Free traders wax nostalgic for bygone globalized era

Trade hawks are sounding wistful for the period of intense corporate trade liberalization from which both the Biden and Trump administrations have increasingly been moving away.

It was one around which a big business consensus had formed over the last several decades and the move toward a less free trade focused chapter has alarmed some of its original architects.

Speaking at an online event on Wednesday, former Ohio senator and U.S. Trade Representative during the Bush administration Rob Portman took issue with recent positions put forward by key Biden administration officials and said the free trade agenda was having “trouble.”

“We’re having so much trouble right now moving the trade agenda forward,” Portman said, while acknowledging the 2020 enactment of the U.S.-Mexico-Canada Agreement (USMCA), the update to the seminal NAFTA deal that ushered in the modern period of international business agreements lumped together under the term “free trade.”

The USMCA, which was negotiated during the Trump administration, moved in the opposite direction from many of the trade agreements that came before it, advancing stronger worker protections and doing away with a dispute mechanism long favored by corporations.

Last month, top Ways and Means Democrat Richard Neal (Mass.) described the USCMA as “the most pro-worker trade agreement ever” while taking issue with some core assumptions about the role of markets in the globalized economy.

“Opening the U.S. market to imports from other countries can, and has disrupted domestic industries,” Neal said during a field hearing of the committee in New York.

Portman on Wednesday espoused the opposite set of views, criticizing another new U.S. trade agreement with countries in the Asia-Pacific region for its lack of provisions on market access – one of the foundational aspects of the free trade agenda.

“The problem is, it doesn’t have any teeth in the sense that it doesn’t have any market access provisions,” he said of the trade deal known as IPEF. “It’s been viewed rather skeptically by countries in the region because they aren’t getting market access.”

Portman’s remarks come in the wake of big, programmatic speeches by the current U.S. Trade Representative Katherine Tai and National Security Advisor Jake Sullivan, who took similar aim at deep-rooted tenets about global economics.

“Our trade policy places workers at its center to reflect the reality that the consumer who enjoys the low prices of imported goods is also a worker who must withstand the downward pressures that come from competing with workers in other parts of the world toiling under exploitative conditions,” Tai said in a speech earlier this month.

In April, Sullivan endorsed the notion of “industrial policy,” the set of economic policies that came before widespread trade liberalization as well as the globalized production and distribution pipelines that set climate change into overdrive.

“In the name of oversimplified market efficiency, entire supply chains of strategic goods, along with the industries and jobs that made them, moved overseas. And the postulate that deep trade liberalization would help America export goods, not jobs and capacity, was a promise made but not kept,” Sullivan said.

Exactly where trade policy fits into this potentially new direction for the U.S. economy isn’t clear, but signs of the reality of re-industrialization are beginning to emerge, including a spending boom on U.S. factory construction.