I didn’t watch the most recent Republican Presidential debate; I figured that we have 7,426 more to go before the Iowa caucuses, so what’s the point? But I did hear and read about it, and one portion of the debate was more than a little disturbing.
Discussing China policy, Mitt Romney came up with the following:
Mitt Romney: Well number one, on day one, it’s acknowledging something which everyone knows, they’re a currency manipulator. And on that basis, we also go before the W.T.– the W.T.O. and bring an action against them as a currency manipulator. And that allows us to apply, selectively, tariffs where we believe they are stealing our intellectual property, hacking into our computers, or artificially lowering their prices and killing American jobs. We can’t just sit back and let China run all over us. People say, “Well, you’ll start a trade war.” There’s one goin’ on right now, folks. They’re stealing our jobs. And we’re gonna stand up to China.
This very bad answer got properly smacked down.
Jon Huntsman: Well, the re– reality’s a little different as it usually is when you’re on the ground. And I’ve tried to figure this out for 30 years of my career. First of all, I don’t think, Mitt, you can take– China to the W.T.O. on currency-related issues. Second, I– I don’t know that this country needs a trade war with China. Who does it hurt? Our small businesses in South Carolina, our exporters– our agriculture producers.
We don’t need that at a time when China is about to embark on a generational position. So what should we be doing? We should be reaching out to our allies and constituencies within China. They’re called the young people. They’re called the internet generation. There are 500 million internet users in China.
The sad thing is that I am sure that Romney knows better than to prescribe protectionist know-nothingism in discussing the crafting and implementation of China policy. But just as discussions of the Federal Reserve, monetary policy, and quantitative easing have been hijacked within the Republican party by the Ron Paul fanatics, with other Republicans not caring enough to push back against the Paulites, discussions of trade policy within the Republican party are increasingly getting hijacked by protectionists. Oh, to be sure, there are plenty of free trading Republicans in Congress, and they should be lauded for having pushed for the ratification of trade deals with countries like Colombia, South Korea, and Panama against the hesitant posture of the Obama Administration, and against Congressional Democrats who find themselves entirely beholden to unions, and other protectionist elements. But protectionists appear to be in the ascendancy amongst members of the Republican electorate, which helps explain Romney’s decision to cater to them.
The Romney answer, is bad policy, and if implemented, it will, in the long run, be judged bad politics. As it should be. Romney remains in a very strong position to become the Republican party’s Presidential nominee, and given Barack Obama’s increasing political weakness, Romney is in an increasingly strong position to become the next President. He should act like one, and when it came to discussing trade and currency manipulation by China, he got just about all of the facts wrong. Huntsman cared enough about the facts not to engage in political pandering when it came time for him to give his answer. Would that Romney did the same.