By Michael Stumo, CEO of CPA
The Trans-Atlantic establishment is shaken about America’s free trade skepticism. They invited CPA to Brussels, the Capitol of Europe, to discuss our balanced trade ideas, explore whether we are “protectionists” or not, and to explain the American flavor of anti-establishment politics to their old guard. Why would voters, they ask, reject the progress of free trade and increasingly global government?
By the end, a whopping forty percent of the the polite but slightly hostile crowd were moved to become supportive of balanced trade. (You can see the video of the panel at the 17 minute mark here).
I arrived in Brussels thinking I would be a mere irritant to the attendees of Brussels Forum 2017, organized by the prestigious German Marshall Fund. But the opening speakers of the three day event clearly labeled dissenters as a “threat”. The Brussels Forum audience favors a deepening of the European Union, an idea that is fracturing in the in the wake of Brexit and ascending nationalism in Poland, Hungary, France and the Netherlands.
Fair enough. However, there is a tendency by the Trans-Atlanticists to lump disparate and unrelated opposing factions together as one in an attempt to discredit all. Racism, economic populism, free trade skepticism, economic nationalism, white nationalism, sexism, and any other “ism” you can think of are considered one body.
I faced off against a “free trade” Member of the EU Parliament (MoP) and an executive from a global energy company. I was immediately labeled a protectionist – which was no surprise – while the other panelists spouted cliches and happy talk about global connectivity, “race to the top”, and cooperation.
My talk switched the focus from protectionism to balanced trade. In the US, Trump won the election due to working class income insecurity caused by our trade deficit devastation that covers much of the country, not just a few industrial states. The US job participation rate is plummeting. As good jobs are lost, they are replaced by low wage/low hour jobs. The Bush and Obama economists, as well as editorial boards and pundits, tell us everything is fine. But Trump said trade deficits kill jobs and everything is not fine. Trump won not because more of the country became racist and sexist, but because the new swing working class voters are concerned about the basic issues of family and community economic survival.
The trade imbalances in the world result from strategic foreign government action, not the invisible hand of free markets, as the editors of the Wall Street Journal claim. The imbalances result in a destructive flood of goods from trade surplus countries like China, Germany, South Korea, Japan (among others). That oversupply of goods rolls into the trade deficit countries, like the US and UK, destroying communities and good paying jobs. Trade imbalances are not only toxic economically, but politically… as evidenced by voter rejection of neoliberal globalist candidates in the US and other countries.
“Balance” is not some new creative concept. It has, since the beginning, been enshrined in the international treaties giving rise to the International Monetary Fund (IMF), the World Trade Organization (WTO) and the Treaty on European Union. The change we seek is to refocus upon those pre-existing international goals.
My challenge to the audience was to rethink their misleading and outdated “protectionism vs. free trade” logic in favor of “balance vs. imbalance”. Not everyone met the challenge. They have never heard anything but “free trade is win-win and anything else is protectionism”. Any marketer knows that a target audience does not change their opinions until they’ve heard the message at least five times.
Brussels Forum attendees are billed as political, business and thought leaders with intelligence and foresight. So I confess I expected a bit more than cliches and slogans substituting for thought. I declared Germany’s institutionalized currency manipulation and trade surpluses a destabilizing force in Europe and the world. I stated that US middle class consumers can no longer afford to fund the rise of three billion people elsewhere seeking to become the global middle class. German reporters, Ukrainian diplomats, Greek parliamentarians and others objected.
Some of the most entrenched globalists were from the US, not Europe. Former Democratic Congresswoman Jane Harman, who now runs the US government funded Wilson Center, said that nation states will be “an anachronism” in a couple of decades because global government will take over. I’m not sure what universe she has been living in recently as she clearly is out of touch with voters, economics and reality.
Senators John McCain (R-AZ) and Ron Johnson (R-WI), on another panel, attacked opponents of trade agreements as “isolationists”. McCain said “I’ve never met an isolationist that did not say ‘I’m for fair trade instead of free trade.'” Many globalists believe international cooperation on defense, foreign policy, and communications is related to free trade agreements. But of course trade agreements do not address those issues. Indeed mutual defense and diplomacy existed long before the modern trade deal.
On the upside, the message clearly started sinking in. An instant poll of the crowed which revealed that nearly 40% of the audience favored balanced trade over unreformed “free trade” by the end of the discussion. That result was unexpectedly good! Attendees from all over the world approached me afterwords to talk about CPA’s ideas and to seek opportunities for future engagement.
The unabashed good news, dear CPA supporter, is that our smart trade ideas are not only dominating the national debate but are going global. We will have to deal with pseudo-economists and special interests feverishly working to derail our progress. But we continue to be ahead of the curve and are now sought out by political, business and thought leaders globally.
Your investment continues to pay off and pay even more dividends!