Thursday, October 2, 2008

Economic stress brings out isolationist feelings in U.S.

Just when the United States desperately needs to open new export markets to address what may become the worst economic downturn since the Great Depression, a new poll indicates that Americans are turning increasingly isolationist.

Whether it's free trade or immigration, Americans said in the Zogby International/Inter-American Dialogue poll that they have little trust in the rest of the world.

The survey of 4,700 people will be released during the 12th annual Miami Herald Americas Conference, which begins Thursday at the Biltmore Hotel in Coral Gables.

Asked what should be done with the 1994 free trade agreement among the United States, Mexico and Canada, 42 percent of Americans said it should be revised, 17 percent said the United States should withdraw from it and 21 percent said it should not be changed.

On whether Congress should ratify the impending free trade deal with Colombia, 18 percent of Americans said it should be ratified, 14 percent said it should be defeated. But 30 percent said it should be ratified with additional human rights conditions, which would in effect force a new negotiation of the agreement.

Fifty-eight percent of Americans said they support expanding the fence along the Mexican border and 34 percent said they oppose the expansion, the poll said.

''Anytime in America that you see any kind of economic stress like the one we are seeing right now, you see this sort of reaction: a reaction against outsiders, against outside economies, against outside peoples,'' said John Zogby, who conducted the poll.

''But it may also reflect a rejection of policies coming out of Washington. There is a serious crisis of confidence in our government institutions,'' Zogby added.

He noted that this and other polls shows that, overall, Americans still support free trade and a humane treatment of undocumented immigrants, especially of children who were brought to the United States by their parents.

`SCARY FIGURES'

When I read the results of this poll to Marcelo Giugale, head of the World Bank's economic policies for Latin America, his reaction was, ``These figures are scary.''

''This shows a huge communications problem,'' Giugale said. ``The benefits to the country of greater integration to the rest of the world, especially at a time like this, have not been explained well enough to the American people.''

My opinion: I agree. There are several reasons why the United States needs greater integration with Latin America and the rest of the world.

Economically, even if a new financial rescue deal is hammered out in Congress in the next days, the current U.S. credit crunch will significantly slow U.S. and world economic growth, which will mean fewer U.S. exports and fewer jobs for Americans. Exports have been one of the few bright spots of the U.S. economy in recent months, if not the only one.

And don't be fooled by CNN's Lou Dobbs and other reckless populists who tell you every day that America is losing good jobs to Mexico. The top U.S. exports to the world are high-end goods such as nuclear reactors, and the top U.S. exports to Mexico are electrical machinery and other relatively expensive products.

According to U.S. Commerce Department figures, U.S. export-related jobs pay about 15 percent more than the average U.S. job.

We need more free trade deals -- not fewer -- as well as to expand the ones we have so that U.S. manufacturers, farmers and service providers can export more goods to 95 percent of the world's consumers who live abroad.

Financially, the United States relies heavily on other countries' purchases of U.S. Treasury Bonds and other debt instruments, which have allowed the Bush administration to spend much more than the country could afford over the past few years.

If the irresponsibility of the 133 Republican and 95 Democratic members of the House who voted against the rescue package leads to a major U.S. recession and countries stop trusting the U.S. financial system, Americans will have even less money available to conduct business as usual.

IMPACT ON U.S. IMAGE

Politically, barring an immediate passage of a new rescue plan, financial chaos on Wall Street will have an effect on America's image as a country that works.

The next U.S. president will have a harder time preaching democracy and fundamental economic and political freedoms abroad if his country is perceived to be collapsing.

The world will be a worse place than it is today.

And for Latin America, all of this will be bad news. A slowing world economy will push down commodity prices that have fueled economic growth in South America, and a depressed U.S. economy will mean a major drop in exports and tourism in Mexico, Central America and the Caribbean.

It's easy to be a populist and blame others in times like these. But it is also utterly reckless.

What we need are leaders who can stand up to populism and make the case that only through greater economic integration will this country be able to sell high-end products to the rest of the world, and avoid the loss of millions of American jobs that are being increasingly threatened by the country's isolationist mood.

BY ANDRES OPPENHEIMER
aoppenheimer@MiamiHerald.com

US EXPORT COUNCIL PROVIDES ASSISTANCE TO US COMPANIES SEEKING ACCESS TO HIGH GROWTH MARKETS OVERSEAS. http://usexportcouncil.com/