American Foreign Policy


12/5/03


2. When Presidents Clinton and Bush supported free trade agreements with Latin America congress opposed their initiatives. In this essay I am going to discuss why free trade is beneficial, why presidents favor free trade while members of congress oppose it, under what conditions congress will support Presidential free trade agreements, how an adversarial legislature can assist Presidents in strategic trade negotiations, and finally whether free trade zone is a good idea.


Free trade is beneficial because it creates a positive sum whereby more products are available for everyone. For example if there is free trade with Mexico the Mexicans can just spend all their time growing crops while the US spends all its time developing technology and thus there will be a greater net number of things if there is free trade between the two countries than if each country tried to produce both crops and technology. Thus, this will benefit everyone collectively because there will be more goods. However, this does not mean that individuals will not be affected. For example in my example technology workers in Mexico would lose their job while farmers in the US would too. Thus free trade is not necessarily the best option because it will bring benefits to the whole but it will harm individuals. The reason the president favors free trade while members of congress oppose it is akin to why free trade is beneficial for the collective but it hurts individuals. The President represents the collective interests of the whole U.S. population. Thus as I mentioned free trade is beneficial in that it benefits everyone. Thus the president wants to benefit everyone and because of this he will advocate free trade because this way he will maximize the benefits. However, members of congress represent individuals. Thus they will want to protect them. For example, the congressman of the farmer who will lose his job if they open free trade with Mexico is likely to oppose the free trade agreement because this will hurt his constituents. The members of congress are not interested in the benefits of the collective. Their interest is to protect their constituents. Since free trade will hurt some individuals then the MOC of these individuals will oppose the free trade while the president will support free trade because he represents the whole of the people and the whole of the people will benefit from free trade. However, since the president depends on congress approval for his duties this means that free trade cannot happen. Therefore we must ask on what conditions will congress support free trade.


The answer to this is that congress will support free trade in the cases when the president and the majority of the members of congress are form the same party. When the president leads a free trade reform the whole of the population will benefit and thus his approval will increase and he will become more popular and so will the party. This benefit is greater than the costs that will be incurred by the losses of the individual districts. Therefore MOC are willing to sacrifice their districts for the welfare of the whole if their party benefits from this. However we should not expect MOC to be willing to do this if the trade will hurt them too much. When there is divided government we will see that MOC will not agree with free trade initiatives because they have no incentives to follow them. They will not get benefits and they will be hurt because they hurt their constituents. Furthermore, MOC are willing to support free trade if the other country is willing to open up their industry and the US puts tariffs on the imports.


However, there are benefits to democracies because of the congress that wants to block free trade. To explain this we must use Putman’s two-level game. The game is like a continuum of where we see where the points are where the key actors are willing to stay. In one side is the US opening up and having the other country close up their markets while the other extreme is the US closing its markets and the other one opening up their market. When dealing with autocracies this benefits the US as we can see