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Redefining the "Terms of Trade?" A Brief History of Social Protectionism

At first glance, the Congressman from Kentucky and the Congressman from Missouri don't seem to have much in common. The Kentuckian, Henry Clay lived in the beginnings of the industrial age. He struggled to foster compromise among America's competing political and economic interests. The Missourian, Richard Gephardt, lived on the cusp of the information age. Both men were fascinated by trade policy. Henry Clay saw tariffs as a tool for economic development; they could nurture American industry and could fund a national system of roads and bridges. In this way, northern producers could secure the southern and fledgling western market for their manufactures and commodities. National harmony and economic prosperity would be the result. Clay thought that the right approach to trade policy would help Americans achieve a wide range of important policy goals [Eckes, 1995, pp. 19-25]. Congressman Richard Gephardt, in contrast, feared that trade policies thwarted the achievement of other important policy goals such as protecting the environment. He believed "the terms of trade are also an implicit statement of moral values."1 Thus, trade agreements must be designed to make global markets more equitable as well as more efficient. "We must not negotiate away our jobs and our living standard based on outdated theories.. .about trade and international economics." In his view, future trade agreements must be made more comprehensive and include internationally accepted rules covering the envi ronment, human rights, labor rights, and food safety [Gephardt, 2/26/1997, p. 2]. Although the two men had different views of what trade policy should achieve, historians, economists, trade policy analysts, and other observers have described both men as "protectionists." After all, both Gephardt and Clay believed that unencumbered trade was not always in the interest of the