On Tuesday January 29 2019, WITA hosted its inaugural Washington International Trade Conference (WITC). At the event, WITA hosted a panel discussion on trade and American values.
Closing Plenary – Trade and American Values
By: James Dail
On January 29th, 2019 the Washington International Trade Association held a panel discussion entitled “Closing Plenary – Trade and American Values” as a part of the inaugural Washington International Trade Conference. The panel sought to examine trade policy through the lens of America’s founding values, with the goal of determining whether our current trade regime has succeeded in living up to those values. Featured panelists included Thea Lee, the President of the Economic Policy Institute, Walter Russell Mead, a Distinguished Fellow in Strategy and Statesmanship at the Hudson Institute, and Michael Anton, a Lecturer in Politics and a Distinguished Fellow at Hillsdale College’s Kirby Center in Washington. Grant Aldonas, the Executive Director of the Institute of International Economic Law at Georgetown University, moderated the panel.
Aldonas opened the discussion by explaining why the values of liberty and equality specifically are central to America’s founding. His objective was for the panelists to determine if there is an existing moral framework in how the United States trades with the rest of the world, and if yes, to explore its success at living up to the values of liberty and equality. He continued on to mention the profound opportunity the country has to reform our trading system to live up to these values at the present moment, when discussions around trade policy are at the forefront of the nation’s political discourse. Aldonas concluded his opening remarks by stating that each panelist will have the opportunity to give an introductory exposition on the topic.
Thea Lee was the first panelist to speak, beginning her comments by noting that, while she was a critic of current United States trade policy, she was not opposed to either trade in concept or the entrance of the United States into the global economy. She went on to say that it is crucial that we discover what the correct set of trade policies are for the United States. She proposed three questions that we can ask ourselves in order to find the answer. First, what are we trying to accomplish with trade? Second, how do we measure our success? Third, how do we express our values to the world and achieve our goals through a combination of trade policy and domestic policy?
Thea’s next point was that we have a tendency to start the conversation around trade policy in the wrong place, with a goal in mind of eliminating the barriers to trade. Instead, we should view trade policy as a tool to accomplish our goals around the world. These goals could include everything from providing both domestic and foreign workers with good jobs, creating safe consumer goods, cleaning up the environment, or fostering good relations with other countries. We need to find a way to engage with the global economy in a way that will foster these values, as well as democratic decision-making in other countries. Through the trade rules we set, the United States communicates the issues it cares about to the rest of the world. At present, too much of what is written in our trade rules expresses our love for corporate profits, and not enough has been written to express our desire for good jobs and workers’ rights. One example of this is that, when China joined the World Trade Organization, there was nothing in the thousands of pages of accession documents about human rights or workers’ protections. This is at least partly because the United States is refraining from applying the pressure needed to make them into international rules for trade.
After Thea Lee concluded her comments, Grant Aldonas connected what she had said with his opening remarks, stating that our trade policy should not necessarily be focused on the values of freedom and equality, but on the means by which we can achieve those values.
Walter Russell Mead was the next to speak, citing a number of statistics indicating that humanity’s condition is improving around the world, such as that infant mortality has fallen in half since 1990. Mead argued that the economic growth stimulated by international trade liberalization has been the key driver to these improvements in developing countries. Due to this, it is difficult to argue that the architects of our current international trading order were wrong about everything. However, there is no question that the results have been mixed for developed countries. The political situation in both America and Europe clearly indicates that many are not satisfied with the status quo. It is essential that we examine all aspects of the current trading regime to determine both what is working, as well as how we can fix what is not working. For both Republicans and Democrats, this will require some difficult conversations. In both parties, there is a desire to return to the past in some fashion. The Republicans propose an economic system with low taxation and low regulation as its defining features. The Democrats want a return to an economy where everyone has access to a stable job for life and the distribution of wealth is far more equitable.
Yet a return to the past in either form might be difficult, as an economic and a social revolution have created cultural upheaval. Mead used the industrial revolution as an example to illustrate how the United States survived cultural upheaval in the past. When we changed from being a country full yeoman farmers to a country of city-based manufacturers, the economic situation of all facets of society improved in the long-run, but the transition period was tumultuous. In comparison to the present day, this experience suggests that there is hope in the future, but the United States will need to learn to navigate the dangers of the present. Mead also spoke about how, for the past several decades, the United States has been crafting policy around economic theory with the expectation that it will be easily understood by the general public. He emphasized that, while economic theory is essential in crafting good trade policy, trade policy and economic theory are fundamentally different things. This revolt against the status quo in the United States is the revenge of the real world against policies that only took theory into account.
After Mead concluded his opening remarks, Grant Aldonas connected them with what Thea Lee said. He stated that Mead implied that when government officials craft trade policy, it is essential that they secure the support of the general public. United States trade policy needs to take into account our traditional democratic values as well as the opinion of the general public. These go hand in hand. In the Midwest especially, the collective attitude towards trade policy has every bit as much to do with their individual identities as Americans as it does with the price of automobiles.
Mead interjected here, adding to Aldonas’s comments regarding American identity by stating that this extends beyond trade policy. Everyone would like to return to the quality jobs of the 1960s. They had stability, the promise of a nice pension, and the feeling that one was contributing to society. However, no one wants to return to the products produced in the 1960s. Thea Lee objected to this statement, saying that she didn’t believe this was a mutually exclusive choice. Good jobs for workers coupled with well-made products is an attainable goal for the United States. Walter Mead clarified his comments, saying that his point was that we should not be trying to return to utopia. Instead, we should be finding ways to meet human needs in the present.
