A Diatribe on the Politics of Trade Agreements
By Ben Conner, USW Deputy Director of Policy
Few who followed U.S. politics as recently as last summer would have expected to see presidential candidates from both major parties taking a hard line against new and existing free trade agreements, but that is the world we now wake up to every day.
It has always been relatively easy to make the political case against free trade. Showing a closed factory or bemoaning jobs allegedly outsourced to “cheap foreign labor” gets too much attention compared to the positive, but more complex, story of positive trade benefits. The arguments against trade usually ignore the growth of technology (including the introduction of the personal computer and the Internet that occurred simultaneously with implementation of trade agreements and increased productivity), overlook the fact that manufacturing output in the United States is at record levels, and dismiss the dependence of farmers —especially wheat farmers — on international trade for their survival.
Another endlessly repeated concern is about a “growing trade deficit.” Trade deficits may matter, but not as much as opponents would leave us to believe. The perception that all deficits are bad stems partially from the almost exclusive focus by trade advocates on the benefits of trade agreements to exporting countries and industries. Let us use the elimination of import tariffs on U.S. wheat exports as an example. That situation does not mean that countries that import U.S. wheat are worse off because they decide they can afford to buy more U.S. wheat with lower tariffs. The purchase of U.S. wheat adds to the import side of the balance of trade, but that is only a bad thing if you assume that wheat itself has no value.
Likewise, when a U.S. farmer buys fertilizer that was extracted from foreign deposits, the U.S. trade deficit goes up, but the farmer is more likely to be pleased with improving quality and yields than alarmed by an abstract accounting measure published by the Bureau of Economic Analysis.
Another persistent objection raised by skeptics of free trade agreements is that foreign countries try to tip the scales against U.S. companies. And we know there is some truth in that. Much of USW’s trade policy work is devoted to off-agreement practices. More details about that work can be seen on the policy section on the USW website. The recourse to address such issues is in the enforcement provisions of trade agreements.
Trade agreements have the potential to create a level playing field where individuals, families and companies can make their own decisions about what to buy and sell. The moral response is to allow people to trade with whom they wish, and not tip the scales. The role of trade agreements is to provide that opportunity, and that benefits both U.S. wheat buyers and wheat producers.