How the Obama trade agenda can advance progressive goals

In the last month, protesters have camped out in the Washington office of Sen. Ron Wyden (D-Ore.) and have even flown a 30-foot blimp over his town halls in Oregon. The senator’s offense? As the ranking member of the Senate Finance Committee, Wyden is negotiating with the Obama administration and pro-trade Republicans and Democrats on Trade Promotion Authority (TPA)—legislation that would set requirements for new trade agreements and rules for how they’re considered by Congress.

Wyden believes that—if done right—new trade deals with Asia (TPP) and Europe (TTIP) coupled with strong enforcement can promote stronger growth and good jobs in his trade-dependent state, while also advancing important values like environmental protection, labor rights and an open Internet.

{mosads}For the protesters, however, opposition to free trade agreements is an article of faith in their version of the progressive cannon.  Since the great NAFTA debate of the 1990s, trade has often been a polarizing issue among progressives. But key developments since then—the rise of China, the dramatic growth in digital trade via the Internet, and concerns about a long-term slowdown in U.S. growth—give progressives good reasons to think again.

Trade-skeptical Democrats should use the debate on Trade Promotion Authority to take a fresh look at President Obama’s far-reaching trade initiatives. As we’ve detailed in a recent Progressive Policy Institute report, open-minded progressives can find many examples of how the Administration is combining smart trade policy and progressive ideals to advance vital goals while strengthening both the United States and the global economy:

Tapping into Global Growth. Assuring that Americans have a fairer slice of the economic pie is easier when the pie is growing.

In the past, America’s middle class fueled growth in the rest of the world. Now, an exploding global middle class—especially in Asia—can return the favor. By 2030, Asia will add 1.2 billion new middle class consumers to the global economy. These global consumers will want to buy what America has to sell—from wholesome food and cutting-edge consumer products to modern financial services and health care.

Trade initiatives like the TPP can help America’s businesses and workers tap into growing global demand by eliminating high duties, discriminatory standards, and other significant barriers to U.S. exports.  And­—if combined with progressive initiatives in areas like education and training—growing trade can help support broad-based American prosperity.

Democratizing Trade. Trade agreements can also “democratize” trade by empowering small business and global consumers.

The Internet and services like eBay and FedEx make it increasingly possible for America’s small exporters to sell globally as easily as their bigger rivals. Small firms that export do well—with 20 percent greater productivity and 20 percent higher job growth than those that don’t. But an array of trade barriers—including high duties and fees and complex standards—still make it difficult for smaller exporters to compete.

U.S. trade negotiators are focusing intensively on eliminating small business trade barriers in the TPP and T-TIP. And they’re working to foster a robust trade ecosystem for small traders by promoting transparent rules, open electronic commerce, and strong protection for innovation. Opening up modern Internet-enabled trade can provide global consumers with greater choice, freedom, and economic power, as well.

Leading on Fairer Trade. Trade agreements like TPP and T-TIP help America lead coalitions of like-minded countries that seek a fairer global trading system in which abuses like exploiting workers, despoiling the environment, or blocking the Internet are not longer accepted means of competition. 

Based on a 2007 deal initiated by House Democrats, U.S. trade agreements now include strong and enforceable rules that require trading partners to abide by and enforce fundamental labor rights and key environmental laws and agreements. TPP and T-TIP negotiations afford the opportunity to extend these—and other important progressive principles—to two-thirds of global trade. If America doesn’t lead, however, countries like China may succeed with a competing trade model—one that ignores values like worker rights, environmental protection, and an open Internet.

Updating Trade Rules.  New trade deals also provide the opportunity to update old trade rules and write important new ones.

Critics of NAFTA, for example, have long complained that its “side agreements” on labor and the environment contain weaker requirements that are neither part of NAFTA nor enforceable under that agreement. Negotiating with Canada and Mexico in the TPP can help assure that trade with America’s first and third largest trading partners is governed by strong, modern, and enforceable labor and environmental rules.

Additionally, new trade agreements can address an array of emerging challenges to U.S. trade, including State-Owned Enterprises that use government subsidies and special privileges to gain unfair advantages, and a growing list of barriers to innovation and electronic commerce.

Supporting a Progressive Growth Agenda. Finally, progressives can use a thoughtful trade debate to remind colleagues that trade is only one piece of America’s larger economic puzzle.

A new study by Progressive Economy concludes that trade is likely not a major cause—nor a major solution—for the serious problem of income inequality. The study notes that trade policy can make key contributions by, for example, driving stronger growth and reducing high duties that particularly impact lower-income Americans.  But, ultimately, solving America’s major economic problems will also require many domestic initiatives long championed by progressives, including better access to education and training, and investment in innovation and infrastructure.

When it comes to trade, not all progressive-leaning Americans are flying protest blimps. Indeed, according to recent polling, some 60 percent of Democrats and 65 percent of millennials believe that trade deals like TPP and T-TIP are “good” for America. It’s time for progressives to avoid reflexive opposition and take a fresh look at the U.S. trade agenda.

Gerwin is senior fellow for Trade and Global Opportunity at the Progressive Policy Institute and president of Trade Guru LLC.