Milling & Baking News - June 1, 2021 - 26

TUES | 06 01 2021
What's missing in President
Biden's policies: Trade
BY ROBBIN JOHNSON
I
n a May 9 commentary in The Wall
Street Journal, Robert Zoellick, a former
US Trade Representative, wrote
that " President Biden's new international
policy is missing one big pillar: trade. "
Meanwhile, the May/June 2021 issue of
Foreign Affairs ran five essays on how to
use trade policy more wisely in the emerging
geopolitical competition between the
United States and China. Though little
was said about agriculture in any of these
essays, the US farm community has much
at stake in seeing this void filled.
The Doha Round of trade negotiations
promised to put agriculture at the center
of its liberalizing initiative. That proved
an important reason why the negotiations
eventually failed, as many countries
resisted farm policy reform. The impediments
to trade reform and globalization,
however, run much deeper. Beginning
with the Tokyo Round of the 1970s, the
domestic US consensus in favor of trade
liberalization has atrophied. The final
stake was driven into the heart of freer
trade in the wake of China's 2001 admission
to the World Trade Organization. .
Missed in this misguided debate was
the small real impact trade has on the US
job market.
As Adam Posen put it in his Foreign
Affairs commentary, " The Price of Nostalgia, "
... " for each manufacturing job lost to
Chinese competition, there were roughly
150 jobs lost to similar-feeling shocks in
other industries. " Trade-related job loss
is a small fraction of the turnover of jobs
in the United States, but it has proven to
be a powerful poster child for struggling
workers and communities.
The cause of freer trade has suffered
badly from this misunderstanding. President
Obama negotiated the Trans-Pacific
Partnership (TPP) but feared that bringing
it to Congress for approval would result in
its defeat. Instead, a successor agreement
has gone forward without US membership.
President Trump claimed to be " tariff
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MILLING & BAKING NEWS
man, " slapping large duties on many basic
and Chinese imports as part of his " America
First " pledge, which failed to bring back
the promised " good jobs, " and the US-Mexico-Canada
agreement he negotiated heightened
protection of the American auto
industry under the guise of reform.
President Biden has pledged a " worker-centric "
trade policy but with little new
content and some reversion to misguided
" Buy American " strategies.
The result is a disconcerting state of
affairs. The United States is disengaging
from globalization at a time when other
countries are opening further. In addition
to joining TPP's successor, key Asian allies
like Japan, Australia, South Korea and
New Zealand have signed up with China
for the Regional Comprehensive Economic
Partnership. Though Brexit took
England out of the European Union, the
EU has added a dozen new member states
since Doha was launched and has struck
bilateral trade deals with Canada and
several Asian countries. Trade's share of
global GDP is approaching 60% while US
trade remains well below 30% of its GDP.
Globalization is moving ahead without US
leadership or participation.
Two cornerstones to renewing US
involvement and leadership in the globalizing
world economy exist. One is the
need for an effective safety net at home
for all who suffer dislocation from economic
change in all its forms. According
to Adam Posen, the best way to accomplish
this is to replace the failed " trade adjustment
assistance " approach launched in
1962 with a more European approach,
spending up to " 1% of GDP annually on
helping unemployed people find work. "
This would both advance economic justice
and reduce the stigma that has wrongly
been attached to trade-related job loss.
The other cornerstone is the need to recognize
that " data is now the center of global
trade, " as explained by Matthew J. Slaughter
and David H. McCormick in their Foreign
Affairs essay. They call on the United States
to " help craft a new multilateral framework
for data " with other countries that share
a vision " that maximizes its immense economic
potential without sacrificing privacy
and individual liberty. " An open framework
of this sort should offer an appealing
contrast for many countries to China's
model: " ...a combination of laws and technologies
that restricts the flow of data in and
out of China... (and)...mandates government
access to data generated in the country. "
US farmers are unlikely to benefit
directly either from larger domestic
investments in helping displaced workers
transition to new jobs or from an international
agreement on data flows that
creates an open, collaborative market that
stimulates innovation. The lack of direct
benefits, however, reflects too narrow a
view of US agricultural interests. What
really drives demand for US farm-product
exports is rising global incomes, especially
in developing countries.
Most of the world's malnourished, hungry
or diet-limited people live in developing
countries. As their incomes rise, their
demand for the products that are the core
of US agricultural exports will rise rapidly,
often outstripping their own national
production capabilities. Their willingness
to import food products from the United
States will be enhanced to the extent that
US markets are open to their exports and
US policies support their access to the
health, energy and environmental innovations
that open data flows promote.
That remains the promise of open markets,
and US farm support remains a critical
factor in making US policy supportive
of freer trade. MBN
Robbin S. Johnson, a fellow
with the Hubert H. Humphrey
Institute of Public Affairs, is a
contributing editor at Sosland
Publishing Company.
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Milling & Baking News - June 1, 2021

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