Commentary: Making the case for free trade
President Obama intends to make free trade a major goal this year, and few policies would do more to stimulate growth and create jobs at a time when too many Americans are still struggling to find work and support their families.
But the president must show much more passion and persistence on this issue than he’s demonstrated so far. In particular, he has to stand up to the labor unions and liberal interest groups who continue to mount a wrong-headed, backward-looking opposition to expanding foreign commerce.
He can start by making trade a major theme of his State of the Union speech next week. Rep. Aaron Schock of Illinois, a key Republican on trade policy, rightly told Bloomberg, “We need the president to come out and say he wants this. We need leadership from him.”
The immediate issue is a bipartisan bill introduced earlier this month that would renew Trade Promotion Authority, commonly known as “fast track.”
Under this process, Congress would be able to vote up or down on trade pacts but not offer amendments or change provisions.
Fast track authority expired in 2007, and reviving it now is absolutely essential. The administration is deeply involved in trade talks with 11 other Pacific Rim nations, and an even larger deal looms with Europe.
These are highly complex negotiations, involving politically risky and finely balanced compromises, and no trading partner will sign such a pact if Congress can veto pieces of the package.
“The last thing we want are 435 members of the House and 100 senators trying to negotiate separately a trade deal,” Rep. Charles Boustany, a Louisiana Republican, told Voice of America.
Passing fast track will not be easy, however. Republicans have suffered from extremists pulling their party to the right on issues like immigration, but the Democrats have their own hardliners on the left, and no issue gets them more riled up than free trade.
A typical criticism came from Rep. Alan Grayson, a Florida Democrat, who told the Huffington Post, “We’ve tried free trade, and not only has free trade not improved the U.S. economy, it’s gutted manufacturing and driven down our labor standards.”
Liberal ideologues like Grayson are flat-out wrong. As the Office of the U.S. Trade Representative points out, “Trade is critical to America’s prosperity.”
In 2012, according to government statistics, the U.S. exported goods and services worth nearly $2.2 trillion. Trade supported almost 10 million jobs, and those jobs pay between 13 and 18 percent more than the national average.
Moreover, every family benefits when foreign sources provide low-cost products from toys to towels.
Here’s the problem. While the nation as a whole benefits enormously from trade, individual industries, regions and unions can suffer from foreign competition. There are losers as well as winners. And the politicians and organizations that represent those losers will always oppose expanded trade, often ferociously.
This is an old battle, and many years ago a labor official explained his position to us. You have to understand, he said, we represent the people who have jobs now, and may lose them — not the people who could get jobs from expanded trade in the future.
That’s a fair point. Previous trade deals have always contained provisions to aid the losers, and new ones should, as well: cash payments, retraining programs, tax incentives to attract new jobs to regions that once made shoes or shirts or steel.
Trade foes like that labor leader should not be allowed to dictate national policy, however. They are, by their very nature, looking at the past, not the future.
In the future, American workers will not prosper by making low-end consumer goods. They will find well-paying jobs in industries that take advantage of America’s competitive edge in technology and innovation, industries that sell their products and services in the global marketplace, not just to the 5 percent of the world’s population that lives in the U.S.
“It is a wager,” writes The Washington Post, “on robots over running shoes.”
Peter Cleveland, vice president of Intel, the world’s largest computer chip maker, wrote recently in the San Jose Mercury-News that by passing fast track legislation, “Congress has a historic opportunity to signal to the world that the country is open for business. ... New trade agreements will create opportunities for American business in every sector of our economy. From digital services to agriculture they are a crucial engine of U.S. economic growth.”
He’s right. Now the president has to sell that message to the American people.