POLLAK: Free Trade and the Conservative Intellectuals

FILE - In this Feb. 23, 2015 file photo, container ships wait to be unloaded at the Port of Los Angeles. The Commerce Department releases international trade data for March on Tuesday, May 5, 2015.
AP/Nick Ut

Conservative critics of President Donald Trump — some of whom are embittered members of the ill-fated #NeverTrump clique — are posing a series of challenges to those conservatives who support the 45th president.

Setting aside his nomination of Neil Gorsuch to the Supreme Court, they say, how can Trump-supporting conservatives support other aspects of his unusual presidency — such as his withdrawal from free trade agreements like the Trans-Pacific Partnership, and his alleged protectionism or hostility to free trade in general?

For Trump-supporting, conservative advocates of free trade, one response is obvious: this president, unlike some of his predecessors, seems quite comfortable with policy differences.

In January, for example, as the first confirmation hearings revealed key areas of disagreement between Trump and some of his nominees, on issues from Russia to climate change, the president-elect tweeted: “All of my Cabinet nominee[s] are looking good and doing a great job. I want them to be themselves and express their own thoughts, not mine!”

But the argument Trump’s critics make on the issue of free trade is not just that Trump’s conservative supporters ought to disagree with him, but that they have abandoned their own views on free trade in order to be more politically supportive.

Matt Lewis, writing in the Daily Beast, lamented that “so many prominent free-traders have given up so easily.” And Bret Stephens recently lamented that the conservative movement had “merrily give[n] itself over to a champion of protectionism.”

Yet free trade is a poor litmus test of conservative orthodoxy, because it is not, and has never been, a point of consensus in the movement.

Lewis mocks the opposing argument as one “occasionally trotted out in campaigns by failed populists hoping to pander to the Rust Belt workers or labor unions.” That is a trite way to dismiss a broad constituency that former Sen. Rick Santorum (R-PA) tapped in 2012 by winning in Iowa and across the Midwest, and which Trump famously harnessed to break down the “blue wall” in 2016.

There are, in fact, constituencies both for and against free trade in both parties.

One of the most interesting exit polls in the 2016 presidential primaries came from Michigan, where trade supports over a million jobs, but Democrats and Republicans were equally skeptical of trade. Among those who showed up to vote, 53% of Republicans, and 56% of Democrats, said trade “takes away U.S. jobs,” while only 34% of Republicans, and 31% of Democrats, said trade “creates more U.S. jobs.”

One way to explain that is the collective action problem first described by Mancur Olson over fifty years ago. Trade creates modest benefits for the population in general, but creates severe costs for particular groups of people. Those who bear the brunt of those costs are more likely to turn out to vote.

And so in Michigan, Sen. Bernie Sanders (I-VT) overcame a 30-point deficit in the polls to defeat Hillary Clinton in the Democratic primary because he was viewed as the more credible opponent of free trade agreements.

The debate over free trade, then, is really more a debate between different economic sectors. Some of the most politically conservative agricultural regions of the country, for example, supported the Trans-Pacific Partnership (TPP).

Trade can also be thought of as a debate between different generations, because retired workers whose pension funds invest on Wall Street might benefit when jobs are moved offshore and companies become more profitable, while today’s workers are left behind.

The idea of free trade as a measurement of conservatism is something of an elitist contrivance. It is easy for conservative critics in New York, Los Angeles, or Washington, D.C. to look down on the rubes who oppose free trade because they are allegedly unable to look past their immediate economic self-interest.

Yet political pundits are no less responsive to their own self-interest. The day new media companies start using algorithms to replace opinion columnists, you may hear a different story.

Still, the critics have a point: the intellectual case for free trade is a strong as ever, and needs stronger advocates.

It was exactly 200 years ago that David Ricardo first articulated the law of comparative advantage, which holds that countries benefit from trade, even if one makes every good most efficiently.

That has not changed. And President Trump actually acknowledges that case when he argues that he is in favor of free trade, but not in favor of bad deals that put American businesses and workers at a disadvantage.

Many conservative free traders are, in fact, recalibrating their views, but are not just trying to appease the administration. They are acknowledging a reality the 2016 election underlined: namely, that human beings are not mere production inputs.

William A. Galston, a liberal columnist for the Journal, noted last March in observing the role trade was playing in the election that two decades of competition from China had revealed that labor markets do not adjust rapidly to free trade. People do not pick up their lives and move, or retrain easily for new careers.

Free trade is not an abstract construct but a set of policies that depends on popular legitimacy. And an additional factor that undermines that legitimacy is the way free trade deals have been negotiated.

True free trade would mean lowering tariffs to zero, ending subsidies, and eliminating regulations. Simple enough — yet the complicated, secretive negotiation process of free trade deals suggests to voters that what is being negotiated is a more subtle protectionism to benefit the well-connected.

What the Trump administration has done is to reject multilateral free trade deals in favor of bilateral agreements, of which we already have several.

Bilateral deals have two advantages. One is that the U.S. has far more leverage in dealing with any individual country than we do in dealing with several countries that may unite against us. And the other is that American voters are likely to be more aware of the specific interests at stake in negotiations with one country as opposed to several.

So while we do hear some talk about tariffs against specific countries — against Mexico, for example, to pay for the wall, or against China for unfair currency manipulation — those proposals have nothing to do with protectionism as a general policy. They are not likely to be implemented in any case, as they would break World Trade Organization rules. And some argue that a bigger protectionist threat may come from Congress, not the administration, in policies such as the Border Adjustment Tax.

What President Trump is providing is not a protectionist argument against free trade, but a new way of framing American participation in free trade agreements.

When free trade emerged as a major thrust of our foreign policy, under Presidents George H.W. Bush and Bill Clinton, the world was emerging from the Cold War and the United States saw itself as the guarantor of the new world that was emerging. Our Navy protected the sea lanes, and our markets were an engine of growth.

There were some interruptions that are worth noting. In 2002, President George W. Bush applied steel tariffs that lasted for nearly two years before they were lifted in the face of opposition at the World Trade Organization. In 2006, Bush approved plans for a state-owned company from the United Arab Emirates to operate some U.S. ports, but Congress opposed the idea, and it was dropped. Deviations from free trade orthodoxy are not new, yet the U.S. remained its global guarantor.

Today, without dismissing that leadership role, President Trump has insisted that the United States, like any other nation, has the right — and, indeed, the obligation — to assert its own national interest in the international economic system.

It is the same principle he is applying to NATO and our foreign military commitments: we want to protect democracy, but not at a cost that threatens our own freedom in the future. He is strengthening America’s global leadership by restoring our presence as a nation-state.

Put another way, the economic theory behind free trade accepts that, in theory, there may be a wide range of prices at which nations will be willing to exchange goods, because everyone will benefit. But the gains from trade may be captured unevenly, depending on what those prices are.

Trump is arguing that through a stronger and more assertive negotiating posture, using all the tools of persuasion theoretically at our disposal, the U.S. should be able to capture more of the gains from free trade.

It is quite possible that the free trade regime that results from this approach will be more efficient, more equitable, and more legitimate than what we currently have. Free trade enthusiasts who support President Trump are simply saying that his new approach deserves a chance.

No one has abandoned free trade, and if the veterans of NeverTrump would put aside their wounded pride, they might see that there is less distance between them and the administration than they may care to admit.

Joel B. Pollak is Senior Editor-at-Large at Breitbart News. He was named one of the “most influential” people in news media in 2016. His new book, How Trump Won: The Inside Story of a Revolution, is available from Regnery. Follow him on Twitter at @joelpollak.


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