Presidential candidates emphasize trade agreement restructuring

The 2016 presidential candidates have made free trade a significant talking point in their campaign platforms, and the majority of the rhetoric has been negative.

The North American Free Trade Agreement (NAFTA) is a trade deal between the U.S., Canada and Mexico that decreases trade barriers between the three countries. Passed in 1992 by President George H.W. Bush and enacted in 1994 under President Bill Clinton, NAFTA was intended to expand the market within North America and allow for increased international trade.

“Free trade allows a manufacturer to import raw material at a lower cost, therefore making his product cheaper, therefore being able to sell his product around the world cheaper and therefore employing more people,” said Wayne Cooper, chairperson of the N.C. District Export Council.

But the economic benefits of free trade are not always evenly distributed. While the overall economy grows, free trade can cause a country to lose manufacturing jobs — and it's this part of free trade that has been debated in the 2016 election.

In a June speech on the economy in Pennsylvania, Republican presidential candidate Donald Trump spoke against free trade deals and revealed plans to renegotiate agreements like NAFTA, calling it a disaster. 

“NAFTA was the worst trade deal in the history — it’s like — the history of this country,” Trump said in the speech. 

Trump outlined plans to renegotiate NAFTA in favor of U.S. workers, and if this was not met with compliance, he would withdraw from the agreement entirely.

Thomas Carsey, professor in the UNC political science department, said in an email Trump wants to appeal to voters who feel anxious about the economy. 

“His strategy has focused on emphasizing that anxiety and trying to convince voters that as an outsider, he can bring new solutions," he said. 

Former Secretary Hillary Clinton, on the other hand, originally supported the trade agreement that went into effect under her husband. She later began to voice skepticism of parts of the agreement and voted against the Central America Free Trade Agreement (CAFTA) in 2005. 

Currently, Clinton supports globalization and international trade, but opposes CAFTA and the Trans-Pacific Partnership — though critics have pointed to her previous statements of support for the TPP.

“Clinton generally focuses on training programs for displaced workers and tax policies designed to make it more difficult for companies to move jobs to other countries,” Carsey said.

He said the Democratic Party has traditionally been skeptical of free trade, while Republicans have favored the practice due to low consumer prices and business costs.

“This year, we have a Democrat running who has been moderate on trade for most of her career, and we have a Republican nominee who is very out of step in his rhetoric on trade with where the Republican Party has traditionally been,” he said.

Despite political backlash against free trade deals, some sectors of the economy have benefited, notably North Carolina's agricultural sector. 

Peter Thornton, assistant director of international marketing for the North Carolina Department of Agriculture & Consumer Services, said NAFTA has benefited the agricultural sector of North Carolina greatly. 

“For North Carolina agriculture, NAFTA’s been a huge boon to us," he said. "We’ve been very fortunate to be on the positive side of this trade deal."

Thornton said North Carolina has a comparative advantage in agriculture.

“We produce some of the best agriculture in the world, and it’s naturally going to be demanded overseas,” he said. “So the more you liberalize markets for North Carolina agriculture, the better it is for us.”

However, this advantage is not recognized in rural North Carolina, where NAFTA resulted in job losses.

“Rural and small town North Carolina areas, where particularly the textile and apparel industries, and where the furniture industries are located, have not benefitted,” said Michael Walden, N.C. State professor in the Agricultural and Resource Economics department. 

Gary Pearce, a N.C. political consultant, said many people in North Carolina have lost their jobs. 

“Whether it’s because of trade agreements or because the economy was becoming more global, a lot of factory jobs shut down here and moved overseas because labor is so much cheaper,” he said.

Walden said the U.S. had to shift labor requirements in favor of more high-skilled labor in order to compete with other countries.

“We have seen a shift in manufacturing of all types in this country, in fact it’s been worldwide, to use more technology and machinery as opposed to labor,” he said.

The technological advancement isn't limited to the manufacturing sector — Thornton said technological innovation is prominent in the agricultural sector as a result of NAFTA as well.

“As more money has come into the industry as a result of trade, you’ve given farmers more ability to invest in new technology, to become more competitive and produce more,” he said.

The third side of free trade agreements is for consumers — Cooper said free trade benefits consumers by providing lower prices.

"Free trade allows a consumer to be able to buy product at a lower cost," he said. "If they can buy product at a lower cost, you've automatically increased their standard of living."

As for why free trade has taken a dominant role in this election, Pearce said candidates are nervous about supporting trade agreements because they believe voters are skeptical even though business people and economists general support trade deals. 

"The people who are against something are much more vocal and much more committed than people who are for the same thing," he said.

@crmetzler

state@dailytarheel.com