Why Americans Are Turning Against Free Trade

When the proceeds of growth are not widely shared, the consensus in favor of pro-growth measures cracks.

Edgar Su / Reuters
A decade and a half ago, I filled my days writing speeches urging Congress to grant President George W. Bush fast-track trade authority. If memory serves, I wrote more speeches on that one subject than on any other. Obviously, I didn’t earn my pay: Despite Republican majorities in both Houses, Congress balked.
This past year, President Obama has worked as hard for fast-track authority as President Bush ever did. It now seems that his efforts will prove as unavailing. This time, if anything, the loss is even more heartbreaking, because the prize in reach is bigger than anything on offer in 2001-2002: a Trans-Pacific Partnership on trade.
TPP matters both to the American economy and to American security. China’s admission to the World Trade Organization in 2001 was necessary and unavoidable. How can you sustain a multilateral-trade regime without including the world’s largest exporter and second-largest importer? But the price of China’s inclusion in the WTO was the paralysis of the multilateral trade regime that had evolved since the 1940s: Trade-liberalization negotiations that included China just became too difficult.
The Trans-Pacific Partnership tries to work around China’s obstructionism by limiting the next round of trade liberalization to 11 highly congenial countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Not all are liberal democracies, but all are committed to a more open global-trading regime. Even more than the U.S.-Canada trade agreement of 1988, which was widened to include Mexico in 1994, TPP is intended to be an “open architecture” agreement, to which other countries can adhere in future if they so wish. In other words, while the door is open to China, the house is being built to non-Chinese specifications and without China’s veto. Since the TPP states together represent not only 40 percent of the world economy, but also many of China’s largest trade partners, the agreement will constrain China’s future trade behavior. TPP thus asserts Western and American will and power against an often-recalcitrant China.
TPP also will accelerate economic growth among the member nations. The importance of trade to the U.S. economy can be oversold—in my speech writing days, I was surely guilty of this to some degree—but by any definition, it’s significant and becoming more so. The slowdown in developed world growth since the late 1990s has many causes beyond the stall in trade liberalization. But the stall in trade liberalization has not helped.
The natural tendency of democratic societies is gradually to accumulate barriers to international trade. The Bush administration itself exemplified this: At the same time as it pleaded for fast-trade authority, it imposed restrictions on foreign steel. Relentless international action on trade liberalization offsets equally relentless domestic pressure for trade protection.
Freer trade is always a tough vote. As long ago as the 1960s, Barry Goldwater tried to make a campaign issue out of John F. Kennedy’s allegedly excessive trade liberalization.  Yet from the 1940s through the 1990s, freer trade benefited from the almost unanimous elite consensus in its favor—and the strong public instinct to defer to elites when unanimous.
That deference has eroded. A recent Pew Research poll found that although 58 percent of Americans felt that free trade benefits the national economy, just 43 percent thought such deals benefited their own families finances. And pluralities of Americans believe that free trade slows economic growth, lowers wages, and leads to job losses.
These are responses that cause economists to roll their eyes. But most of us aren’t economists. We know what we experience—and what most Americans have experienced are many more foreign products on their shelves, a half-decade of weak job growth for Americans, and stagnating or declining living standards for all but the wealthiest.
Economic and political leaders can argue that the nation’s economic troubles are not traceable to free trade—that Americans would have been even worse off if they reverted to protectionism. The trouble is that Americans no longer trust their leaders. If polls can be relied upon, trust in leaders and institutions has plunged to the lowest levels ever recorded, lower even than during the dismal days of the mid-1970s.
The belief that the economic system is rigged in favor of the wealthy and that ordinary people can no longer get ahead run is especially intense. Americans increasingly perceive the rich getting richer, the poor getting poorer. Their view of business corporations has turned especially hostile, very nearly as hostile as their view of government.  
Trade is a pro-growth policy. But when the proceeds of growth are not widely shared, and not perceived as widely shared, it becomes difficult to sustain the consensus in favor of pro-growth measures—especially when those measures seem to impose costs on American workers. That’s the warning in today’s congressional action.