International Trade and Global Business


A Bipartisan Reminder about the Importance of Trade

We've often wondered in this space—more than 10 years now—why big business for whom trade has generated sizable profits and millions of jobs have not more forcefully and persistently argued in favor of its many benefits.

Glad to see a recent opinion piece in the Washington Post (August 19), penned by three authors including Fred Smith, the founder of FedEx. Because the writings are often directed at a particular audience—in this case, members of Congress who don't seem to be great fans of trade—this piece was submitted to the Post by Smith, William Brock, former US Trade Representative under President Reagan, and Charlene Barshefsky, USTR Representative under President Clinton. If you're keeping score, that's a pro-trade dream team consisting of two Republicans and a Democrat.

The authors begin by lamenting that President Trump says Americans have been taken advantage of by our trading partners. What he doesn't say, they point out, is that "trade has become a central element of our prosperity, accounting for more than 27 percent of our economy and supporting 1 in 5 US jobs."
The agenda going forward, the authors argue, should be engagement with the rest of the word, not aggrieved isolationism. Ninety-five percent of the world's population and 80 percent of purchasing power are outside US borders. So, we need to work with our allies in a way that help friendly countries grow. That growth, propelled by rules-based trade, increases US growth too. "Engagement is essential to our survival; trade is an integral part of the engagement.

The authors want a pro-trade consensus that no longer exists. While they're unlikely to get it with a single editorial, they laid down an important marker and in plenty of time to influence political party platforms going into the 2020 election season. Their strategy: Fight for it. But how?
Policies! Among those they will be advocating are: support the rules-based international trading system; avoid a cycle of competitive currency devaluations and pursue additional multilateral trade agreements that set rules for the new economy. In the US, the authors argue that the country needs to return to its entrepreneurial and innovative roots, competing for its way to renewed greatness while leaving no one behind. They place blame for many Americans angst that their situations have not improved since the great recession and have gotten worse squarely on the inability of Congress to do its job. "Congress has failed to legislate—and the executive branch has failed to administer—programs that would provide new opportunities for workers displaced by trade or technology."
Turning to China, the authors say that the strategy of containing the threat from mercantilism and state-directed capitalism is not the answer. "When the answer to China's challenge is containment rather than competition, it demonstrates a loss of confidence in our ability to compete and win when engaging with the world."
Now is not the time to forget what got the American people to preeminence in so many areas. "First, we must recognize our success in creating and leading the global system that has been good for us as well as the world, maintaining peace and stability, and creating economic opportunity."

Hopefully, we haven't heard the last of these voices, and many more will join them in the months to come.

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