In recent days, President Barack Obama and much of the Democratic establishment have doubled down in support of the TPP, especially in light of Donald Trump's measured speech yesterday about his plan to cut taxes and renegotiate America's trade deals.
But it's time to get something straight, this isn't a partisan issue.
So-called free trade is bad for the American middle class, and it has been ever since Ronald Reagan, the Republican savior himself,
declared that "Almost all responsible economist, … are unanimous. They agree that free and fair trade brings growth and opportunity and creates jobs. And they warn that high trade barriers, what is often called protectionism, undermines economic growth and destroys jobs. I don't call it protectionism; I call it destructionism.".
It's been just over 30 years since Reagan proclaimed that, and every president since then has followed the religious belief that so-called "free trade" will save us all.
And 30 years later, it's pretty clear that Reagan was dead wrong about trade, and so are the Democrats today who are saying the same thing.
The fact is, sweeping trade deals like NAFTA, the TPP, and the Transatlantic Trade and Investment Partnership only benefit the CEOs of the corporations that are at the negotiating table.
Democratic proponents of so-called free trade make it seem like the options are either antiquated tariff-based protectionism or forward-thinking globalist "free trade" deals.
But Democrats have historically been the party that opposes these sort of sweeping corporate-managed trade deals and supports the kind of tariff based, or VAT tax based, trade that made America the most powerful manufacturing powerhouse that the world had ever seen.
The truth is, the only way that countries can really benefit through trade is if the two countries have different resources or different specialties, what economist David Ricardo called "comparative advantage".
For example, the soils in France are well-suited for growing grapes for wine, and the soils in Scotland are better for growing barley and wheat.
By applying human labor to fields and grapes and grains, both countries would have used their comparative advantage, their soil and climate, to produce a product to trade with that benefits citizens of both nations. Everybody in both countries can eat bread with their wine.
But what happens if France starts growing wheat in a big way, in addition to making wine? What happens if they can grow it cheaper than Scotland? In a 'free trade" scenario, that would lead to Scottish farmers getting wiped out by French wheat exports, which could then lead to hungry, poor Scots fleeing Scotland for the relatively more prosperous France, producing a challenge for both nations.
And that is, by the way, virtually exactly what happened when Mexico and the US signed NAFTA and US corn growers began selling super-cheap corn into Mexico where small, subsistence-level farmers were previously the major source for that staple in the Mexican economy. Our cheaper corn put over a million Mexican farmers out of work, driving some into the slums of Mexico City, and others across the border into the US in search of work.
It seems like a deal that would advantage one country and screw another, and, interestingly, that's exactly what "free trade" was originally designed to do.
