This critique did not sit well with some Warren enthusiasts, and they fired back with vigorous defenses of Warren’s trade ideas. In The Nation, Todd Tucker argued that Warren is “ditching the xenophobia and envisioning a trade regime that would make life better for workers at home and abroad.” The Week’s Ryan Cooper characterized Warren’s plan as “a bold overhaul of how the U.S. conducts its trade negotiations. It’s only a matter of time before the old trade paradigm dies an ignoble and well-deserved death.” And in his Project Syndicate column, economist Dani Rodrik concluded, “Elizabeth Warren’s new trade plan solidifies her credentials as the Democratic presidential candidate with the best policy ideas."
This is a lot of pushback. So did I misjudge Warren’s trade ideas? I want to say yes. The more I look at Warren’s campaign, the more impressed I am with her politicking, her debate performances and some of her plans for a post-Trump world. I’m not crazy about her foreign policy ideas, but they are not entirely devoid of merit. In just a single tweet, Warren already seems more presidential than President Trump (admittedly not a high bar).
It is tempting to write that her trade plans would not be all that bad. The thing is, none of the arguments in favor of Warren’s trade policies are terribly persuasive.
One crux of the disagreement is just how sweeping Warren’s trade policy really is. Her plan lists an array of preconditions that all U.S. trade partners must meet. The list contains a lot of desirable ends, but as even Warren acknowledges, “America itself does not meet many of these labor and environmental standards today.” Nonetheless, she says explicitly that, her aim is “establishing a set of standards countries must meet as a precondition for any trade agreement with America. And I will renegotiate any agreements we have to ensure that our existing trade partners meet those standards as well.”
This sounds really, really sweeping to me. This is not just about any new trade deals, it’s about revamping all existing trade treaties. It will also not go over terribly well with our current trade partners. Renegotiating existing trade deals is exactly what Trump has tried to do, with little to show for it. Dealing with Warren’s renegotiation demands after Trump’s is likely to generate whiplash among our trading partners, but few concessions.
Tucker repeatedly claims that Warren will be a smarter trade negotiator than Trump, and would not be so foolish as to raise tariffs. But as he also wrote, Warren’s trade plan “is as much a theory of power as it is a set of policy ideas.” For Warren to get our trading partners to renegotiate, she will have to use tariffs as leverage. That will make the current economic uncertainty look piddling. The end result would be further sanctions on the U.S. economy, with predictable economic effects.
Cooper accuses me of displaying a palpable “contempt for democracy” in my critique, going on to say, “By Drezner’s lights, neither the voting rabble nor their elected representatives have any place in trade deals.” That’s not what I wrote — I specifically praised Warren for expanding the advisory groups to include consumers — but why bother with reading comprehension in 2019?!
My concern with Warren’s changes to the process have to do with how trade agreements work. There is no such thing as a trade agreement that does not create new winners and losers. The best way to cope with this redistribution of benefits is for the winners to compensate the losers through government transfers, not for the trade deal itself to offer all things to all constituencies. Warren’s plan is not a recipe for better trade deals, it’s a recipe for no trade deals.
If Cooper had aimed his fire at the lousy trade adjustment assistance programs the United States currently has in place, he would have my sympathy. As it stands, however, Warren’s process will work about as well as Occupy Wall Street’s decision-making process. The result, as I noted previously, will be a world that bypasses the United States and trades more with each other.
Finally, Rodrik’s column, like Cooper and Tucker, elides the effects of Warren’s trade plan on existing trade agreements. This seems like kind of a big deal, because Rodrik also acknowledges the effects of Warren’s plan is no trade deals: “Some have criticized these requirements for being so stringent that they would rule out any new trade agreement. This is a possible outcome, but not an altogether bad one. The US can remain an open economy that takes advantage of world markets without having to sign bad trade agreements crafted along the deep-integration model.” The United States can’t remain an open economy if Warren applies these criteria to our existing trade partners — which, again, she explicitly announced she would do in her plan! Forget deep integration, forget shallow integration — there would be no integration. And although these authors might contest the distributional implications, freer trade has enriched the United States an awful lot.
My favorite part of the pushback is the claim by all these authors that it is unfair to label Warren a protectionist. Rodrik writes, “Trump’s trade policies have been a smokescreen for a regressive domestic economic-policy agenda. Warren’s trade proposals aim to support an extensive agenda of progressive economic reform at home and to ensure that trade deals do not undercut it through the back door.”
This sounds suspiciously like those silly people who defend Trump’s trade plans because in his heart of hearts “Trump is not a protectionist; rather, he is using tariffs as a tool to advance a radical free-trade agenda.” It’s risible when Trump acolytes make this justification, and it is nearly as risible when Warren’s fans do it. Warren’s progressive aims do not mean much if the outcome is akin to Trump’s. Indeed, Rodrik acknowledges that “trade policy is largely an adjunct to [Warren’s] agenda.”
If Warren becomes the Democratic nominee in 2020, I’ll vote for her over Trump. She would be a much better president across a wide number of issues. But I will be holding my nose when I do it. No matter what her acolytes say, her trade policies are not better than the status quo, and in some ways they might be worse. She’s articulating policies that simply do not jibe with the preferences of Democrats. On trade, Warren remains Trump with a human face.