- The fight over trade policy between Bernie Sanders and Joe Biden will come to a head in Michigan, where primary voters will choose one of two opposing visions.
- Their clash over trade is seen by experts as a referendum on "The Washington Consensus," a set of free market economic policies which have helped inform U.S. foreign trade for decades.
- After four years of Trump's trade wars and tariffs, pivotal Democratic voting blocs are shifting their view of foreign trade.
WASHINGTON – There is more at stake in the race between former Vice President Joe Biden and Sen. Bernie Sanders than simply who will top the Democratic Party's ticket in November.
It's a battle to control the direction the party will take over the next decade, and to define and shape the party's core message.
As Sanders and Biden compete for the primary prize of Michigan's 125 pledged delegates on Tuesday, nowhere is there more significant, and potentially consequential, distance between the two men than there is on trade policy.
Sanders has spent his career leading the opposition to foreign trade deals. In Congress, he has voted against every trade agreement that has come to the floor in the past three decades, save for a 2011 South Korea vote that he sat out.
Biden meanwhile, is a lifelong advocate for foreign trade. He voted for the North American Free Trade Agreement in the Senate, supported allowing China to join the World Trade Organization and, as vice president, tried unsuccessfully to convince Democrats to ratify the Trans-Pacific Partnership.
The politics of trade in Michigan are tricky for Biden, even though polls there show him leading Sanders by double digits going into Tuesday's primary. That's because Sanders won the 2016 Michigan primary, defeating Hillary Clinton in part by promising an end to trade deals that have hurt organized labor and manufacturing in the state.
Trump went on to narrowly win Michigan in the general election in large part by railing against trade deals like NAFTA, and promising an "America First" approach to the rest of the world. The billionaire businessman's message appealed to union workers and blue collar voters in Michigan, whose industries had been gutted for decades by shifts in manufacturing overseas.
Today, even before the eventual Democratic nominee will take on Trump, the schism between Sanders and Biden on trade reflects an ongoing battle over a crucial piece of the party's platform.
Democrats and free trade 101
"This primary is a referendum on the concept of free trade, as it has existed as a pivotal platform of the Democratic Party ever since the 'New Democrats' of the 1990s," said professor Greg Brew of the Center for Presidential History at Southern Methodist University.
"At the end of the 1970s, both parties seemed to acknowledge that the wide approach to trade, what we were doing as a country, wasn't working," Brew said in an interview Monday. "All these presidents tried different policies over a decade and none of them really worked."
Then, in the 1980s, Democrats began embracing the notion that globalized trade would lead to economic expansion and growth, Brew said.
"This grew under Bill Clinton, who embraced NAFTA, letting China in the WTO, and a heavier reliance on financing for growth," he added. "Joseph Biden as a senator was marching in step with this."
This approach to macroeconomic policy is what's known as the "Washington Consensus," Brew said. "And in a nutshell, it says you can spur economic growth by deregulating, opening up markets to foreign trade and investment and moving capital to where it's needed. And this primary is a referendum on the Washington consensus."
Representatives for the Biden and Sanders campaigns did not return a request for comment. The silence is understandable, however, given how fraught a subject trade is within Democratic ranks.
"The reputation of trade, and NAFTA specifically, especially for the auto industry, is pretty negative, at least in southeast Michigan.Alan V. Deardorffprofessor, the University of Michigan
"The reputation of trade, and NAFTA specifically, especially for the auto industry, is pretty negative, at least in southeast Michigan," said Alan V. Deardorff, a professor of international economics and public policy at the University of Michigan.
"Sanders thinks his views will help him in Michigan, or at least in southeast Michigan, whereas Biden presumably knows he does not want to talk about this a lot," Deardorff said in an interview Monday.
"There are plenty of people in Michigan that believe that trade has hurt the state," Deardorff said.
But he also acknowledged a potential problem for Sanders: His views on trade seem more sympathetic to Trump's than one might want in a nominee to run against Trump.
For now, however, Sanders is focused on the primary, and on drawing distinctions with Biden, not Trump.
"In the industrial Midwest, Sanders is arguing that Trump won these states in 2016 with the same arguments that Sanders himself is making, and that's why he should be the one to face Trump in these crucial swing states: Because a protectionist platform worked here the last time," said Brew, of Southern Methodist University.
