RADICAL SOLUTIONS FOR RADICAL TIMES.
THE MEANING OF FAIR
TRADE
By Jack Random
Much has been said on trade
policy since Donald Trump became leader of the free world. Trump boldly pulled out of the Trans
Pacific Partnership – which of course never was ratified and never took
effect. He announced that NAFTA
and CAFTA were dead and promptly pulled back from that position by suggesting
that everything was open to negotiations.
It is surprising how similar
Trump is to Hillary Clinton or Barack Obama on trade issues. When the rhetoric is swept away and the
election promises are buried and forgotten, Fair Trade becomes a concept that
no one seems able to define – no less advocate.
Now Trump has opened
negotiations with the beast of Free Trade: China. His
demands are all about the numbers.
We demand that the imbalance be rectified to the tune of $200 billion
per year. We demand that
government subsidies be reduced if not eliminated. We demand that the Chinese stop stealing technology
developed by American corporations.
We demand that China stop manipulating currency to effect trade
imbalance.
The one thing Treasury Secretary
Steve Mnuchin and his circle of Trump negotiators never mention are the rights
of labor– including the right to a living wage. It has become clear that what the rest of us mean by Fair
Trade and what Trump means are separate and distinct concepts. It is therefore necessary to establish
the meaning of Fair Trade. To
Trump it is simple mathematics. If
the trade deficit of all nations engaged is at or near zero then the policies
governing trade are fair. If the
deficit tips to one side or another then the policies are unfair.
To Fair Trade advocates like
Ohio Senator Sherrod Brown this is not what we had in mind. Maybe it’s not clear what we had in
mind. Maybe the concept is
deliberately cloudy so that Democratic candidates can claim to be pro Fair
Trade when in fact they fall in line with the Free Trade mandate enacted by
Republican Democrat Bill Clinton back in the nineties. It has taken us decades to challenge
that mandate and now we find it is being usurped by a pretender: a president so clueless he will surely
destroy the concept for another quarter century.
For the record here’s what Fair
Trade means to me:
First, we need to scrap the
entire framework of international trade as it exists today. We need to dismiss the idea that NAFTA,
CAFTA and the Trans Pacific Partnership only require minor revisions to meet
the goals of Fair Trade. A few
concessions to labor and a provision for the environment will bring things into
balance. No, they will not. What we need is wholesale and systemic
change.
We must understand that the
world has accepted the tenets of Free Trade and will not agree to any systemic
change without a fight. This
includes all of Europe and Great Britain as well as China, Russia and less
developed nations.
In this sense, America must
lead. There was once hope that the
European Union could lead the march to Fair Trade but that hope has faded like
a photograph left too long in the sun.
European leaders from the socialists of Spain to the progressives of
Greece and Italy will tell you that the train has left the station. Globalization is an indelible fact and
its rules are set in concrete. The
World Bank, the World Trade Organization and the International Monetary Fund
are the arbiters of trade and cannot be challenged.
It is unthinkable that the very
institutions that enforced austerity across the continent are now considered
untouchable. Let us abandon that
thinking and demand a new system.
We must establish new criteria
for trade by creating and enforcing new tiers of trade status, ranging from
preferred to prohibited.
TIER ONE: PREFERRED TRADE STATUS. Preferred trading partners would be
held to the highest standards of living wages, the right to establish unions,
the right to binding arbitration, the right to safe working conditions, as well
as retirement and health benefits.
Preferred status would be reserved for nations whose governments do not
provide subsidies to affect a competitive advantage. We would also expect exemplary records for human rights,
civil rights and environmental protection. Preferred trading partners would also be expected to enforce
the same standards on its trading partners. Failure to do so would automatically drop a nation from
preferred status.
Those nations that are granted
Preferred Trade status would be rewarded with unencumbered trade free of
tariffs or regulatory barriers.
Clearly, if we are to hold
others to a high standard we should be expected to hold ourselves to an
equivalent standard. That is not
the case today. We do not uphold a
living wage. We deny the right to
unionize in those states that uphold “Right to Work” laws. We fail to provide universal
healthcare. We are compromised on
human rights (capitol punishment and mass imprisonment) and civil rights (our justice
system discriminates on the basis of race and religion; our economic system on
the basis of race, religion and gender).
And we do not uphold the highest standards of environmental protection
(under Donald Trump it’s not even close).
We have also subsidized industries (auto, steel and banking) in times of
economic stress.
But let that go for now. Let us assume that we are working to
improve our own status and stipulate that we cannot hold others to a higher
standard than we are able to achieve.
Without detailed analysis the
nations that would qualify for preferred trade status under a Fair Trade system
would include western European nations, Canada, Japan, Australia, South Korea
and perhaps some African and Latin American nations. It would include none of the Middle Eastern nations and
would decidedly exclude China, India, Pakistan and Russia.
