• ITVI.USA
    16,350.840
    -55.350
    -0.3%
  • OTLT.USA
    2.731
    0.025
    0.9%
  • OTRI.USA
    21.660
    -0.160
    -0.7%
  • OTVI.USA
    16,343.200
    -45.660
    -0.3%
  • TSTOPVRPM.ATLPHL
    3.520
    0.380
    12.1%
  • TSTOPVRPM.CHIATL
    2.960
    -0.660
    -18.2%
  • TSTOPVRPM.DALLAX
    1.610
    0.250
    18.4%
  • TSTOPVRPM.LAXDAL
    3.340
    -0.130
    -3.7%
  • TSTOPVRPM.PHLCHI
    2.100
    -0.250
    -10.6%
  • TSTOPVRPM.LAXSEA
    3.860
    -0.220
    -5.4%
  • WAIT.USA
    126.000
    -2.000
    -1.6%
  • ITVI.USA
    16,350.840
    -55.350
    -0.3%
  • OTLT.USA
    2.731
    0.025
    0.9%
  • OTRI.USA
    21.660
    -0.160
    -0.7%
  • OTVI.USA
    16,343.200
    -45.660
    -0.3%
  • TSTOPVRPM.ATLPHL
    3.520
    0.380
    12.1%
  • TSTOPVRPM.CHIATL
    2.960
    -0.660
    -18.2%
  • TSTOPVRPM.DALLAX
    1.610
    0.250
    18.4%
  • TSTOPVRPM.LAXDAL
    3.340
    -0.130
    -3.7%
  • TSTOPVRPM.PHLCHI
    2.100
    -0.250
    -10.6%
  • TSTOPVRPM.LAXSEA
    3.860
    -0.220
    -5.4%
  • WAIT.USA
    126.000
    -2.000
    -1.6%
American Shipper

Trade protectionism becomes a dominant theme in presidential campaign

Primary candidates in the 2016 United States presidential election are tacking towards the populist message espoused by Republican Donald Trump and Democrat Bernie Sanders, putting Trans-Pacific Partnership deal in jeopardy.

