If you think a .500 batting average represents as good a performance in presidential debates as in baseball, then you’re going to be pretty pleased with Republican candidate Donald Trump’s performance on trade-related issues in the GOP Milwaukee main event last night. If you’re wondering how the Republican front-runner (co-front-runner?) could have gotten one answer so mind-bogglingly wrong, and one just as completely on target, chances are you’re more downbeat.
Of course, it also needs to be noted that apparently no one in the Mainstream Media knows enough about trade, and specifically about President Obama’s Pacific Rim trade deal, to have recognized the accuracy of Trump’s answer about China’s relation to the agreement. But in defense of the scribblers, they’re not competing for the authority to press policy buttons.
Trump’s wrong answer was his first (here’s a debate transcript), and although it came on a question concerning the minimum wage, not trade, it bears directly on America’s approach to the global economy. Explaining why he opposed government-mandated hikes in pay floors, Trump told the audience that with U.S. “taxes too high, wages too high, we’re not going to be able to compete against the world. I hate to say it, but we have to leave it the way it is. People have to go out, they have to work really hard and have to get into that upper stratum. But we can not do this if we are going to compete with the rest of the world. We just can’t do it.”
What was completely weird about this response was that, as with other critics, a main reason for Trump’s opposition to current U.S. trade policies is that they benefit offshoring interests at the expense of American workers by forcing the latter into a no-win competition with much more poorly paid foreign counterparts. Indeed, although Trump never mentioned “wages” explicitly in his new China trade paper, he did charge that the status quo approach exclusively serves the interests of “Wall Street insiders that want to move U.S. manufacturing and investment offshore.” And he asked how “American manufacturers, who must meet very high standards, [can] possibly compete with Chinese companies that care nothing about their workers or the environment?”
So Trump’s position that the minimum wage can’t be raised because of this (presumably unacceptable) low-wage foreign competition amounts to a version of blaming the victim.
And it would have been so easy for Trump to have had his policy cake and eaten it, too, on this front. He could have expressed sympathy with the idea of raising minimum wages – especially because of penny-wage foreign competition. And he could have gone on to insist that a better way to raise living standards was to fix the trade policies largely responsible. Trump did suggest that his tax policy reforms would get the job done by super-charging America’s growth and job-creation. But if so, why put so much emphasis on the need to overhaul trade policy?
By contrast, Trump’s critique of the Trans-Pacific Partnership (TPP) revealed genuine mastery of typical and major U.S. trade policy failings. As he contended (inter alia), “The TPP is horrible deal. It is a deal that is going to lead to nothing but trouble. It’s a deal that was designed for China to come in, as they always do, through the back door and totally take advantage of everyone.”
The commentariat seemed to agree that Trump had displayed his ignorance by claiming that China is one of the TPP signatories. That’s what one of Trump’s rivals, Kentucky Senator Rand Paul, claimed. So did the Associated Press.
But of course, that’s not what the candidate said. He said it was designed for China to participate covertly, not that China is one of the members. And anyone who’s read the TPP’s rule of origin provisions (here, here, and here) knows that this is exactly the case. The deal would extend duty-free treatment within the new integrated market to a long list of products that could be made largely outside the TPP zone. Indeed, many goods with levels of content from TPP signatories well under 50 percent would be so favored.
Nor did these TPP features appear in the deal by accident. They reflect the clear desire of U.S., Japanese, and other multinational companies from TPP signatory countries to enjoy maximum flexibility in sourcing their production, in order to secure the lowest cost levels. Not only does such sourcing leeway greatly water down the TPP’s potential benefits for the domestic economies of the signatory countries. But it flies completely in the face of promises by Mr. Obama and other backers of the deal that it would both contain the rise of Chinese economic power and influence globally and in the Asia-Pacific region specifically, and that it would create powerful incentives for China to clean up its economic act and become eligible for membership.
Trump remains the only Republican candidate to mount a serious and sustained challenge to today’s American trade policies. And as his China paper made clear, his diagnoses and prescriptions are every bit as substantive as those embodied in numerous bills introduced to overhaul Washington’s longstanding approach. But Trump’s crusade faces obstacles aplenty already – including the establishment-coddling media’s determination to keep branding him an ignoramus even when this accusation is wildly off base. He can’t afford to give them any real ammunition.
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