We need to have that talk about Bernie

‘‘The Zeitgeist in the United States has turned against trade’’, it’s time for New Zealand to move on. Democratic presidential candidate Bernie Sanders’ domestic policies won’t look amiss to many New Zealanders, but his views on trade will leave us in the cold. Spreading coronavirus and its global economic fallout is clearly driving stock market fear and selling. But there’s another spectre too. Investors, especially in the US, are starting to look past the rubble of the virus and to imagine, astride their political stage, Sanders.

The 78-year old Vermont senator is an early contender in the race for the Democratic nomination, though no shoo-in. He’d like to tax the rich, break-up the big banks, spend big on social programmes like a single-payer national healthcare scheme and rein in free trade even more tightly than current President Donald Trump.

Whatever you think of those policies, they typically make for spooky reading in the financial pages, especially in the US where a self-proclaimed democratic socialist cuts an uncommonly Left-wing figure among serious presidential hopefuls.

To New Zealanders, many of Sanders policies are unremarkable. The promise of free tuition at state universities, for example, and the expanded role of the state in paying for healthcare.

Sanders views on trade, however, seem to reflect a widening economic nationalism in the United States that is antithetical to the kinds of trading relationships New Zealand, across its large political parties, remains keen to establish.

If Sanders manages to secure the nomination, or even just to stamp his trade views on the Democratic Party platform going into the November election, it will dash all hope that New Zealand retains for drawing what is still the world’s mightiest economy into a closer trading relationship, either through a bilateral agreement or through joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) formerly the Trans-Pacific Partnership (TPP).

While economic orthodoxy holds that more and freer trade leads to aggregate gains, including more growth and cheaper consumer goods, Sanders’ thinking is rooted in the view that opening trade, particularly with low cost manufacturers, has gutted US manufacturing and harmed bluecollar workers.

Sanders’ broad message on trade chimes in many ways with the views of Trump, who has pursued a high-profile tariff war with China and others. It’s tough to conclude a Democratic presidency under Sanders would take a substantively different tack.

‘‘Independent commentators in the US have been warning for some time against counting on a reversion to the ‘status quo ante’ in either trade or foreign policy,’’ Rob Scollay, trade expert and associate professor of economics at the University of Auckland, said. ‘‘Both the sense of commitment to multilateralism and the perception of free trade as a ‘win-win’ proposition have diminished across the two [Democratic and Republican] parties, unfortunately.’’

Of course, there remain huge obstacles to a Sanders presidency. He needs to beat more moderate Democratic candidates to clinch the nomination in July.

Sanders, however, goes furthest in his promises to ‘‘reverse’’ existing trade arrangements and his track record is arguably the clearest in underscoring this commitment.

He voted against the original North American Free Trade Agreement and against the USChina Relations Act of 2000 that gave China ‘‘most-favoured nation’’ status. In 2015 he was among the senators who helped to block the fast track of TPP under Barak Obama’s presidency. The proposed agreement included 12 Pacific Rim countries including New Zealand, Australia, Japan, Singapore, Vietnam and the US.

Stephen Jacobi, executive director of the New Zealand Business Forum, says he can see why New Zealand business leaders and the Government want to keep alive the hope of a US deal. The need for trade diversity has strengthened with China, New Zealand’s largest trading partner, reeling from the effects of the coronavirus outbreak and many exporters are desperate for other markets. New access, however, will have to come from other Asian countries and the European Union and Britain. ‘‘The Zeitgeist in the US has turned against trade,’’ Jacobi said. ‘‘It’s time to move on.’’