SELA Antenna in the United States SELA Permanent Secretary No th Quarter 2007

Transcription

1 SELA Antenna in the United States SELA Permanent Secretary No th Quarter 2007 SUMMARY: TRADE POLICY AND THE U.S. PRESIDENTIAL ELECTION Impact of the Election on Issues in 2008 Impact of the Election on Issues in Prospects for the General Election TRADE POLICY AND THE U.S. PRESIDENTIAL ELECTION The 2008 presidential election season has now begun, with the first contests for the two parties nominations having already been held in Iowa (January 3) and New Hampshire (January 8). In both parties, the mixed results from those two states suggest that there are two viable candidates for the Democratic nomination and at least three contenders for the Republican nomination. The presidential election itself will be held on November 4, 2008, as will elections for all 435 seats in the House of Representatives and one-third of the seats in the Senate. This note reviews the relationship between trade policy and the presidential election. It does so by considering the short-term impact that the campaign might have on pending issues in 2008, speculating on the effect that the choice may have on U.S. trade policy in the next administration, and considering which party has the advantage in the general election. Impact of the Election on Issues in 2008 As was discussed in the previous Antenna [insert link here], the most pressing issue in U.S. trade policy today is the possible renewal of Trade Promotion Authority (TPA). This is a special grant of power that provides for expedited consideration of trade agreements in Congress. While TPA does not guarantee that an agreement will be approved, its special procedures make it much more difficult for the opponents to defeat an agreement through parliamentary maneuvers. The last TPA grant expired in mid-2007, and a new grant will be needed if the Doha Round of negotiations in the World Trade Organization (WTO) are to come to a successful conclusion. Several other trade initiatives may come up for votes in Three of them are particularly significant for SELA Member Countries: approval of the free trade agreements (FTAs) with Colombia and Panama, renewal of the Generalized System of Preferences (currently scheduled to expire at the end of 2008), and renewal of the Caribbean Basin Trade Partnership Act (currently scheduled to expire on September 30, 2008). It has yet to be determined whether the political environment in 2008 will allow for relatively nonpartisan debates on any or all of these initiatives. That depends on several as-yet unknown factors, including the selection of the two parties candidates, how those candidates decide to treat trade policy in their campaigns for the general election, the degree of progress in the Doha Round negotiations, and the state of the economy. One could easily imagine a scenario in which there is partisan gridlock this year, and hence no progress on any of these matters. That would be especially likely if any or all of the following developments were to emerge: either or both parties nominate candidates who take a populist approach to trade, there is little or no progress in the Doha Round, and the U.S. economy enters into a recession. By contrast, all of those statements would need to be false in order to have a truly favorable environment for the consideration of trade issues in With the year only just beginning, one fact is already clear: Both parties have real races for their nominations, and these could continue for weeks or even months. From the very narrow perspective of trade policy, that is not a positive development. The longer that the nomination process lasts, the narrower will be the window of opportunity for Congress to take action on policy issues this year. The size of that window, which might last from the end of the nomination process until perhaps June or July, will depend on the duration of that first phase of the campaign. The race for the Democratic nomination is especially crucial, insofar as the Democrats control both houses of Congress. That means that it will be within the power of the Democratic nominee to determine whether and to what degree Congress will cooperate with the Bush

