Of all the issues that have led to significant cross-party splits in America over the past seven years, trade policy is one of the most prominent. Left-progressive skepticism about free trade is shared by many New Right and national conservative figures. They even invoke similar rhetoric when advancing variants of the same protectionist proposals.

Wherever they locate themselves politically, free traders have been on the defense. They have pointed to the failures of slapping tariffs on China and the damage inflicted by protectionist policies upon American consumers and businesses. But free traders also need to re-make the positive case to Americans concerning how America can pursue trade liberalization in a manner cognizant of twenty-first-century realities.

This matters because making such arguments never occurs in domestic or international political vacuums. Free trade policies require substantial domestic support if they are to be sustained against the numerous sectoral interests ruthlessly seeking privileges. Trade questions are also notoriously difficult to separate out from foreign affairs. Debates about American trade policy have invariably involved reflection on other great powers’ actions, whether it is nineteenth-century free trade Britain or twenty-first-century neomercantilist China.

In the 1990s, much of the argument for trade liberalization became associated with widespread hopes for a more harmonious world following Communism’s demise in Eastern Europe. Yes, appeals to national interest were made. The fact that it took 15 years of multilateral negotiations and two years of specific Beijing-Washington talks before China was admitted to the World Trade Organization (WTO) underscores how much such interests were in play. Nonetheless, much of the speechifying by political leaders had a perpetual peace tone to it. Nor was it hard to find American policymakers arguing that economic liberalization would help spark political liberalization abroad.

In the Cold War’s aftermath, such sentiments were understandable. But we’re not living in the warm afterglow of America’s victory over the USSR anymore. American domestic politics have changed dramatically, as have international relations. China, for example, has become more authoritarian, less market-orientated in its domestic economic policies, even less transparent about the true state of Chinese businesses and the economy, and more aggressive in its dealings with other nations.

These melancholy facts do not mean that inching America towards ever freer trade is a forlorn exercise. But it does mean making an explicitly realist case for free trade ever more imperative. And by “explicitly realist,” I mean free traders focusing their arguments unabashedly upon the benefits that trade liberalization brings to Americans and America.

Free Trade Makes America Economically Stronger

The US economy’s well-being is never far from most Americans’ minds. That is one reason why advancing the free trade case to Americans today should be heavily focused on how trade liberalization contributes substantially to bolstering America’s economy: i.e., reducing import barriers, diminishing export subsidies, and limiting opportunities for the government to use economic carrots and sticks to direct trade between America and other nations. The result is greater wealth and overall economic welfare for Americans in the long term.

The evidence for this is frankly overwhelming. We know, for example, that trade liberalization accelerates GDP growth. Back in 2008, a World Bank analysis of trade’s impact upon growth estimated that, between 1950 and 1998, “countries which liberalized their trade regimes experienced annual average growth rates that were about 1.5 percentage points higher than before liberalization.” A more recent International Monetary Fund 2017 study of the trade-growth relationship illustrated how trade across borders significantly contributes to increases in per capita income. It estimated that “a one percentage-point increase in trade openness raises real per capita income by 2 to 6 percent.”

How then does trade liberalization help deliver more growth for America? First, free trade widens the number of potential customers for American businesses while simultaneously facilitating an expanding division of labor across borders. That leads to more specialization which in turn stimulates more efficiency and productivity on the part of American businesses. This reduces prices for American consumers and incentivizes American workers to gravitate to more productive economic sectors where higher wages are invariably to be found. Moreover, under free trade conditions, the value of American workers’ real wages also increases insofar as they can buy more goods and services which have, thanks to trade liberalization, become less expensive.

Second, the competition from abroad sparked by ever-expanding trade makes American businesses more resilient and adaptable. Exposure to greater foreign competition means that American companies know that their viability is perpetually open to challenges from existing and potential domestic rivals but also international competitors. This incentivizes them to evaluate over and over again what they are doing and why they are doing it. The bigger the competition, the more American businesses are subject to unrelenting pressures to innovate, reassess their comparative advantage, streamline their organization, shrink costs, find less-expensive inputs, take their products into new markets, reorganize their distribution systems, and thereby lower their prices while maintaining profit margins.

If the United States can steel itself to make trade free again, Americans as individuals and America as a nation will win in the long term.

Such competition can be unsettling for American businesses and workers alike. The alternative, however, is an America cowering behind tariff walls, pretending that people abroad aren’t willing to work as hard or harder than Americans, and imagining that foreigners will somehow be magically less innovative than Americans. It also involves deluding ourselves that politicians and technocrats can know how to engineer the optimal makeup of a $26.8 trillion economy both now and into the future via tariffs and industrial policies. Lastly, it means Americans are denying that most expressions of economic nationalism are really about promoting sectional interests and have little to do with 330 million Americans’ long-term economic welfare.

Free Trade with Free People

The economic case for free trade is relatively straightforward and hard to refute. At its core is Smith’s key insight that people’s pursuit of their private interests plus an absence of privilege advances the general welfare.

Nonetheless, the best free trade thinkers have always acknowledged that we live in a world of geopolitical rivalries and in which nations are forever trying to reinforce their security. These realities are further complicated by the fact that the same world contains many not particularly free countries. The governments of some such nations (Iran, North Korea, Russia, etc.) are hostile to America. Yet others (most notably, China) have failed to fulfill some of their WTO commitments.

No realist trade liberalization policy can ignore these facts. This is one reason why the 2023 Freedom Conservatism Statement of Principles (full disclosure: I am an original signer) underscores “free trade with free people” as part of its call for a return to greater economic liberty throughout America.

