Decades of failed ‘free trade’ deals must end. Instead, let’s manage globalization to raise wages, create jobs, and protect the environment.
Everyone we know is “for” trade. We can’t remember ever meeting anyone who is “against” trade. This simplistic view of globalization — that everyone is either for or against trade — brought grief to millions of workers and families in America.
Thomas Friedman wrote several popular books on globalization. He once said that he didn’t need to read CAFTA — the free trade agreement for Central American countries. The title of the document said “Free Trade.” That was all he needed to know.
Nobel Prize economist Joseph Stiglitz puts the question more productively, “How should we manage globalization?” That framing treats trade like any other public policy issue. We talk about good or bad policies for health care, education, transportation, immigration, infrastructure, financial regulation, workforce development, and many other important issues. Aren’t there good and bad policies for trade?
For almost 40 years, leaders and scholars have promised improved well-being if we integrate our economy with the rest of the world. That intent was built into the design of the World Trade Organization, NAFTA, and hundreds of other “free-trade” agreements around the world.
That approach to trade has enabled corporations to make products anywhere in the world and sell them everywhere. This way of managing globalization has real-life consequences. Global corporations scour the globe for locations where workers are most exploitable and environmental regulations are the weakest. The U.S. industrial base has declined as a result.
That is the lived experience of communities locally and nationally who remember making steel and aluminum, home appliances, electronic equipment, televisions, cars, computers, cameras, ships, pharmaceuticals, and many other products. That work has gone into the global economy.
Rural areas experience a similar loss of livelihood as thousands of family farms disappear, towns lose their small businesses, health care facilities and schools, and families watch their children migrate to population centers in search of economic security.
That lived experience was palpable enough to kill support in Congress for President Obama’s last “free trade” deal, the Trans-Pacific Partnership, and strong enough to push rural and working-class voters to reject Hillary Clinton and elect Donald Trump in 2016, in hopes that he would fight for their jobs and communities.
The Seattle Times and others have suggested recently that an incoming Biden administration should prioritize a business-as-usual trade agenda and attempt to revive the defeated Trans-Pacific Partnership. That would be a mistake.
It is important to recognize that the WTO-NAFTA free-trade approach is exhausted, socially, economically, and politically. It is too late to rescue failed “free trade” policies. We need a new strategy — one different from the neoliberal policies of the past and different from the nationalist policies promoted by Donald Trump.
China, Japan, Nordic countries, South Korea, Germany, and other countries manage globalization in ways that build their domestic economies, maintain economic security, and invest in industries that can compete in the future. These countries are not “cheating.”
They are managing their economies to improve the well-being of their citizens. In our own history, we proudly devised similar industrial strategies. We heard echoes of that in the recent presidential campaign — proposed investments in infrastructure, research and development, alternative energy, health care, and education.
These policies could be aligned to encourage production in our domestic economy, and require high road labor and environmental standards as a condition for access to our markets.
It’s too bad Thomas Friedman didn’t read the full free-trade agreement for Central America. He may have thought about why the interests of global companies had top priority, and why the interests of workers, communities, and the environment were left out.
Members of Congress and the incoming Biden administration should pursue a trade strategy that looks less like the failed trade strategies — both the corporate strategy that brought us the Trans-Pacific Partnership and the nationalist strategy that the Trump administration pursued. Instead, they should pursue a strategy that raises wages, creates good-paying jobs, and protects the environment. That’s a vision of trade worth fighting for.
Hillary Haden is Executive Director of the Washington Fair Trade Coalition.