Former U.S. Vice President Joe Biden, 2020 Democratic presidential candidate, center, speaks during a campaign event in Dubuque, Iowa, U.S. (Photographer: Elijah Nouvelage/Bloomberg)

Biden’s Nafta Vote Is a Liability in the Rust Belt

(Bloomberg Businessweek) -- Joe Biden has emerged as the Democratic front-runner thanks to a perception that his working-class roots and chummy relations with labor leaders make him the likeliest candidate to take back the Upper Midwest and beat Donald Trump. But that scenario is complicated by the former vice president’s decades-long record of backing free-trade deals that have helped hollow out the manufacturing core in several important electoral states.

From his support for the North American Free Trade Agreement as a Delaware senator to his backing of the Trans-Pacific Partnership as Barack Obama’s vice president, Biden played a key role over the last 30 years in advancing a trade agenda that’s now being reassessed by many experts and early proponents as its costs, including job losses, are becoming clearer.

Biden’s record on trade is already drawing attacks from the left and right. Besides Washington Gov. Jay Inslee, a former House member, Biden is the only one of the 22 Democrats running for president who voted for Nafta. The 1993 pact reduced barriers with Mexico and Canada, increasing trade and economic growth in all three countries. But it also led to an exodus of U.S. manufacturing jobs to Mexico and hurt wages for U.S. workers who held on to their jobs. Throughout the 2016 presidential campaign, Trump pilloried Nafta as a “disaster” and “the worst trade deal ever,” a message his top advisers believe was pivotal in helping him carry critical Rust Belt states once considered Democratic strongholds.

“Nafta still resonates in the industrial Midwest and Rust Belt,” says Stanley Greenberg, a veteran Democratic pollster who recently conducted focus groups on trade in Michigan and Wisconsin. “There’s still a lot of anger because it symbolizes, for many people, the indifference about the outsourcing of jobs and the favoring of elite economic interests in international trade agreements.”

Biden’s Nafta Vote Is a Liability in the Rust Belt

Just as with issues of criminal justice, busing, and his behavior toward women, Biden’s record on trade has left him vulnerable to shifts in voters’ attitudes, as the long-term effects of U.S. policies have become apparent.

Since Biden declared his candidacy on April 25, his most vocal critics on trade have been on the left. Vermont Senator Bernie Sanders, who voted against Nafta as a congressman and is aiming to appeal to the same voters in the Upper Midwest, has repeatedly highlighted Biden’s history on trade. “It’s no secret that the most likely path to victory for Democrats in 2020 is to win the states Hillary Clinton won and then to add Wisconsin, Michigan, and Pennsylvania,” says Jeff Weaver, a senior adviser to the Sanders campaign. “Nafta devastated all three of those states. That will be litigated in the Democratic primary—as it should be, because it will certainly be litigated in the general election.”

Other Democratic candidates are also likely to weigh in, reflecting the shift in sentiment against international trade deals within the party. In 2015, Massachusetts Senator Elizabeth Warren, who’s also running for president, spearheaded the effort to sideline the Trans-Pacific Partnership, the signature Obama-Biden trade initiative; she was so successful, even Clinton felt compelled to back away from it. Ohio Representative Tim Ryan, another presidential hopeful, has said, “There’s no question that over its 25-year history, Nafta has hurt American workers and industries.” On CNN last week, Ryan called a recent remark Biden had made downplaying the economic threat posed by China “stunningly out of touch.”

While most economists continue to assert the benefits of trade liberalization, a raft of recent scholarship has highlighted the fallout in U.S. industries hurt by the effects of globalization. One of the main drivers of job loss in the Upper Midwest was China’s emergence as a manufacturing superpower after it was admitted to the World Trade Organization in 2001, a move Biden and other Democrats supported.

An influential 2013 paper by economists David Autor, David Dorn, and Gordon Hanson found that exposure to Chinese trade competition was responsible for the loss of roughly 1 million U.S. manufacturing jobs between 2000 and 2007, many concentrated in regional industries such as the auto sector. Those findings were echoed in a 2016 paper, “The Surprisingly Swift Decline of U.S. Manufacturing Employment,” by Justin Pierce, a Federal Reserve economist, and Peter Schott, a professor at Yale School of Management, that linked China’s WTO entry to an 18% plunge in manufacturing jobs during the same period.

