Listen Up!

A guide for selling trade agreements to a wary American public.

President George W. Bush has an trade agenda. As the States economy slows, he hopes trade liberalization will provide new or larger markets for U.S. producers. Thus, he traveled to Quebec in April to jumpstart the moribund Free Trade Agreement of the Americas. U.S. Trade Representative Robert Zoellick has worked hard to convince other nations to agree to a new round of multilateral trade talks, which are scheduled to commence in Doha, Qatar, in November.

This agenda could be blocked in many capitals around the world, from Rio to New Delhi to Brussels. But Bush will also find obstacles to trade liberalization in his own back yard. Congress is divided on the scope and purpose of trade agreements, and the American public is deeply ambivalent about trade liberalization. The Washington, D.C. suburb of Arlington, Virginia provides a good example of how Americans see trade.

Arlington is a lot like other U.S. suburbs. Its denizens work hard, save for their children's education, and look forward to their retirement. They rarely think about trade. Yet trade is an integral part of their daily life. Like most Americans, the people of Arlington drink French wine, eat Mexican food, and work on computers made in Malaysia. When they save for college or retirement, their savings are invested in U.S. companies that import,goods, U.S. companies that sell goods overseas, and foreign companies that invest in the United States. When they go shopping, they load up their Fords and Hondas with many products made overseas.

The people of Arlington, like most Americans, know that the United States is the world's most active trading nation, but they are more aware that the United States is relatively self-sufficient in many areas. They think so-called "free-trade" agreements enable other nations to trade unfairly.

Policymakers are to blame for public misunderstanding about these agreements. They have not effectively communicated why such agreements became essential. Nor have they adequately explained what trade agreements do, namely regulate how and when nations may use tools of protection to limit trade.

The United States is a signatory to some four hundred trade agreements. In recent years, these agreements have had a significant impact on the United States and global economy. They helped (U.S. and foreign) companies compete in worldwide markets, producing enormous economies of scale and scope. This has led to lower prices for consumers in the United States and around the world.

But many American consumers are not cognizant of these benefits. Americans hear plenty about the costs of our huge trade deficit. But they hear very little about how both imports and exports stimulate economic growth. They hear even less about how trade agreements help regulate commerce among nations with different economies, political systems, and norms.

NAFTA provides a good example of the failure to communicate the rationale for trade agreements. The first Bush administration saw NAFTA as a lever to encourage Mexico to continue its pursuit of market-oriented policies. If economic growth is stronger, fewer Mexicans might migrate illegally to the United States. Thus, low-skilled U.S. workers might find greater job opportunities and higher wages. But that is not how Bush--and later Clinton administration--officials talked about the potential agreement to the American people.[1] The public debate over NAFTA was essentially a food fight about the number of U.S. jobs NAFTA would create or destroy.

The WTO, in contrast, benefited from a broader debate. It was colored by very real concerns that the United States could lose control of its health, environmental, workplace, and safety standards. Opponents linked the new WTO (and NAFTA) to the interests of big business, not to the interests of average Americans. But the Clinton administration did not respond effectively. It defended the WTO by arguing that high-wage, high-skills jobs created by demand from emerging markets would keep the American dream alive. This argument was effective on Capitol Hill. The Uruguay Round (and the new WTO) received a resounding vote of support in both Houses of Congress. But the public still did not understand its stake in trade agreements and why such agreements have become so important. Moreover, to win Congressional support for these trade agreements, the Clinton administration traded "pork" (support for unrelated legislation) for votes for both NAFFA and the WTO. In doing so, the administration undermined the political and economic case for trade agreements. This failure proved critical when the Clinton administration decided to host a ministerial meeting of the WTO in the United States to kick off a new round of multinational trade liberalization.

The Clinton administration debated for years whether to host a ministerial. While some officials argued that a ministerial could build support for trade, others feared it would undermine U.S. support for the WTO. After all, the celebration of the fiftieth anniversary of the GATT in Geneva in 1998 had attracted massive and violent street protests. Still, Clinton decided it would be good to host such an event. But instead of using government money to fund the ministerial, he decided to rely on private business sponsorship. All previous ministerials or GATT rounds had been financed by the host government and the GATT/WTO. However, business had successfully supported the NATO summit, and Clinton did not want to undermine the ministerial by encouraging a Congressional debate about whether the United States should host it, let alone whether the United States should pay for it.

After months of deliberation, the administration decided to host the ministerial in Seattle. At first glance, this was a good choice, given the city's long and broad interest in trade, its diverse economic base, and its strong union history. But because of the reliance on corporate support for the ministerial, some critics alleged that the meeting was the Boeing/Microsoft ministerial. It is true that many of the companies called on to support the ministerial were the same ones that might benefit from trade talks. But the administration did not recognize the potential conflict of interest. Moreover, observers saw the administration's negotiating priorities on agriculture and e-commerce as designed to benefit key Democratic constituencies. This led to criticism that the fox was funding and guarding the chicken coop, and leaving the people outside. It also furthered the impression that the only beneficiaries of trade liberalization were executives of multinationals and their major shareholders.

The administration did not do a good job of preparing the public for the ministerial. Both the Agriculture Department and USTR held heatings around the United States. But while USTR officials "heard" what the concerned public said about trade agreements, they did not change America's negotiating priorities or procedures. USTR did not use the ministerial as an opportunity to educate

Americans about the benefits as well as the costs of trade agreements.

