Not-So-Free Trade

NOT-SO-FREE TRADE….Heather Hurlburt on trade:

Trade policy is the next big bipartisan train wreck. The “pro-trade” and “economic nationalist” certitudes of both sides are largely outdated platitudes, whether it’s President Bush telling the newly-unemployed to take community college courses (so helpful for that job at McDonald’s) or the just-say-no trade rejectionism that I see a lot of in the industrial Midwest where I live. Progressives have less than a year, to my mind, to offer up new ways forward that avert that train wreck. Interesting little things, from unions organizing overseas to proposals for changing how we do unemployment and health insurance, are bubbling all over ? but I’m not at all sure we’ll pull them together in time.

I’m really struggling with this thanks to the defeat of the bill to grant Vietnam “normal” trade status, which looks to be a silly bit of pique over a trade deal that should have been something of a no-brainer. After all, it wouldn’t really have changed Vietnam’s trade status (it would only have removed the requirement for a yearly vote on the subject), it was required by WTO rules, and passing it would have given President Bush a symbolic accomplishment prior to his meeting with Vietnamese leaders ? the kind of “water’s edge” lollipop that leaders of both parties have traditionally supported.

But not this time. Part of the reason is that the free trade crowd’s public face has increasingly been that of guys like Tom Friedman, who famously admitted to a questioner a few months ago, “I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.” That kind of naive boosterism is pretty galling since Friedman knows perfectly well the reality of who wins and who loses in most trade agreements:

On an annual basis, globalization boosts the U.S. economy by $1 trillion, or roughly $10,000 per household, according to the Peterson Institute. Those broad gains dwarf $54 billion in costs to the families that suffer trade-related job losses. But the gains are dispersed throughout the economy in the form of less expensive clothing, cars and phone calls while the costs are concentrated in the heartbreak of an estimated 225,000 individual job losses.

Protectionism would be a disaster for both the United States and for the world’s developing countries. Democrats should resist falling into that trap. At the same time, everyone knows that it’s the well-off who mostly get the benefits from these deals and the working schmoes who mostly take the lumps ? with the constantly promised help for the losers never seeming to arrive. With that in mind, I imagine trade is going to be a hotter topic of conversation over the next couple of years than it has been recently, and I hope that Democrats can figure out some way to embrace trade while also doing something concrete to force the winners to share the gains with the losers. (And not just the “retraining” mantra, please. I’ve got nothing against training and education, but it’s wholly inadequate as a complete solution. We need a lot more than just that.)

Stay tuned.

Washington Monthly - Donate today and your gift will be doubled!

Support Nonprofit Journalism

If you enjoyed this article, consider making a donation to help us produce more like it. The Washington Monthly was founded in 1969 to tell the stories of how government really works—and how to make it work better. Fifty years later, the need for incisive analysis and new, progressive policy ideas is clearer than ever. As a nonprofit, we rely on support from readers like you.

Yes, I’ll make a donation