Let's deal on trade

With deep roots in the plains states, the Duke loves the premise of the book What's the Matter with Kansas? One of the most interesting debates it has prompted is the role of populism today as it relates to international trade.

The Duke has spent a fair bit of time working on trade negotiations. If Kerry had won, I would have suggested Dick Gephardt as U.S. Trade Representative, not only because I respect him and it would be a bold political move, but because he would have a heckuva lot more credibility when he returned to Congress from the bargaining table and said "this is the best we can do".

Very few of the most ardent advocates of imposing additional labor or environmental standards on trade agreements have actually participated in an honest-to-goodness trade negotiation (parliamentary exchanges don't count). It's much easier to armchair quarterback the talks and let someone else take the political heat. With a strong labor ally like Gephardt at the table, trade critics would know he fought the good fight. But even then the agreements wouldn't look much different because the economics of stringent labor and environmental standards simply don't work out for our trade partners. Ambassador Gephardt might still fail to gain broad Democratic support because trade deals are inherently win-win in the aggregate and lose-lose at the micro level. Without a political mandate broader than the generic "trade expansion", it is incredibly difficult to put together a sustainable political coalition in support of trade. ... Even with a labor champion like Gephardt leading the charge.

In retrospect, Democrats on both sides of the trade issue made a significant strategic error in the 1990s. What they should have done is propose a grand bargain with the strong pro-trade interests: "In exchange for plenty of Democratic votes on fast track, the Free Trade Area of the Americas, and additional WTO rounds, pro-trade businesses will deliver Republican votes for a much stronger employment and job skills safety net. Portable pensions, portable health care, and dramatic (and I mean dramatic) increases in education and job training for working class families.

The reality is that trade is more important to multinational conglomerates than opposing a stronger worker safety net. In fact, safety net is the wrong word, because better skills mean greater productivity, and lower health care and pension costs would significantly reduce costs for companies such as General Motors and United. The right kind of investment in the "safety net" would boost economic competitiveness for businesses and workers alike.

Unfortunately, such a grand bargain on trade was never seriously considered, in part because the Clinton White House believed for the most part that it could win on the merits alone. "With just a few more pithy statistics (Americans pay twice the world average for butter), we can convince Congressman X -- who wants to be with us intellectually -- to take a politically suicidal vote." Sure, some transportation projects were traded for NAFTA, and that won a few votes, but how many of those districts remain "pro-trade"? Pro-trade Democrats offered very little to capture people's imagination and win the long-term political debate.

I know that the most ardent "fair traders" would oppose such a deal in an effort to insist on greater labor and environmental protections abroad. But globalization is happening and will continue to happen with or without trade deals. The most important question for Americans is whether or not our workforce will be equipped to compete. Let's deal on trade.