Given the concern they profess for energy security, Democrats in the US Congress—including the two seeking their party’s presidential nomination—should act thoughtfully rather than scornfully on international trade. Energy security and free trade are connected in ways that shouldn’t be ignored.
Hoping to be president, Sens. Hillary Clinton of New York and Barack Obama of Illinois have entered a contest of revulsion toward the North American Free Trade Agreement. Obama asserts that NAFTA is bad for the US but says he would fix rather than repeal it. Clinton also promises to fix the agreement but must deal with her own past enthusiasm for the pact, an achievement of her husband’s presidency. There have been reports that one side or the other is really just posturing for support from labor unions so no one interested in trade needs to worry—reports promptly denied, of course.
No comfort
Apparently, a trading partner to the north takes no comfort from those assurances. In an annual meeting of the leaders of Canada, Mexico, and the US last month, Canadian Prime Minister Stephen Harper responded to the Democrats’ chatter about renegotiating NAFTA by flexing his country’s oil muscle. Noting that Canada is the premier supplier of energy to the US, Harper said that if NAFTA renegotiation became necessary, “We would be in an even stronger position now than we were 20 years ago, and we will be in a stronger position in the future.”
Harper and Mexican President Felipe Calderon both called for damage control on another trade initiative Democrats want to wreck: the Colombia Free Trade Agreement (CFTA). Democratic House Speaker Nancy Pelosi of California on Apr. 10 changed procedural rules to block a vote on CFTA, to which the US agreed in 2006 after negotiations conducted under a now-expired law designed to expedite approval of trade deals.
Pelosi has long opposed CFTA, claiming it hurts US workers and doesn’t hold Colombia accountable for human rights violations and labor-related violence. Her objections are hollow. If anything, CFTA favored the US in its already-fluid trade with Colombia. And the Latin American country not only has made progress in human issues and the rule of law but also wants to solidify relations with the US in response to the growing menace of nearby Venezuela. Pelosi’s maneuver rebuked an important ally and oil supplier and weakened US leadership on trade.
Continuing her assault on US economic interests, Pelosi on Apr. 22 sent a letter asking President George W. Bush to support three bills he has threatened to veto. One of them, the No Oil Producing and Exporting Cartels Act, would let the Department of Justice bring antitrust action against the Organization of Petroleum Exporting Countries. Passage of the bill would be a clumsy and heavy-handed way to deal with OPEC and a sound reason for its members to shy away from the enormous investments energy consumers need them to make in future oil supply.
A more-constructive way to respond to OPEC would be to compete. But competition requires new oil and gas production in the US, which depends on increased leasing of federal land. Democrats show nothing but disdain for leasing and thus for domestic oil and gas supply.
Crimping supply
Americans dislike their dependence on foreign oil, especially OPEC oil. But they like energy security. The latter can’t be achieved in isolation from the former; assertions to the contrary are fantasies promulgated by political opportunists. The US does and will continue to rely on imported oil and needs to view oil in trade—oil from producers with strong motivation to sell—as a vital element of energy security. It needs to treat oil as a component of trade in general, which should be promoted as essential to national economic and security interests.
Congress should be encouraging US competitiveness and the development of all economically sensible and quantitatively meaningful energy sources. The hostility now on display toward trade, resource development, and commercial energy sources promises only crimped supply, rising cost, and diminished American credibility.
