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The Neoliberal Trade System is Dying

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Dayen is correct in arguing that for however idiotic Trump’s tariffs, the old neoliberal trade system was due for a rejection because it so consistently prioritized corporate interests globally over workers’ interests anywhere. Eventually, people aren’t going to accept this.

The United States lost five million manufacturing jobs from 2000 to 2014, while the U.S. trade deficit peaked at nearly 6 percent of gross domestic product. Economists like David Autor call this the China shock, because it occurred on a similar timeline as the country’s 2001 entry into the World Trade Organization. The bounty of cheap Chinese goods had a real human cost here at home.

The losers in this exchange were subsequently ignored, told that temporary wage assistance or retraining programs would paper over these trifling problems. As Jared Bernstein and Lori Wallach put it in a 2016 manifesto calling for progressive trade, “The hollowness of these false promises is finally evident to the broad electorate. The rules must be written for all the cars on the road, not just the Lamborghinis.”

Trump promised to govern for those without Lamborghinis—the “forgotten men and women.” He isn’t doing a whole lot for them, but he capitalized on their discontent, a toxic stew of racial, cultural, and economic grievances. That gives him the rope to impose aggressive tariffs, even if they might harm communities where his base lives. Maybe manufacturing communities are willing to live with Trump’s haphazard experiment because they have already lost millions of jobs in what feels like a long-running trade war—one in which, for decades, the United States never fired a shot on their behalf.

On the other side of this equation is outsourcing enriched multinationals far more than it did any third-world factory worker. Bangladeshi garment workers who saw a textile mill collapse over their heads, or Chinese workers at Foxconn who had large nets installed at their plants to catch colleagues attempting suicide, probably don’t make them feel like they’re on the winning end of the trade exchange. Companies move manufacturing plants to wherever they can pollute the most and pay the least. Bolstering workers isn’t really the goal.

All of this makes the global trading system more like a global disaster waiting to happen, susceptible to discontent from workers all over the world, in industrialized and developing countries. The path outlined by progressive trade analysts would create global labor standards, with decent wages and working conditions and health safeguards, adjusted for the level of development in a particular country. In their telling, with solid standards in place, businesses would have less incentive to outsource, and workers get to share in the benefits of trade.

Dayen goes on to link to my work on trade, which I appreciate, because as I have said for a long time, the left has basically ceded the field to corporations to set trade policy because “NO!” is not an answer. We have to get serious about just what we want global trade to look like. Since we know there will be global trade, what should the checks and balances on it be? What is the enforcement mechanism for labor protections? How should monitoring happen? These questions aren’t real sexy, but there are many high-paid lawyers figuring this out in ways that do not help everyday people. Until we challenge them at the point of legal production, we lose. The question Democrats have to face is what is our answer to Trump on trade. Right now, the Party doesn’t really have one. The left is taking over on a lot of issues–immigration, job creation, racial policy–but not on trade. We are still loudly silent. That has to change.

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