Talk Story
To trade or not to trade,
which side are we on?
GOVERNOR Ben Cayetano led a 64-member delegation from Hawaii to Beijing, Shanghai, Guangdong and Hong Kong this week, spending at least $27,000 of taxpayer money on a two-week trip aimed at increasing trade between China and Hawaii.In all, the Department of Business, Economic Development and tourism expects to shell out $85,000 this year to promote local trade with China. We hope it's not too late or too little.
Meanwhile, Cayetano's Democratic colleagues, Reps. Neil Abercrombie and Patsy Mink, were in Washington voting to deny the president stronger, "fast-track" authority to negotiate global trade deals.
A Wall Street Journal editorial supporting the trade vote, which slipped through the House by the narrowest of margins -- 215 to 214 -- described the bill as one "which will separate the genuine free-traders from the political poseurs."
"House Democrats claim to love American business," the Journal wrote.
"But when crunch time comes they fall back into the arms of the AFL-CIO."
It's a free country and there's no reason why our elected representatives have to be consistent or true to any overriding principle other than the politician's prime directive: Get re-elected.
As this newspaper reported back in 1997: "According to his campaign report, Abercrombie raised $129,000 from political action committees and $33,000 from individuals. Among the PAC contributors were the usual labor groups (AFL-CIO, Ironworkers PAC, Seafarers PAC) that have traditionally been Abercrombie's most generous supporters."
Abercrombie doesn't always toe the party line. For example, he supported the Bush tax cut, saying it would "help working families, increasing take-home pay."
However, the bill also had an amendment sponsored by Abercrombie that would give companies owned by 45 or fewer individuals a four-year grace period before paying inheritance taxes. Once those payments started, rather than coughing up the tax bill in a single lump, they could be stretched out over a 10-year period.
Rep. Abercrombie's own Web site asks and answers the question: "Q: Is it true (as some news media have suggested) that the extended payment provision was tailored to benefit Campbell Estate?
"A: No."
Abercrombie's tax-cut deal was remarkably similar to others cut this week on trade. For example, Rep. Jim DeMint of South Carolina switched his vote from nay to yea after he wrested a written pledge from GOP leaders to support a provision favorable to his state's textile industry. That deal also brought around Rep. Robin Hayes of North Carolina, who'd also planned to vote against the bill. Both DeMint and Hayes are Republicans.
Abercrombie has been consistent in opposing free trade, however. For example, he's supported the protectionist Jones Act, which requires that only American vessels ply routes between U.S. ports. The cruise ship business in Hawaii has gone belly-up, despite this effort to protect it.
He's also the champion for sugar price supports, declaring that foreign sugar producers depend on "slave-driver" wages. We all know where Hawaii's sugar business is these days.
While our representatives continue to battle to maintain trade barriers and price supports for industries already in the graveyard, other politicians are fighting to keep them up for Big Steel, still breathing but doing poorly.
A federal trade panel agreed Friday to new tariffs and quotas on steel imports, although it set them only about half as high as the industry wanted.
Since 1980, U.S. employment in steel making has slipped from 600,000 to 210,000. Despite that, the industry is still suffering from over capacity, as well as inefficient and outdated plants.
President William McKinley, whose place in Hawaii history is memorialized by having his name on one of our largest and oldest high schools, also has his name on the McKinley Tariff of 1890, one of the highest in history. Not surprisingly, Rep. McKinley was from Ohio, a steel state, and steel was threatened by cheap imports.
After McKinley had been elected president, he reversed course on tariffs because the industry had discovered that the benefits of exporting steel outweighed those of keeping foreign steel out. Accordingly, McKinley gave a speech on Sept. 6, 1901 calling for tariff barriers to be swept away. He was shot the next day.
Trade remains a battlefield where economic reality and political expediency shall forever collide. In the long run, trade benefits everybody. In the short run, protection only delays the inevitable -- but it does pay a lot of campaign bills along the way.
John Flanagan is the Star-Bulletin's contributing editor.
He can be reached at: jflanagan@starbulletin.com.