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What the right “gets” about free trade

For Canadians, the American presidential primaries always promise great entertainment value. They’re showy, strewn with flags and red, white and blue balloons flooding the convention floors. They’re full of one-liners and zingers, and full-frontal combat.

And this year, there is a surprising turn in the election. The TPP, the Trans-Pacific Partnership, the mega-agreement with 40 per cent of the world’s economy, is turning many voters sour. It, and NAFTA before it, evoke an allergy to free trade agreements in general.

Many of the frontrunners have come out against the TPP. Ten of the original presidential candidates, both Republican and Democrat, have opposed it.  Hillary Clinton has rallied against an undemocratic deal. Bernie Sanders has made it a rallying cry. 

But no one has made it their cause as much as Donald Trump. 

While many may laugh at him, and many of his ideas are frankly terrifying, Trump has gained substantial momentum railing against NAFTA and TPP. 

In the Guardian, Thomas Frank writes, “In each of the speeches I watched, Trump spent a good part of his time talking about an entirely legitimate issue, one that could even be called left-wing. Yes, Donald Trump talked about trade. In fact, to judge by how much time he spent talking about it, trade may be his single biggest concern.”

In the New York Times, Jared Bernstein, a former economic advisor to U.S. Vice President Joe Biden, has argued that it is the end of the free trade era, and that this may be a good thing.

He writes, “It is unquestionable that expanded trade has vastly increased the supply of goods and services and has thus contributed to lower costs for consumers. But basic trade theory connects prices to wages, and in the United States, globalization is widely accepted as a contributor to both wage stagnation and the growth in inequality. For example, the real wage for blue-collar manufacturing workers in the United States is essentially unchanged over the past 35 years, while productivity in the sector is up more than 200 per cent.”

Another day. Another New York Times article. This one points to studies on areas affected by free trade: “Wages remain low and unemployment high in the most affected local job markets. Nationally, there is no sign of offsetting job gains elsewhere in the economy.… These results should cause us to rethink the short- and medium-run gains from trade. Having failed to anticipate how significant the dislocations from trade might be, it is incumbent on the literature to more convincingly estimate the gains from trade, such that the case for free trade is not based on the sway of theory alone, but on a foundation of evidence that illuminates who gains, who loses, by how much, and under what conditions.”

In many countries, there is a debate over how much power we give to corporations.  And it is boosting populist right-wing parties and left-wing parties that are against trade. In Europe, many of the right-wing parties such as France’s Front National or Poland’s Law and Justice Party are opposing free trade agreements.  At the same time, from the left of the spectrum, voices such as Bernie Sanders and Jeremy Corbyn are also targeting free trade. Often, these messages are mixed with an anti-Wall Street or anti-elite message.  In the meantime, the centre and centre-left fail to gain steam.

There is a reason for this. It is important for all political parties to address these issues. Inequality, whether determined by income, gender, race, disability or sexual orientation, is very much alive. And these deals are not making it better.

Photo:  Matt Johnson, Flickr Media Commons

Originally posted on the Huffington Post.