Judd Gregg: Republicans’ trade quandary

The Democratic Party and the Republican Party both have a somewhat erratic history on the issue of free trade.

It is, however, fair to observe that Republicans, at least in the period since World War II, have stood for reducing barriers to trade while Democrats have been much less clear.

{mosads}In recent years, big labor and the most dogmatic elements of the environmental movement have risen to exert disproportionate influence on the Democratic Party. As a direct consequence, most rank-and-file Democratic members of Congress oppose free trade.

Republicans, on the other hand, are going through a process of searching on the issue.

This has all come to a head because of the push toward major new trade agreements: the Transatlantic Trade and Investment Partnership (TTIP) with Europe, and the Trans-Pacific Partnership (TPP), with mostly Asian nations.

This has set up the Republican quandary.

For the second half of the last century, it was fairly easy to make the case that free trade benefitted the United States in unique ways. We were, after all, the most powerful nation in the world, with the strongest economy.

But other nations over time became stronger and more effective competitors. This, in turn, led to a different question: Was it in the best interest of American workers to give all these new, aggressive nations open access to our markets?

That is only one of the issues that are roiling the debate today.

The question of currency manipulation is a very real one. This has always been an item of concern but today it is more important than ever.

Europe is printing massive sums of euros, partly in order to strengthen its economy. As the euro is made weaker against the dollar, producers in the European Union gain a competitive advantage.

China has been artificially devaluing its currency for decades. Other Asian nations, notably Japan, have also engaged in gamesmanship on currency, at our expense.

A further complication for the traditional Republican support of free trade is the pattern of open assaults from Europe and Asia on our most successful companies.

Google, Amazon, Apple, Facebook and other cutting-edge technology companies that give our economy exceptional lift are being aggressively attacked in other markets. The challenge comes not, primarily, from competitors but from the politicians of these regions through their regulatory bureaucracies.

The people making these challenges claim that their intention is to ensure that commerce is not restrained by the dominance of the American companies. In reality, however, they are trying to hobble U.S. businesses with whom their homegrown equivalents cannot fairly compete. It is a new form of protectionism aimed squarely at neutralizing American advantage.

All this has caused Republican support for free trade to teeter. But, even so, Republicans need to stand for free and open trade agreements.

Yes, legitimate concerns can be raised. But there are good responses to them all.

It is true that jobs in certain industries will be lost, and many already have been lost. But, overall, opening other markets to our commerce is a massive job creator for us. And the employment we create through more trade is primarily in higher-end jobs, bringing higher incomes to Americans.

We may be at fault for not properly training and educating our people to do these desirable, advanced jobs but that has nothing to do with any trade agreement. The simple fact is that, in a global economy, jobs in areas where we are not competitive cannot be protected.

In addition, open trade reduces the cost of goods to Americans. It raises our standard of living by making it possible to buy goods at affordable prices. Whether it is clothes, shoes or electronics, our quality of life goes up if we can get products for less money than in the past.

The issue of currency manipulation is a difficult one. But it is fairly clear that, unlike the European economy, ours is continuing to grow in real terms. Because we are such a productive people, we will have a uniquely strong currency. Republicans should not be the ones calling for a weaker dollar any more than we would call for a weaker nation.

When it comes to the use of protectionist tactics by European nations against U.S. companies, conservatives may be tempted to tell the Silicon Valley crowd, so enamored of the left in American politics, that they got what they paid for. 

Their treatment at the hands of the Europeans is classic protectionist, progressive politics. But it would be wrong to abandon them to their naiveté. Conservatives should defend them. We cannot do so while opposing free and open trade. On the contrary, free trade agreements are the best way to ensure these companies can enter new markets and be treated fairly.

Lastly and most importantly for conservatives, free trade agreements go to the essence of one of our basic purposes. We believe in empowering the individual, in economic growth through individual initiative and opportunity.

Protectionism is anathema to this belief. It amounts to allowing elitists — whether they are cloaked in the garb of government bureaucracy, big labor or the radical environmental movement — to control the marketplace of ideas, as well as the marketplace of production.

Republicans cannot claim we are for individual liberty and open markets while opposing free trade on the grounds that it does not protect us properly.

Let’s show a little more confidence in the resilience and strength of our people, their ideas and our beliefs.

Judd Gregg (R) is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee, and as ranking member of the Senate Appropriations Foreign Operations subcommittee.