It's easy to scoff at the anti-free-trade rhetoric emanating from the U.S. presidential campaign trail. Donald Trump keeps yelling about China, Mexico and Japan. Bernie Sanders won't stop shouting about greedy multinational corporations. Hillary Clinton, Ted Cruz and John Kasich are awkwardly leaning in the same direction. If you're a typical pro-trade business executive, you're tempted to ask: Were these people throwing Frisbees on the quad during Econ 101?
Small and medium enterprises (SMEs) represent a rapidly growing sector of the U.S. economy – creating 30 million new jobs, according to the Office of the U.S. Trade Representative. Exporters benefit from even faster growth, create more jobs and pay higher wages. Yet SMEs, which account for 99 percent of U.S. businesses, represent a mere 13 percent of the total U.S. export value.
President Obama publicly deplores growing economic inequality in the United States. At the same time, he is pushing for a new Trans-Pacific Trade Agreement on top of the trade agreements he won in 2011. Evidently, he sees no inconsistency here, but a growing body of economic research points to the adverse effects of lowered tariff barriers on manufacturing workers and their communities. Whether or not the losers are beginning to outnumber the winners, free trade is increasing the economic distance between the two.