The dramatic loss of manufacturing jobs to countries with lower labor costs gives the demand for higher barriers new emphasis. But if the United States is to continue trading with other nations it has no choice but to honor trade agreements, a responsibility that is not easy, as Congress has discovered.

When U.S. manufacturers are to be helped through tax policy, the steps often are incremental and arcane. Sen. Susan Collins has tried a more direct, though no-less-careful approach by tying benefits to workers directly hurt by free trade, an idea the Senate should pursue.

No bill is allowed to emerge from the Senate without a catchy acronym; the senator’s is locally oriented as well. Growing Our Manufacturing Employment (GoME) Act would provide tax incentives to companies that hire workers who have lost manufacturing jobs because of work going abroad and who qualify under Trade Adjustment Assistance. These tax breaks would be paid for by penalizing companies that move their headquarters out of the country in an effort to avoid taxes. GoME would further provide tax deductions for businesses that kept their work in the United States, rather than sending it overseas.

“Since July 2000, nearly 18,000 Maine people in towns such as Millinocket, Wilton, Waterville, Dexter, Fort Kent and Sanford have lost their jobs through no fault of their own,” Sen. Collins observed. The companies that have left often enjoyed tax breaks as they were laying off workers. Her bill would help end that.

The bill’s bottom line is to make it less expensive for manufacturers to remain in the United States. The tax changes would not stop foreign competition and they should not. Instead, they recognize that in the endless mix of direct and indirect government subsidies the federal government can encourage domestic production while discouraging manufacturers’ flight elsewhere.

The bill is careful not to pay for the hiring of some workers while others are fired or to be used as a subsidy to make it easier for an international corporation to simultaneously expand overseas. It also contains forestry provisions to make it simpler for nonindustrial landowners to harvest timber by providing them with improved tax treatment.

GoME has similar provisions and would be amended to S. 1637, Jumpstart Our Business Strength (JOBS), sponsored by Finance Chairman Charles Grassley. JOBS is a lengthy response to rulings by the World Trade Organization. The WTO ruled after Europe challenged a set of U.S. rules that exempts foreign source income from taxation. The original complaint was made in 1971, addressed by GATT in 1976, reformed by Congress in 1984, became a source of irritation again to Europe in 1997, affirmed by the WTO as both an irritation and an affront to trade in ’99, remade again in 2000, which also failed to satisfy the WTO in ’01. Countermeasures worth $4 billion were established in ’02 and Congress got busy again in ’03, with the result before them now.

The Collins amendment is one of dozens proposed to S. 1637, to which Democrats have tried to attach wage and overtime requirements. Whether these, in an election year, keep the bill from moving at all remains to be seen. But clearly manufacturers will continue to ship jobs overseas while the significant difference in cost of production here and abroad exists.

GoME and similar legislation could help slow this trend, giving time for the U.S. economy to adjust and perhaps keeping some jobs here long-term that otherwise would have departed. The Senate should note that trade agreements may take a long time to solve but job loss hits quickly.