2 2 administration on trade and other issues this year. For much of 2007, it was widely assumed that Senator Hillary Clinton (D-New York) had a wide lead in the race for that nomination, and that there was a chance that the Democrats would effectively complete their nomination process almost immediately. Those expectations were proven false by the rapid rise of Senator Barack Obama (D-Illinois) in the final weeks of last year, culminating in his Iowa caucus victory on January 3. This was quickly followed by speculation that a win in New Hampshire would make Senator Obama the near-certain nominee. After Senator Clinton achieved a comeback in New Hampshire, however, all talk ceased of a quick campaign. Yet a third major candidate also remains in the race, but former Senator John Edwards (D-North Carolina) appears at this stage to have very little chance of catching up to Obama and Clinton. The race for the Republican nomination is even more fluid. The presumed front-runner in that race is former New York Mayor Rudy Giuliani, but he has yet to win a caucus or primary; he hopes to do so in the Florida primary on January 29. He faces a strong challenge from Senator John McCain (R-Arizona), who won the New Hampshire primary, and a somewhat weaker challenge from former Governor Mike Huckabee (R-Arkansas), the Iowa caucus victor. Former Governor Mitt Romney (R- Massachusetts) also remains in the race, but his failures in Iowa and New Hampshire cast serious doubt on his viability. This leaves what are essentially a two-candidate race in the Democratic Party, and a three-candidate race in the Republican Party. How long might these contests continue? Most analysts expect that the races will be effectively over after February 5, when the Super Tuesday primaries are held in 23 states. Those primaries will include several of the largest states, such as California and New York, and thus will allocate huge numbers of delegates for both parties nominating conventions. While it is probable that these results will indeed be decisive, there is a chance that the nominating process will go on even longer. That could happen if there are very mixed results on that day, with two or more candidates in each party dividing up the wins, as well as similarly inconclusive outcomes in the races that fall between now and Super Tuesday (i.e., Michigan, Nevada, South Carolina, and Florida). Recent polling suggests that this is a real possibility, as there is no one candidate in either party who appears to be safely ahead of his or her rivals in most of these states. No th Quarter 2007 Beyond the simple question of how long the nomination process will continue, there is the more consequential matter of which candidates are selected for the general election. Those choices will likely set the tone for how Congress deals with trade policy for the remainder of 2008, and will definitely do so for the next administration. Impact of the Election on Issues in Although this is both a presidential and a congressional election year, the main question to be decided in the 2008 election is who will occupy the White House during The Democrats currently hold a majority in the House of Representatives, and have the narrowest possible margin (51 seats) in the Senate. If current forecasts are accurate, they may be expected not only to keep those majorities, but even to build on them. To put it another way, the presidential election will decide whether the United States continues to have divided government, or if the U.S. electorate instead chooses a Democratic president to work with a Democratic Congress. One difficulty in determining the trade policy views of potential presidents is that so few of them have legislative experience at the Federal level. Four of the last five presidents served as governors of their home states before being elected. Having never served in Congress, they had no prior voting records. That is the case for three of the four leading Republican candidates this year. Whether they previously served as mayor (Rudy Giuliani) or governor (Mike Huckabee and Mitt Romney), each of these candidates is without past experience in trade. John McCain is the only viable Republican candidate who has a lengthy voting record and as shown in Table 1 is also the only leading candidate in either party to have a perfect record of supporting all of the major trade initiatives in recent years. In general terms, however, all of the leading Republicans express pro-trade views. The Democratic field is quite different, insofar as all three of the leading candidates are either current or recent senators. Each one has an established record in this field, and the recent votes on the U.S.-Peru free trade agreement provide further details on their positions. The implementing legislation for this agreement was approved late last year by votes of in the House of Representatives, and by in the Senate. The four incumbent Democratic senators who are seeking their party s presidential nomination were all absent for the vote, but their declared positions are shown in Table 1. (Two of those senators dropped out of the race immediately after the Iowa caucuses.)

3 No th Quarter TABLE 1 Trade Policy Voting Records of Presidential Candidates Candidates in Each Party Listed in Approximate Order of Likelihood of Winning the Nomination Trade Act of 2002 Chile (2003) Free Trade Agreements Australia CAFTA (2004) (2005) Oman (2006) Peru (2007) Total Pro- Trade Democrats Sen. Obama No Yes [Yes] 2 of 3 Sen. Clinton No Yes Yes No Yes [Yes] 4 of 6 Sen. Edwards No No Absent 0 of 2 Rep. Kucinich No No No No No No 0 of 6 Sen. Biden** No No Yes No No [No] 1 of 6 Sen. Dodd** No No Yes No No [No] 1 of 6 House Dems. 10.0% 36.9% 58.0% 7.4% 11.1% 48.4% 28.6% Republicans* Sen. McCain Yes Yes Yes Yes Yes [Yes] 6 of 6 Sen. Thompson Yes 1 of 1 Rep. Hunter Yes No Yes No Yes Absent 3 of 5 Rep. Paul No No No No No No 0 of 6 House Reps. 89.4% 87.8% 89.2% 88.2% 87.7% 91.7% 89.0% * : Note that Republican candidates Giuliani, Huckabee, and Romney have never served in Congress, and thus have no voting records. ** : Denotes a former candidate for the nomination that has dropped out of the race. : The candidate did not serve in Congress at the time that this vote took place. [Yes] or [No} : The candidate was not present for the actual vote, but declared a position on the issue. These positions are counted in the Total Pro-Trade column. Voting data for the House are based on the percentage of Democrats and Republicans who voted for the measure in question. The percentage shown in the Total Pro-Trade column is a simple average for the six items. The most important observations emerging from these votes concern the positions of the two leading candidates for the Democratic nomination. Each of these two leading candidates have taken a pro-trade position much more frequently than the other three incumbent Democrats who were seeking the nomination prior to the Iowa caucuses. Although Hillary Clinton has an imperfect record of supporting FTAs and other market-opening measures, she leans more in this direction than do most Democrats in Congress. That point can be appreciated by comparing her votes with the percentages of House Democrats who favored these measures. 1 She followed the party line when she voted against two measures that received very low levels of support from Democrats as a whole (i.e., the Trade Act of 2002 and CAFTA), but voted in favor of four others. These include two FTAs that roughly half of the House Democrats favored (with Australia and Peru), as well as two others that received much lower levels of support (with Chile and Oman). Overall, she took the pro- 1 Voting records in the House are more statistically valid because there are 4.4 times as many legislators in that body than there are in the Senate. trade position 66.7 percent of the time, compared to 28.6 percent for the average House Democrat. Senator Clinton has nevertheless called for a pause in the negotiation of any new FTAs. Senator Obama (D-IL) has a shorter voting record, but thus far he has voted (or declared positions) exactly the same as Senator Clinton. With such a brief record in Congress, however, it is difficult to reach any definitive conclusions about the approach that a President Obama would take towards trade. Both of these leading candidates are clearly more protrade than former Senator John Edwards (D-North Carolina). Edwards is not the only protectionist seeking the nomination representatives Kucinich (D-Ohio) and Paul (R-Texas) share that distinction but he was the only one with a reasonable chance of becoming his party s candidate. Based on the results in Iowa (where he came in second place) and New Hampshire (where he came in third), Edwards is much less likely to win the nomination than either Clinton or Obama.

