Grassroots battling establishment on trade at conventions

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These are interesting times. Sen. Ted Cruz refused to endorse Donald Trump in the GOP convention. Sen. Bernie Sanders did endorse Hillary Clinton but his supporters tanked Debbie Wasserman Schultz and protested speakers at the Democratic convention. 

[Michael Stumo| July 27, 2016 |The Hill

Trump has promoted a nationalist message of “America First” in trade and foreign relations, opposing or questioning the TPP, NAFTA, NATO and the WTO. But he picked a notorious free trader as a running mate: Indiana Gov. Mike Pence who has not recanted that support. Clinton supported many trade deals including the TPP but now has largely opposed it. She also picked a free trader as her running mate in Virginia Sen. Tim Kaine who has recanted his support of the TPP, but not past trade deals he has voted for supported.

The establishment, globalists, and cosmopolitan elite are losing popularity. Nationalism, patriotism, and localism are on the rise.  

The Democratic and GOP platforms on trade were hard fought internal party battles that reflect these times.  The platforms are much better than in past years, but still contain some wrongheaded baloney.

The GOP platform is titled a “Winning Trade Policy”. It is a big contrast with past party platforms that lavished unabashed praise on all trade deals. On the positive side, it criticizes “massive trade deficits” as bad for America. The platform properly attacks currency manipulation and subsidies of Chinese companies as well as lack of enforcement. It also says trade agreements should not be “undertaken in a Lame Duck Congress”. 

Regrettably, the platform contains no positive goals of balancing trade, net job creation or rebuilding America’s production sector. The platform wrongly says we should negotiate trade agreements with “friendly democracies” that “share our values” falsely assuming that the economic results will be good for America. But we run large trade deficits with South Korea and Mexico, democracies with which we have trade deals. We also have large deficits with Germany and Japan, democracies that are part of the multilateral World Trade Organization (WTO) trade deal.

The GOP platform strangely resuscitates a call for a “worldwide multilateral agreement” among nations called the “Reagan Economic Zone”. If Reagan did come up with this, it was one of his bad ideas. It certainly conflicts with the rest of the platform as well as the evidence of what works. Kevin Kearns of the U.S. Business and Industry Council critiques the GOP platform more extensively here.

The Democratic platform resulted from a wrestling match between the grassroots and the establishment. The trade section is titled “Promoting Trade That is Fair and Benefits American Workers”.

The document is more critical than the GOP platform, stating that too many countries break the rules of trade and too many corporations outsource jobs. It says trade deals have boosted the profits of large corporations while failing to protect workers’ rights, labor standards, the environment and public health.  Currency manipulation is called out as well as foreign product dumping, state owned enterprises and discrimination against U.S. companies.

The solution, according to the Democratic platform, is to have trade agreements that support good American jobs, raise wages, improve national security, include labor and environmental standards and provide better enforcement.

There is no explicit opposition to the TPP because the Obama contingent reportedly “went ballistic” at the prospect of such language. But, while not overt, the language is a rebuke of the substance of the TPP.

Unfortunately, the Democratic platform includes no balanced trade goal or trade deficit criticism. The support of good paying jobs, labor and environmental standards is positive but can play into the hands of TPP supporters who falsely say those goals were achieved. The U.S. Chamber of Commerce and the President say that “trade supports good paying, export dependent jobs”. What is the metric? Why not say “net” job creation rather than supporting existing jobs?

Overall, the party platforms were a good step in the right direction. The balance of power is shifting away from the globalists. Whether a President Trump or President Clinton is elected, it is this struggle at the grassroots level which will determine how far they can go or how far they are forced to go.

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