Fred Hochberg admits that the acknowledgements in his new book, “Trade Is Not a Four-Letter Word,” are unconventional.
In addition to being a bit long, the former Obama administration chairman of the Export-Import Bank of the United States said the section includes a note of thanks to an unlikely character for a book that praises the virtues of global interconnectivity: President Donald J. Trump.
Despite “America First” stances that have made him notorious to trade advocates, Mr. Trump has at least “moved the conversation around tariffs and trade from the back page of the business section to page A1 of our newspapers,” Mr. Hochberg said in a conversation with the World Affairs Council of Atlanta.
He cited the example of China policy: During the Obama years, the bilateral relationship was multifaceted, focused on diverse topics like human rights, climate change, enforcing Iran sanctions, terrorism and more. All those have now taken a back seat to trade.
“Donald Trump sort of collapses all of those and says there’s only one thing that’s important, that the trade deficit with China, so I think that has pushed trade to the center of our thinking,” which isn’t necessarily a good thing, he said.
But with trade now front of mind, Mr. Hochberg is among the voices arguing that it has been a good thing for Americans, even the workers who some say have gotten the short end of the stick.
“Actually, from the cars we drive to the foods we eat and to education — the amount foreign students that study in our country, bringing diversity the classroom and also frankly keeping many colleges solvent — these are the many benefits of trade. People get to sample and understand American life through trade. I’m trying to say trade is a force for good.”
The U.S.-led liberalization of the global trading system and agreements like NAFTA have been blamed by Trump and many others for all manner of ills, including the decimation of the country’s industrial base.
“It did exacerbate and make worse a number of inequities in our society, and we’ve seen that in certain communities that really got badly hollowed out,” he said.
But in talking with former Georgia Department of Economic Development Commissioner Craig Lesser, who now runs the Pendleton Group consulting firm, Mr. Hochberg said that without trade, American life would be “far less interesting and far more costly.”
He wanted to “set the record straight,” arguing through case studies on six everyday products — from bananas to cars — that trade has been an engine of dynamism, not the specter that politicians on both the left and right conjure up to win Rust Belt votes.
Trade may be one of many forces that have harmed factory towns, but it’s not the only one; technology and automation are just as likely culprits, he says.
Donald Trump ‘moved the conversation around tariffs and trade from the back page of the business section to page A1 of our newspapers’
Trade has gotten a bad rap partially because people don’t understand its diffuse benefits. U.S. policy makers, similarly, have failed to value internationally competitive companies as vital national resources, in contrast to Airbuses and Siemens of the world, which are considered “crown jewels” in their countries. (Mr Hochberg was part of a team that honored exporters as part of the National Export Initiative aimed at doubling U.S. sales abroad in five years.)
“We didn’t double exports everywhere in the world, but we did in a lot of countries,” he said.
Ex-Im played a key role in the initiative, bringing Mr. Hochberg to Georgia on multiple occasions as the export credit agency put its credit insurance, loan guarantees and financing to work for companies in the state. Savannah-based Gulfstream Aerospace’s business jets and Albany-based Thrush Aircraft‘s crop dusters alike benefited from Ex-Im’s help in selling to China and elsewhere, as did Delta TechOps, the technical services arm of Delta Air Lines. Mr. Hochberg said the bank once approved assistance worth just $350 for another small Georgia company, showing that its benefits don’t just accrue to large corporations.
Still, fixing trade’s image problem will mean finding a better path forward for addressing the “losers” of trade deals, especially those who have to be retrained for new careers after losing jobs that may never return.
He doesn’t like the term “life-long learning,” thinking it conveys too much of an academic feel that may turn off the very folks who need it most. Not everyone will belike the Kentucky coal miner cited in the book who learned to code and has started his own software development shop.
But Mr. Hochberg believes vocational flexibility should be ingrained at a young age and more care should be taken to inform students, especially, that continually developing their skills is the key to success.
“We need to prepare people to have a sense of lifelong readiness,” he said. “We have to be talking to people we work with, talking to family members, about being a little more resilient.”
Beyond goods exports, he noted that services like education, tourism and air travel are areas where the U.S. has been extraordinarily competitive, bringing hundreds of billions dollars into the economy. He seemed to believe the country would do well to remember that, even as the pandemic threatens to reshape cross-border travel and study patterns.
COVID-19 will shift thinking around the trade in goods, especially those deemed sensitive like drugs and medical devices. More broadly, companies will begin to think more intently about diversification of sourcing as a means of resiliency, even if they don’t move production back to the U.S.
Contrary to criticisms, he also said that sometimes trade can be a source of strength — as in the case of exports to emerging markets propping up U.S. companies after the financial crisis, or imports of food from other markets when production here in the U.S. is down, Mr. Hochberg said.
Prodded by Mr. Lesser, he pointed to trade’s role in paving the way for foreign investment that has so benefited the Southeast U.S.
Answering a question from the online audience, he agreed that anti-immigrant sentiment is intertwined with growing skepticism toward trade, especially given electoral and demographic realities.
“This is controversial, but white, high school educated men had a monopoly in the workplace for a long time,” he said. “We all know that monopolies do not like to give up power very easily or very joyfully.”
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