4 4 Prospects for the General Election Once the nomination process has ended, which party will have the advantage in the general election? Any analysis of U.S. presidential elections must start from the recognition that Republicans enjoy two major, structural advantages in these contests. Those advantages help to explain why this party has won seven of the last ten elections, despite the fact that in public opinion polls there are usually more people who identify themselves as Democrats than as Republicans. One Republican advantage is based on the indirect way that presidents are elected. These elections are decided not on the basis of the popular vote, but instead on the votes in the electoral college. Votes are cast by states, with each state 2 having a number of votes equal to the size of its representation in Congress. Most states votes are awarded on a winner-take-all basis to whichever candidate wins a majority in that state, 3 and the presidency goes to the candidate who wins at least 270 of the 538 available votes. This system provides greater weight to smaller states, and many of these have a history of voting Republican. While the number of representatives in the House is determined by population, each state has an identical number of seats in the Senate (i.e., two). This means that even the smallest state has three electoral votes, a fact that magnifies the size of smaller states in the electoral college. To understand how this system favors Republicans, consider how one medium-sized and reliably Democratic state (Massachusetts) stacks up against four small, Republican states (Alaska, North Dakota, South Dakota, and Wyoming). The combined population of those four states is just 2.6 million, or well under half the population of Massachusetts (6.3 million), yet their combined electoral votes are equal to those of Massachusetts (12). The result is that Republicans enjoy a cushion of support in the electoral college, insofar as they can safely rely upon a relatively large number of votes from numerous, small states. The value of that cushion was demonstrated in the 2000 election, when Bush won the most electoral votes (one more than the needed 270) even though Gore won half a million more popular votes than did Bush. 2 The District of Columbia, which has a non-voting delegate in the House of Representatives but does not elect senators, has three electoral votes. 3 Maine and Nebraska choose electors by what is called the Maine Method, which makes it possible to split the electoral vote. These two states represent only 9 of the 538 votes in the electoral college. Note, however, that Republicans are trying to promote a ballot initiative in California that would switch this largest of states to a Maine-like system. If that happens, it will be a very serious setback for Democrats. No th Quarter 2007 The overall appearance of the electoral map in 2008 can be appreciated from the data in Table 2. While the total number of electoral votes in Democratic-advantage states (195) is higher than those in Republican-advantage states (150), nearly all of those Republican votes are reliable. By contrast, over half of the votes in states where Democrats have an advantage are at least hypothetically within reach of the Republicans. This means that while Republicans can deploy their resources in a purely offensive manner, focusing both on the 193 votes in the battleground states and trying to raid at least a few votes from states where the Democratic advantage is weak, the Democrats must play both offense and defense. The second structural advantage is that people who identify themselves as Republicans are more likely to be registered to vote, and also more likely to vote, than are the people who identify themselves as Democrats. This is a function of several factors that might collectively be called the higher socioeconomic status of Republicans (e.g., higher age, higher income, lower geographic mobility, etc.). Whatever the cause, Republicans are better able to translate sentiment into actual votes. That can make all the difference between winning or losing in the purple states (i.e., those that are neither Democratic blue nor Republican red), and thus in the national election. Taken together, these two structural advantages result in one simple rule: All other things being equal, the Republican candidate has a greater likelihood of winning an election than a Democratic candidate. Generally speaking, Democrats have won elections in recent decades only when either (1) the Republicans were weighed down by special factors (e.g., scandals, recessions, or candidates who were viewed as extremists), or (2) the Democratic candidate was a popular incumbent. With incumbency not being in play this time, the question then becomes: Are there any special factors that will weigh down Republican chances in 2008? The answer is an emphatic yes. Unless something dramatic happens in the coming months to rehabilitate Bush s image and/or to turn around the problems in Iraq (two very closely related matters), the Republican candidate next year will have to bear unusually heavy burdens. To a limited degree that turnaround has begun in Iraq, with the number of U.S. casualties having decreased in recent months. The main effect thus far has been to reduce the profile of Iraq as an issue, rather than to shift the public s view from opposition to support for the war.

