“It’s more complicated than that” is a sentence I probably mutter in my sleep. (My students think I repeat it on a daily basis, sort of like a mantra.)
In a New York Times op-ed a couple of weeks ago, Miriam Sapiro, who was a deputy U.S. trade representative from 2009 to 2014, addressed one of the many subjects that is more complicated than either free-trade purists or knee-jerk opponents of markets understand, in “What Trump and Sanders Get Wrong About Free Trade.”
After noting that the United States enjoys a 200 billion dollar trade surplus, she points out that unless we continue working to pry open foreign markets for American goods and services, we will have a hard time creating more jobs: Nearly all of the world’s population lives outside our borders.
The Department of Commerce estimates that every increase of $1 billion in exports sustains nearly 6,000 jobs, and that export-related jobs pay on average 18 percent more than jobs focused on the domestic market.
We Americans have an unfortunate tendency toward “either/or” arguments. Trade is good or bad. We are for it or against it. But this is one of those areas in which the question is not–or should not be–yes or no, but how. What distinguishes a good trade agreement from a bad one? How do we ensure an equal playing field? If domestic manufacturers have to abide by rules protecting the environment and ensuring fair labor practices, for example, other parties to these agreements should be bound by similar constraints. All trade agreements are not equal.
And we need to recognize that there are multiple causes of our economic problems.
Rather than blaming international trade for economic woes, we need to have an honest conversation about what the United States must do to strengthen its economy. More than 20 percent of American children today live in poverty. Our educational system, once the envy of the world, now ranks in the bottom half of much of the developed world. The tax system rewards companies that exploit loopholes, infrastructure is crumbling and training programs lack the kind of apprenticeship and credentialing opportunities that Germany and other major economies offer…
Of course it is easier to score points by denouncing trade than to tackle the tough issues, but such demagogy ignores the roots of economic insecurity and inequality.
It’s handy to have a villain to identify, but the emotional satisfaction of identifying someone or some thing as the “bad guy” rarely translates into a solution to the problem at hand.
It is also a mistake to think that positions on trade policy break down along neat party lines. As we learn from Political Animal,
U.S. Conference of Mayors (which is overwhelmingly Democratic), endorsed TPP. The reason, as Ron Brownstein pointed out, is clear.
New data released May 13 by the Brookings Institution’s Metropolitan Policy Program helps explain the mayors’ tilt toward trade…Brookings found that fully 86 percent of U.S. exports now originate from urban areas. Moreover, exports drove more than one-quarter of all metro area economic growth from 2009-2014.
I think it was H.L. Mencken who said “For every complex problem there is an answer that is clear, simple, and wrong.”
Great and mind clearing. Thank you.
Of course the argument against trade agreements is that they are made by government and government is always wrong. Just ask the DONALD. Only he can make good deals.
There is no reason for any country to enter into agreements that disadvantage it. Just say no if it does. The problem is that most agreements advantage the future us not the past us. And the average us not each of us.
We used to know that government was competent. It still is. We have changed from informed to ignorant because we choose to be educated by media and they entertain not inform us.
At this time we are in a cycle where the entertainment business is booming. Wealthy individuals and corporations are advertising like crazy who their best pal is so that he/she will be granted power to influence the future. What’s wrong with that is that advertising is never the truth whole and exclusively. Never.
We could choose informed but we prefer ignorant. Informed is hard and after all only freedom and prosperity are at stake and really mostly for our kids not us.
Now, what time does the big game start?
“The Department of Commerce estimates that every increase of $1 billion in exports sustains nearly 6,000 jobs, and that export-related jobs pay on average 18 percent more than jobs focused on the domestic market.” And how many unemployed citizens are there? What products are we exporting? Is it possible to increase our exports another $1B? $10B?
Just reading the news and like Sheila’s feature yesterday a squirrel ran in front of me.
Example of campaign advertising perhaps. Russian jets playing tag with American warship. Could it be a Russian billionaire advertising on behalf of an American billionaire so that they might help each other scrape up the few earthy dollars that they don’t already have?
I’ll bet Trump is first in line with the ad that Obama’s response is way weak.
Well said, Professor. Our world today is much too small to lock ourselves into an US only economy.
The mayors and their export trade are a small slice of the American economy. There are many good reasons to oppose the TPP, and I do. The export trade these days with a fickle and overpriced dollar and an international slowdown in the purchase of any goods weakens their argument for adoption of TPP. I oppose TPP on several grounds. The proposal would allow an international tribunal to determine that a foreign corporation lost money in this country as a result of a state or local law, and even assess damages against the errant jurisdiction. That is, in my opinion, an intolerable insult to our sovereignty. There are also labor and environmental issues insufficiently addressed in the proposal. I think you have served us up a mayors’ look at TPP when in fact there are many more issues that the narrow slice of our economy provided by our export market.
