House Speaker Nancy Pelosi and Congressman Charles Rangel have been getting kudos in the financial press this week for taking leadership in forging a compromise allowing President Bush to move ahead on a couple of free trade agreements with countries in Latin America. In fact, the agreements in 
question are minor compared with the more pressing free trade possibilities that continue to be tied up by protectionist led political wrangling, but it's certainly a step in the right direction.
Frankly it's a bit surprising that a politician can be haled for exercising leadership by championing an issue on which the U.S. is so clearly on the winning end of the bargain. But such is the state of special interest group politics -- in this case to the detriment of the Democrats (although goodness knows the Republicans have their share of other special interest groups dragging them down).
In a column in the current issue (May 21, 2007) of Newsweek, Fareed Zakaria suggests that "Bill Clinton's most important political achievement was to transform the image of the Democratic Party into one that was in favor of growth, markets and trade." He accurately bemoans the fact, however, that "far too many" among the current Democratic leadership "are parochial, pessimistic and paranoid about the global economy."
Among the benefits that the U.S. has reaped from globalization over the past 20 years, Zakaria mentions the following:
- U.S. companies have dominated the global marketplace;
- U.S. consumers have enjoyed low prices and low inflation rates, each of which increase the real value of their incomes;
- The American economy has grown faster than any other large developed economy;
- Per capita GDP has nearly doubled;
- Unemployment stands at a relatively low 4.4% -- about half of the rate in many European economies.
Zakaria's piece echoes themes that have been developed in previous posts on this blog -- particularly 
the observation that while globalization has resulted in real anxieties and displacement for certain people in the U.S., "the basic facts are indisputable: over the past 20 years, as these forces have accelerated, the United States has benefited enormously."
Just as many people abroad have been concerned with the current administration's unilateral approach to foreign policy and its seeming tendency to ignore established principles of international law, they are equally worried about the prospects of a Democratic administration which would gum up global trade by pushing a protectionist agenda advocated by organized labor and many environmental groups. As Zakaria sums up these fears, it is hard to see how one can "plausibly hope to lead the world by abdicating America's historic role as the leader of an open global economy."
In his column, Zakaria poses a question that I think captures the point as well as any argument -- "What advanced economy in history that has closed itself off from the world has prospered?" The answer, of course, should be obvious.
[Attribution Note: The picture of the graph showing the impact of free trade on the U.S. economy is from a Heritage Foundation article entitled "Free Trade by Any Means: How the Global Free Trade Alliance Enhances America's Overall Trading Strategy" -- which in itself reinforces a number of points made here.]
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