and environmental provisions," as though the Canadians needed to raise their environmental and labor standards.

So I think that was irresponsible. These are our two closest neighbors, our two closest commercial trading partners. And he's going to, out of the box, wave a billy-club over their heads and tell them they need to renegotiate this successful 15-year treaty. It's worked in Mexico. Mexico has one of the most stable economies in Latin America. They have a thriving pluralistic democracy. And we're telling them they need to renegotiate this 15-year commitment.

JUDY WOODRUFF, PBS Host: And what would McCain do, from your perspective?

Dan Griswold: I think John McCain is well within the tradition of recent U.S. presidents. Barack Obama would be, at least based on his rhetoric and his voting record, the most protectionist president America has had in decades.

You know, it's funny. The Democrats point back to the 1990s and the economic growth of that time. What they don't talk about is Bill Clinton's trade record. Bill Clinton is the president who gave us NAFTA, the Uruguay Round Agreements Act, China permanent trade relations that brought China in. And that was an important plank in his centrist economic policies. That was one reason why the economy was doing so well in the 1990s. Barack Obama is very much out of that tradition.

Now, I think his rhetoric is more protectionist than what he believes. If you read his book, what he said, some of the advisers around him, I think he has a more favorable view of trade. But I think, unfortunately, he is captive to certain special interests that oppose trade liberalization.

JUDY WOODRUFF, PBS Host: And how well would you say they understand these issues?

Dan Griswold: I think pretty well, both of them. But I think for political reasons, Barack Obama has taken a more skeptical view. I think John McCain is sailing true to his convictions and his established record.

Look, trade is one of the good things going for the U.S. economy. While housing has tanked, trade is the one cylinder that keeps pumping away. Exports were up 12 percent last year. Earnings on foreign investment up 20 percent. It's one of the good things going for U.S. companies. These free trade agreements give us the level playing field that the politicians say they always want. The goods from Colombia, for example, are already coming in duty-free. The agreement would lower those and make it a two-way proposition. 

CNBC Host: "So, in just about two hours the Chinese delegation lands in Washington, DC to begin another round of economic talks. So far, Treasury Secretary Hank Paulson’s go-slow approach with China hasn’t produced significant results. Still on the agenda: China’s enormous trade surplus, the strength of its currency, access to its markets for financial companies, its energy consumption, product safety. Has Hank Paulson done enough? Has done what he set out to do? What should the next President do when it comes to China? Joining us now is Scott Paul. He’s Director for the Alliance of American Manufacturing. And Dan Ikenson is with the Cato Institute. Guys, good to see you. Let’s first assess and then look forward. Dan, let me start with you. On all of these issues that Hank Paulson was trying to make headway with on China, did he get very far?"

Daniel J. Ikenson: "Absolutely. We have to recall why the SED was set up."

CNBC Host: "Strategic Economic Dialogue.  SED."

Daniel J. Ikenson: "That’s right.  It was set up in response to growing anxiety about trade flows, about the growing deficit.  But it was never intended to produce short-term solutions to every gripe presented by U.S. producers or other U.S. interests.  It is focused on structural issues.  If you are really worried about the trade imbalance, you don’t focus on trade policy; you focus on consumption, on savings, on fiscal policy, monetary policy.  That takes time.  And Henry Paulson has been there helping the Chinese to establish social safety nets, insurance markets, health insurance markets, disability markets.  The Chinese don’t spend a lot of money because they are uncertain about the future.  If these markets existed they would spend more.  He is also trying to get credit cards into their hands."

CNBC Host: "And Scott, you represent the manufacturers.  Do you agree with Dan’s assessment of how Hank Paulson has done so far?"

Scott Paul, Alliance for American Manufacturing: "I don’t.  I don’t unfortunately and you just have to look at the numbers to realize what’s happening.  Our trade deficit is growing.  We have a $256 billion trade deficit with China.  It’s the largest in history.  Its forty percent of our non-oil trade deficit.  We have more subsidies that we have identified coming from China.  We have a lot of dumping cases pending against Chinese products.  And the currency, although it has shifted somewhat, it is still grossly undervalued and its hurting American workers and producers."

CNBC Host: "Dan?"

Daniel J. Ikenson: "In the 110th Congress there have about three or four dozen pieces of legislation introduced that I would consider anti-Chinese trade legislation.  Congress is backing off of these pieces of legislation for a variety of reasons.  U.S. exports to China are up 25 percent the first quarter of 2008.  Chinese import growth to the United States has slowed.  The Congress is seeing that the WTO dispute settlement system is working.  We’ve resolved several matters to the liking of the U.S. Trade Representative and U.S. trade interests.  There’s no point in getting provocative right now."

CNBC Host: "Scott, a lot of what he’s talking about … the market has led to a lot of these changes that we’re talking about.  The dollar has gotten weaker as a result.  We are importing more.  Hasn’t that helped out manufacturers?  When it comes to what we should be doing, hasn’t the market answered the question?"

Scott Paul: "Well, the market has answered it somewhat, but when you are dealing with China you are dealing with an authoritarian regime, frankly, that distorts the market.  We still have a number of subsidies; we have a lot of dumping.  When you are looking at U.S. exports to China, the largest increases are coming from scrap.  We’re sending over scrap metal, scrap plastic, scrap paper."

CNBC Host: "What do you think the next President should do?"