TIER TWO: CONDITIONAL TRADE STATUS. Conditional trading partners would be
subject to penalties and limitations proportionate to their failures in
upholding the standards of Tier One partners. For example, a nation that upholds standards in all respects
except for a temporary subsidy to its auto industry might be subject to a
one-time fine or granted an exemption based on exceptional circumstances. A nation that blocks unionization and
fails to provide health and retirement benefits would be subject to more severe
penalties. The guiding principle
is that it should be to a nation’s advantage to uphold all standards to the
highest possible extent. It would
require periodic review and adjustment and that would require a new
international institution to adjudicate.
I suggest the International Fair Trade Commission under the auspices of
the United Nations. It is
essential that any such body be independent of political influence to the
greatest possible degree.
The vast majority of the world’s
nations would be placed in the second tier. If we were honest and objective, it would include the United
States as well.
TIER THREE: PROHIBITED TRADE STATUS. Prohibited trading partners would
include any nations with gross violations of labor rights, human rights, civil
rights and/or environmental protection.
For example, any nation whose government engages in ethnic cleansing or
genocide would be prohibited from trading with the United States or its
preferred trading partners.
Prohibited trading partners
would likely include such human rights violators as Syria, Saudi Arabia,
Somalia, South Sudan, the Philippines, Congo, Myanmar, Turkey and North Korea.
Preferred trading status is not
new. There are a variety of
preferential trading zones currently in operation for any number of
reasons. None of these trade
agreements, however, are established with Fair Trade standards as the unifying
principle. Consequently, while
Fair Trade principles are frequently discussed at trade negotiations, they lack
leverage. Labor representatives
are rarely invited to participate and when they are they serve primarily as
symbols.
The key difference between Free
Trade and Fair Trade is the absence of labor in the former and the prominence
of labor in the latter. That is
the imbalance that must be rectified if the divergence of wealth between the
haves and the have-nots is to be reduced by any significant margin.
Liberals, neo-liberals,
conservative and neoconservatives alike have argued that using trade policy to
guide social development would only punish the people who already suffer under
oppressive governments. Such
arguments are self-serving and short sighted. America’s middle class did not spring from the air. It required that the people extract a
price from their elected leaders for their defiance of human rights. It required resistance and establishing
institutions like labor unions that stood up for workers against all odds. Those who fought for unions and labor
rights in this country paid a price in blood and sacrifice. They persisted until political
institutions and leaders finally stood up for them.
We are losing our middle class
because those institutions that stood with the working people have
crumbled. Unions are in steep
decline. Right to Work laws block
union organizers. Democrats only
pretend to be the worker’s party at election time while they collect their
share from the corporate coffers and govern very much like the corporate Republicans.
Systemic change never comes easy
but it comes. It comes after years
and decades of pushing and refusing to settle for the lesser of evils. Donald Trump, for all his inadequacies,
has tapped the anger of the people and proven that what was once considered
extreme is now completely acceptable.
That goes for radical visions for positive change as well as delusional
visions of self-aggrandizement.
If we do nothing, Donald Trump
will destroy any chance of Fair Trade for the foreseeable future. He will turn it into something that
upends economic gains and turns the stock market downward. He will turn it into nationalism and
patriotism, us against them, in a battle of numbers until we no longer care how
it affects the poor and the working poor.
Donald Trump doesn’t care about the workers. He will bring industrial jobs back only if they operate on
cheap labor or automation.
The coming world must be planned
and plotted to provide for working people. We all have a right to live in dignity and good health. We have a right to pursue happiness
even if we do not have wealth.
Fair Trade is one important step in getting there.
Automation is coming. The robot labor force is coming. There is no job on the open market that
robots cannot do faster and more efficiently than humans. The transition will be stunning for
industrial labor but it is coming for us all. Unfortunately, we cannot all serve as maintenance workers
for a robotic labor force. We will
have to be creative in finding new lines of work and new endeavors for human
kind. In this future world, a
world that has already arrived at our door, it will be more important than ever
that all of us – not just the CEO’s – are represented.
The pundits and political class
will line up against us. They will
bring warnings of global economic collapse. They will predict a market crash. They will tell us that Free Trade brings cheap products to
our local Walmart. They will tell
us there is no turning back.
To some degree they are
correct. A transition to Fair
Trade will not be easy. It will
mean higher prices for consumer goods.
But it will also bring better paying jobs not only to our nation but to
other nations as well. It will
ultimately yield benefits to all people.
It will serve as a warning to the corporate powers that workers will be
represented at the global economic bargaining table. It will serve notice that you cannot build a sustainable
economy on the exploitation of the labor force.
Donald Trump had the corporate
elites running scared for a while.
The markets reacted like a junkie on his last hit when he threatened to
make good on his promise to pull out of NAFTA. The monetary pundits cried out in horror when he announced
in a twit of impulse that he was slapping a tariff on steel and aluminum. But it turned out he was just another
politician who speaks with a forked tongue. Like so many before him, he talks Fair Trade but when it all
comes down he doesn’t mean a word of it.
Jazz.
Jack Random is the author of
the Jazzman Chronicles, Hard Times: The Wrath of an Angry God and the Chess
Trilogy.
