A New Forward Path on Trade? Anything More than Wishful Thinking?
Over at Equitable Growth: Many people are looking. Jared Bernstein is one:
: I’m not the only one seeking a new path forward on trade: "Larry Summers lands where I do... the ‘revolt against global integration’...
...can lead to regressive Trumpian protectionism or to a new, more inclusive approach to expanded trade. Larry lays out the benefits of expanded trade both in terms of consumer benefits and ‘economic integration as a force for peace and prosperity.’ But, after suggesting people don’t always adequately recognize these upsides, he notes:
The core of the revolt against global integration…is not ignorance. It is a sense--unfortunately not wholly unwarranted--that it is a project being carried out by elites for elites, with little consideration for the interests of ordinary people. They see the globalization agenda as being set by large companies that successfully play one country against another. They read the revelations in the Panama Papers and conclude that globalization offers a fortunate few opportunities to avoid taxes and regulations that are not available to everyone else. And they see the kind of disintegration that accompanies global integration as local communities suffer when major employers lose out to foreign competitors.... Read MOAR
It’s essentially the same thing I’ve been saying.... People believe their own well-being, along with that of their families and communities, are neither represented nor enhanced by the process by which we are expanding trade. And the politicians are listening to them.... The question then becomes[:]... How can we best tap the benefits of globalization in a more inclusive manner? I don’t think protectionism will prevail. Global supply chains are deep and consumers will not accept the impact of Trump-level tariffs on prices.... Hillary Clinton has it right: ‘Even if the United States never signs another trade deal, globalization isn’t going away.’... We need to reduce the ‘frictions’ and thus costs between trading partners at the level of pragmatic infrastructure, not corporate power.... TFAs, not FTAs. TFAs are trade facilitation agreements, which are more about integrating ports, rail, and paperwork than patents that protect big Pharma. It’s refreshing to see mainstreamers thinking creatively about the anger that’s surfaced around globalization...
And Dani Rodrik:
: A Progressive Logic of Trade: "Sanders has forcefully advocated the renegotiation of trade agreements to reflect better the interests of working people...
...But such arguments immediately run up against the objection that any standstill or reversal on trade agreements would harm the world’s poorest, by diminishing their prospect of escaping poverty through export-led growth. ‘If you’re poor in another country, this is the scariest thing Bernie Sanders has said,’ ran a headline in the popular and normally sober Vox.com news site. But trade rules that are more sensitive to social and equity concerns in the advanced countries are not inherently in conflict with economic growth in poor countries. Globalization’s cheerleaders do considerable damage to their cause by framing the issue as a stark choice between existing trade arrangements and the persistence of global poverty. And progressives needlessly force themselves into an undesirable tradeoff...
I would have reversed the order of this last. I read what is going on as: Populists--on the right and on the left--want to force themselves into a globally-undesirable tradeoff by summoning nationalist zero-sum energy and applying it to their agenda. That, they think, makes them stronger. That the policies Sanders advocates promise to enrich America's working class at the expense of something called "China" and that the policies Trump advocates promise to enrich America's working class at the expense of something called "Mexico" seem to be, from the perspective of the populist political wannabe machines, more features than bugs.
And surely Jared knows that the "patents that protect Big Pharma" in trade agreements--while bad for the world--are neutral as far as the American working class is concerned? Big Pharma rules already in the United States, no? It is the good jobs for people in poor countries, the refusal of Republicans to allow social-insurance expansions to more-than-offset distributional impacts of trade expansion, and the failure of Democratic presidents (I'm looking at you Bill Clinton and Barack Obama) to condition their signature on trade agreements for progress on their domestic redistribution agenda that has created the adverse distributional impact.
And in this the progressive left has been profoundly unhelpful. The response to "we need to condition trade agreements abroad with more aggressive and successful redistribution policies at home" has always been: "don't offer us burial insurance".
