Bloomberg
12-20-07
Democrats Find Protectionism a Hard Sell in Iowa, New Hampshire
By Hans Nichols and Julianna Goldman
Democratic presidential hopefuls are tip-toeing around an inconvenient economic
fact: Iowa and New Hampshire, the states hosting the 2008 campaign's first
contests, benefit from free-trade policies that many residents nonetheless blame
for lost jobs.
Hillary Clinton, Barack Obama and John Edwards are seeking to avoid alienating
workers from agriculture and other export- intensive industries while appealing to
those from U.S.-focused businesses that have fallen behind, especially union
members.
``You have winners and losers from trade,'' New York Senator Clinton said at a
Dec. 13 debate in Iowa. People ``are gaining because we're exporting,'' she said,
while others have lost jobs.
In Iowa, which holds its caucuses Jan. 3, manufacturing jobs have risen 2.3
percent since 1994 as they've dropped 17 percent nationwide, U.S. Labor
Department statistics show. Workers at exporting companies earn 15 percent
more than those at non-exporters, the Iowa Department of Economic
Development says. Iowa's jobless rate is 3.9 percent, compared with a national
average of 4.7 percent.
In New Hampshire, ``free trade has always been very popular,'' said Ray
Buckley, the state Democratic chairman. While the state, whose primary is Jan.
8, has seen manufacturing employment decline 18 percent since 1994, it has
rebounded in the technology and defense industries. Its jobless rate is the
country's 10th-lowest, at 3.2 percent.
More Diversified
``We're more diversified now,'' said Ross Gittell, a business professor at the
University of New Hampshire in Durham.
New Hampshire exports rose 23 percent to $703 million from 2004 to 2006, the
Federal Reserve Bank of Boston says. Almost a fifth of the state's manufacturing
jobs depended on exports in 2005, the latest year for which data are available.
A Bloomberg/Los Angeles Times poll in September showed 42 percent of Iowa
Democratic voters would back an anti-free-trade candidate, compared with 33
percent who wouldn't. In New Hampshire, the result was flipped: 30 percent
voiced opposition to trade accords, while 43 percent favored them.
Republicans split evenly on trade in Iowa, while expressing solid support in New
Hampshire. It's a less pressing issue for them, though, because they owe little
allegiance to organized labor, said William Reinsch, president of the National
Foreign Trade Council, an exporters' group.
By contrast, Reinsch said, unions are a ``significant organizing force and
financial force'' in the Democratic Party, creating geographic and ideological
divisions that are trickier for candidates and party officials to navigate.
`A Real Class Divide'
``I only have 9,000 Democrats here,'' said Paul Robitaille, the party chairman of
Coos County in northern New Hampshire, where the 300-worker Wausau Paper
Corp. mill will close this month. ``They have a lot more Democrats down south,
where the economy is just fine,'' and who ``aren't that interested'' in Coos
County's concerns, said Robitaille, an Edwards backer. ``It's a real class divide.''
Much of the trade debate in the campaign has focused on the North American
Free Trade Agreement, which was negotiated under Republican presidents but
enacted in 1994 during the presidency of Bill Clinton, Hillary Clinton's husband.
``On net, Iowa looks like it's been in better shape since Nafta was implemented
than the rest of the nation,'' said David Swenson, an economics professor at
Iowa State University in Ames. ``Singling out Nafta as the big bugaboo for
what's happening to American manufacturing is just naïve.''
`Overlooked'
He would have a hard time convincing Mike St. Clair. ``They overlooked a lot of
things when they put Nafta into effect,'' said St. Clair, 61, a former employee of
appliance-maker Maytag.
When Whirlpool Corp. purchased Maytag last year, the appliance maker
announced the closure of its Newton headquarters, eliminating 1,000 jobs and
the town's largest employer. Pro-trade Democrats say it's misguided to focus on
the loss of a single factory. ``While we lost the Maytag plant, we got four or five
or six plants that are building wind turbines because we've really embraced
renewable energy,'' said former Iowa Governor Tom Vilsack, who has endorsed
Clinton.
Still, the candidates take care to avoid offending voters who are suspicious of
trade accords. Clinton, 60, has said she would subject Nafta to a review process
to ``reform and improve it,'' while Obama, 46, an Illinois senator, has advocated
contacting leaders in Canada and Mexico to ``renegotiate'' the accord to include
labor and environmental protection.
Edwards, 54, has been harsher on Nafta, saying it has cost the U.S. ``over a
million jobs'' and distracted Congress from passing universal health care in the
1990s. St. Clair said he'll back Edwards in the Jan. 3 caucuses because ``he
seems like he's in our corner.''
To contact the reporters on this story: Hans Nichols in Manchester, New
Hampshire at 1871 or hnichols2@bloomberg.net ; Julianna Goldman in Des
Moines, Iowa at jgoldman6@bloomberg.net .