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#TBT: Reagan and Trade

May 14, 2015

President Reagan with James Baker, Clayton Yeutter, and Allan Gotlieb signing the Canada United States Free Trade Agreement Implentation Act in the Rose Garden. 9/28/88.

On this #ThrowbackThursday, we look back at one of the biggest champions of expanding American trade: Ronald Reagan.

Our 40th president pursued a vigorous trade agenda. He negotiated the U.S.’s very first free-trade agreement—that with Israel in 1985. The next year, he launched the Uruguay Round of trade talks, which led to the creation of the World Trade Organization. In 1987, he negotiated the U.S.’s second free-trade agreement—this time with Canada. And in all of these cases, Reagan used trade promotion authority to open up markets to American products.

“We do not want to stop other nations from selling goods in the United States,” he once said. “We want to sell more of our goods to other nations. We do not dream of protecting America from others’ success; we seek to include everyone in the success of the American dream.”

He knew the stakes. “Now, I know that if I were to ask most of you how you like to spend your Saturdays in the summertime, sitting down for a nice, long discussion of international trade wouldn’t be at the top of the list,” he once joked. “But believe me, none of us can or should be bored with this issue. Our nation’s economic health, your well-being and that of your family’s really is at stake.”

Our national security too. In 1986, the Gipper explained the larger benefit of trade agreements:

They strengthen our national security because our economy, the bedrock of our defense, is stronger. I’m pleased that the United States has played the critical role of ensuring and promoting an open trading system since World War II. And I know that if we ever faltered in the defense and promotion of the worldwide free trading system,that system will collapse, to the detriment of all.

He also liked to make his case with humor. “It’s sometimes said that if you put three economists together in a room and ask them a question, you’re liable to get more than three answers,” he said. He went on:

But there is one issue on which almost all responsible economists, whatever their political persuasion, are unanimous. They agree that free and fair trade brings growth and opportunity and creates jobs. And they all warn that high trade barriers, what is often called protectionism, undermines economic growth and destroys jobs. I don’t call it protectionism; I call it destructionism.

The Gipper’s faith in the American worker never wavered, and he himself put it best:

I firmly believe that if the deck is not stacked against us, the American people can outproduce and out compete anyone in the world. The genius, creative talents, and hard work of our people have always been our greatest assets. With freedom and the profit motive, there’s nothing we can’t do.

So to the simple question—what would Reagan do?—there’s a simple answer: He’d promote American trade.