To hear President-elect Trump tell it, ripping up, repealing or renegotiating international trade deals will bring back lost factory jobs and restore the glory days of the American working class. Wilbur Ross, Trump’s nominee to run the Commerce Department, plans to work with his new boss to release America from “the bondage” of “bad trade agreements.” Conversely, to President Obama, the for-now defunct Trans-Pacific Partnership trade agreement would have boosted America’s growth, raised living, environmental and labor standards in the 11 other signatory countries, and blocked China from dominating the global stage. They can’t both be right, and the record shows that neither are. Those hoping that American industry will rise again if and when the president-elect whacks deals like the North American or Korea trade deals will be profoundly disappointed. Neither does the failure of the TPP pave the way for the rise of our new Chinese overlords. The problem with this hyper-elevation of trade deals is that it conflates the deals with the trade. The real problem, as I’ll explain, is the persistent and economically large trade deficits that the United States has run with our trading partners since the mid-1970s, which at this point have little to do with trade deals. If the Trump administration seriously intends to help the displaced manufacturing workers and communities that were instrumental in the president-elect’s upset victory, it will need to shift its line of attack from trade deals to the trade deficit. And I’ve got an idea to help the Trump administration do so. First, some background. Trade – the increasing flows of goods and services across borders – will continue to have profound effects on economies, communities, industries and workers. It is a net plus, increasing supply chains, jobs and commerce, while lowering prices. But it also comes at a great cost for those workers and communities in wealthy countries like ours who face increased competition from lower-wage countries. Trade deals, on the other hand, are less consequential. They provide necessary rules of the road by which countries deal with trade logistics, barriers, cross-border investments and conflicts, and, in this sense, they can smooth the path of globalization in useful ways. But they can also be captured by partisan or corporate interests and thereby used to channel the benefits of trade to a favored group. This has certainly been the case in the United States, and it is why many of us who are committed globalists opposed the TPP. One reason trade deals today have little effect on trade is that the big, truly consequential deals, ones that really did boost trade flows, took place decades ago. The General Agreement on Tariffs and Trade in the late 1940s launched the modern era of globalization by coordinating trade and lowering tariffs across multiple countries. The GATT started with 23 countries, including the United States, and by the mid-1990s, when it became what we know today as the World Trade Organization, covered more than 120 countries. Today, membership is up to almost 170. Since GATT and the WTO lowered tariffs and quotas across the globe, what’s left on the trade negotiating table are issues that have more to do with who wins and who loses from trade than with overall trade flows, growth, jobs and net balances (exports minus imports). During the campaign, Trump correctly argued that the target of his administration’s trade policy would be the US trade deficit, which has been a significant drag on growth and manufacturing jobs, particularly in the 2000s, when our trade deficit with China sharply grew. Yet a recent (quite positive) review of the effect of trade agreements by the nonpartisan Congressional Budget Office states that “the estimates of the effects of preferential trade agreements on the US trade balance are very small and highly uncertain…” and that “Trade deficits are not caused by either US or foreign trade policies.” While that last bit isn’t quite right – trade policies that target exchange rates affect trade balances by changing the relative prices of exports and imports – CBO has a point. Advocates claim that the next trade deal with country X will boost our net exports to X while opponents predict the opposite. While both can point to cherry-picked evidence, there are simply too many moving parts – relative growth rates, differences in savings and investment, shocks to exchange rates – to parse out the economic effect of these “rules-of-the-road” trade agreements. Lori Wallach and I have sharply critiqued many of the non-tariff components of trade deals – things like intellectual property rights, investor settlement mechanisms and extended pharmaceutical patents. We argue that we must take corporate interests out of the core of these deals and put in their place the interests of consumers, the environment and workers. And not just US consumers and workers, but those in our trading partners’ countries, as well. But unless we’re also lowering our trade deficit, we’re not going to help communities hurt by imbalanced trade, and trade deals, as noted, don’t help much in that regard. They could help more if they were to deal with exchange rate manipulation, and perhaps the Trump team can figure out how to put enforceable rules into any trade agreements it negotiates. That would be a real advance, as our trade negotiators have been unable or unwilling to do so for decades. But even this advance would have a limited effect for the obvious reason that it would cover only countries in the deal. Instead, we need to give our trading and financial institutions, meaning Congress, the Treasury and the Federal Reserve, the ability to push back on currency manipulation, wherever it occurs. Those of us who’ve studied this problem have ideas on how to go about that, from the narrow imposition of duties on specific subsidized goods to “countervailing currency intervention” (neutralizing currency manipulators by intervening to make their currency appreciate as much as they make the dollar appreciate) to the restriction of international capital flows. What’s needed is a joint effort by policy experts and policymakers to figure out the most effective approach. So, here’s my proposal to the incoming administration: form a bipartisan task force to explore how we can best reduce our trade imbalance in ways that are least disruptive to trade flows. See if Warren Buffett, who has written insightfully about this problem of imbalanced trade (and proposed a solution) and has solid capitalist “street cred,” would be willing to head the task force. Give the group six months to come up with practical recommendations that include legislative and administrative solutions. Not only would this approach bring disparate groups that share this goal together in a way that could send a useful signal after such a divisive campaign. Unlike ripping up trade deals, it also might actually work, helping American exporters finally compete on a more level playing field and reducing the trade deficit.