An Economic Issue That Could Unite Rural and Urban Voters: Trade

On a couple of occasions, I have noted that the U.S. Conference of Mayors (mostly from large, Democratic cities) endorsed the Transpacific Partnership Trade Agreement (TPP). That is likely because of this:

Brookings found that fully 86 percent of U.S. exports now originate from urban areas. Moreover, exports drove more than one-quarter of all metro area economic growth from 2009-2014. “This has metro leaders and elected officials placing an increasing focus on exports as a way to grow and maintain their regional economies,” said Bruce Katz, the Metropolitan Policy Program’s codirector, in an email. In their letter to Senate leaders, Johnson and Rawlings-Blake indicated the conference’s own forecast projects that exports will account for one-third of metro areas’ economic growth in coming years.

Yesterday, Adam Behsudi has a lengthy report at Politico outlining how Trump’s decision to pull out of the TPP is affecting rural America.

For much of industrial America, the TPP was a suspect deal, the successor to the North American Free Trade Agreement, which some argue led to a massive offshoring of U.S. jobs to Mexico. But for the already struggling agricultural sector, the sprawling 12-nation TPP, covering 40 percent of the world’s economy, was a lifeline. It was a chance to erase punishing tariffs that restricted the United States — the onetime “breadbasket of the world” — from selling its meats, grains and dairy products to massive importers of foodstuffs such as Japan and Vietnam.

The decision to pull out of the trade deal has become a double hit on places like Eagle Grove [Iowa]. The promised bump of $10 billion in agricultural output over 15 years, based on estimates by the U.S. International Trade Commission, won’t materialize. But Trump’s decision to withdraw from the pact also cleared the way for rival exporters such as Australia, New Zealand and the European Union to negotiate even lower tariffs with importing nations, creating potentially greater competitive advantages over U.S. exports.

As Martin has consistently noted, Trump didn’t just win in rural areas, he wiped out any advantage Clinton gained in suburban areas with overwhelming wins. Behsudi points out that he won in the farming community of Wright County, Iowa by a 2-to-1 margin. But based on his reporting, it will be interesting to watch what happens to that support. Behsudi notes how swiftly the European Union, Latin America and China have moved into the vacuum created when the U.S. pulled out of TPP, which could permanently edge out this country’s producers. He also writes this:

For his part, Trump once promised a slew of “beautiful” deals to replace the TPP, but his administration has yet to lay out a detailed strategy. U.S. Trade Representative Robert Lighthizer told lawmakers that an analysis is underway to determine where it makes most sense to pursue negotiations.

A president who is unable to rally his own Republican troops to pass legislation in Congress probably isn’t likely to make much headway on complicated trade agreements. That means that for all his promises on trade, we’re not likely to see any more movement on this issue than we have on his much ballyhooed infrastructure plan. That will leave Trump’s rural supporters out in the cold—just as they were with his attempts to repeal Obamacare.

It’s obvious that trade is a contentious issue for Democrats. But given that it could be a lifeline for both urban and rural areas, it would be a huge mistake to simply ignore the subject.

from novemoore http://ift.tt/2vJUWXZ

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s