   The Republican and Democratic parties are holding several primary contests Tuesday and trade could be a deciding issue for voters in states such as Ohio, Illinois and Missouri, where many manufacturing jobs have been lost to overseas competition during the past 20 years.
   One of the big differences in the political climate this year is the growing populism in the Republican Party, which has traditionally been a staunch supporter of free trade.
   Sen. Bernie Sanders on the Democratic side, and Donald Trump on the Republican side, have tapped into a strong populist sentiment that has severely clouded any chance President Obama will be able to secure approval of a major multilateral trade deal in the Pacific Rim that the administration views as a key part of its China-containment strategy. The four leading candidates in both parties – Sanders, Trump, Hillary Clinton and Sen. Ted Cruz – have all expressed opposition to the Trans-Pacific Partnership (TPP) agreement 
   The angst towards trade is embedded in a broader middle class-frustration with decades of wage stagnation and income inequality that makes average Americans feel the economy is working in a fundamentally unfair way for big corporations and Wall Street traders – and not them. Working-class people say that trade deals such as NAFTA haven’t paid off as promised, in terms of greater exports and job creation, although analysts say the deal with Mexico and Canada has produced many indirect benefits beyond simply the balance of trade with Mexico and Canada.
   There are many trends influencing change in the U.S. industrial heartland (including automation, or plants moving to southern states), but losing good-paying jobs to foreign countries is a tangible target that is easy to blame.
   Trump has argued that incompetent politicians have bungled trade deals that hurt American workers, while Sanders’ position is that big corporations have influenced trade negotiators to cut deals that work for them, but not the workers.
   The 2016 campaign is not the first time that trade has been depicted as the villain, but analysts say it is the first time that voters perceive truly authentic leaders speaking against unfair trade. President George Bush negotiated free trade deals with Central American nations, Panama and Korea, John McCain is pro-trade and Mitt Romney, who raised questions in 2012 about currency manipulation, earned his wealth helping to manage companies that often outsourced production.
   Meanwhile, Hillary Clinton has tried to distance herself from her husband’s record of securing NAFTA and opening up greater trade with China. And Barack Obama, who campaigned against NAFTA and criticized Hillary Clinton for supporting NAFTA in the 2008 campaign, finalized the trade deals started under Bush, signed the World Trade Organization’s agreement on trade facilitation, asked Congress for fast-track trade negotiating authority and negotiated the terms of the TPP.
   By contrast, Trump spoke out against NAFTA from the beginning and Sanders has fought trade deals his whole career in Congress, according to Jim Tankersley, economic policy correspondent for the Washington Post, speaking on National Public Radio’s “Diane Rehm Show” last week.
   Neither Trump nor Sanders have given many specifics about what they would do to change U.S. trade policy, but voters seem to believe they would take some steps in that direction.
   According to exit polls in Michigan, where Sanders won last week’s primary, Democratic voters who believed trade deals reduce U.S. jobs backed Sanders by a 56 percent to 41 percent margin, the Wall Street Journal reported. In Mississippi, Republican voters said trade was causing job losses to lower-cost countries.
   Rick Manning, president of the conservative Americans for Limited Government, told the WSJ that an anti-trade position has become a natural fit for Republicans worried about big government. He argued the deals benefit politically connected companies that have the ability to lobby U.S. trade negotiators.  
   Americans for Limited Government claims a poll conducted on its behalf by Patrick Caddell shows Republicans are even more likely to oppose bad trade deals than Independents or Democrats. Once they found out what’s in the agreement, Republican voters opposed the TPP 66 percent to 15 percent, compared to 44 percent opposition among Democrats and 52 percent among Independents, according to the poll.
   “This collapse in support is directly related to the rejection of corporate cronyism that has permeated Washington and should again serve as a wake-up call to every GOP member of Congress that business as usual is over,” Manning said in a press release last week.
   The anti-trade sentiment within the Republican Party has gotten so strong lately that even Sen. Robert Portman, R-Ohio, a former U.S. Trade Representative under George W. Bush who is running for re-election, recently said he was against the TPP as its currently written. And even though Congress renewed fast-track Trade Promotion Authority last year, the vote was 219-211 and there were much fewer Republican supporters than in the past.
   “The big change in the TPP vote count right now is that Republicans are defecting en masse,” Tankersley said. “Now, that may be because Republicans are just anti-Obama. Or, it may be because Republicans now occupy a lot of the seats in areas like Ohio, or especially in the South, where anti-trade Democrats used to, where the populace used to. And so it’s a natural evolution with them to fit the needs of their voters.
   “And it may be that the Republican Party is just moving to a more protectionist place,” he added. “Especially if they nominate Trump, that’s sort of the logical conclusion. I don’t think it’s a given that this is a free-trade Republican Congress that the next president is going to face.”