After this, the discussion turned to the opening comments of Michael Anton. Anton is a student of the Founding Fathers, and he wanted to give what he deemed “the founding approach” to American trade policy. At the same time, he made the admission that times change and it is impossible to take the founding approach in all aspects of trade policy. Anton began his founding approach by stating that Hamilton won his great debate with Jefferson over the economic character of the new nation. We became a nation of manufacturing and industry, not of agrarian farming. Anton pointed out that Hamilton’s protectionist beliefs were initially essential to his manufacturing vision. Hamilton argued that tariffs were necessary to expand the United States’ infant manufacturing sector so that it could compete with the well-established European manufacturers. This initial economic debate between Hamilton and Jefferson was the precursor to a centuries long debate between America’s political parties. Historically, the Republicans have supported protectionism and the Democrats have supported free-trade. The parties switched identities on this issue during the last two decades of the 20th century. What we are seeing today is a reversion to the norm. After this, Michael explained the fueling force behind this reversion. He stated that the manufacturing towns that were adversely affected by factory closings were not heard by the political elites when they voiced their objections. In these towns, it was always possible to get a job at the local factory and still have a relatively good life. Suddenly, that was no longer a possibility for these people. They responded to this by casting their blame on the political elites who argued that the trade deals accelerating these factory closings was economically efficient. Anton then used this point to criticize political elites, saying that an elite’s job is to make sure that every segment of the economy is healthy, not just the aggregate whole. There is something gravely wrong if two coasts of the country are living in intellectual silos and are oblivious to the pent-up anger of Americans in the rest of the country. The President is responding to this anger and desires that the nation’s trading agreements address the concerns of those who elected him.
After Anton concluded his comments, Aldonas gave commentary about Anton’s thoughts on manufacturing decline. Aldonas said that he grew up in South Minneapolis, where the majority of his high school classmates became auto mechanics. In many ways, his classmates have achieved the American dream. They all have a home on a lake, and their kids have all gone to college. However, Aldonas disputed the idea that a sense of identity had been lost through the decline of these sorts of jobs. Instead, he asserted that they had very little identity rooted in their work in the first place. They never had the feeling that their work was meaningful, and therefore, they never had the feeling of participating in the country in a meaningful way.
After Grant Aldonas finished, Thea Lee took the conversation in a different direction, returning to Anton’s comments. She disagreed with his point that the President is actively working to resolve the anger of his constituents. Rather, she argued that the President has succeeded in tapping into this anger, but he has failed to formulate any effective policy response. She responded more positively to another point of his believing that the depleted manufacturing towns demonstrate that workers, both in the United States and around the world, are hurt when corporate interests are prioritized in trade negotiations.
Michael Anton responded by asserting that, to the Founding Fathers, the well-being of workers in other countries would be a secondary or tertiary consideration compared to the well-being of the United States and its citizens.
Aldonas jumped into the conversation with his own point, saying that it feels as if we have migrated away from both caring for the well-being of our workers and for exporting our democratic norms when we negotiate trade agreements. A return to these root values might lead us out of this conflict.
Walter Mead was the next to speak, agreeing with Aldonas’s earlier point that it is critical for all aspects of American society to feel as if they are connected to the country through their work and be represented by their government. He also pointed out that this connection has declined through population growth. He argued that, though women and minorities were denied suffrage, the early republic was more responsive to individual citizens, considering that it had a population of 3 million compared to 330 million today. A common way people overcome this lack of individuality is to adopt a group mentality. However, when people place their allegiances to their social groups above their allegiances to their country, nasty conflicts can be the result.
Thea Lee spoke up next, arguing with Michael Anton that it is actually in our self-interest as a country to advocate for democracy and worker’s rights in our trading partners. To emphasize this, she used the example that it is not inherently altruistic to advocate for reduced carbon emissions from other countries. It is actually in our self-interest because that will help mitigate the effects of climate change.
Anton responded by clarifying his point, saying that the Founding Fathers would certainly care about the well-being of our trading partners’ citizens, but that they would not prioritize it above the well-being of the American people. He also gave another comment on the United States’ political elite, saying that regardless of whether or not one fully believes in this administration’s ability to negotiate with other nations, the overwhelmingly negative response to any alteration in our current trade regime from the elite corners of society has made it difficult for this administration to produce an effective policy response. Anton concluded the panel by mentioning that during the Cold War, there was a divergence between diplomatic and economic interests when it came to trade deals. Economists might have argued that a particular trade agreement might not benefit the United States economically, but diplomats might have argued that it was in the national interest to stabilize another country’s economy so that it would not succumb to Communism.
Featuring:
Grant Aldonas, Executive Director, Institute of International Economic Law at the Georgetown University Law Center
Michael Anton, Lecturer in Politics and Research Fellow, Hillsdale College’s Kirby Center
Thea Lee, President, Economic Policy Institute
Walter Russell Mead, Ravenel B. Curry III Distinguished Fellow in Strategy and Statesmanship, Hudson Institute
To view more details about the event, visit the event page here.