Few Americans have even a rudimentary understanding of the economics of world trade, much less a detailed understanding of institutions and organizations such as the North American Free Trade Agreement (NAFTA), The Trans-Pacific Partnership (TPP), or the World Trade Organization (WTO). Therefore, it would hardly seem to be a good idea to politicize trade and to encourage voters to make extreme choices (e.g., “anti-globalization” or “anti-regulation”). Yet, like many aspects of our government, by politicizing what is really a complex bureaucratic function, we are preventing it from operating effectively. Very few experts would favor any extreme position on trade (e.g., either complete lack of trade tariffs and protections or complete protectionism) or even any position moving toward the extreme, and basically every recent administration and government organization has tried to promote fair and open global trade. The question is simply how to make trade more fair and/or more open.
Our view of world trade has been politicized and distorted. NAFTA has been characterized as the “worst trade deal ever” and the TPP as “a continuing rape on our country”. Even if there were some substance to these statements, they are quite extreme considering that (a) both NAFTA and TPP are the result of extensive negotiations by non-partisan, informed experts backed by the power of the U.S. government, and (b) experts tend to agree that NAFTA and TPP have significant benefits to U.S. businesses and consumers (i.e., they allow businesses to operate more efficiently by using global sourcing and eliminating inconsistencies, and they allow consumers to obtain imported products at lower costs). Those who espouse such a strongly negative view of these agreements nearly always focus on only one simplistic aspect of trade, that, is, its effect on U.S. jobs. But while it is intuitively clear (and evident from historical trends) that globalization can shift some U.S. jobs oversees, there is no evidence that these jobs don’t come back (that is, the trade merely changes what jobs are available and where). There is also no evidence that by scrapping years of work by our professional negotiators we can arrive at something better.
Why do our candidates dump on trade agreements, then?
Given the complexity of global trade, the lack of understanding (or attempt to convey understanding) of the issues, and the need to address underlying issues (i.e. everyone wants a good job that pays good money), candidates are rewarded for politicizing trade, even at the potential expense of the American public. Candidates form their positions on trade based on very simple political formulas.
(a) Big businesses tend to back free trade, except when specific tariffs are proposed that may protect their business and/or drive up prices on their products.
(b) Unions tend to oppose trade agreements, because they tend to license big companies to move jobs overseas and/or obtain more parts and materials overseas.
(c) Every candidate, in order to get elected, has to stand out and prove they know better than anyone else. Therefore, they almost never express agreement with leaders of other parties.
With NAFTA, Trump’s position was quite simple. “Rust belt” voters, whom he needed to get elected (and who ultimately led him to be elected) tended to oppose NAFTA because their perception was that it had contributed to the reduction in union factory jobs in their areas. Further, in order to get elected, Trump had to show himself to be a better candidate than Clinton. Therefore, he framed NAFTA as a [Bill] Clinton deal and characterized it as the “worst deal ever”. In fact, NAFTA was supported by more Republicans than Democrats when it passed the U.S. Senate, but since Clinton was president, this was a good way to make it seem much worse. Hillary Clinton could hardly make a rigorous defense of NAFTA given her need to impress the rust belt voters. And, given that NAFTA was now tagged as a deal her husband made, she could hardly benefit from beating on NAFTA. Therefore, President Trump overwhelming carried this point from a political perspective.
With TPP (the trans-Pacific Partnership, which was negotiated under Obama but was still making its way through Congress but had not been approved), both candidate Trump and candidate Clinton came out against TPP, which Clinton had previously backed. Candidate Trump appeared not to care much about the details of TPP, which he called “a continuing rape of our country”. At various times he spoke as if TPP was in effect, which it was not, and as if TPP included China, which it does not. In general, when speaking about TPP, candidate Trump criticized China for its unfair trade policies and their affect on American jobs. This seemed to be the support for his “rape” statement.
Candidate Clinton said that she changed her mind about TPP (i.e., began to speak against it) when she saw “the details”. But this did not seem genuine. It seemed that she had changed her mind when she became a presidential candidate and did not want to lose votes from union members and others with strong opinions on the matter.
Years later, after threatening a trade war with China that he said would be “easy to win”, President Trump suggested that TPP could be revived. Most likely, this is because as president, he realized that the main purpose of TPP was to obtain greater leverage over China by forming a strong alliance and consistent set of trade rules across all of our Pacific allies. China was never included in TPP.
By politicizing these issues and simply ignoring these facts, we have potentially set our negotiations back years. Republicans were in the strange position of opposition free trade deals, because their candidate opposed them in the strongest possible terms and they could not very well praise anything that had been tagged with Clinton or Obama. Most Democrats certainly weren’t going to champion a trade deal that wasn’t even being backed by Republicans. So TPP was dead.
The result is the opposite of good sense. We lost three years on TPP, along with any benefit TPP could have had on having a stronger position with China. We lost it without regard for its potential benefits to our country and our citizens. TPP is a good example of how we let politicians get away with too much politicking. Politicians have to put getting elected ahead of doing the right thing, so they did the wrong thing to try to get elected. And we went along with it.