Fair Trade vs. Free Trade

I began recently to wonder if one can have free trade and fair trade, or is it an either/or proposition. On the one hand, I believe that in order for developing nations to improve the livelihoods there has to be some form of trade with more developed countries. I also believe that we must do as much as we can to insure that any trade agreements do not infringe on the rights and livelihoods of our citizens. How is one to reconcile these two seemingly opposite positions? I believe that they can be reconciled but first we have to have some basic ground rules.

I believe that there cannot be free trade in country where the people are not free. Globalization by its very nature requires freedom of movement of people, yet the globalization being touted today is only freedom of movement for capital. Since capital is not real or human, what they are really advocating is freedom of movement for the owners of the capital. In other words the large corporations should be able to override the will of the local people for the sake of trade. In addition, these corporations should be able to shop the world for the lowest possible wages and environmental laws to maintain their profits.

I am not a trade guru or a corporate/media talking head. I am just an ordinary working American who lives in the real world, not a world of graphs and charts. And what I know is that free and fair trade has not come about through any of the globalization treaties we have seen in recent years. On the contrary, while corporate profits are up, average worker wages have flat-lined and in some cases decreased. Jobs are being outsourced by the millions. Entire industries have shut down in the states and moved elsewhere.

“For decades we took for granted that everyone agreed with us economists that free trade is good, protectionism is bad. Somewhere along the way, that stopped being the conventional wisdom,” acknowledged U.S. Trade Representative Susan Schwab, in an interview with McClatchy Newspapers. “And whereas the default vote on a trade bill in Congress used to be a ‘yes’ vote, the default vote on a trade bill now in Congress is a ‘no’ vote.” Why? Because lots of people are no longer convinced that a rising tide of trade lifts all boats — and there's evidence to back them up.

For three decades, the richest 10 percent of Americans have been growing even richer much faster than everyone else. Over the past five years, real wages for all the rest of American workers have been almost flat. Many blame globalization.[1]

I have yet to hear a compelling argument of why this is happening. Normally in an economy when productivity is up wages follow, in this economy that is no longer the case. We have experienced strong growth in productivity for the last five years and yet wages have not increased. So the average American is working harder for the same or less money and they wonder why globalization is getting a bad name? I am all for developing countries becoming more developed and have less poverty, but we have to do more to help the workers in this country to cushion the blows from globalization. It isn’t like the money isn’t there. When one CEO can make over 140 million dollars a year, the money is there. The problem is we are not spending it properly; we need to readjust our priorities. Globalization that does not take into account people first is doomed to failure.

This includes not only the people here at home, but the people in the developing countries as well. We must always put people first in our negotiations, in our planning, and in our implementation. For too long we have allowed corporate interest to supersede the interest of people. We have created these oligarchic and monopolistic entities that have more power than the governments that charter them. We must not continue to watch as our corporations engage in a race to the bottom to see how low they can go on wages, on the environment, and on human dignity.

I believe that free trade and fair trade are not mutually exclusive, but that in order to institute them we must allow greater worker organization all over the world. Only by allowing the workers to organize can we begin to offset the uneven system we have in place today. One group of workers cannot be organized and protected and another group not, this would only lead to the exploitation of the unprotected workers as we have today. For decades we have allowed the trade decisions to be made by the money grubbers and the politicians, we see where that has led us; maybe it is time to allow the workers to become involved in the process. For too long we have negotiated these treaties without gauging the impact they will have on our workers or the workers in the other countries. It is time we began to consider the impact they will have on our workforce and how we can reduce the harmful effects of globalization.

I think that the union bill currently in the Congress will go a long way to bring the workers concerns into this process. We need to strengthen our organized labor; the decline of wage growth and industry relocation overseas can be correlated to the decline of organized labor in this country. All those promises of management that organizing workers would lead to outsourcing of jobs was just a smoke screen, the outsourcing happened anyway only without organization, the workers were left high and dry. Is there such a thing as fair, free trade? Yes there is but it will only happen if we demand it.

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[1] http://www.mcclatchydc.com/226/story/18562.html