By Jagdish Bhagwati
President Barack Obama faces protectionist pressures. These are not just from the labour lobbies that have led Joe Biden, US vice-president, to chide “pure free traders” and to ask for “fair trade”; and which, astonishingly, have also led the US president to use his first meeting with President Felipe Calderón of Mexico – overwhelmed by the brutal fight against drug cartels caused by the US failure to legalise drugs – to urge on him tougher labour standards, a protectionist demand that is clearly aimed at raising Mexican costs of production. The pressures come also from the lobbies pushing for a Detroit bail-out that is inconsistent with the World Trade Organisation.
Through all this, the “no-drama” Mr Obama has kept a low, indeed invisible, profile. With his innate ability to moderate highs and lows, he has been America’s first “lithium president”. Fortunately, on Tuesday he stepped up to the plate on the Buy American provisions in the stimulus package, leaving little doubt as to where his sentiments, and his policy preferences, lie.
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