Presidential Candidates Critique U.S. Trade Policy at Conventions
Based on the rhetoric from both presidential candidates at the recent Democratic and Republican National Conventions, it seems that no matter who wins, proponents of international trade are going to lose.
Of course, what politicians say to get elected and what they do once they are in office are sometimes very different. So while trade is now on trial with both parties, it remains to be seen the extent to which current agreements will be impacted, and how future deals will be negotiated.
Republicans: Fair Deals, Fewer Violations
Free trade and support for international trade deals have been a part of as many GOP platforms as cutting taxes and lowering the national debt. But this is hardly a typical election year. With Donald Trump ascending to the top of the GOP ticket, long-time Republicans suddenly find themselves backing a candidate that wants to tear up U.S. trade deals and start over.
Next to that now-famous yet still non-existent wall, the one issue that Trump has emphasized most is protecting American jobs, which he believes have been decimated by trade agreements in which America too often came out offering much and getting little in return.
He revisited that theme during his acceptance speech in Cleveland: “No longer will we enter into these massive deals, with many countries, that are thousands of pages long – and which no one from our country even reads or understands,” said Trump. “We are going to enforce all trade violations, including through the use of taxes and tariffs, against any country that cheats.”
These sentiments do not bode well for the Trans-Pacific Partnership, a landmark deal that includes 12 countries that account for approximately 40 percent of the global economy. Trump’s vice-presidential running mate supports TPP, but Trump has compared it to NAFTA as a potential job-killer. That message has resonated with many low-income and working class voters that traditionally vote Democrat.
Democrats: Tough Talk – But is it Temporary?
Supporters of TPP are hoping that Hillary Clinton’s opposition to the agreement will fade if she wins in November, pointing to a similar trade-outlook pivot made by President Obama, who is now TPP’s most outspoken advocate.
Observers suggest that Clinton switched her initial support for TPP after rival Bernie Sanders came out strongly against it, claiming it would hurt manufacturing jobs and lower wages.
“If you believe that we should say ‘no’ to unfair trade deals, that we should stand up to China, that we should support our steelworkers and autoworkers and homegrown manufacturers — join us,” Clinton said in her DNC acceptance speech.
What appears to be a flip-flop may heighten concerns over the candidate’s trustworthiness, which is already on shaky ground. But her explanation, that the deal falls short of the “gold standard” she expects from such pacts, may leave the door open for later approval with some points renegotiated.
Whatever happens after the votes are counted, it’s possible that America’s perception of international trade may look very different going forward. “The primaries created seismic changes,” said Senator Chuck Schumer, Democrat of New York. “It will never be the same again. Neither Republicans nor Democrats will ever again be unabashed advocates for trade.”
Soybean Prices are a Proxy for How the Trade War is Going