Tuesday, February 9, 2016

How Would a President Sanders Approach Trade Policy?

During the last Democratic presidential debate, Chuck Todd opened a question to Bernie Sanders by pointing out that he had never supported a trade deal during his time in Congress. He then went on to ask whether or not as president, that would allow a country like China to set the rules of trade for the world. Here is how Sanders responded.
Chuck, I believe in trade, but I do not believe in unfettered free trade. I believe in fair trade which works for the middle class and working families of this country and not just large multinational corporations...

We heard all of the people tell us how many great jobs would be created. I didn't believe that for a second because I understood what the function of NAFTA, CAFTA, PNTR with China, and the TPP is, it's to say to American workers, hey, you are now competing against people in Vietnam who make 56 cents an hour minimum wage.

I don't want American workers to compete against people making 56 cents an hour. I don't want companies shutting down in America, throwing people out on the street, moving to China, and bringing their products back into this country.

So, do I believe in trade? Of course, I believe in trade. But the current trade agreements over the last 30 years were written by corporate America, for corporate America, resulted in the loss of millions of decent-paying jobs, 60,000 factories in America lost since 2001, millions of decent-paying jobs; and also a downward spiral, a race to the bottom where employers say, "Hey, you don't want to take a cut in pay? We're going to China."
That answer clarified a few things, but left a lot of questions. I notice, for example, that Sanders says that he supports "trade," but never said that he would support a "trade deal." One has to assume that when he calls for "fair trade," he is imagining a trade deal that he thinks if fair to American workers.

If that is a correct assumption, then it would be helpful to hear what kind of trade deals we could expect a President Sanders to negotiate. When he points to the problem of American workers having to compete with people in Vietnam who make 56 cents an hour, would he attempt to negotiate a $7,  $10 or $15 an hour wage for the Vietnamese people via a trade deal? Or would he simply refuse to trade with any country whose minimum wage was below ours (or what we want it to be)? Perhaps a trade deal negotiated by President Sanders would simply insist on worker's rights to organize for a better wage - as do the side deals the Obama administration negotiated with Vietnam, Malaysia and Brunei via the TPP. But as we've seen in the past, there are significant problems that arise in enforcing those commitments. How would a Sanders administration deal with that?

What Sanders raised as concerns about trade deals are actually the result of dealing with a global economy. Most liberals who reject the TPP seem to recognize this reality and the attempts in recent agreements to narrow the divide. They tend to have other issues with TPP. For example, David Cay Johnston (like Sen. Elizabeth Warren) has zeroed his critique in on the expansion of the Investor-State Dispute Settlement provision. I assume that Sanders shares that concern. So it would be helpful to know what he envisions as an alternative.

Many have noted that on questions of foreign policy, Bernie Sanders does not present his case as strongly or effectively as Hillary Clinton. But when it comes to trade policy, it is clear that Sanders is very passionate. My concern is that he has expressed that primarily in terms of what he is against. We have heard almost nothing from him about what he envisions a fair trade agreement would look like.

I am not suggesting that, in this campaign, Sanders needs to lay out specific detailed answers to the questions I've raised. But it would be helpful if he would identify some goals and principles on how he proposes to deal with trade issues. As many pundits have pointed out recently about Republicans, to merely be against something is not enough.


  1. About the TPP ... I think the Left has pounced on the TPP as a proxy for NAFTA. Democrats who want to distance themselves from NAFTA are 20+ years too late to cast a "nay" vote, so they've decided that the TPP is worse than NAFTA so they can prove how much they hate NAFTA.

    But the TPP includes provisions that any progressive worth the name should be in favor of. Cracking down on child labor and involuntary servitude, or establishing minimum wages and labor unions (as mentioned in your article) ... those are good things. And what's more, the enforcement mechanism is not fines (which can be interpreted as the costs of doing business), but trade itself: TPP member nations are forbidden to import goods produced in part or in whole through child labor / involuntary servitude, which renders them UNPROFITABLE. That's a pretty good enforcement mechanism.

    Now back to Sanders, who says ...

    "I don't want American workers to compete against people making 56 cents an hour. I don't want companies shutting down in America, throwing people out on the street, moving to China, and bringing their products back into this country."

    ... okay Bernie, if the TPP does indeed lead to Vietnamese workers getting better wages and union representation, we won't be competing with them at 56 cents an hour, will we? In fact, if Vietnam is no longer a source of dirt cheap labor, is there some sort of chance of businesses deciding it makes sense to return to the United States? It's entirely possible; not a guarantee, but certainly more likely than any of Sanders' big promises.

  2. The solution is simple. You just have to make the product more expensive to purchase when it is imported rather than when it is made here.