America’s dumb war against trade
Donald Trump bragged that he would put America in the driver’s seat. He would keep us out of trade accords that let China swamp us with its products and take factory jobs away.
Then he did the opposite. He pulled the U.S. out of the Trans-Pacific Partnership. TPP was designed to help us compete against China. It enabled members, led by the United States, to write the rules of trade.
That’s why other high-wage countries — including Canada, Australia and Japan — wanted in. That’s why China is not a member.
Undeterred by the facts, Trump hollered that China would enter the agreement through the “back door” — a problematic argument, in that there is no back door. Even foes of the accord say that.
But blame for the phony war against trade goes well beyond Trump. Demonizing trade had become a default position on the left.
Bernie Sanders engaged in steamy conspiracy talk, calling TPP a “disastrous” agreement “written behind closed doors by the corporate world.” Never mind that President Obama had spent five years ensuring that TPP strengthened labor and environmental standards while sharply reducing unfair tariffs on American products.
Hillary Clinton had a sophisticated understanding of the stakes, once calling TPP “the gold standard” for trade. But she sadly lacked the courage to defend and explain her position. She, too, turned on it out of political expediency.
So small wonder that 34 percent of Democrats polled last year said free trade hurts American workers more than it helps them. But guess what. After the election, 57 percent of Democrats decided that they back free trade after all.
One could see factory workers blaming their hardships on trade agreements. Beating on the North American Free Trade Agreement was a natural, if somewhat misguided, response when factory work moved to Mexico.
But NAFTA also created jobs in the U.S. as an expanding Mexican middle class bought more American products. Mexico is the second-biggest foreign buyer of U.S. goods and services.
American companies supply materials and parts to Mexican factories. Thus, every dollar that the U.S. imports from Mexico contains 40 cents that came from the U.S., according to the Wilson Center. (Only 4 cents of every dollar in Chinese imports originated in this country.)
The ability to send their lower-wage work to Mexico lets U.S. automakers continue employing skilled U.S. workers at higher pay. In any case, automation is the biggest threat to jobs, here and everywhere.
Factory workers at least had an argument against free trade. Farmers and ranchers did not. U.S. agriculture is highly export-oriented, yet farm country gave Trump its lusty support.
When Trump blustered about raising tariffs on Mexican imports by 35 percent, Mexicans started talking about buying their corn, soybeans and wheat from countries other than the U.S. Mexico, by the way, accounts for a quarter of U.S. corn exports. And though Trump has gone back and forth on campaign vows to gut NAFTA, Mexico is getting tired of the bullying and insults.
America’s abandonment of TPP, meanwhile, has rendered the United States impotent and ignored. Ahead of the G-20 summit, Japan and the European Union announced their own trade agreement. It would slash Japanese tariffs on European beef, pork and other agricultural products. To hammer home the point that the United States could go pound sand, the members threw in a line praising the Paris climate accord, which Trump had us abandon.
China is now promoting itself as the new global leader on free trade. It has beckoned others to join its alternative to TPP. China’s “partnership” would do away with TPP’s environmental and labor protections.
Congratulations, America. China is now writing the rules.