New Leadership on Trade
November 20, 2007
Increased economic anxiety, combined with fears of an ongoing global conflict with extremist forces have led many to question the terms of the United States’ engagement in the global economy and the world at large. That anxiety finds its political expression in a growing economic populism that openly questions the benefits of a global economy and an instinct to withdraw from world affairs. Recent elections in the United States underscore that point, bringing a stronger populist and isolationist strain to congressional trade politics. Many incoming members of Congress campaigned on distinctly populist platforms, calling for a halt to new trade agreements, the rollback of existing accords like the North American Free Trade Agreement ("NAFTA"), and higher barriers to immigration.
The populist rejoinder to the benefits of participating in an open world economy highlights the perceived flaws in globalization -- higher returns to capital at the expense of labor and highly publicized estimates of the jobs at risk due to outsourcing (as many as 35-40 million workers under the highest of these estimates). The burgeoning U.S. trade deficit has (erroneously) raised concerns about America’s competitiveness in international markets. Critics of U.S. trade policy (again, erroneously) link the economic rise of China and India with U.S. job losses in manufacturing and services to assert the need for higher tariffs and other restraints on trade.