Trade liberalization has been at the center of the economic platforms of both major American political parties for decades. It has been a powerful force to promote prosperity and strengthen our international alliances. Our economy is built around support for free trade.
At the same time, very few areas of public policy are more complicated or controversial. An enormous number of vested interests have much to gain or lose from trade law. They try to create economic advantage by advocating for tariffs on foreign competitors and for free trade when it's to their benefit.
In any discussion of trade policy, there are fights over who benefits and who bears the costs. Many Americans are skeptical of the impact trade will have on jobs, believing the elites gain an upper hand through trade deals while ordinary people lose jobs.
During my years in Congress, I was continually impressed by the hours we spent on trade issues. We tried to understand the role of trade in the economy. We debated whether trade would improve the economy or cause job losses. We worried about who would win and who would lose and about how to protect vulnerable groups and assist those who would have to adjust to increased competition.
Advocates of free trade see it as an engine of economic and job growth, a force that promotes efficiency leading to improved productivity and higher overall wages and provides political benefits by binding democratic countries together.
Recent surveys find that a majority of Americans see free trade as more an opportunity than a threat. But a significant number of Americans are deeply suspicious of trade. President Donald Trump tapped into those concerns in the 2016 election campaign. He has sought to reverse a trend of trade liberalization policy that goes back to the New Deal. He embraces protectionist solutions, calling on consumers to "buy American" and businesses to "hire American."
He has complained that China, in particular, is "killing us" on trade. He isn't the first American politician to make China a whipping boy in trade debates. China is our favorite trade adversary.
Trump has pulled the U.S. out of several international trade pacts. But when that happens, the rest of the world moves on. They create economic opportunities that do not include the United States, with the result that our citizens are penalized.
Trump's stance on trade is unsettling to our allies and undermines relationships that have been a foundation of America's power in the world.
He also favors bilateral trade agreements over the multilateral agreements that have been a mainstay of American policy for decades. Some bilateral deals are inevitable, and they can be beneficial. But the way to get the most benefit from trade is through multilateral agreements that affect more of the economy.
The best approach is to try to craft agreements where everyone wins: where the agreement is mutually beneficial and one side does not try to prevail against the other side but both sides emerge better off.
Trump is deeply concerned about U.S. trade deficits, bemoaning, for example, America's $500 million trade deficit, more than half of it with China. But the U.S. has had overall trade deficits for many years, and our economy generally has done very well.
There is some evidence that trade has become more important to the U.S. economy. By one measure, it has gone from accounting for 15 percent to 30 percent of GDP in the past 40 years. But trade is just one of many factors that impact the health of an economy, and it is probably not among the most important -- arguably not as important, for example, as technological advances and macroeconomic forces.
Trade policy makes for strange bedfellows, and some Democratic office-holders and unions that have traditionally backed Democrats have supported Trump's effort to change direction on trade.
To the question of whether free trade has strengthened the global economy and increased overall prosperity, I think the answer is unquestionably yes. But has it also caused job losses in some regions and some sectors of the economy? The answer to that question is also yes.
My overall view is that we should be supportive of free trade and multilateral agreements, but we have to be sensitive to the adverse impact trade can have on workers. We must make sure that people hurt by trade are able to gain skills, access job training and have the mobility to cope with economic change.
Formulating trade policy, negotiating agreements and navigating the choices involved in trade deals have been at the center of our economic policy for years and will likely remain there. Few areas of public policy involve more trade-offs than free trade. But it is too important to abandon.