Washington state embraces trade — starting with exports of Boeing planes and agricultural products — but judging by the presidential campaign, much of the nation is marching to a different drummer.
Washington is different, and we’re proud of the attributes that make us an unusual star in the union.
One defining characteristic, however, threatens to leave us as an outlier in a volatile political environment: trade.
Washington ranks third among the states in the value of its merchandise exports, behind only much-larger Texas and California. We actually run a trade surplus.
Presidential candidates’ positions on trade
Backed TPP as secretary of state but now opposes the trade agreement
Has vowed to place a 45 percent tariff on Chinese imports
The state Department of Commerce says Washington is the nation’s highest exporter per capita and one in three jobs are directly or indirectly tied to trade.
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At any other time since the end of World War II, this would be something to brag about. But these are no ordinary times.
Both Republicans and Democrats are turning against trade. It is especially pronounced in the presidential race.
Donald Trump, the presumptive Republican nominee, has promised to place a 45 percent tariff on Chinese imports and a 35 percent tariff on imports from Mexico. He opposes the new Trans-Pacific Partnership, which links the United States and 11 other Pacific Rim nations (but not China) and is the most ambitious trade deal yet.
And he has proposed slapping duties on American companies that make products offshore that they once manufactured here. His aim would be to pressure these companies to keep well-paying factory jobs here.
Trump says many things, often contradictory and hazy. But on trade, he’s been consistent. To be fair, he may think these positions would force other nations to deal. He sees himself as a master dealmaker. Or as he put it in a debate, “The 45 percent is a threat that if they don’t behave … we will tax you.”
It’s easy to shout “protectionist!” and think that one word invalidates Trump’s arguments. The developer does himself no favors with his stream-of-consciousness antipathies against minorities, particularly Hispanics.
In reality, his positions have resonated with millions of white working-class voters, especially in states that have suffered trade-related job losses. The voters of the Republican Party (as opposed to its waffling grandees) have decisively chosen Donald Trump. And he could win.
Meanwhile, Sen. Bernie Sanders has also attacked globalization. In Congress, he opposed the North American Free Trade Agreement and now is against TPP. His campaign website says he “warned in 2000 that Permanent Normal Trade Relations with China would help multinational corporations at the expense of workers and the environment.”
Hillary Clinton, the presumptive Democratic nominee, also came out against TPP. This is a shift: She backed TPP as President Obama’s secretary of state. Her husband signed NAFTA in 1993. Sanders supporters are suspicious, and trade is expected to be a major issue in the party’s platform fight.
The candidates are following as much as leading.
A Pew Research Center poll last month found that 49 percent of those surveyed “say U.S. involvement in the global economy is a bad thing because it lowers wages and costs jobs.” Only 44 percent saw it as a good thing. The antiglobalist sentiment rose to 65 percent of registered Republicans who prefer Trump.
Behind this is more than nativism. Since 2000, the United States has lost 5 million manufacturing jobs. Many have been casualties of factories moving to Mexico and China.
Nor is the view confined to America. It is a big cause of support in the United Kingdom for the idea of leaving the European Union; the “Brexit” vote is June 23rd.
Even more than TPP, TTPP seemed like an easy agreement to approve even two years ago. Not now, in Europe or America.
All this is alarming to Washington state trade advocates. Eric Schinfeld, president of the Washington Council on International Trade, felt compelled to send a letter to the editor after my (very unscientific) online poll showed a majority of respondents was against TPP.
He wrote that a poll by the trade council showed 54 percent of registered voters in Washington support TPP while 23 percent oppose. This is no doubt closer to the truth.
Our state’s trade backers could point out that access to the global marketplace ensures inexpensive goods for U.S. consumers. Unfortunately, that justification is growing fragile as more people blame globalization when they see their wages stagnate or even fall.
Supporters could also rightly note that America’s trade deficit is closely related to what Stephen Roach, former chairman of Morgan Stanley Asia, sees as our profligacy and poor savings rate: “The country has been living beyond its means for decades and drawing freely on surplus saving from abroad to fund the greatest consumption binge in history.”
Only having the dollar as the world’s reserve currency allows us to continue the party.
And globalists would warn that America backing away from the international order it created would impoverish millions in developing nations and add instability.
But this won’t play in places that have seen their prize employers move overseas or shut down because of currency manipulation or stealth protectionism by China and others.
Or among the young people supporting Sanders who see corporate oligarchs winning and average people losing.
Even if Trump loses and we avoid the dangerous territory of a trade war, it is difficult to see us going back to the era of “free trade” (really managed trade, through these complex agreements).
Support for TPP and other trade agreements might not play here, either, if we lost Boeing. Last year, 59 percent of Washington’s $86.4 billion in merchandise exports came from aircraft, engines and parts.
Washington has been a net beneficiary under the old trade paradigm. But it and other export-dependent states such as California face new and uncharted terrain ahead if the United States decides the losers from trade outnumber the winners.