Q&A: Trump’s Deceptive Trade Stance

AP Photo/Keith Srakocic, File

Donald Trump speaks during a campaign stop at Alumisource, a metals recycling facility in Monessen, Pennsylvania, June 28, 2016. 

In a June 28 speech attacking free trade deals and globalization, Donald Trump liberally cited the work of the Economic Policy Institute, a think tank focused on economic justice for workers. But the presumptive GOP presidential nominee didn’t tell the whole story, says EPI President Lawrence Mishel, who has criticized Trump for mischaracterizing how trade deals harm working people. Trump wrongly lays the blame for globalization and its impacts solely at the feet of Democrats, says Mishel, while ignoring the role that business elites and substantially Republican policies have played in depressing jobs and wages. Prospect Co-Editor Robert Kuttner interviewed Mishel to talk about Trump, trade, and what EPI’s research really concludes. This is an edited transcript of that interview.

Robert Kuttner: Were you pleased that Donald Trump cited the work of EPI more than a dozen times in his speech on trade?

Lawrence Mishel: No one likes to be associated with a bigot and a scam artist. The good news from my perspective is that, as I said in my testimony to the DNC platform drafting committee, we are in a “Wages Moment.” What I mean by that is that there is near universal agreement—across all the candidates in both the Republican and Democratic primaries—that wages have been stagnant for the vast majority for more than a dozen years. You and I refer to this as wage suppression, given that it resulted from conscious policy choices and corporate actions. Consequently, we are entering into the first presidential election where debating how to generate wage growth for the vast majority is front and center.

It is also an advance that we are debating globalization’s role in eliminating good jobs and undercutting wages. Brexit obviously added to that. As you well know, for several decades anyone who has contended, or even acknowledged, that globalization hurt workers was accused of being an economic ignoramus. Yet, this is straight-up economics summed up in Josh Bivens’ book title, Everybody Wins, Except for Most of Us: What Economics Teaches About Globalization. A bipartisan set of elites plainly lied about the impact of globalization.

The problem is that wage problems are now being reduced to a problem caused by globalization alone, which is what Trump has done. In fact, as EPI has documented, excessive unemployment, the decimation of collective bargaining, the lowering of the minimum wages, and other factors have also weakened the ability of blue-collar and white-collar workers to obtain decent paychecks, undercutting their leverage in the market.

Remind us, what are the basic problems with TPP?

The claim that this or any trade agreement will lift middle class incomes should be readily dismissed: Whatever benefits there are from lower prices is more than offset by the lower wages generated by increased low-wage competition that affects not just manufacturing workers but all workers who are similarly skilled.

Of course, the TPP (like nearly all trade agreements the U.S. signs) is not a “free trade agreement”—instead it’s a treaty that will specify just who will be protected from international competition and who will not. And the strongest and most comprehensive protections offered are by far those for U.S. corporate interests. For example, the biggest winners from trade agreements have traditionally been U.S. corporations that rely on enforcing intellectual property monopolies for their profits—pharmaceutical and software companies, for example. These companies have been successful in getting U.S. negotiators to make enforcing their intellectual property monopolies in our trading partners’ economies the price of admission for preferential access to the U.S. market. They have used this agreement to even expand pharmaceutical copyright protections.

Then there’s the investor-state dispute settlement (ISDS) arbitration panels set up to allow multinational corporations to enforce their claims when any nation does something that might cost them money. It’s an anti-democratic process that leads governments to bend over backwards to not antagonize business interests.

There’s also what is not in the agreement, such as any provision to stop currency manipulation undertaken by our trading partners.

In what respects is Trump a phony in the way he criticizes trade deals?

Besides bluster Trump offers very little. Trump says he will renegotiate major trade agreements but he does not even bother to designate what his goals are, how he thinks he can make them work for America’s workers. Trump describes the evolution of trade policy as if it was driven by Democrats alone. In fact, NAFTA was originally George H. W. Bush’s proposal. NAFTA was passed over the direct objection of House Democrats, two-thirds of whom voted against it. Trade policy has been primarily driven by corporations and their trade associations working with Republican allies. While trade has been an internally divisive topic for Democrats it has been a point of unity among Republicans for the most part.

Then Trump’s speech pulls a bait-and-switch, shifting from trade to claiming that our real problems are business overregulation and excessive taxation of America’s corporations. Somehow he starts a speech on trade and ends up wrapping his arms around the traditional corporate policy agenda of tax cutting and deregulation. But that’s been the main economic policy orientation of the last four decades and it has not created better growth or good wage outcomes, quite the contrary. Even GOP voters have abandoned this position and now favor increased taxes on the rich. It is amazing that he’s offering the tried and failed elitist corporate policies of the past as his wage growth agenda. 

Do you find it odd that Trump singles out trade but not all of the other policies and corporate maneuvers that harm workers?

It should be noted that it is hard to discuss Trump’s policy positions because it is like nailing jello to the wall, as they say. The positions keep changing. That said, Trump is unwilling to challenge the anti-union GOP orthodoxy and has even endorsed Right-to-Work legislation. He is certainly not campaigning, as Secretary Clinton is, for higher labor standards such as the minimum wage, earned sick leave, paid family leave, or fair work-week scheduling. He’s been silent on the GOP effort to overturn the new Obama regulations that have extended overtime protections to 12 million middle-wage salaried workers. Nor has he weighed in on the rampant misclassification of workers as independent contractors rather than W-2 employees, something that affects millions of workers in construction, trucking and transportation.

I wish the Democrats had a more explicit, fuller narrative on how to create wage growth. They offer most of the ingredients but do not put them together or highlight them sufficiently. We need to achieve a full employment that reaches all communities and can obtain one with monetary policy that will not raise interest rates until we get there. Major infrastructure and public investments will generate jobs. The lower unemployment will fuel wage growth, particularly for low and middle-wage workers and for people of color. Second, we need to rebuild our labor standards starting with putting the minimum wage on a path to $15 and the other policies I just discussed. Third, we must re-establish collective bargaining in a way that provides workers the leverage to share in our growth. Fourth, yes, we need globalization policies that prohibit currency manipulation and the evasion of our trade laws and work to build high labor and environmental standards everywhere.

Do you think Trump’s target audience will see through this—his personal hypocrisy and lack of support for other pro-worker wage issues? Or can he get a lot of traction just by sounding like a nationalist on trade?

I guess we will see. He certainly will be trying. It depends on how well the Clinton campaign can highlight an explicit agenda for wage growth and challenge Trump on issues he’s dodging like overtime, the minimum wage, and so on. It depends on what the Clinton campaign does to blunt the appeal of Trump’s trade mumblings and overcome some of their own vulnerabilities. It would be helpful if Secretary Clinton explicitly closed the door on TPP, in the platform and elsewhere, including opposing any effort to legislate the TPP in this year’s lame duck session. This is one area where Secretary Clinton must distance herself from President Obama—no ifs, ands, or buts.

Trump plays on the loss of good jobs, but he also manages to scapegoat immigrants. There is the same sort of backlash in Europe and in the Brexit vote. What do you make of all that?

It is curious that the immigration issue has received so much attention since we have had very little undocumented immigration in the nine years since the onset of the Great Recession. Some of this is cultural fears and some of it simply racism. I obviously oppose deporting undocumented workers who have become part of the American fabric. Those undocumented workers are vulnerable to exploitation and therefore in today’s America they are exploited. This means they earn 12 to 20 percent less than comparable workers. One way to help generate wage growth would be to provide a path to citizenship that would allow these workers to earn more. This would also raise wages for other workers in the same fields of work.

There are legitimate concerns about immigration through guestworker programs taking jobs and suppressing wages. There are very high profile examples of companies using guestworkers to take American computer programmer jobs that the incumbent about-to-be-displaced American workers actually train them to handle. Trump has actually endorsed an expansion of the H-1B guestworker that enables this to happen. Likewise, at this moment there is an effort in the Republican-led Congress to double or triple the amount of unskilled guestworkers we have in the H-2B program. They are also overturning a recent Department of Labor rule that would have lifted the wages paid to guestworkers. Trump has used such workers himself and has been silent on these actions by his political allies. This creates an opening for the Clinton campaign that I hope they exploit. This is just another realm where Trump is two-faced and supports what I see as an anti-worker GOP agenda.

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