5 No th Quarter TABLE 2 Projected Disposition of Electoral Votes in the 2008 Election Democratic Advantage 195 Battleground States 193 Republican Advantage 150 Strong Advantage 91 Arizona 10 Strong Advantage 137 Connecticut 7 Arkansas 6 Alabama 9 District of Columbia 3 Colorado 9 Alaska 3 Illinois 21 Florida 27 Georgia 15 Maryland 10 Iowa 7 Idaho 4 Massachusetts 12 Kentucky 8 Indiana 11 New York 31 Louisiana 9 Kansas 6 Rhode Island 4 Michigan 17 Mississippi 6 Vermont 3 Missouri 11 Nebraska 5 Weak Advantage 104 Montana 3 North Carolina 15 California 55 Nevada 5 North Dakota 3 Delaware 3 New Hampshire 4 Oklahoma 7 Hawaii 4 New Jersey 15 South Carolina 8 Maine 4 New Mexico 5 South Dakota 3 Minnesota 10 Ohio 20 Texas 34 Oregon 7 Pennsylvania 21 Utah 5 Washington 11 Tennessee 11 Wyoming 3 Wisconsin 10 West Virginia 5 Weak Advantage 13 Virginia 13 Source: Categories are based on trends in the past four elections, as supplemented by the author s intuition. Another factor that could work to the disadvantage of the Republican candidate is the very real prospect that the U.S. economy may be headed into a recession. While economic forecasts are well outside the scope of this analysis, it is notable that high-priced oil, a low-priced dollar, and turmoil in the housing market have led to increasing talk of a recession among economists, policymakers, and in public-opinion polls. These concerns have produced an increasing level of anxiety among the general public, among whom (according to polls) the economy has now surpassed the war in Iraq as the leading issue in the presidential campaign. In the event that a recession begins sometime in the coming months, and if an economic recovery has not clearly begun at least a few months before Election Day, it will be very difficult for the Republicans to win the presidential election. These concerns go a long way towards explaining the very early indicators of how the public might vote in different two-way races. The data in Table 3 summarize the average results for numerous head-to-head polls that were conducted late last year. If these very early numbers can be trusted, Senator McCain is the only Republican candidate who would beat a Democrat. The average poll showed him five percentage points ahead of Senator Clinton, put him in a tie with Senator Obama, and had him narrowly losing to former Senator Edwards. All of the other Republican candidates would be defeated by any one of the three Democratic contenders by anything between 1.8 and 16.5 percentage points. Those polling numbers must be taken as extremely preliminary indicators. They do not take into account the actual results of the current fights for party nominations, the campaigns that the candidates will conduct, the state of the economy in November, or the events that will take place at home and in the world over the next eleven months. They nevertheless suggest that the Democrats enter into this campaign in an advantageous position.

6 6 No th Quarter 2007 TABLE 3 Average Margin of Democratic Advantage Shown in Recent Public Opinion Polls Under Different Election Scenarios Average Percentage Points by Which the Democratic Candidate is Ahead of the Republican in Recent Polls; Negative Numbers Indicate a Republican Lead Hillary Clinton Barack Obama John Edwards Average John McCain Rudy Giuliani Mike Huckabee Mitt Romney Average Source: Calculated from data compiled by Real Clear Politics. Based on the average leads in three to six polls each, most of which were conducted in December. SELA Permanent Secretariat, Apartado Postal 17035, El Conde, Caracas 1010-A, Venezuela Tel: / Telefax: / difusion@sela.org (Legal Deposit No. pp CS182, ISSN: )