As Dartmouth College economist Douglas Irwin masterfully documents in his most recent book, “Clashing Over Commerce: A History of US Trade Policy,” trade politics have been contentious since the country’s founding. The clash generally has been between those who seek greater market access abroad and domestic industries that yearn for protection from foreign competition. Despite the challenging domestic politics, U.S. policymakers largely have gotten the policy right since the disastrous Smoot-Hawley tariffs of the early 1930s.
Until recently, that is.
The basic backstory is this: Since World War II in particular, the United States used its status as a global superpower to establish institutions, write rules and negotiate treaties to facilitate the free flow of goods and services while minimizing potential for the spread of protectionism. The goal was to serve economic and geopolitical interests. Trade liberalization hasn’t been perfect, but it has been reasonably successful in promoting those twin aims, and it earned support from leaders in both major political parties. To be sure, there were fringes on both the left and the right that opposed this consensus in favor of trade liberalization, but every president since Franklin Roosevelt, Republican and Democratic, has been broadly supportive.
In many ways, the 2016 presidential campaign marked a turning point in the long arc of bipartisan support for U.S. trade leadership, as both major parties’ presidential nominees rejected prevailing policy orthodoxy.
Using misleading, inflammatory nationalist and racially tinged rhetoric, Donald Trump promised to tear up trade agreements and destroy valuable institutions like the World Trade Organization. He argued the United States was continually taken advantage of by trading partners and that, if elected, he would restore a bygone era, with shuttered factories reopening as corporations begin reshoring supply chains.
Meanwhile, the rhetoric and policy proposals on trade in the Democratic primary were nearly as bad. Longtime trade critic Sen. Bernie Sanders, D-Vt., harangued trade liberalization as a vast conspiracy of elites aiming to enrich themselves at the expense of the working class. Sensing vulnerability on her left flank, former Secretary of State Hillary Clinton, once a champion of the Trans-Pacific Partnership (TPP), a promising trade pact between Pacific Rim nations, reversed course; she publicly opposed TPP and criticized the prevailing trade consensus. After a bruising primary, Clinton would eventually capture the Democratic nomination for president.
Trump narrowly defeated Secretary Clinton to capture the presidency and quickly embarked on the most ambitious protectionist agenda since Herbert Hoover.
Within days of his inauguration, President Trump withdrew the United States from the TPP. In 2018, the president hit close allies with steel and aluminum tariffs, citing dubious “national security” grounds, and ignited a tariff tit-for-tat with China ostensibly designed to confront Beijing over its mistreatment of American intellectual property. Though the tariffs have imposed unnecessary costs on the economy and ensnared unrelated industries into trade conflicts, it has not yet spiraled out of control.
To date, the president has not attempted to withdraw the United States from the WTO, but his administration continues to undermine the Geneva-based organization by crippling its adjudicatory function. It remains to be seen whether Congress will support President Trump’s rewrite of the North American Free Trade Agreement (NAFTA) with our Canadian and Mexican allies. If it does not, many predict the president will try to terminate NAFTA.
For supporters of trade liberalization on the center-right and center-left, it is a bleak time. Many are trying grapple with what went wrong and how to jumpstart the vital task of rebuilding support for trade.
Against this backdrop comes Kimberly Clausing’s excellent new book “Open: The Progressive Case for Free Trade, Immigration, and Global Capital.” As the name implies, Open is an unapologetic center-left defense of globalization.
Clausing, a Reed College economics professor, translates complicated trade policy nuances concisely. She slays some common misconceptions that animate much of the anti-trade rhetoric on the left and the right. She ably explains that the primary drivers of manufacturing job losses in the United States are technology and productivity gains, not imports. Likewise, Clausing explains why trade deficits are not the result of trade policy and why the fixation on them is a distraction. She also does a nice job explaining why import restrictions will not help struggling workers. These are all important points for trade-skeptics on the left to understand.
The book is not perfect. Toward the end, Clausing lays out policy solutions for how to reinvigorate the middle class and create a “more equitable globalization.” Though she touches on the need for international cooperation to address climate change, Clausing missed the opportunity to explain how trade liberalization itself can help address climate change; during the Obama administration, the United States and a subset of WTO members were negotiating the Environmental Goods Agreement that would have cut tariffs and non-tariff barriers on clean energy products. The Trump administration has unwisely put the talks on hold. Likewise, I am unpersuaded by Clausing’s call for more stringent antitrust enforcement.
These, however, are minor quibbles with an otherwise extremely valuable contribution. With Democratic hopefuls beginning to announce their 2020 presidential candidacies, Clausing’s book arrives at a pivotal time. It is a fool’s errand for Democratic presidential hopefuls to run on a more protectionist platform than Trump’s. For disaffected centrists and conservatives who understand the value of international trade, a pro-trade platform from Democratic contenders would be a welcome addition to the race.
If the United States is going to regain its status as the world’s leading defender of globalization, it will take another bipartisan consensus. For this urgent task, the center-left should start with Open.