Whenever it comes to international trade, often protectionism raises its ugly head. 

In the late 1920s, it was American industry demanding that lawmakers block imports by adopting prohibitive tariffs, strongly backed by a newly elected president and a Republican-dominated Congress that led to passage of the Smoot-Hawley Tariff Act.

Today the protectionist impulse is not coming from the Chamber of Commerce and the business community but the nation’s most powerful union leaders. On Capitol Hill it is the Republicans rallying support of President Obama’s major trade initiative while Democrats are running for cover, fearful of losing support of union leaders who have made it clear that any member of Congress who dares to vote for the fast track legislation (Trade Promotion Authority) that “we will cut the spigot off on future donations to your campaign.”

Protectionism is an attempt to prevent foreign imports from threatening U.S. jobs, often by increasing tariffs and limiting market access in a variety of ways, including anti-dumping and countervailing duties even if they aren’t warranted. 

Today the battleground is the Trans-Pacific Partnership (TPP), a trade pact involving twelve Pacific-Rim countries that has been enduring negotiations for two years.  Bilateral and multi-lateral trade pacts have always prompted strong opposition, especially from Democrats given their close ties to labor unions. It is a populist issue that resonates at the grassroots level, therefore a difficult vote for most members of Congress.

As former U.S. Trade Representative Robert Zoellick, who presided over five bilateral trade agreements, once noted, these “trade agreements are more about politics than economics.”  While his successors may put in a star performance as chief negotiators, they can only initial the final document since the U.S. Constitution makes clear that Congress “regulates interstate and foreign commerce” and has the final say.

What gets lost in the debate is the greater significance of the issue, which is America’s leadership in today’s global economy. 

The Obama administration earlier portrayed the TPP as a geopolitical strategy that would give the U.S. a stronger presence in Asia and provide a protective shield for Asian countries feeling threatened by China’s enormous growth and influence in the region. Now this initiative and America’s leadership in achieving these goals, plus the mutual benefits that come with trade deals, are at risk not because of China or the lack of effective negotiations but the political forces in play on Capitol Hill.

America is also being challenged by China in today’s global economy. The TPP was intended to give the U.S. a competitive advantage in economies totaling roughly 40 percent of the world’s GDP by removing trade barriers in Asian markets vital to American businesses while otherwise improving diplomatic and economic relations with eleven other robust economies in the Pacific region. If Congress disapproves either the fast-track legislation or TPP, America will cede this advantage to other powers and lose economic influence in Asia, and it would signal a decline of America’s global influence, especially as the country is still preoccupied with the escalating conflicts in the Middle East.

Protectionism has consequences. In the 1928 presidential election, Herbert Hoover campaigned on advocating higher tariffs that set the stage for an eager Republican Congress to indulge as never before, triggering an unbridled frenzy of jockeying for maximum protection of commodity and industry producers leading to enactment of the Smoot-Hawley Tariff Act that hiked import fees up to 100 percent on over twenty thousand imported products.

After President Hoover signed the monumental tariff bill, within months America’s leading trade partners – more than 26 countries including Canada, France, Mexico and Italy – retaliated causing the world trade to plummet by more than half of the pre-1929 totals, one of several factors that precipitated the Great Depression.

Failure to approve a trade agreement like TPP and even the Transatlantic Trade & Investment Partnership (TTIP) will not lead to another Great Depression, but it will certainly undermine America’s strategic and economic leadership internationally.

Don Bonker

Don Bonker, former U.S. congressman, is a member of APCO Worldwide’s International Advisory Council and an executive director at APCO. Read More