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25

Feb

2019

Consent and Coercion in Trump’s Trade Policy

Written by: Frank J. Garcia

 
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Frank J. Garcia, author of Consent and Trade, on US trade policy under the leadership of Donald Trump

 

The current U.S. Administration has made coercing our trade partners and allies a signature of its approach to our transnational economic relationships. No one denies the need for trade to be a mutually beneficial bargain, since that is in fact what trade is all about. As early as Adam Smith, it was recognized that trade itself consists of consensual economic exchanges.  That much is not controversial—we all know in everyday life the difference between consenting to an economic exchange, and being coerced, exploited or preyed upon. However, that common-sense understanding can get lost when we make the jump to international relations, especially in times of economic uncertainty and political reactivity.

When the Administration targets current U.S. trade partners with trade sanctions of questionable legality and then renegotiates its agreements, the U.S. is not making trade more “fair.” Instead, it is abandoning trade and fairness altogether, and indulging in coercive tactics designed to force unbalanced concessions from parties facing challenges just as great as ours, if not more so. And towards what? Not trade, but something more oppressive—economic exchanges that may look like they enrich the stronger party in the short run, but which over time make everyone more vulnerable to the damaging effects of globalized under-regulated capitalism, which is where the real problem lies.

Even the wealthiest countries struggle to deal not just with trade-related job losses, but with technological disruptions, climate change, and a gamut of social challenges. Creating oppressive, non-consensual economic relations don’t make it easier for us to meet those challenges, it intensifies them. We can’t protect our “corner” in a global economy where there aren’t any corners any more. Now that wealthier countries have also felt the distributive effects of trade, it is a mistake to stop there.  Instead, we have a chance to acknowledge that trade has always been a distributive force in global economic relations, allocating jobs and resources between and within developed and developing countries alike. Once acknowledged, we can then look at how to make these trade-driven distributions work better for all affected parties, which is where the real wealth—and strength—of nations lies.

As I argue in my book, Consent and Trade,  we need to re-capture a vision of trade as mutually beneficial consensual exchange, and negotiate agreements that protect and enhance consent, rather than undermine it. This will not only help strengthen our economy, but also make trade more sustainable for all parties. Treaties such as the “new NAFTA” and renegotiations such as the one between the U.S. and Korea should not be heralded as trade breakthroughs.  Instead of reacting to economic and social challenges through old strategies that aren’t working, U.S. leadership could help us all engage the real problem, and work towards balancing economic globalization. Building walls—tariff and otherwise—won’t work in a global environment, and obscures the deeper opportunity to make trade agreements truly fair at home and abroad.

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About the Author: Frank J. Garcia

 

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