How Trump and Biden killed the free-trade consensus

The United States has sharply opposed free trade over the past two decades, moving from an era in which lawmakers and presidents of both parties generally embraced free trade agreement after free trade agreement to one in which the forces of globalization were widely criticized, if not condemned. . .

Former President Trump’s recent campaign promise to institute a 10% general tariff on imports into the United States is just the latest arrow in the direction of free trade agreements that have sprouted under previous presidential administrations.

More than a dozen bills implementing various trade agreements were signed by U.S. presidents between 2001 and 2012, all modeled after the Clinton-era North American Free Trade Agreement (NAFTA).

Congress also voted in 2000 to admit China to the World Trade Organization, a vote that further opened the United States to Chinese imports.

However, things have changed dramatically over the past decade.

The only recent trade deal approved by the U.S. Congress was in January 2020, following a bipartisan agreement to approve the Trump administration’s U.S.-Mexico-Canada Free Trade Agreement.

And because it was a major pro-worker overhaul of the North American Free Trade Agreement (NAFTA), many saw it as part of a new era. — By this time, it had become almost a four-letter word to describe many opponents of globalization in both parties.

Longtime critics of America’s free trade era say the political world has finally caught up with the grassroots consensus that trade deals are hurting the country.

“What we’re seeing here to some extent is that elite opinion and policy decisions are catching up to where the lived experience of the public about these policies was already,” said the longtime critic of globalization. said Lori Wallach, trade director for the American Economic Liberties Project.

“There was an elite consensus, and it was clearly bipartisan… There were all the grand promises that anyone would want, but no results were shown,” she said.

Free trade advocates and their allies in the business world are unhappy with the change.

For much of the 2000s, Republicans particularly supported free trade diplomacy, arguing that trade agreements lower prices for U.S. consumers while creating markets for exporters and paving the way for stronger diplomatic alliances. He insisted on opening it.

They are currently confronting populist forces after Trump’s takeover of the Republican Party.

After winning the 2016 election, partly on a promise to loosen decades of free trade agreements, Mr. Trump sidelined the Republican Party’s most ardent free trade advocates and sought common cause with anti-trade Democrats. He insisted.

Liberal populism is on the rise within the Democratic Party, represented by Sen. Bernie Sanders (D-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.), who are also highly skeptical of trade. It is.

“There’s a lot of frustration in the business community about trade,” said Bill Reinsch, who served as deputy secretary of commerce in the Clinton administration.

At the same time, he acknowledged that the old days are over and are unlikely to return anytime soon.

“Business people want to go back in time and negotiate real deals, where they can lower tariffs and increase market access in return, so we can all grow and get more. You can make money. But no, there is no agreement on this at the moment and it’s not going to happen anytime soon,” he said.

How has the free trade consensus changed?

Criticisms of globalization continued into the 1990s and early 2000s, but were largely drowned out by political free trade agreements, especially after the terrorist attacks of September 11, 2001.

Over the next several years, the Republican-led Congress approved free trade agreements with Singapore, Chile, Australia, Morocco, several Central American countries, Bahrain, Oman, Peru, Panama, South Korea, and Colombia.

But there were repeated rumors of violations.

One landmark moment occurred in the early 2000s, when the business lobbying group National Association of Manufacturers (NAM) was nearly split in two over normalizing trade relations with China, and major multinational companies Supported, small manufacturers opposed.

While major companies benefited from cheap Chinese assembly lines and access to the Chinese market, small and medium-sized manufacturers were overwhelmed by competition from the country’s cheaper imports.

“Our world is different now,” U.S. Trade Representative Katherine Tai said in June.

“reality [is] Consumers who enjoy the low prices of imported goods are also workers who must endure downward pressure from competition from workers in other parts of the world who toil under exploitative conditions. ”

Free trade expansion slowed under the Obama administration, but the Democratic president is nearing the end of his second term with the goal of creating U.S.-friendly trade alliances in the region to counter the rise of China. Japan strongly urged the conclusion of the Trans-Pacific Partnership Agreement. .

