Trade has been at the forefront of 2016 presidential political conversation in ways that it hasn’t been since the 1992 election, when negotiations on the North American Free Trade Agreement (NAFTA) were well under way and Ross Perot (in)famously warned of the “giant sucking sound” of American jobs to Mexico.
Since the ’92 election, the United States has acceded to free trade agreements (FTAs) with 20 countries, from Chile to Oman. With exception of the Central American FTA, most of these agreements were passed non-controversially with bipartisan support.
The reason for the renewed focus on trade during the election season is that the Trans-Pacific Partnership (TPP) deal between the United States and 11 countries has been agreed upon and is set to go to Congress for a vote. Collectively, these 12 countries represent about 40 percent of the global economy and this agreement will likely be the precedent that will shape the form of future multilateral FTAs.
Despite the immense ramifications of the TPP, few Americans are even aware of its existence. An August Morning Consult poll found that more than 40 percent of voters either haven’t heard or have no opinion of the TPP agreement, a figure that is essentially unchanged from a May, 2015 YouGov poll that found 40 percent of voters didn’t have an opinion on the agreement.
Among policy priorities of voters, a Pew poll found that trade doesn’t resonate as a top priority among either Democrats or Republicans.
Despite the lack of resonance and understanding of the issue among the voting public, Donald Trump’s supporters are particularly mobilized on the issue of trade. Sixty-seven percent of Trump supporters during the primaries believe free trade to be bad for the United States. Trump has had such success mobilizing his base thanks in part to this position on certain trade deals – despite having a well-documented record taking advantage of agreements for his businesses. Comparatively, only 31 percent of Clinton primary supporters believe free trade to be bad for America.
Although free trade is often perceived as a boon for businesses, many believe free trade hasn’t necessarily delivered on its promises for workers and is hurting middle America. Adjusted for inflation, median household incomes are down 2.5 percent from 2000 and in real terms, many Americans feel they aren’t much better off than they were in 1989. Free trade exposes low-wage workers to international competition from abroad, and some believe it is a contributing factor to help explain why wages haven’t improved in 35 years for blue-collar American workers.
However, supporters are quick to point out that the economy as a whole has benefitted from entering into free trade agreements – even NAFTA. The United States can, in many ways, credit free trade agreements for productivity boosts, overall GDP gains, enhancing and expanding access to new markets for more American businesses, among other benefits.
Many would argue that the benefits of free trade extend beyond pure economics, including building international institutions like multilateral trade organizations – and creating conditions where countries that often don’t follow international norms to do so, which in turn has made the world a safer, more peaceful place.
So where do the candidates stand on free trade? Surprisingly, despite the bluster, as NPR’s Morning Edition pointed out, they don’t disagree on much with regard to free trade.
Trump doesn’t claim to be anti-free trade and his chief trade adviser has even identified a priority country for an FTA with the United States – the United Kingdom. But he believes that NAFTA needs to be re-negotiated to ensure better prospects for American workers and that the TPP would cost the United States jobs.
Key statements on trade by Donald Trump:
CNN – June, 2015
Q: So, you would tear up NAFTA?
A: I think NAFTA has been a disaster. I think our current deals are a disaster. I’m a free trader. The problem with free trade is, you need smart people representing you. We have the greatest negotiators in the world, but we don’t use them. We use political hacks and diplomats. We use the wrong people. Mexico is smart; they have out-negotiated us to a fare-thee-well. They’re going to be the capital of automobiles pretty soon, the way they’re going.
(Never Give up, p. 18 – 2008)
“The important thing to consider is that more and more there is an interdependence of world economies. No one can afford to be isolationist any more. Keep your focus global. Globalization has torn down the barriers that have formerly separated the national from the international markets.”
Comparatively, Hillary Clinton’s perspective on trade has changed over time (in large part because of the impact and influence of Bernie Sanders and his supporters’ stance against the TPP). She now stands opposed to the TPP where she once was in favor of it, having called it the “Gold Standard” of trade deals. Her explanation is that the details of the trade deal doesn’t have effective protections for workers. She has similarly evolved her view on NAFTA. While she remains in favor of the agreement, she acknowledges – as she has since 2008 – that enforcement provisions of NAFTA aren’t strong enough and those that are in the books need to be better enforced.
Key statements on trade by Hillary Clinton:
TPP-related remarks in Australia – 2012
“This TPP sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field. And when negotiated, this agreement will cover 40 percent of the world’s total trade and build in strong protections for workers and the environment.”
TPP policy Position Statement – 2016
“I’m continuing to learn about the details of the new Trans-Pacific Partnership, including looking hard at what’s in there to crack down on currency manipulation, which kills American jobs, and to make sure we’re not putting the interests of drug companies ahead of patients and consumers. But based on what I know so far, I can’t support this agreement…”I still believe in the goal of a strong and fair trade agreement in the Pacific as part of a broader strategy both at home and abroad, just as I did when I was Secretary of State. I appreciate the hard work that President Obama and his team put into this process and recognize the strides they made. But the bar here is very high and, based on what I have seen, I don’t believe this agreement has met it.”
What’s clear is that no matter who wins on Tuesday, the TPP and the status of other trade negotiations in progress are grim in the immediate term. Without continuing progress to unlock greater access to new markets, American businesses are competitively disadvantaged as other countries continue to make progress unlocking new markets by reducing barriers to trade.
Trade accounts for about 30 percent of the American GDP, with Canada and Mexico our biggest trading partners. It would be unlikely either candidate would actively pursue the repeal of NAFTA, especially given the unknown of exactly how the disintegration of a trade agreement would occur. Yet, millions of Americans have made their voices heard – that they haven’t benefitted from free trade and want a change. This will all but certainly be taken into account by policymakers who wish to secure the passage of any future trade agreement.
Jere Sullivan is vice chairman, international Public Affairs. He is based in Washington, D.C.