The new president needs a fresh approach to trade.
While political and media elites wonder why international trade has emerged as a top election issue this year, we were not surprised. Our question is, “What took so long?”
Obviously, the anti-establishment candidacies of Senator Bernie Sanders and Donald J. Trump were instrumental in elevating the issue, but it is not hard to identify the energy source behind the current debate: The inherent inequities in the “trade” agreements pushed by the United States for the last 30 years have finally surfaced, and the voices of the people and the communities long hurt by those deals are finally being heard.
The important question for progressives is, “What now?” How can we tap this moment such that we bring lasting change to an area of tremendous portent—globalization?
Globalization isn’t going away.
The first thing to realize is that, despite Trump’s nostalgia for a bygone era when the United States was insulated from global trade, stopping or slowing trade is not at issue. Global trade volumes—imports plus exports—have grown from 25 percent of global GDP in the mid-1960s to 60 percent today. In the United States, that same metric has grown from 10 percent to 30 percent (with imports a larger share than exports over almost that whole time; i.e., we’ve run trade deficits). We view that expansion as potentially positive, as it is through expanded trade that we seek new markets for U.S. products, expand the supply of goods and services, and provide emerging countries with opportunities to grow by trading with wealthy countries.
But trade and contemporary free trade agreements (FTAs) are far from synonymous. Today’s FTAs, of which the Trans-Pacific Partnership (TPP) is Exhibit A, are not mainly about cutting tariffs to expand trade nor are they about jobs, growth, and incomes here in the United States. Rather, they’re about setting expansive “rules of the road” that determine who wins and who loses.
With 500 official U.S. trade advisers representing corporate interests having been given special access to the policy process while the public, press, and largely Congress have been shut out, it is not surprising that corporate interests have thoroughly captured the negotiating process and ensured they are the “winners” under these rules. Their message to the rest of us has been: “Don’t worry, this will be great for you, too. And, hey, if it isn’t, we make it all better with adjustment assistance and some training.” The fact that the hollowness of such false promises are finally evident to the broad electorate provides an opening to come up with new rules of the road.
The new rules must prioritize the economic needs of low- and middle-income families while preserving the democratic, accountable policymaking processes that are essential to creating and maintaining the environmental, consumer, labor, and human-rights policies on which we all rely. In what follows, we briefly outline our “Out with the bad, in with the good” reform of FTAs. We also recognize that achieving such inclusive policies will require a new policymaking process to replace the current system of opaque negotiations, a system heavily influenced by hundreds of official corporate trade advisers while the “fast-track” process limits Congress’s role and largely shuts out the public.