Trump taps into opposition to free trade
Canadians used to fret over free trade. They don’t much anymore. The notion that trade and investment deals are good things to pursue has become part of this country’s political orthodoxy.
The Liberals, who famously called the original 1984 Canada-U.S. Free Trade Agreement a threat to Canada’s very existence, now take credit for implementing the 1993 North American Free Trade Agreement, its far more intrusive successor.
Even the New Democrats have become accepting. They may oppose the looming Trans-Pacific Partnership trade and investment deal. But they broke with their union allies to support the 2015 free trade pact between Canada and South Korea.
So it is intriguing to see free trade emerging front and centre as one of the key political issues in the U.S. presidential election.
Free trade has been a part of modern American politics since NAFTA integrated the economies of the U.S., Canada and Mexico.
Ross Perot based much of his 1992 third-party presidential campaign on his opposition to signing NAFTA. Bill Clinton, the Democratic candidate and eventual president, essentially supported it.
Over time, Democrats, including U.S. President Barack Obama, played a more devious game — criticizing trade deals on the hustings, but supporting them once in power.
In those years, only the Republicans could be counted on to support unfettered free trade in both word and deed.
With Donald Trump, however, all of this has changed. Barring a miracle, the billionaire developer is poised to become the Republican Party’s presidential nominee this summer.
And Trump is basing his campaign on adamant opposition to free trade.
As journalist Thomas Frank noted this week on CBC Radio and earlier in the Guardian, Trump’s success with white working-class voters in the U.S. stems less from his racism and more from his recognition that free trade has cost too many people their jobs.
In his rambling, stream-of-consciousness speeches, Trump returns again and again to free trade. Does Ford want to build cars in another country? Go ahead, Trump dares the auto giant. But be prepared to pay a stiff tariff on every vehicle you bring into the U.S.
Does Carrier plan to move its air conditioner manufacturing plant from Indiana to low-wage Mexico? Fine, says Trump. Just don’t expect to sell those air conditioners in the U.S.
Perhaps Trump too is simply playing politics. Perhaps he’d fall into line with the free-trade needs of corporate America if he won the White House. But in the meantime, he and Democratic challenger Bernie Sanders, another free-trade critic, are changing the dynamic of American politics.
Sanders’ critique of free trade has forced his opponent, Hillary Clinton, to do an embarrassing U-turn on the TPP, a trade deal that she, as Obama’s former secretary of state, helped to negotiate.
She now says she doesn’t support “what I know about (the deal), as of today.”
All of this is coming at a time when some mainstream economists are rethinking their reflexive support of free trade.
Paul Krugman, the Nobel laureate who writes in the New York Times and had been a booster of trade deals, noted recently that such pacts are not panaceas for ailing economies.
Free trade, he wrote, doesn’t always provide more jobs. It is not an unalloyed engine of economic growth. It invariably produces losers as well as winners.
Theoretically, he said, winners from free trade could compensate losers so that everyone is marginally ahead. For instance, hedge fund managers could share some of their millions with unemployed steel workers. But they don’t. In Canada, polls suggest that roughly a third of the population still opposes NAFTA, down considerably from the 60 per cent against the deal when it was signed.
Certainly, no major Canadian political party is campaigning on opposition to this bedrock trade and investment deal.
But will Canada’s era of free trade last? That in large part depends on the U.S. The Trump phenomenon is tapping into a real anger. This could be channelled into the politics of nativism and race.
Or, it could result in something almost as disruptive but considerably less ugly — a rethinking of the entire international economy. Thomas Walkom’s column appears Wednesday, Thursday and Sunday.