Some might view this as effectively limiting the scope of any American attempt to kickstart trade liberalization to that relatively small number of countries that truly value constitutionalism, the rule of law, and free markets. That, however, would be a mistaken assumption. Free trade with free people should be understood as a starting point for America to pursue a wider free trade agenda.

To the extent that some countries are economically freer than others and committed to things like limited government and property rights, they are likely to be more amenable to liberalizing their trade with America. It is harder, for instance, for special interests to get traction in such societies compared to those countries in which overmighty and arbitrary government prevails. That makes opening up free nations’ markets to American businesses somewhat easier.

There is also some likelihood that genuine national security concerns will exert less-inhibiting effects upon expanding trade with free nations, especially those who are American allies. Questions like transfers of potential dual-use technologies or supply-chain vulnerabilities are less in play in the case of a privately-owned Australian-based business than with a Chinese state-owned company whose board is dominated by CCP members.

And Not-So-Free People?

Free trade with free people is not, however, a manifesto for America to ignore the rest of the world when advancing trade liberalization. Again, there are good realistic reasons why this is the case.

If US trade policy shifts decisively in economically nationalist directions, Washington will be seen by friendly and non-aligned nations alike as no longer interested in modeling an alternative vision of international political economy to, say, China’s neomercantilist policies. By contrast, a strong American return to the trade liberalization game would send a quite different message to the world and deliver considerable benefits to America. As the foreign policy analyst Mike Watson writes, “Offering greater access to American markets would counteract China’s economic influence, [and] make friendly and neutral countries more prosperous and less vulnerable.”

Granted, many of these nations are not as free as your average Western country. Nonetheless, some of them are looking for alternatives to China. They increasingly recognize that programs like China’s Belt and Road Initiative (BRI) come with weighty political strings. Not only do they resent Chinese officials behaving like an occupying power; nations ranging from Pakistan to Sri Lanka and numerous African countries have experienced how China doesn’t hesitate to turn the economic screws on them when significant disagreements with Beijing emerge.

Moreover, there is an even longer-term payoff associated with America expanding trade liberalization beyond free peoples. The evidence is growing that Chinese-style neomercantilism and the political dysfunctionalities and economic inefficiencies associated with it, combined with massive capital malinvestments, a self-inflicted demographic immolation, declining productivity, growing corruption, and a property market in crisis is inflicting considerable damage upon the Chinese economy. If such trends continue, many businesses in countries that once regarded China as the future are going to be looking for wider and more reliable access to other markets—especially the biggest market of all: the US economy—in which the rule of law is taken more seriously.

Should American policymakers pursue wider trader liberalization through, for instance, re-entering structures like the Trans-Pacific Partnership, they will be positioning America well for life in a global economy in which China becomes less of a player. Certainly, some TPP nations are not models of limited government constitutionalism or civil liberties. Four TPP members—Vietnam, Peru, Mexico, and Brunei—fall significantly short in all these areas. But many of their present and future political and business leaders are surely aware of China’s present and looming difficulties.

That represents economic opportunities for America. Liberalizing trade with these and similar nations is one way for American businesses to take advantage of these openings. Nor would the implied contrast with the behavior of an overbearing China be lost on the millions of relatively unfree people in such countries who represent no threat to America, and for whom access to American markets is one way to climb out of poverty. Political goodwill is a hard-to-acquire asset and can only augment America’s place in the world.

Pursuing such prospects need not compromise ongoing American commitment to the type of multilateralism associated with the WTO. Multilateral all-or-nothing agreements remain important because simultaneously lowering particular trade barriers of all WTO members increases the overall volume of trade and therefore much greater economic gains than would be realized by bilateral arrangements.

But participating in multilateral trade liberalization efforts need not obstruct America from deepening its trade ties with free nations or engaging in a mutual opening of markets with countries fed up with Beijing’s neomercantilism. America can, for instance, seek plurilateral agreements with these and other nations.

As the former Chairman of the WTO’s Appellate Body, James Baccus, explains, plurilateral arrangements involve a subset of the WTO’s 164 members agreeing on new trade commitments and then either extending the benefits to all members on a most-favored-nation basis or offering non-signatories opportunities to enter the agreement at a future date. This approach offers a pathway for America to seek wider trade liberalizations that gradually embrace free and less-free peoples in a context in which the WTO’s all-member consensus approach presently seems stalled.

Smithian Realism

Personally, I am skeptical that universal free trade among the world’s nations will ever be realized. So was the author of The Wealth of Nations. While Adam Smith’s intellectual outlook was certainly cosmopolitan, he specified in his Theory of Moral Sentiments that he did not think that most people’s natural sympathies for others could consistently extend much past the level of their country. Smith also grasped the immense challenges involved in overcoming the power of special interests pursuing favors at everyone else’s expense, but who are adept at persuading others that they are “really” promoting the public good.

Combating such machinations is an unending battle. Yet such realities are not sufficient reasons for America to settle for the mediocrity of a mildly-protectionist status quo. For the more America inches itself and the world in the direction of freer trade, the better off economically and politically Americans will be. Not only will the American economy be more competitive and adaptable, but it will also be less susceptible to the cronyism that scars so much of American political life.

Put another way: if the United States can steel itself to make trade free again, Americans as individuals and America as a nation will win in the long term while special interests and their armies of DC lobbyists will lose. That’s good news for America’s future economic prosperity but also for the well-being of the republic as a whole.