Trade agreements have advanced corporate interests at the expense of workers in both developed and developing countries.
Globalization sits at the center of America's economic crisis. On one side, critics of globalization blame it for the plight of America's suffering middle class. According to President Trump, our trade negotiators got snookered by those smart negotiators from other countries. We signed bad trade deals that led to the loss of American industrial jobs. This criticism of globalization has found enormous resonance, especially in the parts of the country that experienced deindustrialization.
For more than twenty years, I've been criticizing the way that globalization has been managed — but from a completely different angle. From my perch as chief economist at the World Bank, it was obvious that the global rules of the game were tilted — not against, but in favor of the United States and other advanced countries at the expense of developing countries. The trade agreements were unfair — to the benefit of the U.S. and Europe and to the detriment of developing countries.
It's true that American workers have been disadvantaged — low-skilled workers in particular have seen their wages reduced, in part because of globalization. But that is partly because American negotiators got what they asked for: the problem was with how we managed globalization and with what we wanted — trade agreements simply advanced corporate interests at the expense of workers in both developed and developing countries.
Trump is wrong to blame globalization, whether unfair trade rules or unwanted immigrants, for the country's woes, but globalization's advocates are also wrong in arguing that globalization has played no role in the plight of the large parts of the population that have seen their incomes stagnate or decline, and that it's just technological progress that's to blame.
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