Free Trade Agreements and Offshoring
Public opinion on the economy and trade policies played an important role in Trump’s victories in both the Republican primary and the general election. Trump emphasized these issues – particularly the connection between job loss and international trade – throughout his campaign.” So concluded Professors Blendon, Casey, and Benson (2017) in a recent Challenge article, after analysis of a plethora of polling data. Since becoming President, Trump has obtained the agreement of the Mexican and Canadian governments to renegotiate NAFTA, and has withdrawn the U.S. from the process for reaching a Trans-Pacific Partnership trade agreement. With free trade agreements, offshoring, and jobs continuing to be hot-button issues in the U.S. political process, there are three key issues that members of the attentive public should keep in mind as they form their own opinions about what the content of U.S. trade policy should be. Most of the gains from free trade do not derive from offshoring, but from other aspects of trade. Since World War Two up to very recently, most U.S. economists, and government officials dealing with trade have unquestionably accepted the standard narrative of the effects of free trade (familiar to every Econ 100 student):