The GOP's Growing Rift on Trade

A party that has embraced free trade as a bedrock principle is increasingly divided on that question, particularly in the White House contest.

Republican presidential candidate Donald Trump speaks at a rally in Las Vegas on Monday. (AP Photo/John Locher)

The Republican Party has split anew on one of its core tenets—free trade—and the question is how long the war will last.

While the GOP has largely supported free trade for over three decades, its top-tier presidential candidates are split on the recently-struck Pacific trade accord, the most significant in a generation. And Donald Trump, the GOP front-runner, has been labeled by The Wall Street Journal as potentially the most protectionist nominee since Herbert Hoover.

The Trumped-up rhetoric on closing down the borders—both to humans and to trade—is so divisive that it endangers a split within the party, says Stephen Moore, a conservative economist who founded the Committee to Unleash Prosperity with Steve Forbes, Larry Kudlow, and Arthur Laffer. He thinks Trump's candidacy pits a pessimistic, “1950s-style” Republican populist wing versus an optimistic, free-market wing of the party.

“Here’s my big worry right now, as you follow what’s happened in the last year or so and especially in the last six weeks or so,” said Moore in a phone interview. “I’m very nervous that Republicans are becoming a kind of ‘close the border’ party—close the border to people, close the border to goods and services. And that’s bad economics. It’s terrible economics. And that’s the wrong direction.

“I worry that the party is going down this Pat Buchanan wing of the party—that’s now the Donald Trump wing—is ascendant,” added Moore. “There’s now becoming a rift within the party between the ‘build the wall’ party and the—I think—the party Reagan [built.]”

More than 30 years ago, Ronald Reagan campaigned on a North America Free Trade Agreement and, when he became president, entered the U.S. into the first free trade agreement with Israel. His emphasis on expanding trade and lowering trade barriers in an effort to increase economic growth and create better paying jobs stuck with the establishment wing of the party. In 2012, the GOP platform stated: “A Republican President will complete negotiations for a Trans-Pacific Partnership to open rapidly developing Asian markets to U.S. products. Beyond that, we envision a worldwide multilateral agreement among nations committed to the principles of open markets, what has been called a ‘Reagan Economic Zone,’ in which free trade will truly be fair trade for all concerned.”

Yet of the nine top-tier candidates taking the GOP presidential debate stage Tuesday night, at least four oppose the Trans-Pacific Partnership. Congressional approval for TPP, which was recently reached by the U.S. and 11 other countries around the Pacific Rim, is under severe political pressure. Senate Majority Leader Mitch McConnell said Tuesday that he is “disappointed” but undecided on the agreement—and warned President Obama that voting on his potentially last legacy-defining achievement should wait until after the 2016 election.

“I think he ought to take into account the obvious politics of trade at the moment in our country,” McConnell said at a Politico-sponsored breakfast.

The issue is blurring all kinds of lines. Along with both unions and the “Middle American Radical,” Hillary Clinton and Donald Trump, Bernie Sanders and Ted Cruz all oppose the pact.

The vast majority of Democrats in Congress oppose the agreement, as they think TPP would outsource American jobs and depress wages. Republicans are split. Many are particularly skeptical of this agreement because it was negotiated under the Obama administration, which has deemed TPP the most progressive pact in U.S. history, and are concerned it places burdensome environmental and labor regulations. McConnell and the North Carolina GOP congressional delegation have concerns about various tobacco provisions, and some Republicans, particularly Sen. Orrin Hatch of Utah, believe the intellectual-property protections for pharmaceutical companies producing biologic drugs aren’t strong enough.

But other conservatives are keen on lowering tariffs and taking advantage of greater economic trade with the Pacific nations surrounding China. Grover Norquist, the chief of Americans for Tax Reform, supports the pact, while acknowledging flaws in intellectual-property provisions, among others.

“This is both sound foreign policy and it’s great economic policy,” Norquist told National Journal. “It’s 4,000 pages of tax cuts. Tariffs … tariffs suck. Tariffs kill jobs. Tariffs slow the economy. This is good. It’s not everything you wanted—no. But it’s progress towards almost everything you wanted.”

The GOP opposition, in his mind, “has everything to do with who wrote it and not what’s in it.”

Whether this juncture signifies a greater surge in the populist wing of the GOP—or merely measures a passing moment, as others have before—is up for debate.

“There’s a Buchanan wing that’s been anti-trade, anti-immigrant for quite some time, and we’re just seeing another round of that in Cruz and in Trump,” says Douglas Holtz-Eakin, the director of domestic and economic policy for John McCain’s 2008 presidential campaign. Holtz-Eakin, who served in George W. Bush’s Council of Economic Advisers, can remember the Republican-led House’s squeaker vote in 2002 granting the White House enhanced trade-negotiating powers. “Not a new phenomenon. Visible on the campaign trail—I don’t disagree with that. It’s been around before.”