The death of fair trade

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. 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.

This article has been excerpted from: ‘The Death of Fair Trade’

Courtesy: Counterpunch.org