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February 16, 2016

When Democrats Supported Free Trade--100 Years Ago


On January 8, 1918, 10 months before the end of World War I, President Woodrow Wilson delivered before a joint session of Congress what came to be known as his Fourteen Points speech

The purpose of the speech was to identify several principles and considerations that he hoped would help expand peace and democracy, which should govern nations when the war ended. 

Wilson’s third point is a call for free and open trade among nations: 

III. The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance. 

Wilson was not advocating unilateral free trade, just between those countries that would form the future League of Nations. Between those countries all trade barriers would be eliminated. 

Nearly 100 years later, the Democratic Party has almost completely reversed itself with respect to free trade.  

President Obama is pushing for passage of the Trans-Pacific Partnership, but he and those who work for him are about the only Democrats advocating for free trade. And even Obama has shown his protectionist side over the past seven years. 

President Bill Clinton was mostly supportive of free trade, signing both the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT).  

But it was a hard slog rounding up Democratic votes for those bills in the House and Senate. It was Republicans who gave him the votes he needed. 

That was more than two decades ago. Today both Democratic presidential candidates are doing all they can to bash free trade and threaten significant trade barriers. And even some Republicans—and especially Donald Trump—are having second thoughts. 

What Wilson understood then—and what the vast majority of economists understand today—is that free and open trade benefits consumers by giving them wider access to more products and services at lower prices. And it opens up markets for Americans to sell our high quality goods and services. 

Protectionism and trade barriers would almost surely lead to a trade war—and, by extension, lower economic growth. And after seven years of the Obama “recovery,” lower economic growth is the last thing the country needs.


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