The SMU Tower Center Sun & Star Program hosted the conversation “President Trump, NAFTA and the Future of US Trade Policy” featuring Edward Alden, senior fellow at the Council on Foreign Relations, April 27. HCM Tower Scholar Visakh Madathil wrote about what he learned at the lecture in his essay below, “A Failure to Adjust.”
By: HCM Tower Scholar Visakh Madathil, editor-in-chief of the Tower Center Student Forum publications Dialogue and Open Forum
Edward Alden began speaking purposefully and with a sense of urgency. Though his wit frequently showed, there was no denying the seriousness of his message – more must be done to account for the consequences of free trade.
A Failure to Adjust
It is a common misconception that the world was on an inevitable course to become increasingly open and connected. However, international trade, and increased globalization, sprang from conscious US policy decisions and directives to create an open and interconnected world.
After the second World War, the United States purposely crafted policy to create a new, intertwined economic world order in hopes of avoiding another destructive conflict. This resulted in new institutions, including the General Agreement on Tariffs and Trade (GATT), World Trade Organization (WTO), and the United Nations (UN), to help foster a connect and cooperative international order.
Increased international trade was initially welcome by many Americans in the 1960s. However, by the time NAFTA passed in 1993 early anti-trade and nationalist tendencies could be seen. Over the course of five decades, free trade came from being celebrated to being vilified by some Americans.
Part of this is caused by the mass hemorrhage of American manufacturing jobs, six million of which have disappeared since 2000 alone. While trade has brought millions of people out of poverty, the gains of trade have not been distributed well across society.
The largest issues surrounding free trade, Mr. Alden argues, stem from wealth and income inequality created under free trade agreements, not from free trade itself. America, and other Western economies, have not properly adjusted to trade-related negative shocks. If economies continue to adopt free trade, they must be able to craft meaningful mechanisms to combat ramifications. These solutions will include widening the social safety net, expanding worker education programs, and revitalization of communities affected by increased international trade.
President Trump rode to office on a wave of anger, with much of that anger directed towards trade. However, Mr. Alden makes it a point that trade is not the source of economics angst – poor policies surrounding trade are. The challenge is to fix these failed policies. Unfortunately, there is no quick and easy fix, leaving us to critically think about how to overcome our failure to adjust.