Look who’s pushing back, free tradersJuly 16, 2016
Buried in the Quinnipiac University poll released last week was a curious set of numbers. The survey looked at the presidential race in Ohio (tied at 41 percent). It included a question about trade.
Those surveyed were asked whether they strongly agree, somewhat agree, somewhat disagree or strongly disagree with this statement: “I believe trade agreements with other countries have hurt my and my family’s financial situation.”
The responses? Sixty-six percent of Republicans strongly or somewhat agreed. For Democrats, that share was 47 percent.
Really? Republicans long have championed agreements to expand trade. Now two-thirds of Republicans see them as harmful?
And to a greater degree than Democrats whose latest chapter in bashing trade agreements includes an embrace of Bernie Sanders and his description of the deals as no less than “disastrous” and the dark work of corporate plotters?
Perhaps this is the effect of Donald Trump who is coming to Cleveland this week to claim the Republican presidential nomination. The real estate tycoon, reality TV performer and relentless self-promoter has called the North American Free Trade Agreement “the worst trade deal in history” and China entering the World Trade Organization “the greatest jobs theft in history.” He promises to strike better agreements, in which Americans will get tired of winning.
Look at Hillary Clinton and Rob Portman. In the past, each has been a strong advocate for free trade agreements. Now each opposes the Trans Pacific Partnership. The thinking seems to be that President Obama, a sharp critic of past trade deals in his own way, has delivered something worse for the country.
The sad thing is that Clinton, the Democratic presidential nominee, and Portman, an Ohio Republican seeking re-election to the U.S. Senate, know better. Yet they have done little to defend their past positions on trade. Are those positions so indefensible?
Maybe in the era of 140 characters and enough said. Fortunately, economists and others have begun to speak out, reminding that trade is not as simple as Trump portrays, our negotiators chumps, the rest of us losers as a result.
Take the trade deficit, often (and wrongly) viewed as a scoreboard. Trade involves an interested buyer and seller. In 2015, Americans purchased $482 billion in Chinese goods. China, in return, bought $116 billion from us. What did China do with the difference, $366 billion, or the equivalent of that trade deficit? It returned those dollars to this country in the form of investment, generating economic activity, including job creation.
You might say, as economists do, that we have a foreign investment surplus. Recall that Don Plusquellic launched a forward-thinking strategy to attract foreign capital to the city.
In the Washington Post last month, Andrew Selee of the Wilson Center told the story of Mexican investment coming here. For instance, Grupo Bimbo, the largest bread producer in the world, has opened plants in Pennsylvania. Mexican auto-parts makers have done the same, including in Montpelier, west of Toledo.
The trade deficit, in part, mirrors the leading role of the dollar in the global economy. That makes the dollar stronger, and American exports more expensive. Yet that status pays other dividends, just as trade deals bring access to foreign markets and support jobs, 11.7 million nationwide and 263,000 in Ohio, where exports to free-trade partners have increased 37 percent since 2005.
The trade deficit expanded in the boom years of the 1990s. It shrunk during the Great Recession.
That isn’t to downplay the harm. It is real, expanded trade not reducing jobs but shifting patterns of employment, throwing many out of work. Is the smart response stiff tariffs? Not when automation is the main culprit for job losses in manufacturing. Not when a projected 3.2 billion are moving into the middle class along the Pacific Rim.
A recent assessment of the Trans Pacific Partnership concluded that in the first decade, the costs to dislocated workers would be 6 percent of the overall benefits. That is an argument for going forward, and for doing something we have not done — truly assist those whose lives have been turned upside down, getting serious about wage insurance and productive training.
To its credit, Summit County recently set in motion Conexus, a promising program designed to match workers to the needs of employers. It is just a start. The New York Times recently reported that this country spends 0.03 percent of its overall economy on worker training. Denmark commits almost 18 times as much to its much-praised effort and Germany seven times.
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“Look Who’s Pushing Back, Free Traders” Akron Beacon Journal. Retrieved from http://www.ohio.com/editorial/look-who-s-pushing-back-free-traders-1.697731 (16 July, 2016).