Scott Paul: "I think the next President needs to get tougher with China.  Senator Obama has already laid down the marker on that.  He said he would name China as a currency manipulator.  I think you need to get strong.  Beijing has shown when it wants to do something, when it wants to build an Olympic stadium fast it can do it.  When it wants to protect intellectual property on the Olympic mascot, it can do that.  And we just need to ask them.  Secretary Paulson unfortunately hasn’t done that.  We need to set down some deadlines to do that, and I think we’ll get some results."

CNBC Host: "Dan, what do think the next President should do?"

Daniel J. Ikenson: "I think the next President should continue … if there is anything the Bush Administration has gotten right, and I don’t think there has been too many things, but they’ve been good on U.S. trade policy toward China.  There was a bit of a honeymoon period at the beginning allowing China to implement their WTO commitments.  In 2006 they had a top-to-bottom review, and they said we are going to turn over a new leaf here.  We are taking a new tact with China.  We are going to bring more cases in the WTO and they have.  The next President should do the same if our rights have been violated.  But in the meantime, there is no point in passing provocative legislation and hitting China on the head.  They are an important trade partner of ours.  And let’s stop talking the currency down.  It only helps a small portion of the U.S. economy … some of the manufacturers represented by Mr. Paul.  Most manufacturers need a strong currency.  U.S. producers import 55 percent of U.S. import value."

CNBC Host: "Scott, how do you answer that?  Manufacturers frequently talk about wanting China to strengthen their currency.  In many ways, it just imports inflation to the U.S. consumer.  It’s only good for manufacturers; it’s not necessarily good for everybody else."

Scott Paul: "Actually it’s going to be good for America, because it’s helped to get the trade balance out of whack.  That $256 billion trade deficit that the currency misalignment helps to lead to has racked up $1.8 trillion in currency reserves in China.  They are buying our debt.  We have an economic relationship that is grossly out of balance and we need market fundamentals.  We need China to begin down that path.  And until we do, we are going to see these distortions that are causing these lop-sided trade relationships.  And it’s costing jobs.  John McCain and Barack Obama are going to hear about this every time they go to Pennsylvania, Ohio, and Michigan.  This is going to be an issue next fall."

CNBC Host: "All right gentlemen.  Good to see you.  We really appreciate it."

Sallie James discusses rising food prices on Fox Five.

Sherri Ly, Fox Five Host: "The rising cost of your holiday barbecue comes down to primarily two things: the high cost of gas to get the food to your grill, and the high cost of corn to feed the animals you eat."

Sallie James: "A big, important reason is the price of oil, so the price of fertilizer goes up, the price of harvesting crops goes up, the price of transporting food goes up."

Sherri Ly, Fox Five Host: "Food inflation is almost the highest in two decades.  Take hamburgers: a pound of ground beef cost one percent more.  And don’t forget the buns.  They’re up nearly seventeen percent.  Figure on hot dogs, up seven percent.  And those buns: fourteen and a half percent higher.  Chips: that’s almost twelve percent more."

Sallie James: "It really is a dramatic increase in the price of food, certainly, over the last year or six months."

Dan Griswold discusses NAFTA on the Fox News Channel.

February 29, 2008.

Fox News Channel Host: "Presumptive republican candidate John McCain today, continues hitting democratic rivals hard. This time on free trade. While Senators Clinton and Obama squabble over how to best fix NAFTA, McCain says the treaty doesn’t need fixing. Correspondent Molly Heninburg has details."
Heninburg:
"Speaking to employees at Dell Headquarters, in Round Rock Texas, Senator John McCain, says democrats may want to change NAFTA, the North American Free Trade Agreement, but he doesn’t, at least not unilaterally. A point he then repeated in a press conference."
Senator John McCain:
"And I believe that when someone, as Senator Obama and Senator Clinton have said, would “renegotiate” a treaty which went through years of negotiations with our leading trading partner Canada without consulting or without the agreement of our Canadian partners. I think it sends the wrong message to the world."
Heninburg:
"But Democrats are using NAFTA to appeal to their base in manufacturing states such as Ohio. Which has lost jobs, which unions claim are because of NAFTA. Senator Obama and Clinton have hit on the theme frequently in the run up to Tuesday’s primary."
Senator Obama:
"I think that NAFTA was a fundamental mistake."
Senator Clinton:
"I’m the only candidate with a comprehensive plan to fix NAFTA."
Heninburg:
"McCain’s camp also believes he can use NAFTA and his support of it in states like Texas which has benefitted from the trade agreement. And to shore up part of the GOP base free market economic conservatives."
Senator John McCain:
"I believe in free trade, I will stick with free trade and it is the future of America’s economy and every time in history we have practiced protectionism, we have paid a very heavy price for it."
Heninburg:
"And McCain who often benefits from playing up his national security strength, altering NAFTA could cause the Canadians to pull their troops out of Afghanistan."
Senator John McCain:
"If we announce that we are going to unilaterally change a treaty or suspend it, which is important to them, I think obviously can affect Canadian public opinion adversely."
Heninburg:
"But would changing NAFTA bring jobs back to Ohio? Some trade analyst say not necessarily."
Dan Griswold: "The problems in Youngstown Ohio and other places like that, go back decades before NAFTA. It is part of a structural shift in the U.S. economy away from heavy industry to more light manufacturing to services, higher-end services so it is a cruel illusion to say if we just go in and ticker with NAFTA that there will be some sort of industrial renaissance."

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