House Speaker Paul Ryan appeared last week on Larry Kudlow's talk radio show talking about his differences and similarities with Donald Trump's position. In the process of describing how they will ultimately come together, he tried to sell his old failed trade approach as "smart trade" akin to what Trump is talking about. That pitch doesn't survive scrutiny.
“It is in our interest to get other countries to agree to play by our rules,” he added. “If we can get them to agree to our kinds of rules so that we along with our allies are writing the rules of the global economy for the 21st century, that’s in our interest.”
He said it “helps us show China that you’re not going to write the rules that benefit you,” adding, “smart trade agreements” happen when America writes the rules.
Trump is talking about trade deficits... words that I've never heard Ryan utter. Ryan is talking about who writes the rules. The latter sounds seductive until you look at all the past attempts to "write the rules" where we actually either (1) did not write the rules because negotiations are compromise, not dictation; (2) we wrote stupid rules to help offshore our industry and economy.
We heard the "we are writing the rules of trade" pitch when China joined the WTO and when we passed the trade deal with South Korea in 2011. Both were economic disasters.
So hopefully Trump will not be seduced by Ryan's repackaging of "dumb trade" as "smart trade". I know that I am not seduced.