- By Phil LevyPhil Levy is Senior Fellow on the Global Economy, The Chicago Council on Global Affairs, and teaches strategy at Northwestern University’s Kellogg Schoool of Management.
What are the early prospects for Republican presidential leadership on trade? Dan Drezner and Scott Lincicome last week took Gov. Tim Pawlenty to task for his debate remarks on the topic. Pawlenty espoused "fair trade" and increased enforcement as the primary response to the country’s manufacturing employment woes. Dan ultimately decides that Republicans look no better than President Obama — effectively "a pox on both their houses." To strike this balance, he credits the Obama administration with renegotiating the Korea FTA and with "signaling strong interest" in the Trans-Pacific Partnership (TPP).
The exculpation of the president is unusually generous on Dan’s part. After two years of sitting on the Korea FTA, the administration managed to renegotiate in such a way as to slow liberalization. The TPP holds enormous promise, but no end line is in sight and the administration has not even sought negotiating authority yet. Where the administration has moved on trade, it has usually been in response to strong pressure from Congress (mostly, but not exclusively, from Republicans).
However, tallying up each party’s merits and demerits on trade is a distraction from the more important point. We know from two years of experience that President Obama is inclined, at best, to "lead from behind" on trade. At a time when global trade talks are engaged in a prolonged and dramatic death scene and U.S. foreign relations increasingly hinge on the ability to cement commercial ties, there is a desperate need for leadership of the sort that can only come from the White House. Dan and Scott are right to scrutinize the Republican candidates and see whether any of them might provide it.
There is a temptation to excuse statements like Pawlenty’s. After all, in his call for "fair and open trade," he was hardly embracing protectionism. Fair trade is the sort of elastic term that means different things to different groups, but seems to poll well with all of them. Isn’t this just smart politics on Pawlenty’s part? Why should Republicans cede enforcement fervor and the embrace of fairness to the Democrats? This could be cast as the equivalent of a pro-motherhood, pro-apple pie platform.
Such temptation should be resisted. It is misleading to tell Americans that the prime cause of manufacturing job loss lies with imports. This offers the false hope that very real employment problems can be fixed with judicious application of trade barriers. As with any snake oil, there is the dual danger that the potion will not work and that reliance on the false cure will preclude a search for a true remedy. One of the great challenges that any American leader will face in coming years is how to structure the social safety net to meet a job market that is far more dynamic than in times past, one in which Americans will change both employers and perhaps their type of employment with greater frequency than ever before. Trade is one driver of this dynamism, but technological change and domestic competition are at least as important, likely more. Any candidate who misses the broader challenge and misattributes the problem to foreign cheating is not just pandering; they are failing to engage on a central economic issue and missing an opportunity to win a mandate for a much-needed policy response.
There has been an intriguing battle among Republican candidates, in the wake of Indiana Gov. Mitch Daniels’s withdrawal from consideration, to claim the role of Teller of Difficult Truths. The first skirmishes have come over ethanol subsidies, which some candidates — including Pawlenty — have dared to oppose (though John Dickerson has questioned just how brave this stance really is). Trade offers the candidates another such opportunity. It may be too soon to render final judgment, but it will be telling to see which candidates use the opportunity to offer a vision for American engagement in modern commerce and which opt to pander to easy prejudices.