Finally a Trade Debate, Sort Of
September 16, 2019
The Democratic presidential candidates’ debate last Thursday finally featured an actual discussion of trade policy, although, typically for television, it was too short and too focused on a single hot-button issue: China tariffs. It also turned out to be not very enlightening.
The actual question—whether they would lift the tariffs on China once in office—evolved into a broader discussion of what we should do about China. To my surprise, nobody said they would immediately lift the tariffs upon taking office, although all were predictably critical of the president’s handling of trade policy. This reflects what most observers have noticed for some time—a hardening of attitudes about China in both political parties—which leads to the conclusion that regardless of who wins the 2020 election, U.S. policy toward China may not change all that much.
Of the group, former Vice President Biden was clearest in his criticism of the president’s failure to build coalitions, particularly with respect to China. This is a common, and in my judgment accurate, criticism. China is too big and too complicated a problem to take on unilaterally. They respond more responsibly when they are outnumbered; other countries face the same problems we do and are ready to join forces; and our failure to take advantage of that has been a serious flaw in our strategy.
Beyond coalition building, the other area of broad agreement was simply that the president is not implementing his policy effectively. A variety of colorful words were used, but the basic point was old news and a common one for Democrats. If you criticize flawed execution, then you don’t have to address the question of whether the policy was correct.
So, the net result was that we learned, again, that the president is a failure, but we learned very little about what his would-be opponents would do instead beyond building coalitions. That extends beyond the debate. So far, only two of the remaining candidates, Senator Elizabeth Warren and former Representative Beto O’Rourke, have put forward comprehensive trade plans. (CSIS’s analysis of Warren’s can be found here and O’Rourke’s can be found here.)
There is a reason for that—trade is a touchy subject among Democrats. Poll data as recent as last July continues to show broad support for trade and trade agreements among Democrats—stronger support than among Republicans. The base of that support is young people and minorities, which are essential to the party now and even more so in the future. At the same time, organized labor leadership are usually some of the most vocal trade opponents and retain considerable influence with Democratic politicians who rely on unions for financial and organizational support. Most of the politicians navigate this Scylla and Charybdis by giving fealty to labor on trade and other issues and hoping the millennials won’t notice. They get away with it because, as other polls show, when you ask voters what they really care about, trade is near the bottom.
So, Warren and O’Rourke get courage points for tackling the issue, and once there are more candidates daring to do so, I’ll comment on them in detail. In the meantime, however, they and others have raised an interesting issue. Democrats are invariably focused on stronger enforcement of our laws and agreements, which is not particularly controversial, but they are also focused on making sure that our trade agreements address a growing number of social issues, particularly labor and environment, but sometimes human rights, health, and safety, particularly tobacco, internet privacy, competition rules, climate change, and so on. (Warren’s plan, for example, would prevent the United States from negotiating with countries until they have met her standards on many of these issues.)
This was unheard of in the immediate post-war period when tariffs were high, and negotiations focused on bringing them down. As that succeeded and tariffs declined, other trade barriers became more significant, and negotiations increasingly have focused on rules and standards that constitute trade barriers. Often that makes sense. If the European Union won’t take U.S. chlorinated chickens—my favorite example—the United States should call that out as protectionism rather than something based on sound science, and the United States is right to seek an agreement to change it.
Labor rights are also a legitimate trade target, albeit a somewhat cynical one. The United States claims to want to improve wages and conditions for trading partners’ workers, but that has less to do with improving their lives and more with increasing labor costs in those countries and decreasing their comparative advantage.
Expecting countries to honor and enforce obligations they have taken on makes sense, but how far should the United States go in demanding they take on new obligations? Should it, like French president Macron, refuse to sign trade agreements with countries that have not joined the Paris Agreement on climate change? One candidate last week brought up China’s treatment of its Uyghur minority. Reprehensible, surely, but is it fair game for a trade agreement?
As trade negotiations veer off into addressing social issues, agreement becomes much more difficult because the United States is asking countries to change the way their citizens live not just the way they do business. These lines inevitably must be drawn, but the United States should be careful not to go too far. As one wag noted, Warren’s proposal is so demanding the United States would not be able to negotiate with itself because it does not meet her standards. This is a debate worth having, and when it occurs, I will come down on the side of letting trade agreements be trade agreements and not comprehensive solutions to the world’s problems.
William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.
Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).
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