Trade may fade as issue in presidential race

WASHINGTON (Reuters) - John Edwards' departure from the presidential race removes one of the shrillest critics of globalization and gives the Democratic Party's two remaining contenders more room to maneuver on trade.

Edwards follows a long line of presidential aspirants whose barbed views on trade have energized supporters but possibly prevented them from gaining the nomination they sought.

The former South Carolina senator blamed the North American Free Trade Agreement and the World Trade Organization for millions of lost U.S. manufacturing jobs, stagnant U.S. wages and "larger and larger trade deficits."

"Washington insiders have looked at every trade deal and asked one, and only one, question: Is it good for corporate profits," Edwards said.

Democratic presidential rivals Sen. Hillary Clinton and Sen. Barack Obama have been milder in their criticism, although both say they would push for changes in the North American Free Trade Agreement, or NAFTA, to strengthen its labor and environmental provisions and not rush into new trade pacts.

"Edwards is definitely more of a trade basher than Obama and Clinton," said Ed Gresser, trade policy director for the Progressive Policy Institute, a center-left think tank that advocates both open markets and stronger programs to manage problems caused by globalization.

"It may be that this kind of anti-trade rhetoric has some salience and appeal when people run for Congress but up to now it's been a negative thing when they run for president," said Gresser, whose new book, "Freedom From Want," partly sketches a history of American trade politics.

The last president who was elected after running a campaign critical of trade was a Republican, Herbert Hoover, who signed the infamous Smoot-Hawley bill that raised tariffs in 1930 -- an act that many economists believe was at least partly responsible for that decade's Great Depression.

No Democrat has ever gained the White House by running against trade, although the campaign trail is littered with many that tried -- including former Rep. Dick Gephardt, who railed against Japanese and South Korean trade barriers in his first attempt in the late 1980s, Gresser said.

In his failed bid to win the presidency in 2004, Gephardt targeted NAFTA and growing trade with China -- raising many of the same concerns that Edwards has in this election cycle.

In this year's Republican presidential contest, the battle is essentially down to two free-traders -- Sen. John McCain of Arizona and former Massachusetts Gov. Mitt Romney, said Edward Alden, a senior fellow at the Council on foreign relations.

Former Arkansas Gov. Mike Huckabee's gospel of social conservatism and economic populism helped propelled him to victory in Iowa, the first state presidential contest.

But that message, which included a critique of U.S. trade policies and a call for tougher action on illegal immigration, has failed to catch fire in other states.

"I think trade was the biggest populist issues on the Democratic side and immigration was the biggest populist issue on the Republican side and I think the strongest advocates of each of those positions have now fallen out," Alden said.

One vocal critic of U.S. trade policy believes Edwards left a permanent mark on the campaign.

"All the other Democratic candidates have now co-opted the Edwards trade and globalization message to a point where Obama and Hillary Clinton are having an anti-NAFTA" competition, said Lori Wallach, director of Public Citizen's Global Trade Watch.

That means doom for two free-trade agreements with Colombia and South Korea that the Bush administration wants to push through Congress this year, she said. "Korea and Colombia are absolutely not happening," Wallach said.

Still, the White House is signaling strongly it intends to send both agreements to Congress, which has never before defeated a free-trade pact. If Congress rejects the two agreements, one of the first jobs for the next president would be to soothe relations with two of the United States' strongest allies.

Hoover's decision to sign Smoot-Hawley was rooted in a reoccurring worry in U.S. politics that competition from lower-wage countries threatens U.S. prosperity.

Those concerns still exist but the United States has thrived by "finding new technologies, moving up the efficiency ladder and creating new industries that other countries aren't in yet," Gresser said. "So, it's always worked out up until now."

(Editing by Bill Trott)

(For more about the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http:blogs.reuters.com/trail08/)