There is reason for grave concern about the direction of U.S. trade policy. The bipartisan, pro-trade consensus, which served U.S. economic and diplomatic interests so well for so long, collapsed during the final two years of the Bush administration.

Congressional skeptics, who helped derail the U.S. trade agenda, have increased their ranks in the new Congress. And, already grim economic conditions appear to be growing worse, making the political climate even less hospitable to arguments favoring trade and globalization.

Trade Should Be a Priority

Yet, touting trade’s virtues is exactly what President Obama and his cabinet should be doing. For the sake of the economy and the prudent exercise of foreign policy, restoring the pro-trade consensus should be an economic and diplomatic priority of the new administration.

U.S. consumers’ access to imported goods extends family budgets. U.S. manufacturers’ access to imported raw materials, components, and capital equipment helps hold down production costs, which enables producers to pass on savings to consumers and increase profitability and investment. And, access of U.S. manufacturers, farmers and service providers to the 95 percent of the world’s consumers that are living outside the United States is needed to accelerate the nation’s return to economic growth.

The President Needs Help

President Obama has expressed a desire to repair America’s damaged credibility abroad. But making amends for unilateralist missteps during the Bush years will be difficult without first challenging—and reversing—the congressional leadership’s increasingly unilateralist approach to trade. The president’s repudiation of the “Buy American” language in the so-called stimulus package was a commendable start. But he must do more.

Reaching out to Hugo Chavez in Venezuela, while Congress continues to deny Colombia—our staunchest ally in the region—the courtesy of a vote on the long- pending U.S.-Colombia Free Trade Agreement, will further damage America’s credibility. Turning our backs on another long-pending trade agreement with South Korea will be seen as a sign of U.S. disengagement from an increasingly China-centric Asia.

Public Opinion Continues to Fall

According to public opinion polls, American sentiment toward international trade and globalization has been souring steadily throughout this decade. Recent surveys find Americans believing, in historically large numbers, that free trade leads to job losses, lower wages, higher prices, and economic contraction. Other surveys find that Americans believe there is more to fear than to embrace about international trade and globalization.

That Americans hold these views is one of the great ironies of the early 21st century. After all, increasing international trade and investment over the past several decades have been catalysts for the unprecedented wealth creation and robust economic growth experienced in the United States and around the world.

Most Americans have been beneficiaries of sustained U.S. economic growth. Most Americans enjoy the fruits of international trade and globalization every day. Most do not harbor antipathy toward trade because they or someone they know lost a job to foreign competitors or because of out- sourcing. It is simply implausible that the degree of antipathy toward trade reflected by survey results is driven by past personal experiences or any realistic fears about the future.

Disseminating Misinformation

Could it be that U.S. policymakers and the media have helped shape and reinforce these negative attitudes? After all, anti-trade rhetoric flows from Congress and the media into America’s livingrooms via cable news—sometimes shortly before pollsters call, seeking opinions about trade. Those opinions are then cited by policymakers as evidence that their own hostility toward trade reflects the views of a worried American public. And the vicious circle spins on.

Congress and the media have indeed been central to the perpetuation of three myths. Both have spoken for years about the decline of U.S. manufacturing as though it were fact, when the overwhelming evidence points to a sector that, until the onset of the current recession, was robust and setting performance records. Both ascribe bloated significance to the U.S. trade deficit without attempting to convey or even understand its causes, meaning, or implications. And both contend that this alleged decline of manufacturing and the rising trade deficit attest to the Bush administration’s failure to enforce existing trade agreements.

The media’s motive is straightforward: it is giving its customers what they seem to want. Frankly—and regrettably—Americans seem to be more captivated by stories of gloom and doom than by factual, logical arguments that are devoid of sensational imagery. For that reason, the media seem to favor the anti-trade narrative.

Members of Congress are motivated by the imperative of reelection, which for the Democratic Party means doing the bidding of organized labor—a special interest that opposes international economic engagement and allowing Americans the choices that trade affords. Meanwhile, economic nationalists from the Republican Party see trade as a zero-sum game, and a losing proposition from a national security perspective. They oppose U.S. policies that benefit potential adversaries, regardless of how enriching those policies may be to Americans.

Ignoring the Benefits of Imports

The Bush administration was also complicit—although sometimes unintentionally—in this shaping of adverse public opinion. The very fact that former president George W. Bush (one of the least popular presidents in history) supported trade liberalization was reason enough for many people to question its virtues. But more substantively, President Bush and his trade policy team spent too much time touting the benefits of exports while downplaying or ignoring the benefits of imports. In so doing, the administration reinforced public misconceptions that imports are bad and that our large trade deficit is proof that the United States is losing at trade.

For our part, pro-trade advocates have failed to make a convincing and durable case for why free trade is superior to the alternatives. The factual arguments are compelling, but tend to be lost on a public that is more susceptible to depictions of worst-case scenarios and the ill-conceived policy bromides that follow. We need better salesmanship.

A Call to President Obama

The authors’ intention in this article is to make the arguments for freer trade more accessible and compelling so that the Obama administration may be more inclined to carry that message. Restoring the pro-trade consensus in America should be among the most important—and least expensive—objectives of the Obama presidency. Particularly in this time of economic contraction, if the United States indulges misplaced fears and attempts to retreat from the global economy, the country will suffer perennially slower economic growth, which could adversely affect U.S. living standards. Neither Democrats nor Republicans want this to be our nation’s fate or their political legacies.

The steadfast determination of the U.S. president to arrest and reverse America’s misguided and metastasizing aversion to trade would help restore the pro-trade consensus. But that first requires that the president be familiar with the lingering misperceptions and political circumstances that have driven the backlash against trade.

This article appeared in Impact Analysis, May-June 2009.

Daniel Ikenson and Scott Lincicome
About The Author Daniel Ikenson and Scott Lincicome
Dan Ikenson is an author, speaker and Director of Cato's Herbert A. Stiefel Center for Trade Policy Studies. Scott Lincicome is an international trade attorney in Washington. They are the coauthors of the Cato Institute study, Audaciously Hopeful: How President Obama Can Help Restore the Pro-Trade Consensus.

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