Courier-Gazette Column: Global Trade and Politics, managing turbulence by Ronald Bancroft
The good news is that the Camden Conference is back in person. The Opera House has come alive after going dark for two years in the COVID Era, It was quite wonderful to see old friends and to catch the energy in the air again from yet another global challenge, namely, Global Trade and Politics: Managing Turbulence. One might be daunted by such a topic, but once again the Conference’s able and hardworking Program Committee, chaired by Charlotte Singleton, was up to task, bringing together as fine a group of panelists as I have seen in many years of Conference attendance. Such brilliance was needed to illuminate what is a dense and difficult thicket of issues.
It took some work to tease out a central message in such a sprawling set of issues and the several different perspectives represented in the panel, largely drawn from distinguished PhD economists and lawyers. In the quest for clarity and understanding, we were greatly assisted by our moderator, David Brancaccio, host of Marketplace on Public Radio.
My take would go something like this: The global trade system is wracked with disagreement and dispute. The World Trade Organization, charged with setting the rules and enforcing them, is emasculated and ineffective. The United States’ unabashed love for free trade over the past 20 years has been dashed by largely unforeseen difficulties in finding meaningful work for all those in manufacturing jobs that were shipped overseas The Biden Administration’s efforts to re-shore manufacturing jobs could make all of this much worse with the subsidy policies embedded in the Chips Act, the Deficit Reduction Act, and the Infrastructure Act. Nonetheless, free trade remains good, essential, and will somehow survive.
Oh, and amongst all the PhD’s at the Conference was the inevitable politician, John Sununu, former senator from New Hampshire, who confirmed that the Congress had neither the appetite nor the will to address the problems associated with trade issues.
All of this may sound pessimistic, but you would be wrong to infer this from my summary. One of the standouts among an array of standout speakers, Jennifer Hillman, was unabashedly optimistic. Dr. Hillman, a veteran of trade dispute resolution from years as Commissioner at the U.S. International Trade Commission and the UTO’s appellate body for dispute resolution, radiated a compelling balance of fact and understanding with a resolute belief that progress through the tangle of challenging issues was possible.
Indeed, though the discussions were lively and diverse, the prevailing view of the panelists was that the world would figure out a way to muddle through without damaging essential global trade patterns. All agreed that the Camden Conference setting and dialogue somehow breathed more life into this debate.
Nonetheless, many acknowledged that the substantial progress in raising standards of living in much of the developed world, driven by “free trade” over the past 20 years, was now jeopardized by the failure of the champions of free trade in the U.S. to recognize the serious impacts of the hollowing out of jobs and opportunity in many parts of America.
Several panelists noted that the Scandinavian countries were the best examples of dealing with the disruptive effects of free trade. There the social safety net and extensive retraining and job support has cushioned the effects of loss of manufacturing jobs. Not so in the U.S., where our political system has been unable to come up with effective solutions — and the political cost to the Democratic party has been significant. There were many reasons given for the U.S. failure. The simplest was cited by New York Times global economics editor Peter Goodman who said “We don’t tax rich people in America.”
What happens next? This is a question that economists, even ones as good as these at the Conference, have difficulty articulating clearly. The most hopeful of suggestions related to small steps forward — perhaps regional trade agreements? There was hope for a revisiting of the Transpacific Partnership, particularly as China has been successful in developing its own Asian partnership organization.
Clearly the U.S. needs to build more support in Congress and domestically for effective trade policy. Yet, as several panelists mentioned, Biden is now focusing on enormous subsidies to drive our shift to green energy and to new technologies to bring more advanced chip manufacturing to the U.S. The goals of these programs are laudable but the unintended effects are just beginning to emerge that, if not modified, will negatively affect us and our allies. One simple example is not allowing EV’s made outside America to receive incentives, a policy that impedes the global objective of green energy, encourages retaliation from our allies, and will be disruptive to our automotive market. One hopes cooler heads prevail and the Administration modifies the more egregious of these uber-protectionist policies.
For me, I am placing my hopes with Jennifer Hillman. I have discussed the possibility with Conference friends of a “Hillman for President initiative.” She may be our best hope.
Ron Bancroft is a retired businessman, former weekly columnist for the Portland Press Herald, and longtime attendee of the Camden Conference.