It is natural in the course of an election to debate the finer merits and policy details the presidential candidates put forth before the American people. This year, however, the universal castigation free trade has suffered at the hands of both major party candidates is unprecedented — and particularly underserved.
Both Donald Trump and Hillary Clinton have been vocal critics of free trade deals in recent months, the former more so than any other candidate in history. Naturally, the example set forth by presidential candidates has a significant real-world effect — a staggering 85 percent of Republicans say free trade has cost the U.S. more jobs than it created. Similarly, 54 percent of Democrats say the same.
How on earth did the nation of the free market become the nation against free trade?
First, let’s review the facts. It is almost a universally-held belief in economics that free trade is a net positive for our economy, and the data backs such a claim. Economists, conservative and liberal alike, understand that opening ourselves up to trade with foreign nations is not only beneficial but necessary.
A whopping 83 percent of economists agreed or strongly agreed that past major trade deals have benefited most Americans, and none of those sampled disagreed at all. This isn’t due to some far-fetched conspiracy but rather to the simple economic truth that lowering barriers to business helps everyone in the economy be more productive.
Barriers for trade essentially function as a tax: a tax on consumers, a tax on businesses and a tax on net profits themselves. As a whole, barriers to trade slow down growth and investment, which is why nations go to such great lengths forming trade deals that reduce such barriers.
When we form trade pacts with other countries, we lower the price and increase the variety of goods available to each American consumer. This not only has a widespread effect of benefiting all taxpayers, but it even disproportionately helps those of lower income. Furthermore, many of our imports are not even final goods, but rather unfinished products and materials to be used and later sold by our own businesses and manufacturers.
Let’s not forget that 95 percent of the world’s market lies beyond our borders. To shut the door on such an opportunity is not only misguided, it’s downright economic malpractice. With appropriate trade deals put in place, that mass of consumers can one day become a mass of customers for American companies to sell their products and services to.
So are the presidential candidates right to cast the blame for our economic malaise onto free trade deals? Not at all.
When Mr. Trump plans outrageous protectionism such as a 45 percent tariff on Chinese goods, the American economy stands to lose. While Secretary Clinton may claim to be against the Trans-Pacific Partnership — the largest trade deal in human history currently under negotiation — the truth is she’s called it the gold standard in the past, shifting only due to political pressures.
So how do we reconcile ourselves with the fact that our two would-be presidents have taken frightening economic stances on something so vital? Voters need to understand the enhanced competition and access to larger markets offered by free trade allows our economy to flourish but that some workers are, indeed, left behind. Factory workers whose jobs are replaced overseas may not like it, but the truth is that there will always be foreigners willing to work in worse conditions for less pay than Americans.
The answer, then, is to bolster the few who have the most to lose from free trade. Unskilled laborers and manufacturing jobs need to be retrofitted for the 21st century, with our focus put on enabling more people to get training in a skilled trade or studying to get a degree. Rather than reject the consensus on free trade, we must move forward on it for the benefit of everyone.