This is classic Democrats. Self-conscious that they lost the middle of the country, they recast themselves as the ones who really care about their opponent’s trademark issue. But Republicans are better at emotional appeals and have already exploited the nation’s fear and anger. This is John Kerry in 2004, who ran an ineffective national security campaign against George W. Bush. The Democrats’ latest move on trade is pathetic, and it is bad for the country.
Bill Clinton dragged Democrats toward an optimistic, pro-globalization stance in the 1990s. Since then, the economic case for this position has become more nuanced but has not fundamentally changed. Society at large benefits from increased international trade, in the form of cheaper goods, higher exports and increased specialization. Though there are some losers, most everyone benefits. The rational response is not to forgo trade-related wealth creation but to use some of the gains from trade to compensate the losers.
Many Americans, spurred by irresponsible or ignorant leaders, nevertheless blame trade for creating far more losers than it has. The mainstream of both parties resisted this sentiment until 2016, when Trump executed his hostile takeover of the Republican Party and Sen. Bernie Sanders (I-Vt.) came surprisingly close to winning the Democratic presidential nomination.
Now Democrats have fully evacuated the intellectual high ground. Senate Democratic leaders announced Wednesday that, just like Trump, they favor renegotiating the North American Free Trade Agreement, which has bound North America together with little net impact on U.S. employment. Democrats would also create a new agency that would scrutinize foreign investment in the United States, offer new tax incentives for “reshoring” jobs and hire a new trade prosecutor to crack down on unfair trade practices.
These are mostly gimmicks. Two existing agencies already have powers to combat unfair trade practices. Politicians have promised to renegotiate NAFTA before without meaning it. Even so, the policy rollout signaled a more intemperate tone from Democrats. “They’re rapacious, the Chinese,” Senate Minority Leader Charles E. Schumer (D-N.Y.) exclaimed Wednesday.
Experts are not impressed. “I’m both saddened and furious that the Senate Dems have jumped on the protectionist bandwagon so fully, with all the rhetorical flourish,” New York University Professor Robert Howse told the New York Times. “As a matter of policy, none of these measures, on any plausible economic theory, would result in improving the circumstances of U.S. workers, addressing inequality, or the socioeconomic challenges specific to the U.S. heartland.”
A common retort is that the nation should seek “fair” trade, not the harmful trade pacts of past decades, with deals that promote worker and environmental protections. Yet President Barack Obama negotiated just such an agreement, the Trans-Pacific Partnership. Turned out that a real-world trade deal did not satisfy anti-trade zealots and the politicians who attack the poverty-destroying, wealth-creating project of global integration. Instead, they became only more resistant. Rather than making the case that the TPP is what trade critics had demanded, that freer trade helps nearly everyone and hurts a relative few, or that automation is responsible for many of the lost manufacturing jobs that offshoring is blamed for, Hillary Clinton unconvincingly flipped against the TPP during her 2016 primary race against Sanders.
Now the Democratic Party — the one to which the country must look for responsible governance in the age of Trump — has formally surrendered to anti-trade nonsense. With ever-fewer leaders making the case for globalization, it will be easier for Americans to assume that freer trade has devastated the nation. The country should focus on building trade relationships while investing in education, infrastructure and other things that will make the country less stratified and more internationally competitive. Instead, it will continue to shrink from global leadership and waste resources trying to save a manufacturing economy that was never going to last.