This displacement caused acute problems that continue to resonate. Many workers who lost their jobs struggled to find new ones or dropped out of the labor force altogether. “What we really gained a different appreciation of was how costly this was at the level of individuals and communities,” Autor said in 2017. Those costs extended beyond employment to encompass cultural and social effects, from a decline in family formation to an increase in the number of children living in poverty.

Although experts say factors such as technological advances and China’s evolution are bigger causes of workers’ dislocation, international trade deals have become the focal point of political wrath for those left behind. Democrats have been forced to adjust. Clinton’s pivot on TPP “was a big deal—a political reality that is in no small part demanded by the geography of the electoral college,” says Jared Bernstein, Biden’s chief economist in the White House and a senior fellow at the Center on Budget and Policy Priorities. “If you want to reach voters who feel left behind by globalization, you can’t tell them with a straight face, ‘Don’t worry, this new trade deal will be a lot better for you than the last one.’ ”

Biden’s Nafta Vote Is a Liability in the Rust Belt

In the wake of Trump’s 2016 presidential campaign, Nafta in particular has for many voters come to symbolize everything they dislike about the globalized economy and the effects they see it having on their lives. During 2016, Greenberg’s polling tracked an intensifying, bipartisan negative attitude toward past trade deals that moved the country from a net positive view in the spring to a net negative view leading into Election Day. This trend upended the basic consensus in favor of trade liberalization that was prevalent when Biden cast his Nafta vote nearly 30 years ago.

“Trump has managed to convince much of the GOP and also bring many of the anti-trade Democrats into the fold,” says Maury Obstfeld, former chief economist at the International Monetary Fund and a professor at the University of California at Berkeley, who served in the Obama administration. “Now, if you look at both the major parties, there’s a prevailing skepticism. It’s been a remarkable shift in the political landscape.”

As he adjusts to the new politics of trade, Biden should have several things working in his favor. He has long been a popular figure among members of organized labor, and his father, grandfather, and uncle all worked at a General Motors plant in Delaware that shut down in 2009. Democrats’ desire for a nominee who can beat Trump is also working in his favor, at least for the moment. An April 30 Quinnipiac University poll found that 56% of Democrats say Biden has the best chance of defeating Trump next year.

While he’ll still have to defend his Nafta vote and other potentially troublesome stances, Biden can point to clear instances where he intervened to defend Midwest manufacturers, none more important than the Obama administration’s bailout of the auto companies during the 2008 financial crisis. “When I worked for Biden, he was constantly pushing me to find policies to help our manufacturers,” says Bernstein. “His support was instrumental in saving the auto industry, as well as in investing in manufacturers through tax credits and strengthening industrial unions.”

Strangely enough, Trump, who has done so much to toxify the politics of trade, may inadvertently help Biden overcome his apostasies. Trump has polarized public opinion on trade, causing Democrats to express a more favorable view toward free trade than in the past. A May 3 Marquette University Law School poll of Wisconsin voters found that more than three times as many Democrats say free trade is a “good thing” rather than a “bad thing” (66% vs. 19%), up sharply from the result in 2016 (48% vs. 36%). Independents and even Republicans also express moderately more favorable views.

“Trump’s amazing power to persuade is partly to bring his own party around to positions they didn’t hold before—tariffs is an example—but also to propel Democrats away from him, even if it means supporting free trade,” says Charles Franklin, the director of the Marquette poll. But he’s also skeptical that these results signify a true reassessment of Democrats’ feelings about trade and its effects. “I’m confident this is a reaction against Trump,” he says. The evidence: Asked about free-trade agreements, a large plurality of respondents still say they “cost”—rather than “create”—jobs.

“If Trump pushes the message that ‘Joe Biden voted to send your jobs to Mexico,’ there’s a good chance you’ll see a receptive audience,” Franklin says. “The trick for Biden will be playing up the positive economic value of free trade. He’ll have to walk a real tightrope to balance that with the effect on lost jobs.”

So far, Biden has said little about trade, choosing instead to signal his solidarity with workers by kicking off his presidential campaign at a Pittsburgh union hall, surrounded by firefighters. Despite his early stumble on China, his advisers say he’s prepared to weather attacks on his trade record, wherever they come from, and roll out a plan of his own. That will likely include calls for better worker and environmental protections—and a multilateral approach to getting tougher on China, to contrast with Trump’s volatile solo style.

But he’s standing by his Nafta vote. “Fair trade is important,” Biden told the Associated Press on Monday. “Not free trade. Fair trade. And I think that back in the time during the Clinton administration, it made sense at the moment.”

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