Over the past five decades, ill-conceived, uninformed notions about trade have grown stronger and louder with every deal negotiated. Today, this opposition is culminating before our eyes in the 2016 presidential primaries with unprecedented attacks by candidates from both political parties.
Opposition to free trade deals on the left is unsurprising. The Democratic Party has traditionally run on Big Labor’s anti-trade platform and tugged at the heartstrings of Americans’ emotions by stoking fears of job losses to Mexico and China. Sen. Bernie Sanders’s (I-Vt.) anti-trade crusade is a core tenant of his political platform.
But anti-trade rhetoric coming from the right in this election cycle is more surprising. After all, to be anti-trade is to be anti-free market and anti-competition. So, why is the GOP’s self-proclaimed “best in business” candidate piling onto anti-trade rhetoric?
Donald Trump’s positions are deeply rooted in his personal belief that the role of government is to coerce markets into doing whatever will benefit him, from manipulating the bankruptcy code to abusing eminent-domain law. Throughout his campaign, Trump has lamented America’s decline and the country’s lack of global competitiveness. The main culprit, he says, is “horrible” trade deals. Now, not only is Trump proposing a “beautiful” physical wall on our southern border, but also trade policies that would wall America off from the global economy.
Take, for example, Trump’s proposed punitive tariffs on products made by U.S. companies overseas: specifically, a 35 percent tariff on every car and car part manufactured by Ford Motor Co. in Mexico, or a flat 45 percent tariff on any product from China.
As with many of his other policies, Trump’s positions on trade run contrary to the decades-old Republican Party platform of eliminating tariff and non-tariff barriers and promoting economic expansion abroad. Some of his issue positions even violate the U.S. Constitution.
Trump bashes U.S. outsourcing and threatens to levy punitive tariffs and build border walls. In the 1920s, global isolation tactics like these resulted in the Great Depression. Trump’s positions might make for good sound bites, but the idea that a president of the United States would punish private companies for doing business in the most cost-effective manner that allow them to innovate should send a shiver down the spine of every American.
Free and fair trade that is bound to rules by trade negotiations and deals is in America’s best interest. Trade sustains and supports more than 40 million American jobs. Trade opens new markets to American manufacturers. Trade has increased wages and helped to create a strong and vibrant middle class, and it helps ensure innovations by U.S. companies will be protected.
Rather than submit to populist rhetoric of the Trump and Sanders campaigns, we must support principled positions on free trade and open markets, including the recently concluded Trans- Pacific Partnership (TPP) agreement.
The TPP includes groundbreaking provisions that require countries that sign on to permit data flows and forbid server localization. At a time when we see some concerning measures around the world aimed at limiting information and forcing localized data, the TPP is an important tool to help protect and grow the information age.
The TPP takes into account the realities and importance of the current open Internet and digital economy. The agreement – which encompasses 40 percent of global GDP will eliminate unnecessary tariffs and other barriers that are unduly burdening U.S. innovators, create more open and equitable international markets for consumers and provide protections against forced localization cross-border data flows. All of this will ensure the burgeoning demand for our companies’ digital goods and services is not thwarted by foreign governments.
Free trade has prevailed during the past 50 years despite opposition and emotional arguments against it. It has survived because principled policymakers have fought for free markets, America’s innovators and job creators. In this tumultuous election cycle, we need such principled leadership now more than ever.
Gary Shapiro is president and CEO of the Consumer Technology Association (CTA)™, the U.S. trade association representing more than 2,400 consumer technology companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro