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US protectionist fangs bare in Unocal bid
By Matthew Benjamin (usnews.com)
Updated: 2005-07-10 22:04
Essentially, the United States and its politicians are learning that globalization is not pain free. "Many politicians fully realize the importance of free trade to America's long-term prosperity," says Albert Keidel, a former Treasury official now with the Carnegie Endowment for International Peace. "But they have constituencies and need to balance long-term well being with the short-term pain of adjustment."
In a letter to Congress explaining CNOOC's bid, Chairman Fu Chengyu pointed out that because 70 percent of Unocal's oil and gas reserves are close to Asian markets where CNOOC operates, it "fits our business well and offers value to our shareholders." Fu earned his master's degree in petroleum engineering at the University of Southern California, just a few miles from Unocal's El Segundo headquarters.
Growing worries over globalization and the effects of free trade on American workers also threaten to scuttle the Central American Free Trade Agreement, a long-planned economic compact between the United States and six small nations in Central America and the Caribbean. "We're opening up a market with a very low-wage economy that has no tradition of worker protections. The consequence will be another exodus of American jobs," says Alabama Democratic Rep. Artur Davis. He and most party colleagues plan to vote against the trade pact, potentially dooming it.
With unease among voters about further trade liberalization--especially in states dependent on manufacturing and agriculture--as well as anger about American jobs moving to China and India, "politicians who don't appear to be vigilant toward China's rise will be much more vulnerable to being thrown out of office by competitors who play on people's fears about China," says Carnegie's Keidel. Congressional Democrats also think they finally see a chink in the Republican armor, says Claude Barfield, a former consultant to the U.S. Trade Representative, now with the American Enterprise Institute: "They sense they've got the Republicans on the defensive on this issue, and they'd love to hand Bush a defeat on CAFTA."
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