Confessions of a Pro-Trade Democrat

By Al From
Monday, June 9, 2008

Where are the pro-trade Democrats? America won't increase middle-class incomes and create jobs without them.

From jobs and incomes to gas and food prices, Democrats are absolutely right that the Bush years have been a disaster for the forgotten middle class. Every homeowner in America knows that we're poorer than we were eight years ago. But if Democrats are serious about turning the economy around, we have to be willing to tell people that job and income growth depends on Washington's willingness to get its fiscal house in order, invest in people and technology, and, yes, expand trade.

History proves that expanding trade and productivity help create growth. We learned that the hard way when the Smoot-Hawley tariff helped crush trade and exacerbate the Great Depression. Conversely, we have seen trade drive the economy during the great expansions of the 1960s and 1990s.

Today, with the economy in or near recession, the market-opening agreements of the 1990s are proving their value. Even while domestic finance, real-estate and consumer sectors have begun to contract, manufacturing exports have jumped by $200 billion since 2005. Meanwhile, service-sector and agricultural trade surpluses have soared, so that, along with government spending, exports to places like Europe, Brazil and China are proving to be the only spark keeping us out of a full-fledged slowdown.

There is no doubt that many Democrats worry about reducing trade barriers. That is at least in part because the Bush administration has given trade a bad name by repeatedly resisting efforts to strengthen the guarantees of health insurance, job training, placement and portable pensions that can help workers cope with change. Under such circumstances, many hard-working Americans who are nervous about their economic futures are understandably wary of additional competition.

But globalization is here to stay. We need to respond with American ingenuity and optimism, rather than fear. Our biggest economic challenge is to create a path toward opportunity and mobility in the global economy. We need to build on the success of our exporters, and find a strategy that helps U.S. workers and businesses beat our competitors. The next president also needs to forge a new social contract that deals with the anxieties that often make middle-class families resistant to trade.

With such new policies in place, hopefully Democrats will welcome low tariffs and open trade. Once middle-class anxieties are addressed, most people will come to accept that our country is better off with an open economy. We need trade agreements that share the benefits across the economic spectrum, and also include sensible labor and environmental standards.

For important moral reasons that go to our party's first principles, Democrats should support efforts to expand trade. No American who works full time should be poor. Growing the economy and creating jobs remain the best ways to fight poverty, and neither is possible with a cocoon around our economy.

Trade gives poor people around the globe the opportunity to build a brighter future. During the Clinton administration, new trade programs like the African Growth and Opportunity Act helped key regions in the world succeed, while American workers stood to gain.

I helped found the Democratic Leadership Council in the wake of Walter Mondale's 49-state defeat in 1984, and we have always supported expanded trade. We still have a ways to go to win that argument in the Democratic Party. But the record is clear. Over the past 20 years, our party has grown stronger when we've been willing to do the right thing on the toughest issues, from putting the nation's fiscal house in order to overhauling a broken welfare system that trapped millions in poverty.

America can compete, win and prosper in the global marketplace. Shaping an economic strategy to achieve that should be among the next president's highest priorities.