American Trade Hypocrisy: The notion that the United States is being cheated across the board is not only wrong, but dangerous.

Author:Lester, Simon

Tn U.S. trade politics, we are flooded with allegations of unfairness, with Americans cast as the victims. We are told that other countries are constantly cheating us with a vast array of nefarious practices. The exorbitant subsidies given by the Europeans to their aircraft and agriculture sectors are unfair. The low wages and weak labor protections in Mexico constitute "social dumping." The "rapacious" Chinese are manipulating their currency and stealing our intellectual property. Even our polite neighbors in Canada are up to no good, with their lumber subsidies and agriculture restrictions.

And it's not just other countries, but international institutions as well. The World Trade Organization itself, President Donald Trump has said, "was set up for the benefit for everybody but us. They have taken advantage of this country like you wouldn't believe." Everyone is cheating us!

By contrast, the implication is, we in America behave appropriately. We compete only with hard work and ingenuity. Any problems we are experiencing are the result of bad behavior by others. We are the victims here.

For anyone who follows U.S. trade policy, it is obvious that this narrative is wrong. Buy America procurement laws, agriculture subsidies, the Jones Act, and abuse of antidumping law are just a few of the practices our trading partners, as well as the Americans who are harmed by them, complain about. U.S. trade policy suffers from all the same flaws--ignorance about economics, favors to special interests--that other countries exhibit.

And Trump's claims about the WTO have no basis in fact. He says, "We lose the lawsuits, almost all of the lawsuits in the WTO--within the WTO. Because we have fewer judges than other countries." The reality is that the U.S. record in WTO dispute settlement is very similar to that of other countries.

But the cheating narrative is not just wrong, it is dangerous. When we accuse foreigners of behaving unfairly, we fan the flames of nativism. Spreading the myth that others are taking advantage of us gives rise to xenophobia, which we have seen intensify in recent years. When political leaders and commentators continually cast aspersions on foreigners, people start to believe the foreigners are doing something wrong. Trump may be an extreme version of this, but people on both sides have been guilty over the years. The result has been a largely mistaken conception of how other governments behave on trade, and growing anti-foreigner...

To continue reading