In the wake of Election 2014, both President Obama and Republican leaders in Congress expressed a commitment to working together on issues where they agree.
On Thursday, House Ways and Means Chairman Paul Ryan, R-Wis., made an eloquent address in favor of two major foreign trade agreements that present just such an opportunity for bipartisan agreement — the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership. Negotiations surrounding the former involve countries on the Pacific Rim, from Australia to Japan to Canada. The latter agreement involves Europe.
Ryan warned that there are dangers to letting other nations negotiate such agreements and then trying to fit in between them later. This is so even when it comes to deals with friendly European countries. The example he gave was about bratwurst. Europeans, he noted, are “a little prickly about their labeling … So since a Wisconsin brat isn’t from Germany, they want us to label it a ‘bratwurst-like sausage’ … It’s all a little humorous, but in recent talks, Canada agreed to accept some of these labeling standards for things like feta and fontina. The point is, if we do nothing, the red tape and barriers to our exports will only multiply.”
Likewise, and perhaps more urgently, if the United States doesn’t secure agreements with Asian and Latin American countries, then China will do it first. U.S. exporters may be reduced to entering the game later, and on terms drawn up by the Chinese. Not only would this shut Americans out of the economic gains that others will enjoy in the short term, but it might establish a lower baseline for labor and environmental standards in the long run. That would put conscientious American firms at a greater disadvantage in exporting their products.
Of course, this isn’t just about sausages or cheap electronics. In the big picture, everyone benefits from free trade. International trade broadens the population within which the division of labor — that fundamental concept upon which modern economies are based — takes place.
In every moment of the last thousand years, human prosperity has advanced precisely to the extent that people have abandoned self-sufficiency and moved toward economic interdependence. A world in which every person milks his own cow and makes his own clothes will always be an impoverished world. But increased interdependence created the possibility of greater specialization and eventually mass production, which has made modern life possible.
The world’s poor are nearly always those who find themselves cut off from the broader market — either through the conscious efforts of a malicious government (as in North Korea, which preaches an ideology of self-sufficiency or Juche) or by geography, or by indifferent third world bureaucracies that exclude the poorest from the legal and economic life of their countries.
Americans can only do so much to change the way other countries operate. But they can make agreements that broaden their economic community. As Ryan put it, such agreements are the “best solution” for connecting Americans with the commercial life of other nations while preventing grave imbalances in the rules of the game.
If Obama and GOP leaders want to leave something behind as an unambiguously positive joint legacy, then these trade agreements are their best opportunity to work together and get something done.
