No thanks to his fellow Democrats, President Barack Obama won a victory in Congress last week when Republicans voted to give him the authority to negotiate trade agreements in Asia and Europe. Too bad so much of the president’s case for the agreements is based on his belief that the United States is in decline.
Let’s take a step back. Since 1945, the United States has advanced the cause of free trade around the world. We’ve done this partly because it’s in our economic interest to sell and buy more. But we also did it to help make the world safer for democracy, and safer from the Soviets.
We believed the rise of protectionism in the 1930s had made the Great Depression worse, and that the Depression had led to the rise of the Nazis and the Second World War. Trade, we decided, doesn’t guarantee peace, but the absence of trade can help bring war. Prosperity was our best defense against communism.
At its core, our trade diplomacy was optimistic: We believed that a free economy was good for the free world, and that the United States and our democratic allies would be more powerful and more secure if we were more free. And to their credit, it was mostly liberals who were responsible for making that case.
Certainly, Republicans played their part. But it was Democratic presidents like Harry Truman and John F. Kennedy who led the way. Promoting free trade was a great, positive act of American grand strategy.
Unfortunately, President Obama chooses to preach pessimism. For the first time, a U.S. president is making the case for trade agreements by arguing that we’re in decline. Speaking at Nike in April, for example, he argued that we need new trade agreements now, “while our economy is in the position of global strength.”
If we waited, he warned, China would write the rules of trade “in a way that gives Chinese workers and Chinese businesses the upper hand.”
Obama’s not the only one who talks this way. The Europeans say the same thing. This month, Cecilia Malmström, the European Union’s trade commissioner, said that we need a trade deal now, because in the future the United States and the European Union will “account for far less purchasing power.”
There’s just enough sense in this idea to make it dangerous. It’s true that, as the rest of the world grows, the U.S. and European share of the pie will likely shrink. But if the president is right that China will someday be so powerful that it can write the global rules of trade on its own, a new U.S. trade agreement is a pitiful response. The idea that our rules will keep on working if China is in charge is naive.
But the chances are that Obama is wrong. China’s economic growth is slowing, and even the United States at the peak of its relative strength—after 1945—didn’t have the power to write the rules of trade on its own.
And, worst of all, one reason we’re likely to have a smaller share of the pie going forward is that we’ve burdened our economy with lots of expensive rules. New trade agreements that focus on imposing even more rules aren’t the answer: They’re the problem. They’re also not free trade.
American trade diplomacy since 1945 has been based on believing the future can be better than the past, and that the best thing the government can do for trade is to get out of the way. The answer on trade now isn’t more rules to cushion our decline. It’s more freedom to boost our growth.
