Technology & Trade

Trade’s Perfect Storm

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By William Reinsch:

One thing that has become obvious in the presidential campaign is that trade is front and center as an issue. For those of us who have spent our professional careers working on the subject, this ought to be good news. Finally “our” issue is getting the attention it deserves. Unfortunately, this is a classic case of “be careful what you wish for.” We are not having a high-minded debate about trade policy. Rather, we are down there in the gutter debating whether U.S. negotiators are stupid or just incompetent and whether trade agreements are really nothing more than a race to the bottom. 

How did it come to this? It turns out we are experiencing the perfect storm of trade debates. First, on the Democratic side, this is nothing new. Trade has been a divisive issue among Democrats for some years. In 2008, Barack Obama and Hillary Clinton spent weeks in the industrial heartland beating each other over the head on who was the bigger trade skeptic, egged on by organized labor. Once the nomination fight was over, the issue faded. The Republican nominee John McCain did not make a big issue of it, and Obama — having established his position — did not have to. This year has featured a replay between Clinton and Sanders, but unlike 2008, it is not likely to disappear after the conventions.

The reason for that is the second factor — a Republican candidate in Donald Trump who has made it a big issue. There are ironies here. While the Republican Party was historically the party of protection, for the last 60 years it has been for the most part full of committed free traders. Trump is changing that, although his message so far seems to be that trade is good, but our agreements have been poorly negotiated and he, of course, will do better. Regardless, his message is perceived as anti-trade and is certainly being regarded as bad news for the pending Trans-Pacific Partnership (TPP) agreement.  

The fact that Trump appears to be determined to bring TPP up at every opportunity means the issue will not fade away over the summer but will stay in the limelight through the election. Typically, he will attack, and the Democratic nominee will be forced to respond, but with what?  Both Trump and Clinton already oppose TPP. Trump probably hopes if Clinton is the nominee, she will be trapped into either defending our negotiators’ skills, since the agreements were done on her watch, or abandoning her friends and allies. The wiser choice is to explain the reasons for her opposition and challenge him to do the same, which would reveal how little grasp of the issue he actually has. Unfortunately, his actual response will likely be more insults, and the downward spiral continues. 

The third factor in the storm is the effectiveness of the private sector trade opponents. Organized labor, environmental groups, consumer groups, manufacturing industries that want protection, and civil society organizations have proved to be well organized, well-funded and determined, and all have taken on trade as a hallmark issue. For some of them — most notably labor and industry — their opposition is actually about trade.  For many of them, though — and Sanders personifies this — it is about power. Trade agreements are perceived to take power away from the people and give it to the large soulless corporations that many love to hate (even though millions of us work for them). There are doubtless people in those companies who wish that were true, but it is not, unless one believes that creating a predictable trading system based on a common set of rules somehow empowers companies at the expense of individuals. Be that as it may, these organizations have been effective in keeping trade on the front page and in putting the pro-trade forces on the defensive.   

So there you have it — a perfect storm where both parties won’t be able to let go of the issue, and both are encouraged not to do so by citizen activists. The losers here will be the millions of ordinary citizens who are not represented by any of the NGOs and will not be able to participate in a debate where facts actually matter.   
William Reinsch is a Distinguished Fellow with the Stimson Center, where he works principally with the Center’s Trade21 initiative.

Photo: President Barack Obama attends the Trans-Pacific Partnership (TPP) meeting at the ASEAN Summit at Peace Palace in Phnom Penh, Cambodia, Nov. 20, 2012. Photo credit: U.S. Government Work via Flickr. 
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