January 7, 2019 11:20AM

Some Questions for the Democrats on Trade

Presidents have the power to set the agenda and drive policy debates, and President Trump has put trade policy front and center. While President Obama moved slowly on trade policy during his first term (he picked up the pace during his second term), and candidate Hillary Clinton called for a "pause" on trade policy during her campaign, Trump has made an activist (and protectionist) trade policy one of his signature issues. Among other things, he has imposed tariffs under a number of trade statutes, accused many other countries of cheating on trade, renegotiated some existing trade agreements, and challenged the functioning of World Trade Organization by blocking the appointment of appeals court judges.

This flurry of trade policy activity has brought a wide-ranging debate over the foundations of trade economics, trade law, and trade politics. Ultimately, this debate might be productive, and it has provided an opportunity to explain these issues to the broader public. In the short-term, however, it has led to a chaotic and economically harmful U.S. approach to trade policy.

With trade policy making headlines, the current group of actual and aspiring Democratic leaders may be forced to make some tough choices on trade. It is not so much whether they are "for it or against it," but rather, what exactly are they for?

In the short-term, this question is for the House Democrats, who have a great deal of power over Trump's trade agenda. The administration has negotiated a new NAFTA (called the U.S.-Mexico-Canada Agreement, or USMCA), and Congressional ratification will require support from at least some House Democrats. But do they like the agreement Trump negotiated? And do they want to give Trump a political win? So far, many of them seem skeptical about supporting it in its current form.

But the more interesting question is the longer-term trade agenda of the Democratic party. We just hit 2019, but 2020 Democratic presidential candidates are coming forward already, and with trade policy making daily headlines they will almost certainly be offering their views on trade. Senator Elizabeth Warren has already announced that she would form an "exploratory committee," and has said a few things about trade. Her statements so far have hints of traditional economic nationalism, but leave room for maneuver, and many questions remain. Here are a few questions I would like to see reporters ask her:

- Does she think the tariffs on Chinese imports are working, and would she keep them in place or remove them? What alternative strategies would she consider to address China's trade practices?

- Would she maintain the steel and aluminum tariffs imposed for what are said to be "national security" purposes?

- Would she support Congressional ratification of the USMCA (subject to certain changes), or would she wait and try to renegotiate NAFTA herself if elected? How exactly would her vision of trade agreements differ from the existing model?

- With which countries, if any, would she negotiate new trade agreements?

- Would she end the Trump administration's tactic of blocking appointments to the World Trade Organization's appeals court?

Prior to 2016, it was difficult to imagine so much focus on the details of trade policy. Many politicians were content to proclaim vaguely that they were for "free and fair trade" and leave it at that. But now we have a number of specific actions on the table, and it is worth asking presidential candidates what they think of each one.

Senator Bernie Sanders has been an outspoken trade critic for years, but it is still worth pinning him down on all this. There are nuances to being a trade critic, and we do not know what he thinks of all the issues noted above.

Less is known about other potential Democratic candidates on these issues, however. Senator Kamala Harris, Senator Cory Booker, Senator Amy Klobuchar, Beto O'Rourke and others should all be asked to weigh in on the questions set out above. In the past, when trade policy was not as prominent, candidates could get away with saying very little, and sticking to vague platitudes, but now there is an opportunity to ask them very specific policy questions about actual U.S. tariffs and other trade actions that will be hard for them to evade.

The Democrats have a big choice to make here on how they want to approach trade. Some of Senator Warren's comments make it sound a bit like she favors a less chaotic version of Trump's protectionist, nationalist trade policy, with all the same favors for influential companies, just done more efficiently. But she has left things open enough that she could go in a more pro-trade direction if she wanted. Polls suggest that the Democratic base is more open to trade than ever before, which means that an anti-tariff/pro-trade position might be more acceptable in a Democratic primary than in the past (and could also be an advantage in the general election against Trump).

People hoping that Democratic politicians will become enthusiastic proponents of trade liberalization may end up being disappointed. But there is a chance that they will move away from the confrontational, unilateralist, protectionist approach of the Trump administration. To find out how likely that is, let's start pressing them on their views right now.