We support aggressively pursuing mutually beneficial free trade agreements such as the Trans-Pacific Partnership (TPP). These agreements should include respect for intellectual property rights and restrictions on currency manipulation. We also support continuing to give Trade Promotion Authority to the President that allows him to negotiate free trade agreements and then submit them to Congress for a simple up or down vote.  We should not naively expect trade to miraculously convert autocratic and threatening governments into peace loving democracies. We should continue to restrict access to sensitive technologies to countries who remain antagonistic to U.S. national interests, e.g. Russia, China, and Iran. We also support generous federal support for retraining programs so that workers who are displaced by trade, automation, or other factors can adjust to the changing workplace.

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In the last twenty years the growth of international trade has been responsible for removing more people from poverty worldwide than all of the foreign aid, public and private, of the last 100 years. It also makes high quality, low priced goods available to American consumers.   

There are losers, principally organized labor and workers in industries that cannot compete with lower-cost foreign goods. The solution is not to limit trade. Mutual free trade agreements with other nations are vital to the U.S. and the world’s economy. The solution is to make it easy for workers to re-educate, re-train, and re-locate to where the jobs are. We would support programs to facilitate this process that are shown to actually work and move workers to new jobs when old ones are lost. It may well be that the best programs are on-the-job training. If this is the case, the important thing may be to reduce legal, regulatory, and tax disincentives which discourage the hiring of new employees, such as minimum wage and benefit requirements.

Protectionist legislation is unwise and we will oppose any candidates that support “Buy American” campaigns.   Nevertheless, we believe that there is a role in making sure that free trade really is free. Currency manipulation, such as that practiced by China, is clearly a barrier to free trade and we support efforts to induce China to adopt floating exchange rates. Similarly, the protection of intellectual property rights should be a major consideration in trade negotiations. Finally, there are legitimate national security issues that might require us to limit access to sensitive technologies, in the case of clearly antagonistic governments, like China and Russia.

There are legitimate economic and geo-political reasons for reducing America’s and the world’s dependence on China. Programs like the Trans-Pacific Partnership are the right approach to accomplish this. China is losing its comparative advantage offered by cheap labor. The Chinese Communist Party is cracking down on political and economic freedom within China, which will inhibit Chinese economic growth. These trends create an opportunity to encourage economic development in the rest of Asia, Latin America, and Africa through reciprocal trade agreements like the TPP. America should seize this opportunity rather than engaging in self-destructive trade wars.

The United States held a fairly plausible, but with hindsight naive, belief that prosperity would inevitably lead China toward being a more open, democratic, and benign state. Instead, it has become a more autocratic, belligerent, and powerful state. The United States is also much wealthier by virtue of trade with China. The lesson is not that free trade agreements are a bad idea, but rather that we need to be clear-eyed about the consequences with respect to our geo-political adversaries. History is not deterministic. It is possible that with different leadership China might well have become a more open, democratic, and benign state. A strategy of impoverishing the world though mutual protectionism seems to us an unlikely path toward peace.

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