"But the realities of renegotiating big trade deals and dealing with tariffs have turned out to be very different from the 2016 campaign promises of 'America First' and tougher trade deals," he added. "And after four years of trade wars and retaliatory tariffs under Trump, it's a risky proposition for Sanders to argue that we need more of both."
A shifting view of trade
In many ways, the Sanders campaign's effort to draw a clear line between his opposition to trade deals and Biden's support for them is also predicated on political divides that were pivotal to the 2016 election but which, four years later, may not exist in the same forms anymore.
In 2016, Trump capitalized on what he painted as a deep divide between "liberal elites" on the coasts and rural Americans in the Midwest; and between blue collar voters and suburban voters. Rural Americans and blue collar voters, Trump argued, had been victimized by a generation's worth of bad trade deals – deals that were struck behind closed doors by Washington elites, to benefit billionaires and political donors.
But this has changed, said former Sen. Heidi Heitkamp of North Dakota, who now works as a pro-trade advocate.
"Talking about foreign trade used to be just for Washington elites. But now it's an issue that's being talked about as a kitchen table issue for real people, especially in rural America," said Heitkamp, a CNBC contributor who has endorsed Biden.
"After four years of trade wars, midwesterners clearly are appreciating the importance of foreign markets and foreign trade," she said. "Part of this is that we've seen how integrated the supply chains are, and how important the world market is to rural America. And this has recalibrated people's thinking on the need for trade."
Indeed, a recent Gallup report revealed that 82% of Democratic voters now say foreign trade is "an opportunity for economic growth," the highest percentage since Gallup first began polling the question in 1992.
Heitkamp, however, cautioned that polls like this risk obscuring Democrats' real feelings about trade by giving them only two options: one that Trump has embraced, and one that he hasn't. "They'll disagree with anything he agrees with," she said.
The big picture for Biden
Listening to Sanders' campaign ads and speeches in the past week, you'd be forgiven for thinking Biden was a heartless corporate capitalist, a friend to the "banksters" who robbed people's pensions.
"The community has been decimated by trade deals," a union auto worker in Michigan says to the camera in a recent Sanders campaign TV ad. "Only one candidate for president has consistently opposed every disastrous trade deal. And that candidate is Bernie Sanders."
Sanders has worked hard to drive home this characterization of his opponent. "In Michigan, the people here have been devastated, devastated in Flint and Detroit, by these disastrous trade agreements that Joe Biden voted for," Sanders said Sunday on CNN's State of the Union.
But experts say Biden's approach to trade is broader, and more complex, than Sanders would have voters believe.
"Biden is not just someone who delivers a message of open markets and laissez faire – his world view is more nuanced than that," said Jack Caporal, an associate fellow at the Center for Strategic and International Studies, and an expert in global trade policy.
"It goes back to a line that the Obama administration used, which was basically, we live in a global world, and if the United States retreats and isolates itself, and is no longer seen as a credible rule maker, we'll become a rule taker," Caporal said. "Biden sees trade as a way for the United States to remain a credible rule maker."
Trade is part of Biden's broader argument about U.S. influence across the globe, said Brew, of SMU.
"What's happening right now on a global scale, with oil prices falling, and global markets struggling to respond to the coronavirus, this could pull in Biden's favor," he said. "By linking trade and foreign policy, Biden can say it's time that we reassert our influence in the world, and lead on these issues, because a world without U.S. leadership includes a host of new instabilities."
Heitkamp, too, said trade policy for Biden has always been about America's national interest in keeping adversaries in check.
"When Biden used to talk about TPP [to senators], the message was that it was necessary for the viability of the country. They saw it as a way of curbing the growing influence of China especially, both militarily and economically," Heitkamp said.
She said the idea of trade policy and national security being interconnected is one that resonates with lawmakers in both parties. "I can't begin to tell you how many conversations I've had with my colleagues, both in the Senate and since then, about the need to equate foreign trade with national security," she said.
Heitkamp said that over the past several decades, "the debate has shifted, to become, not, 'should we have foreign trade agreements?' versus 'hell no,' but 'what should the agreements look like, and how do we do it? Let's make sure there are environmental protections and labor standards.'"
Sanders is still making the "hell no" argument," she said. "And I just think, for the whole party, that's yesterday's argument."
– CNBC's Jacob Pramuk contributed to this article.