Technology & Trade

Trumped on Trade

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By William Reinsch: 

Now that Donald Trump appears nearly certain to be the Republican nominee for president, you can expect a lot more attention being paid to the details of what he really thinks about the important issues of the day. Polling suggests trade may not be such an issue despite the media’s fixation on it. People care about trade but tend to rank things like jobs, the economy, and fighting terrorism as higher priorities. That’s not new — it’s hard to find a president, or even a senator, who won or lost an election because of a vote on a trade agreement (maybe a House member or three, but that’s about it).

However, with Trump as the nominee, trade is set to become a featured issue in the campaign since he talks about it at virtually every rally.  So, let’s examine what he said on the subject in a recent CNBC interview: 

“We used people who are political hacks to make deals. We have to renegotiate our trade agreements. Our trade agreements are disastrous.
“We didn’t use our best and our finest. We didn’t use the people who are on your show. We used the people that are political hacks to make deals with China, to make deals with Mexico, to make deals with these massive countries. We don’t use our finest …our brightest business people …to help us make these deals.
“I want to renegotiate trade agreements. I think these trade agreements are a disaster for this country.”

There are two issues with Trump’s comments — what he said and what he consistently fails to say. With respect to what he says, there are several important observations:

First, negotiating with sovereign nations is not exactly the same as negotiating with bankers, landlords, tenants, and gambling regulators. You can’t sue countries — they don’t play by the same rules — and they have their own armies. Moreover, subject matter expertise is not irrelevant. Just because somebody is a tough negotiator doesn’t mean he or she would be a good trade negotiator.
Second, Mr. Trump is empirically wrong. Trade agreements have not been disastrous. We have trade surpluses with most of our bilateral agreement partners. More than 20 years after NAFTA was negotiated, we’re still debating its benefits, but with total trade with Canada and Mexico having nearly quadrupled over that period and with that trade supporting nearly 14 million jobs, according to a study commissioned by the U.S. Chamber of Commerce, it’s hardly an unmitigated “disaster” from anybody’s perspective.
Third, trade negotiations are not always about trade. Sometimes they’re about other things. The anti-trade lobbyists have recognized that in their argument that trade negotiations are about power (shifting from the people to large companies) rather than trade. To focus solely on market access gains and losses looks at trade agreements from only one perspective which is not always the most important one.  The Bahrain FTA, for example, wasn’t about trade; it was about the 5th Fleet and security in the Persian Gulf.  Colombia wasn’t just about Colombia; it was also about Venezuela, and so on. If Trump doesn’t see that, he may win a few battles, but he’ll lose all the wars. 
This is a painful point for me. As a trade legislative assistant on the Hill many years ago, I was regularly offended when trade concessions were made to achieve other foreign policy or defense goals. I’m still annoyed but have come to recognize that those kinds of tradeoffs are inevitable if one is a world power. The United States is the global leader. We have broad and diverse interests all over the world, and achieving some of our goals generally means postponing or sacrificing others. Put plainly — criticizing a trade agreement for not achieving all our trade goals is a cheap shot that ignores our larger interests.
More worrisome than what Trump says is what he doesn’t say, which is to provide any details at all about what kind of trade policy he thinks is appropriate for our country. It’s a fair point that we cannot expect our presidents to spend their time in the weeds of trade negotiations, but candidates ought to do better with a depth of detail beyond just saying our policy is to “win.” It would be prudent, for instance, to have a president who can speak thoughtfully about globalization and how it is changing the world trading system and how the U.S. can best respond to create more jobs and growth in the economy. Hillary Clinton and Bernie Sanders, to their credit, have both done that — clearly articulating the problems the U.S. continues to face. With Mr. Trump, we really have no clue.

William Reinsch is a Distinguished Fellow with the Stimson Center. 

Photo credit: cornstalker via Flickr
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