Bernie Beats Trump (and Biden) on Trade

It is an indisputable fact that over the last few decades American workers have seen their wages stagnate and jobs disappear. Unfortunately, they have found little relief in the policies of either the Democratic or Republican parties. Quite the contrary, at least since Bill Clinton's promotion of the North American Free Trade Agreement (known as NAFTA) in 1994, American policy makers have been doing much to hurt and little to help the ailing American working class.

In order to see why Bernie is the best choice for laborers in America, his stance on trade must be distinguished from both Biden's waffling and Trump's hollow rhetoric.

This has been combined with a media narrative that does more to confuse than clarify American trade policy. Any presidential candidate, Democrat or Republican, that criticizes existing or pending trade agreements is duly labeled a "populist" and sidelined as beyond the pale of rational policy discussion. It has become standard practice to lump Donald Trump and Bernie Sanders together, tarring them both as populists, with the obvious implication that Sanders is just the left-wing version of that unhinged Republican.

Indeed, serious policy discussion was abandoned in favor of pat formulas about the populist disdain for trade. Witness James Surowiecki of the New Yorker: "Both Trump and Sanders downplay the enormous economic benefits of globalization for American consumers of all incomes, and their proposals are vague and could well be harmful if implemented."

This is sheer nonsense. And it is more important than ever to dispel such claims, given the narrowing of the 2020 Democratic field, with Joe Biden and Bernie Sanders competing to be the champion of American workers. In order to see why Bernie is the best choice for laborers in America, his stance on trade must be distinguished from both Biden's waffling and Trump's hollow rhetoric.

The basic fact is, both as a legislator and vice president, Joe Biden has supported free trade agreements like NAFTA (under Clinton) and the Trans-Pacific Partnership (under Obama). And yet as a presidential contender, Biden has backed away from these deals to avoid alienating American workers. It is not difficult to see that this is sheer political expediency. Barack Obama used the same strategy in his run in 2008.

Sanders, by contrast, has been consistently critical of trade deals that are crafted to benefit corporations rather than workers. He was clear in 1993 about why he opposed NAFTA, arguing that the "essence of NAFTA is that American workers will be forced to compete against desperate and impoverished Mexican workers," which "will only benefit the ruling elites" of those countries. And during the 2016 primary, Hillary Clinton did an about-face on the Trans-Pacific Partnership--which she had praised as the 'gold standard' in trade agreements--after Bernie vehemently criticized it.

While there is no question that Bernie has a knack for forcing his primary opponents to flip-flop on trade, there is a question about why he takes such a strident and critical attitude toward free trade deals.

This question is even more pressing given that a recent poll has shown record numbers of Americans, especially Democrats, warming up to trade. Some have pointed to this poll to say, "See, everyone loves trade--so leftists like Bernie need to get on board."

This is not surprising given the editorial cottage industry that has sprung up in the last three years criticizing Trump's tack on trade, and his economic policy more generally. But despite the urge of pundits to lump Trump and Bernie together as trade skeptics and populists, there is a world of difference between their positions.

To see why, it is helpful to begin by understanding the plight of American laborers, to whom the so-called populist rhetoric is meant to appeal.

Consider the observations of Steven Rattner, one of President Obama's former economic advisers and hardly a Bernie-style leftist. Rattner has pointed out, for those reluctant to acknowledge it, that globalization has left many workers behind. In particular workers in manufacturing who, when they lose their jobs, are not likely to find new jobs that pay as well or are as secure in their benefits.

You may think, though, that this negative impact is limited to a relatively small group. Perhaps gains to workers overall outweigh the loss of jobs, say, in the reduced price of goods due to the efficiency of trade. But this is not true for the majority of American workers. As Josh Bivens, of the Economic Policy Institute, has noted, "A reasonably cautious estimate is that between 1973 and 2006, global integration lowered the wages of U.S. workers without a four-year college degree (the large majority of the U.S. workforce) by 4%." This is taking into account the decrease in prices of consumer goods.

It is important to acknowledge that Sanders is not opposed to trade deals of all kinds. What is important is that such deals are negotiated with input from labor and include protections for the environment.

This is, Bivens points out, basic economics. Literally--if you look at a textbook for international trade, the Stolper-Samuelson Theorem says just this. Because of how advanced the U.S. economy is relative to its trading partners, the benefits of trade redound primarily to the benefit of high-end sectors, while we import cheaper goods from overseas rather than making them at home. Not only does this depress wages, it generates inequality. High-earners gain and low-earners lose.

This makes redistributive policies more important than ever.

This, obviously enough, is one clear difference between Sanders and Trump when it comes to economic reform and trade. Trump is simply not interested in redistributive policies--instead, he has made bogus claims to bring back jobs to the U.S. with massive tax incentives. The most noteworthy case is his false promise to bring 13,000 jobs to Wisconsin in the form of a Foxconn manufacturing plant.

Finally, it is important to acknowledge that Sanders is not opposed to trade deals of all kinds. What is important is that such deals are negotiated with input from labor and include protections for the environment. This was lacking in Trump's 'NAFTA 2.0,' so Sanders rightly opposed it. Compared to Trump and Biden, there is simply no question that Sanders's approach to trade prioritizes workers and the environment, and not corporate convenience.