Tons of talk about tiny trade deals

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Barack Obama is a politician, so he’s oscillating between what he knows and what brings in votes, says David Brooks:

Barack Obama delivered a speech in Pittsburgh on Monday on the economic stresses facing American workers. In the speech, he devoted one clause in one sentence to the single biggest factor affecting the workplace: technological change. He then devoted 45 sentences to one of the least important: trade deals…

He wasn’t even talking about trade in general. He was talking about the Nafta- and Cafta-style trade agreements whose negative effects on the American economy are barely measurable. And, to make matters even more inconsequential, he wasn’t even taking a clear stand on such deals themselves…

He wound up in the no-man’s land between Lou Dobbs-style populism and Bill Clinton-style free trade. He made a series of on-the-one-hand/on-the-other-hand distinctions about which sort of trade deals he’d support and which he wouldn’t. It added up to a vague, watered-down version of economic light beer. In the end, he suggested a few minor tweaks in the U.S. tax code that would have a microscopic effect on outsourcing, and a few health and safety provisions which might have teenie-weenie effects on investment decisions. The ideas he sketched out in the speech aren’t dangerous. They’re just trivial.

We all know why Obama spoke the way he did on Monday. The forces transforming the American economy are big and hard to control. If you think your listeners aren’t sophisticated enough to grasp them, it’s much easier to blame those perfidious foreigners for all economic woes. It’s much more heroic to pretend that, by opposing Nafta, you can improve the lives of middle-class voters. Furthermore, these trade deals have become symbolic bogies for union activists. Instead of concerning themselves with the tidal waves washing overhead, they’ve decided to insist on bended-knee submission in the holy war against Colombia.

Similarly, from the Economist:

Democrats are enduring a six-week pause between their last primaries, on March 4th, and the next contest in Pennsylvania on April 22nd. This big rust-belt state has lost over 200,000 manufacturing jobs since 2001. So it’s just the kind of place where demonising trade with foreigners (particularly China) is likely to prove politically useful.

This hyperinflation of trivial trade deals has resulted in a big political conflict over a proposed PTA with Colombia that will have little to no effect on the US economy.

Please get over it!

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2 Responses to “Tons of talk about tiny trade deals”

  1. Tom Walker Says:

    Globalization is not a ‘trivial’ issue. American companies have been outsourcing millions of middle class (i.e. white collar) jobs to the third world. American management knows only one sure way to increase profits and their bonuses, cut labor costs. If David Brooks or any of the other self appointed experts had spent the last 20 years in typical corporate office jobs, they might be qualified to preach on this.

  2. Jonathan Says:

    Tom,
    Globalization is far from a trivial issue, but CAFTA and the Colombian PTA contribute very, very little to economic integration. These policy instruments are not driving phenomena like outsourcing.

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