   Most Washington observers say it is unlikely that TPP will get a ratification vote during an election year, even though House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell favor free trade and the TPP. There is a possibility that a vote could take place during a lame-duck session of Congress after the election, but the prospects for TPP are very uncertain even if the debate is held off until 2017.
   In an interview Monday with MSNBC’s Chris Matthew’s during a town hall in Illinois, Clinton said she understood why people feel trade is the villain.  
   “I think that we’ve had years of experience now about what trade can and can’t do in our globalized economy…I’ve learned some things since the ‘90s,” she said, pointing out that as a senator from New York she voted against the Central America Free Trade Agreement.
   She said as secretary of state she supported the principles of TPP, but once out of office and running for president waited to see the agreement’s final language before announcing her opposition. 
   “I hoped we could deal with currency manipulation and a lot of the other problems that people have faced…It didn’t meet my standards,” said Clinton.
   Clinton pointed to the recent announcement by Nabisco to close a food factory in Chicago and move production to Mexico as an example of poor corporate behavior that hurts workers. Nabisco received millions of dollars in government subsidies over the years to keep it from moving and Clinton said she wants to pass a law that would claw back taxpayer money when companies relocate.
   “If you took any money from the state or federal government to put in a plant, to upgrade a plant, to do anything to the plant, you have to pay it back. That’s how I think we have to get leverage on these companies, so when they do the cost-benefit, on the cost side is, ‘Hey, we’re going to owe back the money,’” she said.
   Trump, a businessman who has never held elective office, has also railed against the Nabisco move to Mexico, although some of his private label clothing and food products are made in Mexico and China.
   Clinton said the United States has to take a more aggressive trade stance because other countries aren’t playing fair.
   “You have countries that are not shy about putting a heavy thumb on the scale. They supporting their own industries. In China, for example, there is no free market. That’s just an illusion. It’s not a market economy. You have state-owned enterprises, you have the government being used to threaten companies,” she said.
   “You have in Europe, in a more refined and genteel way, you have in Asia in a more rough and tumble way, a set of trade conditions where we end up with the only real free trade economy,” said Clinton. “And we’ve been able to manage that until fairly recently.
   “Now because of competition, increases in technology, automation and the like, we’ve got to really fight for our jobs. And fighting for our jobs means improving our skills, incentivizing advanced manufacturing in clean and renewable energy. But it also means sending a really clear message that you’re not going to mess with us.
   “We’re going to do what is necessary to make sure you’re not dumping steel, stealing our intellectual property, and you’re not walking out on communities where we’ve given you money in effect to stay. So I’m taking a tough line on this.”
   The former secretary of state said the difference between her and Sanders is that Sanders is reflexively against anything that has international implications, while she wants to engage with the rest of the world in a smarter way.
   “I know you have to trade with the rest of the world,” she said. “We’re only 5 percent of the world’s population. We have to trade with the other 95%…My view is let’s get tough and smart and effective. But we can’t shut the door to the rest of the world. We got to trade with the rest of the world. I want us exporting more. I want more good jobs with rising incomes.”
   Her evolution on trade has even drawn the endorsement of Sen. Sherrod Brown of Ohio, who voted against NAFTA and has been an outspoken critic of many U.S. trade policies for years.
   In a separate interview on MSNBC’s “All In with Chris Hayes,” Brown said Clinton has articulated a much more detailed plan than Sanders for helping to grow the manufacturing sector, including establishing a special trade prosecutor, tackling currency manipulation, and addressing how to designate so-called non-market economies like China. 
   “I just think there’s a depth of understanding and I’ve worked with Hillary on some of the plans for this,” said Brown. “I want to look forward on how we put together a trade policy that works because we’re going to trade, there’s going to be globalization, but we need to do it under rules that work as rules work for our domestic economy on the dynamic of capitalism.
   “You need to do trade in the same way. And I think Hillary Clinton understands that and that’s why I like the direction she wants to take us in.
   “I’ve seen the input she’s welcomed. She’s worked with me in helping formulate trade policy. The world is different [than in 2008]. She knows that…and Hillary can recite chapter and verse about what’s wrong with [TPP] and how to fix it, and I will be standing with her as she does that…in 2017,” he added.
   “And I think we’ll see a very different trade policy a very different tax policy. No more this whole business plan that has become the way companies do things now, you shut down production in Mansfield, Ohio, in Sandusky, Ohio, you move it to China and sell products back into the U.S. That just doesn’t work for our country any more. I think Hillary Clinton has an acute understanding of that and how you fix it.”

We are glad you’re enjoying the content

Sign up for a free FreightWaves account today for unlimited access to all of our latest content

By signing in for the first time, I give consent for FreightWaves to send me event updates and news. I can unsubscribe from these emails at any time. For more information please see our Privacy Policy.