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Why Would the Democrats Want to be “Tough” on Trade, as Opposed to Smart on Trade?

By Dean Baker | Beat the Press | August 11, 2019

The New York Times has created an absurd dilemma for Democrats, “how to be tougher on trade than Trump.” This framing of the trade issue is utterly bizarre and bears no resemblance to reality.

While Trump has often framed the trade issue as China, Mexico, and other trading partners gaining at the expense of the United States because of “stupid” trade negotiators, this has little to do with trade policy over the last three decades. The United States negotiated trade deals to benefit U.S. corporations. The point of deals like NAFTA was to facilitate outsourcing, so U.S. corporations could take advantage of lower cost labor in Mexico.

The same was true with admitting China to the W.T.O.. This both allowed U.S. corporations to move operations to China and also made it possible for retailers like Walmart to set up low-cost supply chains to undercut their competitors. The job loss and trade deficits that resulted from these deals were not accidental outcomes, they were the point of these deals.

U.S. negotiators have also made longer and stronger patent and related protections (which are 180 degrees at odds with “free trade”) central components of recent trade deals. While these provisions mean larger profits for drug companies and the software and entertainment industries, they do not help ordinary workers. In fact, by forcing our trading partners to pay more money for the products from these sectors, they leave them with less money for other exports.

Anyhow, given the reality of our trade policy over the last three decades it is hard to know what being “tough on trade” means. In the Trumpian universe (and apparently at the NYT ) this could make sense, but not in the real world. The question is whether our trade policy is designed to help ordinary workers or to increase corporate profits, “tough” is beside the point.

August 11, 2019 - Posted by | Economics, Mainstream Media, Warmongering | ,

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