WASHINGTON — The Democratic Party’s 2004 platform — a blueprint for a John Kerry presidency set to be adopted tonight at the convention in Boston — is long on populism, including benefits for domestic manufacturers.
But if someone has a business with offshore operations, under a Kerry presidency its ability to defer taxes paid on foreign income could disappear, a change that would require Congressional approval. The money gleaned by the Treasury would be shifted in the form of lower taxes for U.S. manufacturers, as part of Kerry’s plan to curb the number of U.S. jobs moving offshore.
A Kerry administration would also take a different stance than the Bush White House on China and how the Chinese value their currency, the yuan. Critics, including U.S. textile mills and other manufacturers, argue the yuan is undervalued by as much as 40 percent, which makes it more difficult for domestic producers to compete against China’s exceptionally low-priced imports.
Retailers and other importers have supported President Bush’s strategy of consulting with the Chinese on the yuan, about the same position taken in the Clinton administration. However, Kerry would investigate the “manipulation” of the yuan, as well as longstanding allegations of Chinese worker abuses there, the platform said.
Any move against China is significant for the fashion industry, since the country supplies 13 percent of all apparel and 29 percent of all textiles imported into the U.S., an amount expected to increase next year when quotas are dropped among all World Trade Organization member countries.
The platform doesn’t specifically address the U.S. textile industry’s calls for quotas to remain on Chinese apparel and textile imports after 2005. However, the Democrats give a nod toward the flagging textile industry, as well as to others, such as steel, that have complained about unfair foreign trade practices going unchecked.
“We will effectively enforce our trade laws protecting against dumping, illegal subsidies and import surges that threaten American jobs,” the platform reads.
Likewise, the platform reflects Kerry’s campaign pledge for trade agreements to contain tougher labor and environmental standards in order to better balance the competitive advantage producers in developing countries can have against U.S. manufacturers. It’s a theme that was pursued in the Clinton administration, but not fully implemented, except in a free-trade pact negotiated with Jordan.
Kerry, whose trade policies Bush criticizes as “economic isolationism,” counters in the platform: “We will make it a priority to knock down barriers to free, fair and balanced trade so other nations’ markets are as open as our own.”
Gene Sperling, a key member of Kerry’s economic team, conceded that when the platform was being worked out, protectionism was an issue.
“There were a number of amendments,” he said. “We really were able to sit down and come up with a unified policy. Of course, there are always differences in party on trade, but what we put forward in platform is consistent with Sen. Kerry, of supporting open markets.”
Other policies Kerry would pursue as president that are included in the Democratic platform are:
- Granting businesses and individuals tax credits to lower insurance costs, using technology to rid waste from the health-care system and allowing lower-priced prescription drugs to be imported.
- Giving access to capital for small and medium-sized businesses through new “investment corporations.”
- Eliminating the federal deficit by ensuring that Treasury revenues match up to Congressional spending, a bipartisan strategy used in the Clinton years to help eliminate the deficit.
- Increasing the minimum wage to $7 an hour from $5.15.
- Cutting taxes for businesses operating domestically by 5 percent, a reduction paid for by eliminating deferred tax breaks on U.S. companies producing offshore. The platform also calls for repeal of the Bush tax cuts for households with incomes higher than $200,000, but keep those for the middle class.
- Creating college tuition and elder-care tax credits, aggressively promoting renewable energy use and adopting other measures as part of Kerry’s “Standing Up for the Middle Class” plans.
Massachusetts delegate Elaine Kamarck, a professor at Harvard University’s Kennedy School of Government and a former senior policy adviser to former Vice President Al Gore, said on the eve of the convention: “Most economic political decisions, including international trade, will probably take place against a backdrop of Bush’s jobless recovery, which means all actions, including trade, will be evaluated in terms of the impact on American jobs.”
— With contributions from Susan Watters, Boston