By: United States Trade Representative Katherine Tai
When I worked for the House of Representatives during the trade debates of 2015, I had the privilege of spending time with Members as they reflected on the consequences of trade policy for their districts. One conversation in particular has stayed with me: the one I had with Congresswoman Marcy Kaptur of Ohio. She talked about the harms to her district from the North American Free Trade Agreement, and of the devastation to the workers themselves and the broader community. She was not only concerned about her own constituents: she was also concerned about exploitation of Mexican workers, the very people who were seen as the beneficiaries of the offshoring that had hurt her community. She said she wished that the people at USTR who negotiate trade agreements would visit not just far-flung places abroad, but places like her district, to witness first-hand the consequences of the deals we negotiate.
That comment stayed with me as I became the United States Trade Representative in March 2021. I made it my mission to put the U.S. back into USTR.
I am proud that my team and I visited all 50 states during my tenure. Here are a few of our takeaways.
- Americans feel that something’s wrong with the system. The rejection of trickle-down economics surfaces whether I am visiting farmers, manufacturing workers, or small businesses. Farmers complain about the pressure to “get big or get out” and of the damage volatility does to their businesses. Manufacturing workers don’t think it’s right to be asked to compete with facilities overseas that fail to respect labor or environmental laws. Small businesses feel stifled by larger corporations that wield market power and make it hard to compete.
- There is common cause among rural communities in the United States, and abroad. One of the more striking realizations we’ve had from our travels is the similarity of the complaints among people in resource-rich countries and resource-rich American states. That is, the current economic model is extractive, in more than one sense of the word. People don’t feel cut in on the deal.
Whether in Montana, Idaho, Wyoming, Chile, or South Africa, or on Tribal Lands, trickle-down trade is enriching a few but leaving others behind. One of the more wrenching aspects of these visits is the way working people caveat their comments before they speak up: “I didn’t go to college, and my friend who’s got a PhD in economics says I’m wrong, but ….” The snobbery inherent in the elite economic discourse devalues the views of working people, as if they simply don’t know enough to realize how good they have it. One person put it succinctly: “Who’s the one going down the mineshaft in the dark?”
- Americans believe in their country. My team and I also saw patriotism – what my friend Bayard Winthrop, the CEO of American Giant, calls “non-partisan patriotism.” The people we visited believe in the promise of America. Indeed, some of those people include CEOs who are not even American. As President Biden says, “I can define America in one word: possibilities. There is nothing we can’t do if we do it together.” Americans believe we can fix what’s broken. That optimism has infused my time at USTR.
Coming back to Congresswoman Kaptur’s point, I recognize that, for many years, USTR focused almost exclusively on the export opportunities that we could create through free trade. But those policies failed to recognize that exports are typically only 10 to 12% of our GDP. Our superpower is our consumption power. It's why other countries yearn to do tariff-liberalizing agreements with us – they want access to our market. But in focusing so much on exports, we neglected to give enough consideration to imports, and the consequences of those imports on our workers and businesses. Now that we are seeing a growing consensus that we need to reimagine the rules of globalization, it’s suddenly becoming fashionable to talk about trade-offs – if you change the rules, there will be ominous consequences that have to be addressed. During the heyday of free trade, were its proponents equally concerned about tradeoffs, or did they just pay lip service to displaced workers without lifting a finger to do anything to address the problem? We know the answer, and so do Miss Kaptur’s constituents.
At USTR, we are no longer bound by false choices of “protectionism” or “free trade.” We can connect with our people, be responsive to their experiences, and craft a trade policy that moves away from ideology to more purposefully chart a course in which we shape trade rules so that they deliver better results for working people – here, and abroad.
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