Thursday, March 24, 2016

Mayors Rise to the Defense of Free Trade

Mayors Rise to the Defense of Free Trade
As presidential candidates from both parties attack TPP, it’s municipal leaders who are offering the most cogent vision of global engagement.
Carlos Osorio / AP

CHICAGO—Howard A. Tullman, the chief executive officer of the technology incubator called 1871 doesn’t exaggerate when he calls the bustling operation “a start-up factory.” Working from a 130,000-foot facility in the imposing old Merchandise Mart building here, 1871 currently provides office space, mentoring, courses, and networking opportunities to 425 companies, their workers hunched over laptops in the cavernous workspace. Firms nurtured by 1871 have created 4,500 jobs since the incubator opened in 2012.

One core service 1871 provides to its tech entrepreneurs is exposure to like-minded international counterparts. It has established working relationships with start-up accelerators in cities from Mexico City and London to Tel Aviv, and regularly brings delegations through to meet with its budding firms. “We’ve learned that you have to be global from day one,” says Tullman. “It may take a while. But [our companies] are very sensitive as to how do they build connections into the big...other markets: China, India, Europe, South America.”

1871’s default instinct toward global engagement captures a larger dynamic almost completely obscured in a 2016 presidential race dominated by criticism of free trade: Mayors and private sector leaders in almost all of America’s major metropolitan areas believe they can accelerate growth and expand opportunity by deepening their integration into the world economy, not retreating from it. “Mayors are becoming much more aware that cities need to be active participants in the global economy,” says Amy Liu, the director of the Brookings Institution’s Metropolitan Policy Program. “It’s not just about connecting their firms to consumer demand through exports. They are also becoming more focused on what can cities do to position their economies [as] the destinations for foreign students, foreign firms, and supply chains.”

Particularly among Democrats, this metropolitan globalism has opened a chasm between the party’s local and national leadership. In the presidential race, Bernie Sanders has unreservedly denounced free trade deals like the 12-nation Trans-Pacific Partnership that President Obama completed last year; Hillary Clinton has feebly bent in that gale, abandoning her own earlier support for the Pacific agreement. Far fewer congressional Democrats than in the 1990s are backing free trade, too.

But the nation’s mayors—most of them Democrats, especially in the larger cities— remain overwhelmingly committed to free trade in general and the Trans-Pacific Partnership in particular. The U.S. Conference of Mayors has officially endorsed the Pacific pact, and it has drawn enthusiastic praise from big-city Democratic mayors such as Atlanta’s Kasim Reed, Chicago’s Rahm Emanuel and Tampa’s Bob Buckhorn.

Buckhorn sees TPP as a chance to grow the 80,000 jobs the giant Port of Tampa already provides. The agreement enhances “our ability to sell made in America goods to largely the Far East via the Panama Canal,” Buckhorn says. “It would be foolish not to support that.” Other mayors like Emanuel see opportunities in exporting not only goods but also business services, which tend to cluster in cities—like the young software engineers congregating at 1871. Completing TPP “is essential for the architects who work here, the lawyers, the manufacturers, our software developers,” says Emanuel. “Growth for Chicago’s economy requires more markets to sell into.” Even in places where the statewide debate favors protectionism, mayors and local leaders in such cities as Columbus, Ohio, are investing in aggressive strategies to promote exports and attract foreign talent and investment.

Christopher Cabaldon, the mayor of West Sacramento, California, since 1998, remembers that when he first started attending Mayors’ Conference meetings on trade only mayors from cities with big ports or major exporters would participate. Now, cities of all sizes recognize their stake in finding their global “niche,” says Cabaldon, who chairs the Mayor’s Conference committee on jobs. So many cities, in fact, have successfully tapped global opportunities that Brookings research shows that the nation’s 100 largest metro areas account for nearly 90 percent of all U.S. exports and roughly three-fourths of jobs in foreign-owned companies. The top 118 metro areas also host 85 percent of foreign students.

These same population hubs are now increasingly indispensable to Democratic political fortunes. In 2012, Obama amassed more of his total victory margin in just his 100 best counties than any presidential winner since at least 1920. And Democrats now control the mayor’s offices in virtually all big cities—even in the reddest states.

Yet in their national debate, Democrats are elevating the protectionist sentiments of blue-collar workers who largely vote Republican over the desire for expanded trade in the growing urban centers that now anchor their electoral coalition. Buckhorn and Cabaldon are two of many mayors scratching their heads over that calculation.

Both men say the answer to understandable anxieties about economic change is to provide workers in threatened industries with training to compete for new jobs—not to renounce opportunities from expanded trade in the vain hope of protecting existing firms and jobs. Blocking trade agreements, Cabaldon notes, won’t stop the changes powered by the unrelenting forces of technological advance and global competition. “The notion that you can just freeze your metropolitan economy in place right now, or the way it used to be, is just a fiction we [mayors] can’t live with,” Cabaldon says. “So it’s a question of what are the tools we have to make the best of the opportunities, reduce the suffering from the dislocation and then figure out how to compete.

Neither Sanders nor Clinton has framed the new economic reality anywhere near so cogently. It’s a special kind of Democratic myopia that America’s inexorable integration into the global economy looks so much clearer from the base of the party in the cities than it does from its apex in the race for the White House.

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