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Sunday, April 22, 2018

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Hart Cunningham’s Free Trade Doctrine

Free trade is a complicated issue that has divided Americans and their politics for generations. On a high level, free trade allows different countries to specialize in their respective advantages and creates increases in wellbeing between countries. In the United States free trade provides higher quality, cheaper products for consumers, as well as better intermediate goods that will be turned into American products. This boosts the competitiveness of domestically produced goods and creates more employment and exports. It also opens up foreign markets and allows increasing competitiveness for U.S. exports.

The idea of free trade is that barriers that prevent the sales of goods and services across borders are reduced and removed. Almost all trade partners of the United States have higher barriers than we do. Thus, trade negotiations with these countries primarily involve how quickly and to what extent these countries will lower barriers, upgrade regulatory standards, and open their markets. The United States already has low trade barriers and a high level of regulations, which means that often we must concede comparatively little in these international negotiations. On the whole, free trade and globalization lead to increases in domestic standards of living. The Hart Cunningham administration plans to pursue a pro-free trade stance, while simultaneously protecting those citizens who are most vulnerable to market changes.[1] Although trade agreements are beneficial for our country and increase our overall standard of living, it is an unfortunate fact that not everyone emerges as a winner following easing of trade restrictions. Trade pacts have been shown to create better, higher paying jobs (e.g. workers in manufacturing firms that export earn wages 12 to 18 percent higher than non-exporting peers), but some workers may be displaced. Many firms will greatly increase their earnings through more competitive exports, but some others may see increased competition from market entrance of foreign firms.[2] This means that the U.S. government must accompany any free trade agreements with support for anyone that does not come out ahead in our country.

Hart Cunningham believes in standing behind American workers and making sure that they have every tool they need to work hard and succeed (as well as his strong support of trade unions). He believes in job retraining initiatives. He believes in industry and job transition aid, including strong unemployment benefits. He believes in the support and creation of new industries that can kickstart economic growth and provide better jobs for those that may have lost out. Hart wants to make sure that free trade benefits everyone on an individual basis, rather than on an economist’s society-wide level. Hart wants to provide the American people with a candidate who they know will look out for their own interests, and not his and his friends’ personal economic gain.

Donald Trump has referred to NAFTA as “maybe the worst trade deal ever.” This rhetoric is untrue and harms the United States, its economy, and its allies. The United States, Canada, and Mexico have each benefitted from the treaty, and 2016 saw over $1 trillion in aggregate trade between the three nations. This trade has buoyed high paying jobs in the United States and added to our economic wellbeing.

The Cunningham administration pledges to back NAFTA, but also recognizes that there are areas for improvement. Since NAFTA was drafted, digital trade has quickly become a significant source of economic interaction, but the treaty does not have strong measures to support it. NAFTA must be amended to reduce customs fees and paperwork for small ecommerce businesses. It also must have a stronger framework with clear rules and standards for electronic payments and cybersecurity. NAFTA should also include tighter covenants against currency manipulation. Countries who devalue their currency make their exports cheaper and themselves artificially more competitive. In a free trade bloc this has serious negative consequences for the other countries. NAFTA must include a simple definition of manipulation with which to apply to violators, and it must include strong sanctions to deter such behavior. This includes binding safeguards to prevent violations.[3] The Trans-Pacific Partnership would have been the largest regional trade accord in history. Encompassing the United States and eleven Pacific Rim countries, the proposal would have included nearly $28 trillion in GDP and one-third of world trade. This accord is extremely divisive, and was a major issue in the 2016 presidential race. Hart Cunningham believes that there are strong positives to the proposal, and does think that further negotiation would be better than the Trump administration’s outright withdrawal.

However, issues such as too much protection for some corporations, especially pharmaceuticals, need to be fixed. Labor and environmental standards must remain strong, and there must be accompanying provisions domestically to provide for any workers that may be displaced. That said, the benefits strongly outweigh the costs. This trade pact would open up a number of different countries to U.S. exports and would allow U.S. firms to increase competitiveness. It also addresses important intellectual property issues and includes protection and regulation of e-commerce, telecommunications, and financial services industries. It would also, on average, increase incomes of U.S. citizens, according to an independent analysis. Most importantly, by withdrawing from the TPP the United States suffers. The trade pact is still active, under the name of the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership, but without the United States. Its 11 member countries have agreed on core elements, and are adopting many of the same standards included in the original TPP. They will enjoy opened trade among themselves, and the United States is excluded, while also losing political and diplomatic influence on the world stage.

On the deeper specifics of trade negotiations, and beyond any specific proposals, Hart plans to stand strong on the issues that matter to Americans. His priority is to prevent labor abuse and environmental degradation by emphasizing the need for all trading partners to adhere to strict regulations. This is the morally right thing to do, and it is also the economically right thing to do. U.S. firms are put at a disadvantage to foreign firms in lax regulatory environments because the cost of adhering to these regulations makes U.S. firms less competitive and their products more expensive. Hart also wants to use free trade negotiations as a means to promote global climate change initiatives. Conversations with trade partners about regulations are a perfect opportunity to stress the importance of combating this world issue. The Cunningham administration will use trade pacts to open markets to U.S. goods while simultaneously applying much needed pressure on foreign nations to adhere to strict climate-saving goals. Outside of climate change-specific issues, trade negotiations are a crucial avenue for the United States to maintain its position as a world leader. The Trump Administration’s insistence on a return to a Monroe Doctrine-like U.S. isolation through a closed off foreign policy stance will only hurt our country. Hart Cunningham wants to open the world through trade and protect our country’s reputation and place as a commercial, policy, and moral leader. The United States cannot retain its position by retreating into itself and cutting off the rest of the world. Nationalist rhetoric and policy-making only hurts us. The best way to improve our country, and the world, is to work tirelessly to integrate ourselves into international dialogue, from trade to climate to peace. The bottom line is that Hart Cunningham will do what is best for every American. He will fight to open international markets to our goods and he will work to expand the choices that United States consumers have on offer. He will also make sure that even when free trade’s negative sides come to fruition each and every affected worker will receive the full support and backing of the U.S. government. Hart wants to ensure that the United States continues to maintain its place as a world leader, in trade and everything else. Support Hart Cunningham in 2020 and help our country achieve an economic and trade resurgence that will benefit everyone.

 [1] The New York Times

 [2] The Wharton School of the University of Pennsylvania

[3] The Economist