Democrats must rethink trade positions or risk losing supporters

Arka Roy Feb 5, 2017
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It has only been a few months since the Democratic Party lost the election, and it seems like they have already started to forget one of the primary causes of their failure: trade. Liberal institutions such as The New York Times have taken advantage of the fact that the Trump administration adopted anti-trade policies to undermine a legitimate position. They have grouped exiting the Trans-Pacific Partnership (TPP) as part of the larger xenophobic narrative that has caused the Muslim ban and the funding of a wall on the border with Mexico.

Ever since Trump ended the deal, it has been decried as yet another political blunder by the inexperienced administration as well as a complete upheaval of one of Barack Obama’s trademark policies. However, this brand of reporting creates the impression that, since Trump opposes a policy that Obama enthusiastically supported, Trump must be implementing a foolish policy. By adopting this course of action, the liberal elite risk further alienating their blue-collar electorate whose abandonment of the party resulted in Trump’s ascendancy.

In the primaries, the Bernie Sanders candidacy revealed the deep division in the Democratic Party between skilled white-collar elites and blue-collar working people that had lost their jobs due to prior trade agreements. Hillary Clinton’s past endorsement of the North American Free Trade Agreement (NAFTA) and her support of the TPP hurt her in the primaries and during the general election as Trump continuously attacked her for her pro-trade stance.

Many liberals and their economic experts dismiss anti-trade positions as the same brand of mindless populism that led to the election of Trump, and believe that his supporters are inspired by the xenophobic forces behind anti-immigration policies. These fallacious arguments are designed to invalidate the anti-trade forces within the democratic party by associating them with Trump.
Before accepting this false association, one must consider that progressive icons such as Senators Bernie Sanders and Elizabeth Warren have vehemently opposed the TPP, and with good reason. Though the TPP has received support from Barack Obama and other prominent Democrats, they represent the neoliberal wing of the party that blindly promotes free markets with no limitations. Proponents of this deal claim, as with all other trade deals, that this would greatly benefit the American economy.

When NAFTA was ratified by Congress, it was promoted as a deal that would immensely improve the American economy. Yet in retrospect, experts agree that it improved the GDP by less than 0.5%. At the same time, workers in highly paid manufacturing positions lost their jobs, because the products they were making could be created with lower costs in Mexico’s low wage economic environment. This greatly influenced the manufacturing-based industries in states such as Pennsylvania, Michigan, and Ohio. Not only were old jobs lost, but new manufacturing jobs that otherwise would have been created in America were instead created in Mexico, as that led to companies incurring lower costs of production. By not adding to America’s manufacturing jobs, this indirectly harmed many members of the workforce.

While NAFTA harmed the manufacturing sector of the American economy, the TPP threatened to undermine the very sovereignty of all governments involved in the deal, and their ability to protect their citizens.

Through the investor-state dispute settlement (ISDS) provisions, foreign companies could sue governments for enacting policies that harm their profits. Essentially, if a Japanese company deemed an American environmental regulation harmful to its profits or a drug safety standard to be too costly to abide by, they could sue the American government for the loss of profit.
These disputes are settled by private arbitration panels composed largely of unelected corporate lawyers who are not accountable to anyone. The settlements reached by these panels could force governments to abandon a regulatory law that would protect or improve the lives of its citizens. The TPP would undermine the power of governments involved in the deal and lead to companies dictating how countries are governed. By suing governments for large sums of money they cannot afford, corporations could have controlled which regulatory statutes a country can establish. As a result, foreign corporations would gain an unprecedented level of influence over governments.

Recent media attacks on the anti-trade stance have not addressed any of these concerns, but have been aimed to convince the public that trade deals have become the victim of the same brand of populism and xenophobia that caused Brexit and the election of Trump. However, people oppose these deals because they have never been designed to help the American worker, or even the American government. Instead, their purpose was to advance the cause of the lobbyists who helped write the agreement in complete secrecy. Continuing to pursue this strategy would not only be harmful for working class people, but for the democratic party itself.

Democrats have always been on the side of labor and working people, yet in this election the party lost due to its failure to secure those votes. The last time the Democratic party lost in the states of Pennsylvania and Michigan was back during the Reagan-Bush Era. As trade became such a large issue in this election cycle, the people of these states could not support a candidate who spent her entire career championing these trade policies.

To move forward, Democrats need to adopt a united stance on trade. They can no longer blindly promote and defend their neoliberal ideology and expect the electorate to accept it. That strategy worked before since no candidate on either side opposed corporate-friendly trade deals.

With the rise of authoritarian populists and general anti-trade, isolationist attitudes around the world, Democrats finally have an incentive to correct their stance on trade. In general, trade deals with the right parameters and negotiated by both corporations and labor have the potential to be beneficial for all parties involved. Deals such as the TPP however, were created with no transparency to the public and advisory boards composed of lobbyists from large corporations advising negotiators from each of the countries. A deal drafted by corporate lobbyists is bound to reflect the interests of those same corporations. The party should not denounce trade but rather endorse fair trade deals that represent a balance of interests between corporations as well as labor. If it fails to do so, they risk further dividing the Democratic party amongst socioeconomic lines, which could spur the destruction of the Democratic party.