Donald Trump breaks with Republicans on trade policies
Reaction from the 'Special Report' All-Star panel
At the Republican National Convention in Cleveland, Donald Trump gave us a more concrete plan to unravel global trade than to defeat Islamic terrorism.
While offering scant details about his fight against the Islamic State, Trump has been frighteningly specific in his plans to systematically undo the global free trade network first pioneered by President Reagan, and strengthened by leaders from both parties for more than 3 decades.
In his acceptance speech for the Republican nomination, Trump suggested he will only make “individual deals with individual countries.”
Trump continued, “No longer will we enter into these massive deals, with many countries, that are thousands of pages long – and which no one from our country even reads or understands.”
Really?
Trump’s suggestion that the United States’ brightest trade negotiators and the Department of Commerce essentially do not understand trade deals or do their jobs is wrongheaded.
Even more concerning, Trump thinks the best way to “Make America Wealthy Again” is to undo the global economic structures that have underpinned the US economy over the past three decades. Needless to say, Trump’s anti-trade approach would sever alliances with developing nations around the world, which the United States has partnered with to lift millions out of poverty.
Rigorous economic analyses have shown that free trade is the leading reason why the number of people living on less than $1.25 per day today is half of what it was in 1990. Economists argue that a country’s annual GDP growth increases by 1.5% after opening up to trade. Trade deals, like the Trans-Pacific Partnership (TPP) for instance, take aim at reducing the prevalence of child labor and other abusive practices both as explicit parts of the agreement and as effects of rising incomes.
During one particularly anti-trade Trump speech, the U.S. Chamber of Commerce — a typically conservative, pro-business lobbying group — eviscerated his remarks on Twitter. For example, the Chamber tweeted, “#TPP means good jobs, higher wages, new opportunities. And $77 billion added to US incomes by 2025.”
For his part, Jay Timmons, the president and CEO of the National Association of Manufacturers (NAM), pointed out that 40 percent of American manufacturing jobs are related to exports, the sector Trump’s inward-looking plan targets.
A reduction in exports would be truly devastating for the American worker. The spike in prices and slowdown in growth that follow would wreak havoc on consumers as well.
Anti-trade sentiments have even spread to a GOP platform that bears the fingerprints of a nominee obsessed with deal making, rather than a party that traditionally supports free trade. The platform reads, “Republicans understand that you can succeed in a negotiation only if you are willing to walk away from it. A Republican president will insist on parity in trade and stand ready to implement countervailing duties if other countries refuse to cooperate.”
Such language is a non-starter for a fruitful international negotiation. “America first” is delusional and greatly threatens the United States’ effort and ability to lift hundreds of millions of Americans and global citizens from poverty.
Based on the distinct lack of benefits under Trump’s plans, observers of all stripes are left to assume his arguments rest in nothing less than xenophobic aversion to working with valued Chinese and Mexican partners.
Trump, however, isn’t the only candidate responsible for pushing the United States toward severing free trade partnerships.
Senators who have been respected throughout their careers as ardent supporters of free trade are now making politically expedient decisions to oppose the Trans-Pacific Partnership.
In particular, Republican Senators Rob Portman of Ohio and Mike Lee of Utah both publically opposed the Trans-Pacific Partnership, riding a wave of popular support for protectionist trade policy. Hardly a surprise, it happens that both Portman and Lee face challenging reelection prospects in November.
Across the aisle, Hillary Clinton is not much better when it comes to trade—at least for the time being.
During the 1990s in her time as first lady, Clinton ardently supported NAFTA. As Secretary of State, she vigorously promoted TPP. But in the aftermath of a primary process that pushed her to the left in order to defeat Bernie Sanders, Clinton began to peddle protectionism.
The Clinton campaign’s ability to reject a Sanders-supported anti-TPP plank on the Democratic platform was reassuring for the future of free trade. That said, Clinton’s electoral gamesmanship continues to jeopardize advocacy and public support for critical global free trade networks.
This has left only one major promoter of free trade on the national stage: President Barack Obama.
Although he spoke critically of trade deals like NAFTA during his 2008 campaign, Obama has become Washington’s strongest advocate for free trade, vigorously promoting TPP in his final year in office. His trade advocacy is a bright spot on an issue in which many politicians reject simple economic truths.
To this end, in a joint press conference with President Enrique Peña Nieto of Mexico and Prime Minister Justin Trudeau of Canada on Wednesday, June 29, Obama provided a cogent defense of trade, correctly explaining that a return to protectionism would disrupt the economy, increase unemployment, and reduce economic efficiency.
Although he conceded that there are problems with trade, Obama insisted that it is the best way to promote vigorous economic growth despite the fact that public support for trade is slipping.
Alongside his NAFTA partners, Obama assumed the responsibility for leadership necessary to reinforce free trade networks, yet more troubling factors remain.
A 2000 Gallup poll showed that 56% of Americans saw foreign trade as an opportunity for domestic economic growth. A more recent ABC News/Washington Post poll found that 65% of Americans favored more import restrictions to protect American jobs. This contrasts strongly with the 95% of economists from leading universities who agree that the gains from trade are larger than the losses.
Unfortunately, this rejection of free trade is not unique to the United States. Across the world, voters and politicians alike have begun to embrace protectionism.
It’s easy to point toward the UK and see a country looking inward following a vote to leave the European Union. The anti-globalism sentiments that propelled Brexit are also being used to promote destructive ideas toward trade.
Current Labour Party Leader Jeremy Corbyn — a tepid supporter of the EU and one who recently overwhelmingly lost a confidence vote within his party — has made the case against a trade deal between the EU and the United States. Similar to U.S. progressives, Corbyn harps on workers’ rights and government independence from the private sector as reasons to reject free trade.
In another area, China, the world’s second largest economy, has been a thorn in the side of free trade advocates as it has continually devalued its currency in order to be more competitive on a global scale, flooding markets with cheap goods.
A consensus against free trade is precipitously building around the world despite the well-documented benefits of trade throughout modern economic history across industries.
The concerns of American pharmaceutical developers for global consumers are strikingly akin to those of American auto manufacturers. These industries accurately believe that the United States has not only the ability, but also the responsibility to take leadership in building global trade networks for the benefit of American producers and consumers.
Through American leadership, the key tenants of these international partnerships will continue to be respect for U.S. law and order, as well as the promotional of just and fair economic practices globally.
Perhaps the worst thing American voters could now do is reject the conditions of peace and stability which free trade has forged, making a return to an era of political and economic uncertainty under protectionism.
After all, free trade raises the quality of life for hundreds of millions of the world’s poor and, as prominent research continues to indicate, prevents global war. This is not a time to break partnerships, but build them. American politicians must assume the same positions of responsible leadership they have for decades and make the valued, strategic decisions to build economic partnerships and spread prosperity.
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