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An open letter to Obama on trade

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Dear Mr. President,

I understand your concerns that many who support your domestic agenda disagree with you on the question of trade. Here's why. Because we agree with you that increasing the concentration of wealth causes serious economic and social problems, we are against increased foreign trade without adopting measures that will diminish excessive inequality.

Some argue that these issues should be treated separately. But they are inextricably linked, economically and politically. Going ahead on trade expansion while making no progress on reducing the income gap not only misses an opportunity to address the problem, but exacerbates it.

First, the economics: It is broadly acknowledged that trading patterns have contributed to the widening income gap. Few entities have been more vigorous in support of free trade than The Economist, and even it concedes that the view that "imports from low-cost countries . . . will hurt American workers . . . is not a foolish worry," and that "trade has probably . . . held down blue-collar wages in rich countries." The Economist does argue that this happens even without treaties.

But since the purpose of the Trans-Pacific Partnership is to increase trade, one of its effects will undeniably be increased inequality. It is logically inconsistent to claim that fast-track authority will be a significant accomplishment while simultaneously dismissing the argument that it needs policies to counter its negative impact on economic fairness.


Nor is this a problem that is solved by the Trade Adjustment Assistance provision in the bill that offers compensation to workers who can show a direct link between trade and the loss of their jobs. The depressing effect of trade on the wages of tens of millions of workers goes far beyond what can be fixed by direct aid to the much smaller number who will be able to meet the strict causality required by that program.


Mr. President, you have advocated policies that promise to achieve a better sharing of our increased wealth. This brings me to the political linkage. Frustratingly, to many of us who support that agenda, it is being blocked by those who are siding with you on the trade bill — and virtually nothing else you support. For many in the business community who resist an increase in the minimum wage, seek to destroy unions, oppose changes to retard corporate maneuvers that facilitate the avoidance of American taxes, work to disempower the Consumer Financial Protection Bureau while re-deregulating derivatives and otherwise protect the economic status quo, trade expansion is the number one priority. We do not think they should be able to achieve this without agreeing in turn to some of our own priorities.

In Congress, I was disinclined to help people who were killing legislation important to my values without some discussion of mutuality. But insisting that trade promotion be part of a package that includes many of your own proposals to diminish inequality is not simply a request for a quid pro quo. In this case the quid has both positive and negative effects, and the quo seeks to offset the latter.

It also demonstrates that fairness is an integral element of economic policy, and that even as we take steps to increase national wealth, we will pay attention to how it is shared.

Those of us who continue to be your proud supporters want to help you make this a reality. That is why we cannot support a stand-alone trade bill.


Former US Representative Barney Frank is author of "Frank.''


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