I like Fred Bergsten a lot. He named, supported, and published my book Has Globalization Gone Too Far?--despite the loud protests of some on his board of directors. I am a member of his advisory committee at the Peterson Institute (although it has been a while since I have attended the annual meetings). But I think he goes overboard in his WSJ oped today when he says that Democratic refusal to play by usual trade rules represents the "the gravest threat to the global trading system in decades."
What is at issue is Nancy Pelosi's decision to effectively kill "fast track" procedures that guarantee a yes-or-no vote on trade agreements within 90 days.
The immediate effect is to scuttle the pending free trade agreements with Panama and Korea, as well as Colombia, and to end any remaining prospect for an early conclusion of the Doha Round in the World Trade Organization.
The much more profound impact, however, is to remove the U.S. from any significant international trade negotiations for the foreseeable future. Current and former chief trade officials of three of the world's largest trading entities have told me that, since the House action, the U.S. has lost all credibility. In other words, the "time out" proposed for trade policy by one of the major presidential candidates – a central goal of the opponents of globalization – has already been called.
If this is indeed a time out, I say "good"! For the real threat to the global trading system today is not that we will forgo signing more trade agreements, but that we will fail to implement the reforms needed to sustain globalization. By presenting the debate as one between globalizers and anti-globalizers (instead of what it really is: a debate over the rules that govern globalization) globalization's cheerleaders are radicalizing and doing considerably more damage to the economic system they admire so much. It is time to give up on the bicycle theory.
Larry Summers, who recently assumed the chairmanship of Bergsten's advisory committee, has it right when he points to the unhelpfulness of those who would argue that
economists should stick with the mantra “freer trade is good” and not acknowledge in newspapers the implications of their models for fear of emboldening protectionists. This is a dangerous game. It is ethically problematic to withhold knowledge in fear of its misuse. It is likely over time to undermine the credibility of the experts who fail to share all that their science knows. And most importantly as demonstrated by recent debates the strategy of sweeping distributional issues under a rug and simply insisting on various kinds of dislocation assistance has been a political disaster for advocates of freer trade.