From Dinner Table to Board Room, NAFTA Discussions Should Be Happening More
By Jere Sullivan, Vice Chairman of Global Public Affairs
Free trade has become part of the modern-day lexicon and viewed by many as an integral component of a prosperous U.S. economy. Free trade pacts like the North American Free Trade Agreement (NAFTA) have been good fodder for discussion, but not generally viewed as “hot-button” political issues inside the Beltway. And despite the usual tête-à-tête debate between free traders and isolationists, they were generally accepted – at least after implementation, on a bipartisan basis. Congress had even introduced “fast track” provisions to ensure swift passage of the agreements.
That was all upended during the 2016 Presidential election. The status quo was challenged by candidates from both parties, and skepticism regarding the “free” part of free trade grew with the magnification of the United States’ trade deficit. Political dialogue led to the public asking questions about trade, questions such as:
Did manufacturing jobs leave my hometown because of NAFTA? Are corporations lining their coffers by using labor in lower cost markets like Mexico? What is the impact of the ballooning trade deficit with China on the American worker?
Trade became a convenient bogeyman on the 2016 campaign trail and we witnessed a steady drumbeat from
candidates and surrogates making this an issue that resonated with voters. Simply put if I as a worker and voter was left behind something had to be responsible. And that something became previous and pending “bad” trade deals. The sentiment was populist and it turned trade into a household concern for Americans on both sides of the political aisle.
While there is some consensus that automation and other advancements in technology have largely spurred the decline in manufacturing in the United States, being against something, frankly, is much easier.
Despite the shift in positive job and wage growth in the services industry, most everyone in this country has a personal story of a factory of some other sort of business being shut down in their lifetimes. Many knew or were related to someone who worked in one of those factories. Blaming those losses on trade was frankly a shorter putt than digging into the specifics of global economics or weighing faceless pros against very personal cons.
And in spite of the real culprit, the transition of the American economy from manufacturing to services is a reality and it has not lifted all boats.
That’s why opposition to NAFTA has been louder, and in many cases more compelling. And that’s also why tariffs are popular with many constituencies at the present time.
Support Drowned Out
Advocates for free and fair trade have struggled to gain traction in the populist debate. It’s been years, or decades, since advocates have had to “make a case for themselves.” Some industries like agriculture, energy, retail who support free trade have made their case, but the message often times comes across as analytic lacking the emotional resonance of those on the other side of their debate – more specifically the displaced worker. In a tough economic environment, the absence of a unified effort to advocate for free trade and trade agreements like NAFTA is noticeable.
Progress on trade and continuing trade agreements cannot be taken for granted. Neither can renegotiations or reforms. Remaining silent on the sidelines in the current environment is not an option unless you are seeking to become collateral damage. The case needs to be clearly made for why certain trade outcomes are important and who will be helped in each scenario. The subject matter needs to be personalized in order for others – from our corporate to political leader – to care.
And equally important as the message is the messenger. Which beckons the questions, who is best positioned to lead the debate?
Return of Experts
For nearly two decades, Edelman has studied the issue of trust through its Trust Barometer. The 2018 results found that experts, both technical and academic, are once again those we trust most. In a world where confidence in the media and government is slipping, voices of authority are regaining credibility—and that includes CEOs. We also saw the rise of trust in employers. And in spite of all of our tendencies to complain about the boss – in reality, we have deep trust in those entities that employ us.
Companies that stand to be impacted by immediate changes in trade policy have an opportunity to seize this moment. By adding respected voices to the discussion and anchoring them locally with those of employers, business leaders have an opportunity to make the topics of international trade and trade agreements less about vague macroeconomics and more about household-level benefits.
For businesses and organizations, there are several paths forward to engage customers, employees, and members of the communities they serve. A cohesive message across those networks has an impact.
Dialogue surrounding trade has too often lacked clear data and economic analysis that’s translated to make sense for typical households. One side in the debate has tended to have a monopoly of emotion and empathy in messaging. That’s an error that can be corrected.
Engagement on trade does not need to be combative, or even political, but it does need to be timely, understandable, relatable and true.
We saw this with President Trump’s proposed tariffs on steel and aluminum. CEOs and business experts were among the most impactful voices speaking out in opposition. Their arguments weren’t hinged on GDP numbers and trade deficits. Their statements supplemented that information with a human take on how tariffs would affect local operations, employees and customers. The opposition was substantive and personal, not bombastic, and the message carried through to employees, stakeholders, lawmakers and the media.
This effort is driving results. The President pulled back on slapping steel and aluminum tariffs on Canada, Mexico, and several other trading partners.
Steel and aluminum tariffs have proven to be a quantifiable flashpoint driving business to engage in local and national trade dialogues, grounded with expert data and stories that resonate around the dinner table like the price of a new car or a carton of milk. We can expect the debate on trade to continue for the foreseeable future. But for it to resonate, it has to be personalized and grounded in emotional real-world benefits and challenges.