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Former Export-Import Bank Chairman On How 'Trade Is Not A Four-Letter Word'


This week, the U.S. and China are set to sign the first phase of a trade agreement. Farmers and manufacturers hope this could be a sign that the trade war between the two countries is ending. At a time when politicians are skeptical of global trade agreements, our co-host Ari Shapiro talked with an author who is an unapologetic advocate for trade.

ARI SHAPIRO, BYLINE: You could say that Fred Hochberg was born to be a voice for global trade. His mother's name was Lillian Vernon - the same Lillian Vernon who created a multimillion-dollar mail order catalog company selling everything from clothing to toys. That company grew from his mother's kitchen table to a household name, partly by buying products that were made in China.

FRED HOCHBERG: Nixon opened China in 1972. Lillian was hot on his trail, went to China in 1981. We started buying in China partly - Taiwan became too expensive, so companies started moving from Taiwan into China and do the manufacturing there.

SHAPIRO: During the Obama administration, Fred Hochberg ran the Export-Import Bank, making him one of the country's top cheerleaders for global trade deals. Now the political tides have shifted. President Trump pulled the U.S. out of the Trans-Pacific Partnership, started a trade war with China and scrapped NAFTA. So you can understand why Fred Hochberg called his new book "Trade Is Not A Four-Letter Word."

HOCHBERG: Part of the reason I wrote this book was because I was kind of surprised and thunderstruck over the last eight years how we got so negative on trade. The problem is we as a country - we're not candid. We're not honest with the shortfalls about trade. The fact is, there are losers. And we did not really sufficiently, as a country, really address the people who got badly hurt. We have many things in our economy that says, yes, it's a - we're a market economy. But at the same time, we have to have things that take action when the market's not perfect. We didn't put enough time and attention into making that work.

SHAPIRO: The way you structure this book, you tell the story of global trade through a handful of everyday products. And I'd like to zoom in on one of them - the avocado.

HOCHBERG: Well, I think, you know, the avocado follows the path of the banana...

SHAPIRO: (Laughter).

HOCHBERG: ...Which is also in this book, and that is being this exotic delicacy that became more mainstream. So bananas were once a delicacy and then became a staple and, frankly, the most consumed fruit in the American family of any fruits or vegetables that we consume. A lot of that has to do with global trade and has to do with the importation from Central and South America.

And avocados are similar in that regard. In 2000, we consumed a billion avocados. We doubled that within five years and then doubled that again in another 10 years. So we now consume over four and a quarter billion avocados a year. So I think that it did catch fire, and part of it catches fire - and probably NAFTA - and the importation and the fact there was free trade going back and forth. And I used the example of the taco salad. You can now enjoy a taco bowl in all 50 states in 12 months of the year. That would not be possible if it was only relying on our own local products, local agriculture and local ingredients.

SHAPIRO: And more broadly than avocados or even just the taco salad, you talk about the way diversity in supermarkets has just exploded because of global imports.

HOCHBERG: Yes. I mean, the choices we have - and there's a illustration in the book about when Boris Yeltsin visited a supermarket in Houston and was just flabbergasted at the array of products that we have - that degree of opportunity, plenty, selection and variety was something that we now take for granted in America. That was largely because of global trade, largely because we can get agriculture products year-round, cheeses from around the world, meats from around the world. And they can go into every corner in the United States.

SHAPIRO: There's a stunning figure here where you write that in 1975, before the first free trade agreements were written, the average U.S. supermarket carried just under 9,000 products. By 2008, that number had mushroomed to nearly 47,000. That's because of global trade.

HOCHBERG: Global trade and, as a result, changing eating habits. One of the things I put in the book - I would never have guessed growing up - as a little kid, we - you know, going to a seafood restaurant was, like, the worst thing in the world.

SHAPIRO: (Laughter).

HOCHBERG: And the fact that Americans have so embraced sushi - and virtually in every supermarket you go to, you can buy fresh sushi every day - is remarkable.

SHAPIRO: You obviously think more trade is a good thing. So I was surprised at the end of the book to see that you think the U.S. should take a pause on entering into any new trade deals. Why?

HOCHBERG: I - this has been such a divisive issue that I think - it's not healthy for a democracy to have such highly divisive issues that are often decided by one vote. Now, since I wrote the book, USMCA - the United States-Mexican-Canadian agreement that passed the House of Representatives with 385 votes to 41 - is the largest single majority we have ever seen on a trade agreement ever. So maybe we are now moving towards that. Recent surveys have shown a majority of Democrats and Republicans believe in free trade. Majority of Democrats thinks it's actually better for our economy.

SHAPIRO: Fred Hochberg is former chairman of the Export-Import Bank of the United States. His new book is "Trade Is Not A Four-Letter Word: How Six Everyday Products Make The Case For Trade." Thanks a lot.

HOCHBERG: Thank you.

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