I just read a story in Reuters yesterday about our trade policies. It explains the various trade deals we have made and their impact on our economy.
The author states that: “Sanders and Trump have helped expose the folly of America’s current course. Our trading policies are classic examples of rules rigged to benefit the few. Economists increasingly accept that they contribute directly to our increasingly extreme inequality, as workers lose ground and CEOs clean up.”
The link to the story is: http://blogs.reuters.com/great-debate/2016/04/12/forget-free-trade-heres-what-fair-trade-looks-like/
mea culpa – substitute than for that in the last sentence of my earlier offering.
I would simply offer that Bernie Sanders is not Donald Trump when it comes to trade and who really knows what Trump means by his comments. Regarding Sanders, he is talking about having trade agreements based on “fair” trade principles that take in the interests of working people and communities on all ends of a trade deal, that have viable enforcement mechanisms, that account for harmful environmental externalities (which must be addressed if we are ever going to get serious about global warming), that have real public review and input since trade deals are technically agreements between our country and other countries (and many other countries, such as the Europeans, do have a process for viable public input on their end of trade agreements), and which are not privately arranged deals between corporate lobbyists loosely based in the U.S. and foreign governments. For example, what is often overlook in the previous NAFTA and GATT agreements from the 1990s was the failure to protect small agriculturalists (meaning, farmers and local farm and ag product markets) in the U.S. and elsewhere. The “elsewhere” in these agreements included farmers and people who depended on their local markets in Central American countries and Mexico. That failure resulted in hundreds of thousands, if not millions, of economically displaced people and directly contributed to our now long standing immigrant problems and directly contributed to the institutional and criminal violence against people in these countries. Labor organizations and human rights groups here and in other countries tried to respond to these created crises but essentially had their legitimate concerns thrown under the bus by most politicians and too many other people in the U.S. So when Bernie Sanders talks about disastrous trade agreements it is the outcomes of that nature that he is talking about. Bernie is also aware that other countries do take the pains to address the needs of their indigenous workers, communities, and environmental quality. That is why trade agreements have served European countries well. The U.S. has long been criticized for negotiating trade agreements that are good for international corporate conglomerates but harmful to people across the globe and harmful to the environment. Consequently, the Sanders position is a sophisticated recognition of interlocking global economic, human, and environmental consequences. He is not anti-trade. He is simply saying that in the interest of humankind we can no longer afford such one sided agreements that displace people and disrupt communities across the globe, that are harmful to the environment, and which set conditions favorable to poverty, violence and war. BTW, these are among the reasons he was invited to the conference at the Vatican.
Pete,
At this time we are in a cycle where the entertainment business is booming. Wealthy individuals and corporations are advertising like crazy who their best pal is so that he/she will be granted power to influence the future.
Instead of Goebbels, you have Fox.
I question Miriam Sapiro statement you cite in your article, “After noting that the United States enjoys a 200 billion dollar trade surplus”. Where did she derive this number from??? I find deficits.
According to the US Census, we have the following Trade in Goods with the World, Seasonally Adjusted in millions : https://www.census.gov/foreign-trade/balance/c0004.html
2016 Jan- Feb – $ 126,039.3
2015 -$ 736,018.6
2014 – $ 727,153.3
2013 – $ 689,931.3
2012 – $ 730,446.3
2011 – $ 725,447.0
You can go back farther, but I think you get the picture.
Let’s laser in on Mexico
2015 – $ 58,363.7
The last time we had a Trade Surplus with Mexico was in 1994. Bill Clinton signed NAFTA into law on December 8, 1993; the agreement went into effect on January 1, 1994. Well looks like Ross Perot was right about that big sucking sound.
The trade deficits with China have been in more massive.
Leo Gerard, President, United Steelworkers – >> Between 1997 and 2014, America lost more than 5 million manufacturing jobs. The vast majority, according to the Economic Policy Institute, vanished as a result of growing trade deficits with America’s free-trade and investment-deal partners. Some 850,000 jobs were lost to NAFTA after it took effect in 1994. China’s entry into the WTO in 2001 cost the United States a staggering 3.2 million manufacturing jobs over the next dozen years.
Bumper sticker politics has a limited shelf life. On the other hand, some of the most relevant non-partisan thoughts with an unlimited shelf life have their genesis from the bumper sticker.
