Where Bernie Sanders and Donald Trump agree

Both candidates are dead wrong on trade.

Why This Matters | Perrin Brown | April 13, 2016

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Bernie Sanders and Donald Trump have made different enemies throughout the courses of their campaigns. For Sanders, 2016 is about taking power from the billionaires, CEO’s, and large banks he feels are conspiring to rig our economic and political systems. For Trump, it’s taking out his nationalist populism on women, immigrants, institutions, and all things foreign.

The candidates have, however, taken aim at one common issue: free-trade and the United State’s involvement in such deals. While this is to be expected of Sanders, a self-proclaimed “democratic socialist,” Donald Trump’s statements are puzzling for someone claiming to be a fiscal conservative. This protectionist sentiment, now taking root across American politics, is incorrect in its rationale, misleading in its appeal, and damaging in its potential effects on the American economy and consumer. Free trade has its consequences, but isolating ourselves economically will do nothing but hurt consumers here and abroad.

Bernie Sanders views the world and the American economy through a protectionist perspective, blaming globalization, unfettered capitalism, and economic liberalization for income inequality. As Michael Gerson of the Washington Post explains, the Sanders narrative begins with increased economic liberalization and globalization, continuing through multilateral international trade treaties. The culmination of all of this is a series of deals that hurt American manufacturing jobs, strengthen corporate interests, and weaken the American economy.

Donald Trump’s views, on the other hand, could be mistaken for an 18th century mercantilist, one who believes wealth is static and one country must lose for another to gain. Trump specifically takes aim at Mexico, China, and other Asian economies, claiming they have “stolen” American jobs and “cheated” the economic system.

Both candidates are wrong.

While free trade naturally creates some losers in the global economy, it unequivocally creates massive amounts of wealth and jobs. Trade has transformed the American economy, and gives less-developed and poorer countries a chance to succeed and compete on the international scale. Individuals in repressive and isolated countries serve only to gain by opening their markets to the United States.

As Zach Beauchamp writes for Vox, Bernie Sanders wishes the United States wouldn’t trade with any country that doesn’t have our wage or environmental standards.  To him, free trade allows wealthy corporations to ship jobs overseas so that they may pay local workers less than American workers.

This does occur, but the aggregate increase in freer trade has had a direct relationship with the decline in global poverty, because “when poor countries can sell cheap goods to rich countries, or bring in a lot of foreign direct investment, growth skyrockets,” writes Beauchamp.

Furthermore, the geopolitical benefits of open markets shouldn’t be disregarded: countries that trade don’t shoot at each other, and economic cooperation boosts diplomatic and political communication.

But even if you look only at the American side, according to ThirdWay, an economic policy group, the benefits are undeniable. If you look at American trade history since NAFTA, a favorite target for Trump and Sanders alike, one would see that the “U.S. trade balance has improved in 14 countries and by nearly $30 billion [annually] in the blue collar goods sector.”

It is critical to take stock of the negative effects of freer trade, however. By opening markets and borders, many American manufacturing jobs have been taken by a globalized, more skills-based economy.

The solution to this, though, is not to rip up trade agreements, as Sanders and Trump would. Rather, prudent policy would be to increase benefits and training given to disenfranchised manufacturing workers. Instead of destroying the set of agreements that made America great, politicians should aim to smoothe out the rough edges that economic liberalization inevitably creates.

Paul Krugman, a Nobel laureate economist, posed a question for Sanders and Trump: “Are they saying that we should rip up America’s international agreements? Have they thought about what that would do to our credibility and standing in the world?” They are, and they haven’t.

These candidates’ positions on trade also expose rife hypocrisies within their platforms. Donald Trump claims to be a man of the forgotten blue collar laborers, and yet the trade wars he would start would only limit opportunity and raise costs for these low-income consumers. Bernie Sanders wants to help poor people by giving them opportunity to challenge the established political and economic elites, but it seems he only wants to do this in the United States. Indeed, Sanders “delivering on his campaign promises requires doing real damage to the global poor.” By limiting their opportunities to join free markets, Sanders’ policies would keep them just as disenfranchised and at the whim of elites as before. Free trade is a strong weapon against poverty and repression, and it is a weapon that shouldn’t be abandoned.

Alas, both candidates are demagoguing the issue, somehow promising that America can win at a game by removing itself from it. History and the future will prove them wrong. The greatest damage, for American and international consumers, is that this protectionist sentiment takes a permanent root amongst individuals in power.