Two landmark US trade deals look like candidates for the morgue: the 12 nation Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) with the EU.
After nearly 70 years at the forefront of efforts to liberalise trade and investment across international borders, the US has done a complete about face, with leaders across the political spectrum driving the final nails in the free trade coffin. A surge of populist isolationism sent the issue of free trade to its death. Sound familiar?
The Brexit vote should be a warning that, despite positive attitudes to trade among most British voters for now, free trade advocates need to get their act together quickly.
A recent poll found 55 per cent of Americans support the idea “that free trade with other countries is a good thing because it opens up new markets, and Americans can’t avoid the fact that it is a global economy.” Yet in Washington, the issue has become toxic. Republican leader Mitch McConnell has effectively killed the proposed 12 nation TPP pact; he has supported every trade deal since first being elected in 1984.
So how did US free trade advocates fail? It’s not a simple question, and it doesn’t have a simple answer. It does, however, come down to one fundamental problem: communications.
As pro-traders across the political spectrum withheld support for agreements still under negotiation, opponents of trade, primarily unions, seized upon the issue as a motivating force for their members. They aggressively sought to force politicians into taking public positions opposing trade agreements like the TPP, staging digital and in-person protests where they would have the most impact: at home.
Tactically, they strove early on to define technical aspects of trade negotiations regarded as too obscure for the average voter to understand or care about. Fast-track authority, which allows trade negotiators to reach better deals by guaranteeing an up-or-down vote in Congress without amendment, became an attack by shady politicians on “the health of our families and [our] access to clean air, clean water, and land.” Never mind that private negotiations are the only path to compromise, especially in an age of instant news and knee-jerk punditry.
Investor-state dispute settlement, a mechanism for arbitration found in 3,000 international treaties which allows companies to seek damages for seized property, suddenly became an assault on the judicial process by evil corporations. Intellectual property rights protections became an attack on access to medicines. And so on.
Pro-trade politicians and the US business community fundamentally misjudged the intensity of the opposition they faced. As they delayed in their efforts to define obscure components of treaties, their opponents pounced, leaving a picked-over skeleton of policies no politician in their right mind would want to defend.
Free traders also returned to the political-insider playbook that served them well in the past. They deployed unwieldy arguments about the general benefits of trade policy, failing to tell the story of how trade is a twenty-first century reality that affects nearly every purchase a consumer makes today.
Too often, these cases were made in specialist publications often ignored by the public writ large, by former government officials and policy wonks who did little to provide the political cover members of Congress desperately needed.
Legislative offices were flooded with anti-trade letters at a ratio of 10:1; no lecture from a cabinet official was going to stem that tide while voters watched their neighbours planting signs outside town council meetings. In choosing their weapons of war, free traders chose poorly.
All of this may have been prevented by employing a counter-tactic too often ignored in the public affairs arsenal: introducing political risk among your opponents. In the fight over TPP, with proxy battles cropping up over fast-track authority and TTIP, few bothered to point out that populist anger over trade negotiations was threatening job growth, investment into local communities and, most importantly, the low cost of goods and services consumers have come to take for granted.
These arguments should have been made in home district media outlets, with credible, local voices to articulate them to their neighbours. But they weren’t. Unencumbered by these criticisms, trade opponents were free to pick off legislators at will. They tapped into a populist tidal wave that has come to define much of western politics. Opponents successfully turned an unsexy issue into a vehicle to channel widespread frustration. With it, they took down the largest trade agreement ever.
Pro-Brexit voters dismissed warnings of economic upheaval that many experts declared a Leave vote would bring. And while British politicians aren’t currently being forced to defend trade agreements, treaties and policies specifically, they soon will be. Fewer UK voters have been affected by trade with China in the way manufacturing workers have in the States, but they cannot be relied upon to reject protectionist arguments without a vigorous and public defence of free trade.
Populist fury, already effectively directed at the EU, could be aimed elsewhere, and international trade agreements and regulations may very well be next. Just ask anyone in Washington.