The United States has been the undisputed leader in trade liberalization for the past 70 years, and more importantly, the architect of the global trading system. Current congressional squabbling about Trade Promotion Authority seems more like special interest-driven partisanship than a substantive policy debate one would expect from a global leader. Abdicating its leadership role, the U.S. leaves a significant gap. China is the only champion willing, indeed anxious, to pick up that mantle, offering a less certain future for the global trading system.
Since 1947, the U.S. has led the multilateral process of trade liberalization. This seven-decade enterprise has not only dramatically reduced trade barriers, it has also created an expansive, open, rules-based global trading system. More importantly, this rules-based framework has been carefully designed to accommodate the evolution of the system and foster inclusion. It adapts to new technologies, commercial issues, political systems, disputes and geo-economic sensitivities. It welcomes any — now more than 160 nations — who can negotiate their way into the group by opening up to more commercial engagement.
As a result of a generation of leadership, the U.S. is already an extremely open economy. The United States International Trade Commission in 2013 identified the significant U.S. restraints on imports. The average U.S. tariff is less than 1.3 percent. "Significantly restrictive tariffs" in its study were anything above 4.1 percent, found in just 15 products: cheese, sugar, tuna, apparel, costume jewelry, cigarettes, footwear, light fixtures, pens, pencils and a few other commodity products. These, and an oddly persistent 25 percent tariff on pick-up trucks, are it. We are largely disarmed.
As a result, trade agreements for the U.S. are a way to pry open trading partners. For instance, the 2012 U.S.-Korea Free Trade Agreement (FTA) immediately increased duty-free access for U.S. exports to 80 percent of Korea's tariff lines from 13 percent. Export markets for U.S. agriculture and autos were pried open along with commitments in major service sectors and provisions for addressing non-tariff barriers as well as trade-related issues such as labor, environment and competition policy.
Even bigger gains will come from the 12-nation Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership negotiations. These new negotiations are highly valuable because they track evolving global commercial interests: transnational value chains, regulatory structures and procedures, e-commerce, state-owned enterprises and health and safety standards (including dealing with pandemics as a factor for mandatory licensing under TRIPs). Even the textile industry has reversed a century of protectionism to support the TPP.
In many ways, the current trade debate is a distraction. Manufacturing in the U.S continues to grow, but fewer people work in manufacturing today than in 1997. Trade is responsible for a very small part of that. The major cause is technology. For the past century and a half manufacturing has replaced humans with machines. The 21st century problem is broader — replacing people with Apps. The most vulnerable jobs identified by MIT's Technology Review are butchers, secretaries, payroll clerks, bank tellers, file clerks, pharmacists, bookkeepers and postal clerks; none particularly vulnerable to trade, or necessarily machines for that matter; it's all about software.
The job situation will get worse (or better, depending on your vantage point). Digital processes increasingly "talk" to other digital processes to create yet new processes, enabling greater production in manufacturing and services (including government) with fewer people. The workforce is becoming polarized — jobs for the highly trained who can work with technology and the low-skilled who can't yet be replaced by it. Those in between are struggling.
Technology's explosive growth underlies the hollowing out of the middle-class in developed markets. But who can be against technology? Protectionist sentiment erroneously, if understandably, transfers the problem onto international trade. It is politically correct to oppose trade, but not technological progress. Ironically, opening up the markets in the Trans-Pacific Partnership and other trade deals could be an important part of the solution.Robert A. Rogowsky is a professor of Trade & Diplomacy at the Middlebury Institute of International Studies in Monterey, Calif., adjunct professor at the School of Foreign Service at Georgetown University and former chief economist at the U.S. International Trade Commission. Thinking of submitting an op-ed to the Washington Examiner? Be sure to read our guidelines on submissions.