When approximately thirty thousand people took to the streets of Seattle for days to protest the ministerial, Americans had to wonder why this trade negotiation was so threatening. Moreover, some of the protestors' complaints about the secrecy of the Seattle negotiations resonated with the public. The closed-door nature of the negotiations led credence to critics' allegations that global trade officials were cooking up something few Americans would support.

That is why the doors must be opened and trade negotiations brought into the sunlight of public awareness. Trade agreements are America's main tool to govern globalization--a phenomenon that is very scary to many Americans. We will have better trade policies if the public has a greater understanding of them.

There are several reasons why we must promote a different discussion about trade. First, trade is a huge and growing share of U.S. GDP--at last count 27 percent. Second, trade policies increasingly affect the achievement of other policy goals, from public health and immigration to patents. In recent months, WTO decisions have found that some U.S. tax and environmental policies favor U.S. industries. Some of these decisions should please trade critics on the left, including environmentalists and foes of so-called "corporate welfare" for multinationals.

Still, these critics are not publicizing the WTO decisions. Nor do WTO critics on the left and right acknowledge the fact that sovereignty is in no way affected by the WTO. The United States does not have to change its public policies in response to a WTO decision, but there are economic and political consequences for ignoring a decision. For example, another nation could retaliate.

The increase in WTO decisions and their potential consequences have led more Americans to pay attention to the power of the WTO. But that hasn't produced a more informed debate about trade. Proponents and opponents of trade agreements tend to make simplistic cases. The debate focuses on the economic virtues or evils and de-emphasizes the impact of globalization on a nation's system of social and environmental regulation and, more broadly, the social compact between citizens and their government. Take public health as an example. Trade is at the epicenter of a debate over whether drug companies should lose their patents so Africa can afford to treat millions of people dying of AIDS. And trade is a key factor in the debate in the United States over whether we should import lower-cost drugs from Canada, a country with a strong public health infrastructure. In Africa and in North America, at issue is whether drugs should be treated as a public good or an export good.

Finally, and most importantly, the United States can't seem to find consensus on the purpose of trade agreements because we use trade to achieve too many unrelated policy goals. In recent years, the United States has used trade to protect sea turtles, prevent the spread of mad cow disease, and rescue financially precarious sugar producers. We also used trade to punish rogue nations like Iraq, lower pharmaceutical costs for AIDS victims in Africa, and ensure that countries protect the intellectual property of Madonna and Microsoft. By using trade as a weapon in pursuing so many goals, we foment confusion about the purpose of trade and undermine support for trade agreements.

Why do we rely so heavily on trade to address other international disputes? First, we have enormous leverage with all the nations that want to trade with us. Secondly, trade actions are easier to impose politically because there is not a direct budgetary cost that Congress must approve. Trade decisions are "off budget," which means the administration does not have to get specific budget allocations to lower pharmaceutical costs for AIDS victims or to subsidize the steel industry. If we want to expand trade agreements and build public support for them, we must ask if trade policy is the most cost effective solution for these other problems?

So how do we get the public to focus on trade policy when most Americans can barely juggle their work and family responsibilities? Moreover, how do we get the public to listen when trade is one of many policy tools about which they must make tough choices? We must be honest about the benefits and costs of trade agreements, explain what we are really doing when we negotiate trade agreements, and finally, make a case for trade that people can understand.

Here are five ways to sell the American public on trade:

1. Highlight the rationale for trade at a consumer level. Trade is based on a perceived mutual benefit, but the notion of "benefit" seems lost in the trade debate. When you travel to Pads or Casablanca or Sydney for your honeymoon, you choose to trade. When you ponder whether to buy a U.S-assembled Honda or a Korean-made Hyundai, you are making a trade decision. The consumer is as important a player as the producer and shareholder.

2. Become a missionary. Preach the virtues of globalization to your family, friends, and neighbors.

3. Explain what trade agreements do. They are one of several tools policymakers can use to govern globalization. Citizens, producers, friends of the earth, consumers, shareholders, and taxpayers need such regulations because global markets are constantly changing, for the worse as well as for the better. The price and supply of goods may not accurately reflect costs to the environment, or some producers may gain unfair market share. There are always time when nations must protect their citizens from injurious imports. But like domestic regulations, these regulations are often imperfect and incomplete. And like domestic regulations, they come with costs to some producers and consumers. That is why we must constantly renegotiate trade agreements.

4. Tailor your arguments to what consumers care about. Every hour of every day, Americans see, smell, touch, taste, and hear goods and services that are traded. Their perspective on trade policy may stem from how trade most affects them. However, their conclusions about trade policy may turn out differently if they examine the costs and benefits of trade from each of these perspectives. One can simultaneously be a winner and a loser from trade agreements. But it is empowering to understand how trade affects us in our daily lives--as parents, citizens, workers, shareholders, or environmentalists.

5. Use the news to get peoples' attention. One of the most popular sports events in the United States is the college basketball tournament in March. You might think trade has nothing to do with it, but the uniforms for many teams and some of the players are "imported." Trade ministerials, such as the upcoming ministerial meeting of the WTO in Doha provide an opportunity to begin a different dialogue about trade. Trade is, after all, everybody's business, but it is a business everybody needs to know more about.

[1.] Bruce Michael Bagley, "U.S. Policy Toward Mexico," in Mexico and the United States: Managing the Relationship, ed. Riordan Roett (Boulder: Westview, 1988), p. 224.

Susan Ariel Aaronson is a Senior Fellow at the National Policy Association and the author of several books on trade. Her latest, Taking Trade to the Streets: The Lost History of Public Efforts to Shape Globalization (University of Michigan Press, April 2001) is reviewed on page 55.