Think Globally, Act Locally.
As Sheila’s title states, it is much more complicated than we think. From the comments, it appears that she is spot on, as usual.
Trade agreements are very complex to even read and comprehend much less determine their impact over time on the greater good. I’m not sure why anyone would believe that they totally understand any of them based on advertising or even real news if you can find it.
That’s why I rely on other professionals like Drs and lawyers for their specialties and why I hope they rely on folks like me to keep wings from falling off airplanes.
It’s the most pernicious of modern myths that we are capable of understanding the intricacies of many many things including international trade.
Thank you Nancy and Gerald for pointing out two of the things that I was going to say. I would add to Gerald’s comment that I would want significant reassurances before supporting TPP that the tribunal that is ruling on these trade issues are not just corporate shills, like many of the managers today of to many federal agencies. John Oliver on Last Week Tonight in February 2015 talks on cigarettes, and how Tobacco companies are already suing countries for trying to discourage smoking in their countries. If you are wondering just how this works, this is a must watch! https://www.youtube.com/watch?v=6UsHHOCH4q8
@JD, yes, life beyond the bumper sticker is difficult for many. The bumper sticker announces to the world that the discussion is closed.
Louie, good point. The US hasn’t had a trade surplus since 1976 mostly due to our unquenchable thirst for oil.
Why do we do things like this to ourselves? The technology/products are on the shelf right now to cut our transportation oil use in half but we let advertisers sway us to the dark side because it’s good for them.
Pete,
Re: Trade
“The technology/products are on the shelf right now to cut our transportation oil use in half but we let advertisers sway us to the dark side because it’s good for them.”
Do we really believe advertisers are acting alone, acting single-handedly like Old West cowboy mavericks, swaying us to the dark side for their profit without having any advance knowledge and assurance that some politician in DC has already paved the way for their amped-up marketing.
Mid-day unscientific observation.
I’m noticing what I perceive as fewer and less spirited comments today where the topic is ‘Trade’ as opposed to the larger number and more spirited comments on days where the topic is decidedly partisan.
Does this tell us something? What’s the condition of our thought fluidity when presented with critical issues that are not expressly defined in partisan terms? Hard work, isn’t it?
Here’s one consideration. The politicians have had to force the advertisers into acting responsibly by imposing much higher CAFE standards on them. In the absence of that the advertisers would continue to sell hugh engines and fat cars.
Pete, am really hoping that you’d never, ever approve of government politicians ‘forcing’ (your words) any industry into acting ‘responsibly’ by imposing the politicians’ definition of ‘acting responsibly’. Seriously, think about what you wrote.
And by the way, here’s an article that illustrates the old phrase, ‘No good turn goes unpunished.’
Victims of good behavior…go figure.
http://www.autoblog.com/2016/04/13/illinois-proposes-per-mile-driving-tax/
The economic and social problems of the US are so complex that nobody has a snowball’s chance of accurately analyzing them or proposing a successful solution. There are forces in society and economics determine their course based on physics, line of least resistance, gravity, or something we never thought about. Politicians and economists like to talk about the effects of lowering interest rates and altering the money supply, lowering taxes to create jobs. However, when the prediction is proven wrong they are always able to define the failure by identifying another previously unknown problem or circumstances that were overlooked. There aren’t any quick and easy answers or someone would have already done it.
daleb,
“The economic and social problems of the US are so complex that nobody has a snowball’s chance of accurately analyzing them or proposing a successful solution. There are forces in society and economics determine their course based on physics, line of least resistance, gravity, or SOMETHING WE NEVER THOUGHT ABOUT.”
As former Secretary of Defense Donald Rumsfeld articulated there are things you don’t know, you don’t know. Those are the ones that can “burn you.” The answer is to know those things you don’t know.
BSH, can’t tell if sarcasm or not.
We have to get off fossil fuels. Make more money regardless of the impact on others won’t get us off of the starting line. The only man standing on the side of the future is government. No other option.
I’m not sure why folks expect more from free market capitalism than it’s capable of delivering. Advertising on their behalf I guess.
Marv: That illustrates the point I was struggling to make.
daleb,
It’s imperative to know the unknown to avoid political catastrophes like we are now facing in the U.S. The most important political contest here is not the political battle between the Republicans and the Democrats but the domestic war between Theocratic/Fascism and Democracy.
I second the commenter above questioning this notion about a “200 billion dollar” trade surplus. That’s news to me. As far as I know, we haven’t had a trade surplus in over 40 years. What is your source?