Getting on a new track on trade

Todd Tucker

Getting on a new track on trade

Folks trapped in a flat world mindset may think all this hub hub about fair trade is some sort of disguised attempt to smash the machines and shut down the borders.

That’s so 1990s. Consider just two examples from this week.

Case study 1: Costa Rican voters will vote on Sunday in the world’s first popular referendum on a trade deal (CAFTA). Polls show the “no” vote with a 12 point lead, despite the Bush administration’s considerable bullying and threats. And the hundreds of thousands of people that have filled San Jose’s streets for the “no” campaign aren’t asking for a shut down of trade, but a renegotiation so that human, labor and environmental rights can be put in, and a lot of the bad NAFTA-style provisions taken out.

Case study 2: Just this afternoon, leading fair traders in the U.S. Congress showed yet again that they’re not anti-trade, they just want a different model of trade. Reps. Raúl Grijalva (D-Ariz.) and Linda Sánchez (D-Calif.) announced plans to introduce a bill to make permanent the tiny fraction of Costa Rica’s duty-free market access that isn’t already. These benefits would be extended to nearly two dozen countries, including desperately poor Haiti. This move puts the kibosh on the Bush threats that preferences would expire, which, as I argue here, were based on lies anyway.

In fact, there’s a growing sense that, in order to save our foreign policy, we’re going to have to move away from the NAFTA-CAFTA model, which has been a largely destabilizing factor in Mexico and had painful economic costs. Sen. Bernie Sanders (I-Vt.) articulated this well in his Wall Street Journal op-ed earlier this week, as did Sen. Sherrod Brown (D-Ohio) in a moving floor speech, which you can see here.

Rep. Mike Michaud (D-Maine) echoed these themes in a letter sent just last night to Costa Rica:

"There is a growing sense in Congress and among the American public that threatening our neighbors to our South with reprisals for seeking their own economic path after a generation of lost income growth is a strategy that has largely backfired and undermined the U.S. reputation in the region."

Indeed, whoever our next commander in chief ends up being, if they want to re-establish U.S. credibility in the region, they’re going to have to start paring back the harmful interventionist habits and the trade and aid conditionalities and rules that limit local economic development.

Well, that’s it for me at DMI this week. If you want to keep up with the trade debate, and its impact on politics, economics and foreign policy, come hang with us at www.EyesOnTrade.Org sometime, or visit our main Public Citizen’s Global Trade Watch site at www.TradeWatch.Org.

Posted at 4:20 PM, Oct 05, 2007 in Economy | Trade | Permalink | Comments (2)

Comments

I find it ridiculous that the Bush administration would actually choose to intervene in such an instance when pretty much anything they say is construed as negative by our friends abroad. It just goes to show how absolutely tone deaf they are. As it stands now, it seems that the free-trade agreement's gone through in spite of this intervention: http://www.nytimes.com/aponline/world/AP-Costa-Rica-US-Free-Trade.html?ref=americas

Unfortunately, there's a very thin line in issue space between free trade and protectionism and it's difficult to convince people that there actually is a middle point between the two. The public is well aware that the extreme positions are noxious and harmful to the middle-class and workers abroad, but the fair-trade movement has done a relatively poor job convincing working-class Americans that it's not protectionist and that it's not beholden to hippie radical college students and dreadlocked leftists. It's too bad and it's an obvious distortion of the truth, but that's how many people perceive it. As such, there's plenty of support for the positions they advocate but a completely lack of trust of those backing it. There is a need to rethink the NAFTA model so that a balance can be established between stimulating growth and doing the least amount of harm possible to workers here and abroad; just don't look for it until 2009, at the earliest.

Irony of ironies, there's a really good article on the Economist about the FTA that is pending between Peru and the US and what a mess the FTA structure is right now. Worth a read:
http://www.economist.com/world/la/displaystory.cfm?story_id=9909344

A balance can be established between stimulating growth and doing the least amount of harm possible to workers here and abroad;