The deal became a hotly contested political battle, with President Trump mounting attacks and Hillary Clinton, who had supported the deal as Obama’s secretary of state, turning against it.

“Hillary Clinton’s announcement that she was not in favor of ratifying the TPP was a huge moment,” said Daniel Sargent, a public policy historian at the University of California.

At the time, Clinton was excited about the deal not only by Trump, who was already leading in Republican presidential polls, but also by a surprisingly strong primary challenge from Sanders.

Sargent said Clinton’s change in direction was especially important given his support for trade deals during the Clinton and Obama administrations.

Her face “really demonstrated that even the executive branch, which has been more or less a champion of trade liberalization since the days of the New Deal and Cordell Hull, can no longer be taken for granted.” ” he said.

“So I think that was a really defining moment.”

Trump’s own emergence as a populist anti-trade politician was also important. His criticism of U.S.-China relations goes back far before his presidential campaign, which was centered on the theme of economic nationalism.

In 2011, he called the country “not an ally or a friend.”

“They are trying to defeat us and our country,” he said.

Mr. Trump’s shocking loss to Mr. Clinton placed a trade critic in the Oval Office with credentials as a businessman who supports closing borders to people and goods.

President Trump’s renegotiation of NAFTA included worker protections and environmental provisions that were supported and touted by Democrats.

“The USMCA has a mechanism for filing lawsuits against certain facilities that do not respect workers’ rights to freedom of association and collective bargaining. Over the past two years, we have secured victories for workers at several facilities. “I have done so,” Tai said.

USMCA also repealed a controversial arbitration rule known as investor-state dispute resolution that had long been thought to allow companies to override labor regulations.

its eliminationI was furiousRepublicans were members of the Congressional Ways and Means Committee;cheeredMany Republicans worked together at the state level to unite with Democrats.

Trump’s loss to President Biden in 2020 put a more traditional type of White House policymaker in the Oval Office.

This marked a shift from President Trump’s “America First” policies on immigration and foreign affairs, but not much changed on trade.

How are President Trump’s changes taking hold?

The Inflation Control Act (IRA), one of the Biden administration’s flagship bills, includes a “Buy American” clause regarding renewable technologies that are not allowed under WTO rules.

“We’re prioritizing domestic production over imports. That’s flatly prohibited by WTO rules,” Robert Lawrence, a professor of trade and investment at the Harvard Kennedy School, said in an interview with The Hill.

“What he’s doing is illegal. We’re violating the rules that American foreign and trade policy has been trying to convince other countries to abide by for 75 years.”

Biden also imposed new export controls on artificial intelligence and quantum information systems to China, amid growing national and economic security concerns that China is closing the technology gap.

“When it comes to international trade, [Biden] “We’re pretty much continuing on the same protectionist path that President Trump started, maintaining most of President Trump’s policies,” Lawrence said.

Like Trump, Biden is aiming to revitalize the U.S. manufacturing industry. I refused It has been used as a source of employment since the early 1980s.

Increased trade has been blamed for the loss of U.S. manufacturing jobs and influence and for the stagnation of U.S. wages. Not moving much Actually 40 years later.

One 2012 paper A paper published by the National Bureau of Economic Research links the sharp decline in U.S. manufacturing employment that began in 2001 to changes in U.S. trade policy toward China that negated the possibility of higher tariffs on imported goods. I discovered that there is a sex.

The report found that “trade has been directly and indirectly linked to the large and long-term decline in U.S. manufacturing employment since 2001.”

Tim Hutchings, a former sergeant with the Columbia County, N.Y., Sheriff’s Department and a 41-year veteran of the volunteer fire department, said it’s been several days since his hometown of Hudson lost its vitality. He told The Hill that he had seen him go. Manufacturing industry.

“After NAFTA, we lost WB McGuire, a loading dock manufacturer. A few years later, we lost Cass, a humidifier/vaporizer type manufacturer on the outskirts of town. L&B Products was a restaurant furniture manufacturer and closed down probably in the late 1990s. We lost a ton of jobs here,” he said.

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