If Trump and Clinton won't defend free trade, then someone must
Across the world’s developed economies, free trade has become a whipping boy – a convenient explanation for why wages have stagnated and why low-skilled jobs have either migrated abroad or been filled at home by foreign workers. Protectionists have had all the running. In Europe and America, trade unions and radical environmentalists have already torpedoed an EU-US deal. Now the Canadian-EU deal is on the rocks, we should take seriously Donald Tusk‘s warning that it could be Europe’s last.
In fact, free trade bashing may already be having an effect. In September, the World Trade Organisation forecast that, for the first time in 15 years, global trade will grow at a slower rate this year (1.7 per cent) than overall GDP (2.2 per cent).
If the next US President won’t extol the virtues of openness – and given her recent comments, Hillary Clinton can’t be relied on – then the rest of us must. It will be an uphill struggle. Rhetoric around the closure of yet another factory makes a great headline; it can be easily understood. But it only paints half the picture.
Clearly, talking about the projected increase in GDP from a new trade deal hasn’t worked. Instead the challenge is two-fold. First, ensure the benefits of free trade to ordinary consumers are well-understood and, second, restore a sense of moral purpose to the debate.
The first should be easy. Consumers are the primary beneficiaries of lower tariffs because they cut the cost of foreign imports on the high street, but also enable economies to focus on where they add the most value, raising growth overall.
The second is harder. Trump and his ilk have such attraction because free trade is seen as something decided upon behind closed doors, influenced by global corporations to the detriment of the man on the street. It never used to be like this. The Anti-Corn Law League, which successfully campaigned to scrap taxes on imported wheat, turned the issue into a moral crusade, raising the lot of the consumer against the interests of producers.
The idea that hiking tariffs and ending openness would make anyone better off is simply untrue. Now more than ever, we must make our voices heard.