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The Plain Dealer (Cleveland, Ohio)

Trade: It's Just Not a Serious Conversation for the Candidates

Elizabeth Sullivan

Ohio's faltering economy and its quarter-million lost factory jobs are at the cusp of the Democratic primary debate.With parts of the state, including the Cleveland area, at the leading edge of the national foreclosure crisis and facing a jarring new round of job cuts, Democrats Hillary Clinton and Barack Obama understandably have been hammering on the economy. How Ohio voters react to their messages Tuesday could determine whether Clinton stays in the race.

What's discouraging is how incredibly narrow the conversation has been.

By demagoguing trade, Obama and Clinton choose an easy scapegoat over the complex reality of why manufacturing jobs are being lost and why that's hurting the nation as a whole.

Even more troubling is the emptiness of the rhetoric. While they're in trade-scarred Ohio, Clinton and Obama say they're ready to throw NAFTA on the trash heap. Yet behind the scenes, they reportedly wink to show they mean no such mischief.

It's not that Obama and Clinton lack good ideas to spur growth. More dollars for basic research and education, health care reforms, tougher trade enforcement and incentives for energy research and innovation all will rebound positively in Ohio and the nation.

Yet by making trade the bogeyman, the Democrats promote a damaging backlash against the very mechanism that could save Ohio and the country from recession. They ignore the boons of trade -- the billions of dollars that flow into Ohio and the tens of thousands of jobs tied to auto, machinery, chemicals and agricultural exports to Canada, Mexico and other parts of the world.

Even Republican John McCain, an advocate of free trade, has failed to enunciate a clear industrial policy aimed at saving manufacturing jobs.

From the candidates' viewpoint, Ohio might as well be an aberration -- a manufacturing backwater that hasn't yet seen the light of the new service economy, with its advanced technology highlights.

But Ohio is no backwater.

It is one of the most competitive states in the nation at building and exporting valuable things -- from auto parts and medical devices to industrial machinery. Not only does Ohio rank eighth in the nation in overall exports, but as of several years ago, it was the only state in the union that had seen its exports grow every year since 1998.

The falling dollar now gives this state a new export edge, if politicians don't blow it by failing to wake up to the importance of maximizing the U.S. manufacturing advantage by how we structure taxes, trade deals and industrial policy.

For it's manufacturing that drives innovation, in Ohio and elsewhere. It's manufacturing that pays top dollar for the productivity, skills and work ethic that give American -- and Ohio -- products a competitive advantage in much of the world. And it's these skill sets that still make the Cleveland area a manufacturing and innovation powerhouse.

Economic analyst Bob Sadowski of the Federal Reserve Bank of Cleveland has been studying which regions of the country are leading the new economy in innovation and patents.


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Not surprisingly, Silicon Valley stands atop the heap.

Sadowski found that scientists in just 18 counties around the country, about half of them in California, accounted for more than three out of every 10 patents for electronic innovations since 1975.

Yet, amazingly, once these 18 counties are removed from the mix, the Cleveland Fed's area, including Ohio, western Pennsylvania and eastern Kentucky, starts looking pretty good -- all because of industrial innovation.

"Our innovation is greater per capita, on average, than the rest of the United States," Sadowski says -- especially in chemicals and industrial machinery.

Preserving those advantages means recognizing them, and doing more to make sure this edge isn't further diminished.

Yet none of the leading presidential contenders is talking about a real industrial policy or a national mandate to save manufacturing jobs.

None talks about what many factory workers and managers in Cleveland talk about -- from true trade adjustment assistance to reapportionment of the health costs burden, longer-term economic planning and a radical rethinking of trade that doesn't make it a dirty word but instead expands the concept to encompass more American interests instead of fewer.

In the 2004 election, small to mid-sized manufacturers in Ohio strongly criticized the Bush administration for failing to take their interests into account when negotiating trade deals. The lack of accountability and transparency is telling.

William Gaskin, president of the Cleveland-area Precision Metalforming Association, a trade group representing 1,200 firms in Ohio and 40 other states, as well as Canada and Mexico, gives America's trade bureaucracy an "F" for failing to track pricing trends for some products that now compete with his members' goods. That means there's no way to know whether another country is dumping goods below cost because of unfair or illegal subsidies.

Yet a deeper problem, says Gaskin, is the political resistance to changing how we do things, from trade to tax policy. That includes the sort of value-added taxes most of our industrial competitors now use to promote exports while bolstering the government's ability to provide subsidies that don't count against them in trade deals.

"I hope the candidates can recognize that what they really need to be putting in place in their policies are long-term strategies," Gaskin said.

As in, a little longer than just until Tuesday.

Sullivan is The Plain Dealer's foreign-affairs columnist and an associate editor of the editorial pages.

© 2008 The Plain Dealer

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