Last week, Politico featured an interesting article about EU trade negotiations by Barbara Moens, titled, “Europe’s Glory Days of Trade Deals Are Over.” The piece began on a gloomy note:
That [negotiating trade deals] seems a distant memory now for the world’s biggest trade bloc. Concerns about human rights in China and fears about deforestation in Latin America mean that the EU’s free trade agenda is running out of steam.
Doing trade deals is no longer just about keeping German carmakers and French farmers happy — which was often challenge enough. EU trade officials must now also please young climate marchers, union leaders and human rights activists — and that’s before they even start to haggle over tariffs and quotas with the negotiators across the table. The growing litany of public objections to trade means that the European Parliament and EU capitals are increasingly unwilling to sign off on deals that the Commission has struck.
What intrigues me most about this is that you could take out “EU” and insert “United States,” and it would still make perfect sense. Clearly, there has been a sea change in thinking about trade, perhaps not by the majority of people (U.S. polls continue to show strong support for trade), but certainly among the people that make the most noise.
This debate over trade is not new—the older folks reading this will remember Seattle in 1999—but the argument has evolved. In the early days, the focus was on what the activists were against—most trade agreements, which were deemed to be tools of big corporations that exploit the workers. Now it has turned a useful corner, and the trade skeptics, while still seeing a corporate conspiracy, are talking about what they are for rather than what they are against. This is a hopeful sign because it permits a more constructive conversation, although we have yet to have it.
The fact that these concerns are international is also not new. It was obvious during negotiations on the Transatlantic Trade and Investment Partnership (TTIP) that the agreement was in more trouble in Europe than in the United States, as activists convinced European consumers that the deal would be a giant regulatory downgrade that would imperil their health and safety. (This concern is also not new. One of my favorite headlines from the 1980s appeared in a Canadian paper attacking the proposed U.S.-Canada free trade agreement: “Free Trade Called Threat to Day Care.” It’s on the wall in my office.)
Sadly, these ideas have not gotten better with age. They were wrong then, and they are wrong now. Overall, trade creates benefits. It leads to more jobs and more growth. As every economist will tell you, however, trade agreements, while net positives, produce both winners and losers, and as politicians will tell you, the losers make the most noise. Historically, the answer was to design programs like trade adjustment assistance that compensated the losers. For a variety of reasons, those programs have not been as successful as we would like, and the debate has turned from compensation to prevention—let’s not have trade agreements that don’t do what we want.
The list of things we want has also grown longer, to include worker rights in other countries, avoidance of forced labor and other human rights concerns, climate change mitigation, opportunities for women, and more. These are all worthy objectives, consistent with administration goals and values the United States has long advocated. (The Scholl Chair has recently completed analysis on three of these issues—the role of women in trade, climate and trade, and forced labor in Xinjiang.)
Where I get off the boat is with the insistence that these are more important than other trade priorities, and we should oppose agreements that do not contain them. In that regard, I am admittedly old fashioned. Trade agreements should be about trade. Their goal is to promote the exchange of goods and services to the benefit of all parties in the agreement. There are millions of Americans who have a stake in the global economy (whether they know it or not) because they grow things, make things, or provide services that are exported. Improving market access will enhance their prosperity and grow our economy.
The trade activists seem to have forgotten this, and the administration seems to be forgetting it as well. They will be reminded of it if they ever launch a trade negotiation, because I can guarantee the other party will bring it up because it has its eyes more clearly on the prize. That does not mean we should give up on these other important goals. They are fair game in negotiations, but we should be realistic about how much we can obtain and not forgo agreements that provide important market access because they don’t give us everything we want on other issues.
There is a disconnect here. Trade negotiations are incremental—get what you can and come back later and try again for more. Environmental, labor, and human rights activists are pursuing a moral agenda. They want the whole loaf because it is right and just and are willing to sacrifice the agreement if they don’t get what they want. The two groups speak different languages. Here at the Scholl Chair, we’re dedicated to bridging that divide. I hope the administration will attempt to do the same.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
To read the full commentary from the Center for Strategic and International Studies, please click here.