Trump abandons free trade’s opportunities


Yesterday morning, President Donald Trump “left” the Trans-Pacific Partnership, better known as the TTP. Congress’ choice not to ratify the deal in the previous session all but assured this already, but this particular act marked the beginning of what could be the end of free trade as a marketable economic policy in the eyes of votes. And for that, we should be ashamed.

During his campaign, Trump also placed the North American Free Trade Agreement squarely within his crosshairs. A separate deal negotiated under the Obama administration and the EU, known as T-TIP, looks to be dead in the water following his election.

As a political fight, this represents a departure from previous stances. While President Barack Obama stood in favor of free trade, most who opposed it stood to his left, and were concerned about the effects of outsourcing. In 2012, the Republican Party platform was staunchly pro-free trade. It was only after Trump and Sen. Bernie Sanders, I-VT, ran on populist and isolationist platforms that either party began to seriously question being pro-trade. Even today, the majority of voters in both parties support free trade as a whole and the TPP in particular, even though neither party’s nominee did.

This leaves open the possibility that students who are still working through their beliefs could co-opt those of a candidate they admire without acknowledging the trove of evidence in favor of it. The rhetoric of Sanders, Trump and Hillary Clinton aside, free trade has benefited the American public, even as other policy choices have meant that its benefits have gone to fewer people than they should have.

In short, we trade because it doesn’t make sense not to. When another country produces another good more cheaply than we can, American consumers benefit. And while jobs can be lost when nations with disparate average income trade with each other, trade between nations with similar labor and environmental standards tend to mean cheaper goods — and more jobs.

While outsourcing has undoubtedly cost the U.S. many of its manufacturing jobs, automation has arguably played a larger role. The difference is that through automation, more jobs are created because goods get cheaper — meaning consumers can buy more things — and the technological systems that now build those goods require better paid workers with more training to maintain. Indeed, the net effects of automation are better jobs and higher wages.

And while focusing on the number of manufacturing jobs is misguided, exclusively looking toward Rust Belt cities to assess the effects of globalization is even worse. Often, the jobs that left Cleveland, Detroit and Chicago are now in San Diego, Seattle and Atlanta. 

That said, global trade plays a greater role than purely lining American citizens’ pockets. It also exists as an institution to promote foreign policy goals. Trump repeatedly attacked the TPP for making China richer — but by leaving it, we’re more likely to do that and risk handing them greater control over the Pacific region. By allowing China to replace the U.S. in that deal, which now seems likely, Trump hands China greater power over countries like Vietnam, Malaysia and Singapore that the U.S. is competing to influence, for better or worse.

Leaving T-TIP should be an even greater embarrassment. Not only are the EU member states similarly developed to the United States, making outsourcing much less of a concern, but reducing tariffs on American goods there would increase their competitiveness with China. While the projected GDP gains for the TPP were a mere half percent, T-TIP could have provided up to 3 percent growth.

This is not all to say the results of these policies have helped as many as they ought to have. Lack of reinvestment in education and infrastructure have capped how much of the benefits it has provided extend to all Americans. But following in line with the populist misdiagnosis of the problem will make life more expensive for every American.

If and when Trump comes for NAFTA, Texas will be among those that loses the most. In the decades that follow his administration, students will be part of the inevitable rebuilding of global trade as an institution. While the institutions in place now are undoubtedly imperfect, the lessons their rise and impending demise can tell must be learned now. If more graduates of our University may end up unemployed in the short term, we have the responsibility to prevent that from happening when our children and grandchildren look to enter the job market.

Chase is a Plan II and economics senior from Royse City. He is the Editor-in-Chief. Follow him on twitter @alexwchase.