Political support disappearing for trade deals

Trade policy, often misunderstood or ignored, may be a major political issue this year.

Hillary Clinton, the likely Democratic presidential nominee, and Donald Trump, the likely GOP standard-bearer, take similar positions.

They say President Obama and previous presidents have gone too far in making international trade agreements.  It’s time to stop negotiating new ones or even unravel existing pacts.

Since John F. Kennedy was president, the U.S. has pushed for lowering trade barriers among countries.  Trade agreements, both worldwide and one-on-one, have been negotiated.  Trade has increased and national economies have become linked, supporting so-called globalization.

But trade accords have met increasing opposition, at least in this country.

Labor unions and others argue that foreign suppliers can compete successfully in the American market because they pay much less than U.S. employers.  Without doubt, jobs are outsourced to places like China and Bangladesh because their labor costs and working conditions are far below those here.

Trade deals are likely to throw some people out of work even while adding new jobs.  The federal government is supposed to provide “trade adjustment assistance” to displaced workers, but it has often done poorly.  Workers can feel they bear the burden of living with change.

Recently, after complaints about competing Canadian paper production, apparently government subsidized, Obama belittled the dispute, saying it would ultimately be compromised.  Since then, paper companies in Maine have been shutting down.  Jobs have been lost.

Even if new jobs are created by trade deals, it is difficult to calculate their net effect.  That makes it possible for opponents like Trump to charge that the U.S. comes out on the short end.

Beyond employment questions, environmental standards in Asia are far below those in the U.S., making production less costly there, but penalizing the quality of life.

Trump adds another point.  He sees an unfavorable American trade balance with another country as a defeat.  For him, trade is conflict, so that when its imports exceed exports, the U.S. loses.  He also links trade with immigration, playing on fears of anything foreign, especially Mexican.

The logical extension of Trumpism is complete American economic isolation or at least only entering into trade deals that are a sure bet the U.S. will come out ahead.

Clinton does not go that far, but somewhat amazingly for a former secretary of state, she chooses to ignore the political side of trade arrangements.  Most trade agreements are part of strategic relationships that are more than purely commercial.

Under pressure from Bernie Sanders, who is generally aligned with labor opposition to trade agreements, she has dropped her official support of the Trans Pacific Partnership and now opposes it. 

Clinton ignores the desire of Pacific Rim countries for a deal with the U.S.  These countries want to show an expansionist China they have a powerful ally.

Traditionally, congressional Republicans have supported new trade agreements.  In fact, the GOP more than the Democrats gave Obama a free hand to negotiate the TPP.  Now, reluctant to allow the president a political win, they are backing away from ratifying the agreement.

The combined resistance of Democrats and Republicans has finally led voters to focus on trade issues and increasingly to oppose new agreements, especially the TPP.  Unless the Senate ratifies the deal this year, it is likely to be dead.  China would have won this round.

A fact that is overlooked in this debate is that other countries are entering into trade agreements with one another.  New trade relationships, formed in the absence of U.S. participation, may displace American exports in world markets.  China can profit.

What does the American consumer want?  Does he or she want lower prices or to insist on better wages and environmental measures in other countries?

Even in the absence of trade agreements, some foreign goods are going cost less than their American versions, and people will buy them.  So the absence of trade deals does not mean the end of cheaper imports.

People have the right to be skeptical of promises to enforce better working conditions and higher pay in other countries.  When factories making goods for the American market collapse in Bangladesh, concerns about the value of trade pacts seem justified.

Trade deals would be more acceptable if they were accompanied by vigorous federal government action.  That’s made more difficult these days by political insistence on reducing its size and role. 

The TPP leaves real questions about U.S. enforcement of the agreement’s labor requirements.  And the government should do a better job to train and place American workers harmed by trade deals.