America Must Reject Economic Nationalism
Simply pursuing progressive trade policy is an achievable action. The nations in the African Continental Free Trade Area will soon make immense progress on undeniably progressive goals.
The largest free trade zone in the world by population is not the European Union or U.S.-Mexico-Canada Agreement. It’s now the African Continental Free Trade Area (AfCTA), a trade zone encompassing the entire African continent (aside from Eritrea) that formally launched in January 2021. Under the trade deal, member countries agreed to lower or even eliminate tariffs, reduce bureaucratic red tape (simpler customs procedures, less paperwork, etc), and update regulations. While many of the deal’s provisions will take years to be fully implemented, AfCFTA’s impact will be transformative for millions of people. The World Bank estimates that AfCFTA will bring nearly 100 Million people out of extreme or moderate poverty, narrow the gender wage gap, and raise Africa’s income by $450 Billion. In an interview with CNN, African Union official Wamkele Mene stated there was “a sense of optimism that, quite frankly, I have never seen before on the African continent, about trade integration and market integration.”
It is unfortunate that this sense of optimism cannot be found in America, which has regressed greatly since the pro-trade Clinton administration in the 90s. Trade protectionism reached its modern peak under Trump, who doubled existing tariffs over the course of his presidency. His 2020 defeat potentially saved America from the dire whims of the economic nationalists he appointed as trade advisors. Unfortunately, since his election, President Biden has significantly underperformed on trade policy.
Biden’s shortcomings in this area were held under a microscope by a powerful column from CNN’s Fareed Zakaria in the Washington Post. After a review process, the administration decided to leave in place a set of tariffs Trump placed on China. That action defied logic. Trump's tariffs unequivocally failed: China did not change their behavior, and well-paying manufacturing jobs did not return. At this point, these are simple facts. Researchers across the aisle have agreed on this, from the liberal Third Way to the right-leaning Tax Foundation. Despite these supposed death blows, protectionism keeps returning. Zakaria deems it a “zombie idea” for this reason. The zombie returned right before Halloween: Senator, and noted treason-supporter, Josh Hawley wrote a column for the New York Times arguing that America’s supply crisis, a crisis worsened by protectionism, could be solved with… more protectionism. American tariffs and duties on Chinese-made truck chassis have made shipping, a vital step in the supply chain, cost 300% more than it would without the added costs. This means that companies are forced to choose between expensive Chinese chassis or cheaper but much scarcer American chassis. The choice is ultimately between inflated prices or shortage. Hawley’s nationalist fantasies ignore these crucial facts.
The zombie trudges on, infecting even potential cures. On Halloween, America agreed to drop Trump-era tariffs on the EU. In return, the EU will pause their own retaliatory tariffs, and both entities will negotiate for low-carbon steel and aluminum production. On the surface, this seems like a win for supporters of trade liberalization. Unfortunately, the underpinnings of the deal are a small improvement over the arrangement they replaced. America will switch to imposing a tariff-rate quota and other bureaucratic restrictions on EU imports, a step that will still serve to limit trade with Europe. Furthermore, the deal may very well fall short on its intended climate progress due to its potential impacts on the EU’s existing carbon-intensive import policies. The new agreement with the EU is the latest trade policy misfire by the Biden Administration. The administration’s peculiar blend of conservative trade policy with a progressive face is unsustainable.
Simply pursuing progressive trade policy is an achievable action. The nations in the AfCFTA will soon make immense progress on undeniably progressive goals. By reducing bureaucratic hoops, instead of simply changing what the hoops are, the AfCFTA will lift millions out of poverty, decrease the gender wage gap, and power the fight against climate change. Liberalizing trade can accomplish similarly progressive goals in America.
For guidance, the administration needs to look no further than its own staff. Dr. Kimberly Clausing, a Treasury Department official, has written extensively on the inherent progressiveness of free trade, and how free trade can be used to advance progressive goals. Clausing contends that well-crafted trade deals not only eliminate regressive tariffs, but also can enhance protections for workers, intellectual property, and the environment. These protections have aided the world beyond the confines of official trade zones like the AfCFTA and EU: WTO leader Ngozi Okonjo-Iweala reported that trade literally helped save the world during the pandemic. Dr. Okonjo-Iweala’s recounting of how global supply chains were able to quickly produce vaccine doses stands in stark contrast to Hawley’s unsupported rants about those same supply chains.
Free trade is not the scapegoat that cynical politicians like Donald Trump and Josh Hawley have made it out to be. As the United States regresses into harmful protectionism, the rest of the liberal world shows that it will not be deterred from making progress without us. The AfCFTA reaffirmed an entire continent’s commitment to liberalizing trade, a policy that America finds itself suddenly unable to pursue. Instead of bowing to a misinformed consensus pushed by economic nationalists, President Biden must instead push for integration over isolation.
Alex Moskovitz is a freshman C.L.E.G. major in the School of Public Affairs. He is a staff writer and deputy editor at American Agora.
Image Credits: Paul Kagame