Should the Democrats oppose Trump's tariffs with a return to the ideology of free trade (albeit with handouts for globalism's losers)? That's the view of Edward Alden, writing this week in Foreign Policy. Alden launches a defense of prior Democratic administrations' support for NAFTA and TPP, where for instance presidential hopefuls Bernie Sanders and Elizabeth Warren have been sharply critical.
Alden's conceit is that in the case of both NAFTA and TPP prior Republican administrations had set the agenda, and the incoming Democrats in the White House had no choice other than to accept that agenda or walk away from trade deals altogether. Alden writes: "For Democrats, the choice for decades has been a Republican trade policy or no trade policy. A truly Democratic trade agenda would have produced deals quite different from NAFTA or the TPP." In other words, a bad trade deal is better no no deal.
Alden's principle is: "Trade is good, period." Never mind rising inequality, sweat shops and slave labor, carbon leakage, essential drugs priced beyond most people in the world; forget about the resource curse states, displacement of indigenous peoples, devastation of forests and decimation of endangered species. To be sure, not all simply a product of free trade. But all undeniably connected to Davos-driven globalization in which free trade is a central creed.
Alden's notion of how the US and its allies won the Cold War (through multilateral economic cooperation, the WTO etc.) is fanciful.The Cold War was over before the WTO even took shape let alone came into existence;the years leading up to the defeat of Sovietism were marked by more tension among allies than cooperation over trade (agriculture, for example) . More fundamentally, our situation is different than that of the Cold War. Today, in a sense, all security is cyber security. Our most ruthless economic competitor China is also our ascendant geopolitical rival. Despite the dreams of some of its leaders the Soviet Union never managed to come close to challenging the West's economic success.
Today national security requires the retaking of economic sovereignty. That doesn't mean tearing apart the WTO because most of the WTO's agreements have safeguards and exceptions provisions that-when properly interpreted-allow for economic sovereignty (whether public morals or security or conservation of exhaustible resources).
Retaking economic sovereignty does require real skepticism about new trade deals driven by corporate interests and free trade ideologues rather than by the national interest or the needs of people. Democrats should adopt the exact opposite maxim from that of Alden-better no trade deal than a bad deal. Arguably, Sanders and Warren have already done that. And it doesn't exclude good trade deals, if we could ever get one.
But Alden's revisionist history about Clinton and Obama is more fiction than fact. Much more truthful is that the Clinton Administration simply dropped the ball on NAFTA. Joseph Stiglitz, who present at the time, recalls there was not even a discussion about the investment chapter of NAFTA (Ch. 11), which allows corporations to sue investors and recover 10s or 100s of millions of dollars, often because governments have changed regulation against investors' interests-for perfectly legitimate reasons. The Clinton administration did negotiate side deals on labor and environment-it's just that they had no teeth. As for TPP, President Obama was hardly a reluctant convert-he was an enthusiastic backer of the pact-claiming, without any evidence, that it would somehow help the US with China (an argument that Harvard Law professor Mark Wu demolishes in forthcoming scholarship). Obama's trade officials were not under duress moving forward with a GOP trade agenda that they didn't own; Michael Froman, Wendy Cutler and others were hard-core neoliberals, arguably with fewer hesitations than the Republican mainstream in negotiating trade deals on behalf of Google,Apple and Hollywood (rather than American workers or indeed the people of the world). And that isn't even to mention Larry Summers.
Democrats today shouldn't hitch their future to this discredited corporate globalism. Instead, Democrats should embrace the new economic sovereignty as the only sensible response to America's geopolitical conflict with China-and, equally importantly, as an opportunity for rebuilding public institutions that are needed as much for the country's future security as its prosperity. Tariffs may not be the best or most important way to retake economic sovereignty-in fairness to Trump, they were probably among the few instruments easily available that could be deployed (within certain constraints) by the executive alone. Adopting a robust response to China and a larger role for the state in ensuring that the economy works for everyone (including for not against our security) doesn't mean being uncritical about the way in which losers and winners are created by the tariffs; we have a duty to question the fairness of the way the pain is distributed. Just as there are losers from free trade, there are also losers in a transition where we retake economic sovereignty. Free trade advocates prove nothing therefore when they point out that there are costs or losses from imposing tariffs. The question is dividing them equitably through taxes subsidies and other measures. Trump should be given real credit for the tariffs already helping direct supply chains away from China, thus lowering US dependency on our geopolitical rival. But Trump's inattention so far to vulnerable groups and individuals, to the collateral damage from tariff policies, must be called out.
Democrats should always remember who gets their hands on the controls when free trade is the mantra; Stiglitz is one of the sharpest minds I know and yet the free trade technocrats were able to slip a lot by him in NAFTA as he freely admitted. Free trade talks bring with them big corporate interests who are, at the same time, prepared to resist liberalization tooth and nail when it harms vested interests. If, in the real world, free trade worked in favor of progressive values and goals, it would not be green industrial policies that are challenged or disciplined at the World Trade Organization, but fossil fuel subsidies (the latter of course are backed by the kind of anti-environmental big corporate interests behind Joe Biden's presidential bid).
Democrats may be perturbed that the retaking of economic sovereignty has been linked on the right to insular nationalist or nativist agendas. The challenge for progressives is to decouple these notions, proposing an alternative conception of national economic sovereignty where America wins through empowering people. As Representative Ro Khanna, Bernie Sanders campaign co-chair, has set out, this means large-scale public investments in education, infrastructure, non-proprietary research. China's rise has been facilitated through a shrewd and highly selective imitation of our system. Whether it's the Green New Deal or cyber security, we'll never win by turning back to neoliberal trade talks; instead we need to relearn the exercise of collective economic sovereignty through a strong progressive state-pursuing prosperity and security but also justice.
