USDA Official, Republican Senator Say US Should Not View Trade Deals as Zero-Sum

Without calling out President Donald Trump by name, both Sen. Ben Sasse, R-Neb., and Undersecretary of Agriculture for Trade Ted McKinney criticized his approach of describing trade with friends as them taking advantage of the U.S. and stealing its jobs and wealth (see 1803300013). Sasse, a longtime critic of Trump and ardent free-trader, said good neighbors see trade as positive. "If you understand trade is a win-win, you don't talk about it as a zero-sum game," he said. Washington is talking about trade deals as if they were real-estate transactions, which are zero-sum, while trade enriches both parties as they each produce more according to their comparative advantage, Sasse said. "NAFTA has been overwhelmingly good for the U.S. and NAFTA has been overwhelmingly good for Mexico and NAFTA has been overwhelmingly good for Canada," he told an international conference May 8.

Sasse said that voters believe that they have benefited as consumers, and farmers know they've benefited as producers, but they all assume industrial producers suffered because of the lure of Mexico's lower wages. Some, then, feel the benefit they gained as consumers wasn't worth the pain to factory workers. Sasse asserts that most of the factory job losses are due to automation, not the trade balance. In the mid-1950s, he said, 31 percent of the workforce was in manufacturing. "Today, it's 7 percent," he said. "And it's going down forever. The problem is we're telling people: we're going to make it 1950 again. We're never going to be 1950 again."

McKinney said at the conference that trade is a two-way street. "If we ever fall in the trap of 'I win, you lose,' we're in trouble," he said. McKinney did criticize the Class 7 milk system in Canada, and said Canadians "have not been very nice" in the way they've protected their dairy farmers. But he also said, "I hit my knees morning and night [praying] that NAFTA is settled."