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Interpreting Trade

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My good and intelligent friend Reuvain B. e-mailed me to suggest that in this letter [2] I was unfair to whoever at the Federalist Society wrote the two-paragraph description of the up-coming Federalist Society event titled, tellingly, “Fair Trade: Reinvigorating American Leadership in the 21st Century [3].”

Here’s my reply to Reuvain:

Reuvain,

The second paragraph of that two-paragraph Federalist Society description reads to me, rather clearly, as one that gives much too much credence to Trump’s claims about the ill-consequences of trade. It’s true that that paragraph ends by noting that these issues “will be debated,” but in the middle of that paragraph the Fed. Soc. writes “The President made a commitment to revivify sectors that have slowly atrophied over the decades, negatively impacting our culture as well as our economy. By engaging vigorously with foreign powers – allies and strategic competitors alike, the President is attempting to send a signal: He wants free trade, but it must also be fair trade.”

This passage reads as though it states established facts – that the president wants free trade, that parts of our economy have “atrophied over the decades,” and that the very concept of “fair trade” is meaningful and operational. But not one of these assertions is defensible. Indeed, the notion that Trump wants free trade is absolutely ludicrous given all that Trump says, and has said for more than 30 years, on the topic (and given his choice of trade advisors – one of whom, Wilbur Ross, will deliver the opening address to the event). And, of course, “fair trade” is a term infamously employed by protectionists seeking to make excuses for trade barriers. “Fair trade” has no economic meaning whatsoever (save trade that is unobstructed by the home government), but it does have the power to persuade audiences that aren’t economically informed to tolerate, or even to endorse, protectionist policies.

Ending its two paragraphs by noting that these issues “will be debated at our event,”¬†and inserting in the text a handful of question marks, does not, in my view, save the thing from reading as a thinly veiled endorsement of Trump’s trade policies. The other side – the free-trade side – is mentioned dismissively, with the impression that it consists of people who naively believe that we’ve had a world of pure free trade and that Trump & Co. are among the relatively few, of any significance, to understand that foreign governments have not practiced pure free trade.

Well guess what: no knowledgeable free trader has ever been under any delusion that most other governments are principled practitioners of policies of pure free trade. The notion that the case for the U.S. government to practice free trade requires or presupposes the practice of free trade by other governments is a pernicious myth that simply will not die – but, alas, it is, in this Fed. Soc. write-up, sadly given yet a bit more additional unwarranted credence.

I concede that a literal reading of the text of those two paragraphs – especially by someone who has heard none of the trade debates of the past three years, and who failed to read the title of the event (on which see below) – can support the conclusion that these paragraphs simply lay out the two sides of the trade debate without indicating any bias on the part of the anonymous author(s). But when I read that text – and I’ve read it now at least a dozen times – I cannot come to any conclusion other than that it very solidly, if not explicitly, endorses Trump’s view of trade while it treats with contempt the free-trade view. The free-trade side is presented as naive – as arguments consisting of nothing but theoretical concepts such as comparative advantage – while Trump & Co. are presented as noticing harmful real-world consequences, such as “unjust trade imbalances,” that naive free-traders do not see or dismiss as irrelevant.

My interpretation of the Fed. Soc. write-up of this event as reading as if it were written by the White House is only further justified by noticing the title of the event, a title that does not end with a question mark: “Fair Trade: Reinvigorating American Leadership in the 21st Century.” The implications of this title are that (1) “fair trade” has economic meaning; (2) American “leadership” (whatever that means in this context) needs reinvigoration, and (3) “fair trade” – presumably as defined and implemented by Trump – is a means to this reinvigoration. To which I say to it all: baloney.

Perhaps I’m too caught up in today’s on-going, furious trade debates to see clearly. I pretend neither to be flawless on this front nor without my own (very strong) biases. If I have misread that Fed. Soc. write-up, I apologize. But in that write-up – again, especially given the title of the event – it seems to me there is an unmistakeable and heavy bias toward the utterly mistaken Trumpian-Navarroian view that we Americans have been unjustly harmed by trade and that, in his promises to correct these injustices, Trump is right and righteous.

Don

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