Misunderstanding the New Politics of Trade

December 05, 2006

Policymakers and pundits are still scrambling to decipher what the results of the U.S. midterm elections mean for the U.S.’s role in the world. Caught in the middle of this is the question of global trade. Daniel Gross, in Slate and the Washington Post, argues that fears about the incoming Democratic Congress curtailing the nation’s free-trade policies “misunderstand the new politics of trade.”Gross argues that there is not a “left-right split” in the new politics of trade, and “just as free trade was a bipartisan project in the 1990s, this decade’s anti-trade backlash has been bipartisan as well.”The real concern facing the incoming Democratic Congress and the Republicans, Gross posits, is creating the social and political conditions to ensure the benefits of free trade are not lost to the host of other woes that happen to coincide with it. Gross writes:

Free trade has exposed U.S. workers to global competition on an unprecedented scale. In recent years, wages have stagnated (despite massive increases in corporate profits and steady economic growth), jobs have become more insecure, and benefits such as pensions and health care are being wiped out. Is free trade the cause of all these woes? Not necessarily. Does free trade coincide with all these woes? Absolutely.Rightly or wrongly, many Americans, even those who reap the gains of trade daily, identify free trade and globalization with their declining financial security. And the response of Bush and congressional Republicans has essentially been: tough. Companies facing ferocious overseas competition won't provide health care benefits anymore? Open a health savings account. Companies won't provide pensions? Privatize Social Security and cut benefits.This you're-on-your-own attitude has ultimately been more damaging to the cause of free trade than anything the Democrats could do.
The new Congress has a real opportunity to reframe the global trade debate, with both parties working together to ensure that the benefits of global trade for the U.S. are more equitably distributed. Let’s hope that they do. Unless Americans associate free trade and globalization with their own social and political well-being, we will face an uphill battle in bringing the benefits of free-trade and globalization to bear on global poverty.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.