Should Sovereign Nations Continue To Find Ways Of Promoting Trade Agreements That Increase Global Competition And Threaten The Stability Of Established Industries?
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The magazine Foreign Policy recent ran an article laying out a detailed strategy that President Obama must follow in order to pass Trade Promotion Authority (TPA) through the halls of the US Congress. It spoke to bipartisan levers to pull as well as key stakeholders who might tip the balance in final voting. And while the article briefly addressed the why behind the policy, it essentially accepted the current round of bilateral free trade agreements between the US and several other countries as a debate not worth having, that common sense dictates their passage.
Yet given all of the recent struggles the US and other countries have experienced attempting to emerge from the Great Recession in 2008, and the fact that the United Kingdom is genuinely debating the idea of leaving the European Union (the largest trading block on the planet), this seems like a debate worth having.
Consider a few things related to the issue:
- Capitalism, specifically global trade, is credited by many commentators with lifting over one billion people out of poverty in the last twenty years.
- In the US, the political center has shifted in a pro-free-trade direction. Bill Clinton’s throaty enthusiasm for NAFTA (the North American Free Trade Agreement) in the 1993 changed the American political landscape in this area.
- Tens of millions of people have felt the negative consequences of bilateral and global free-trade agreements. Entire industries and sectors in many countries have shriveled up or closed because of fierce competition from other countries, places that often play by different sets of rules.
- All of this trade isn’t necessarily leading to a safer world. Thomas Friedman used to say that no two countries with McDonalds restaurants in their territory had ever gone to war. This axiom was shattered by the NATO bombing mission in Serbia in 1999, and the world’s only gotten more unstable ever since.
And, to add another interesting dimension to the conversation, more choice may not even lead to more happiness. Dr. Barry Schwartz, in his powerful TED talk, explains that more choice often leads to more anxiety and unhappiness. So, does spreading robust, Western-style free trade to the rest of the planet leave people any better off once they’re past the point of meeting their basic needs?
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Just stop and think for a moment what it must be like to work for most of your career for a company that suddenly goes under because of increased global competition. Then stop and think about the life of a person in a developing country who has little-to-no economic opportunity because his country has no access to international markets.
There are clearly no easy answers. It’s hard not to see the situation as win/lose, that one group wins and another loses. But does this outcome need to be the case?
- Is it possible to encourage free trade that both takes into account new competition and on-the-ground realities of existing businesses?
- Is it possible to facilitate the movement of energy-intensive, dirty industries such that the environment isn’t trashed in one country rather than another? Many people see China as a destination for manufacturing companies that want to simply ignore environmental regulations and constraints.
- Is it possible to preserve what’s best and unique about a country (often its local industries) and gain global market efficiencies?
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What do you, citizens of the world, believe about global free trade? How much openness works for the world in this regard? How much preservation works?
I would especially love to hear from those readers who lives or work outside of the United States.
Please share your comments below.
Photo credit: Flickr/Steve Jurvetson