Politics of Poverty

How can US trade policy work for working people?

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trade agreements discussion center for global development Panelists at the Center for Global Development's discussion on the future of trade last month. Photo: Gawain Kripke

The next President should pursue agreements that produce shared economic, social, and environmental gains.

Back in the day of Oxfam’s Make Trade Fair Campaign, I was a trade nerd—living, eating, and breathing trade policy. So it was with a touch of nostalgia that I attended a nerdy panel last month on reforming US trade policy to benefit more Americans and better advance global development.

In the fight for Dignity for All, trade can be a powerful tool to fight poverty. The panelists agreed on the need for change—noting that President Trump won election in part due to his critique of trade agreements, tapping into a populist backlash against globalization. And while he has pursued policies that break from conservative and neoliberal orthodoxy, his agenda’s impact on lower-income workers and consumers has not been positive.

The panel seemed to align on a progressive vision for what the goals for US trade policy should be. But there were deep divisions in how to get there.

Simplify trade agreements?

My old friend and colleague Kim Elliott, a non-resident fellow with the Center for Global Development, argued that US trade policy is discriminatory toward developing countries. It imposes higher tariffs on the mostly agricultural and light manufacturing products many are best able to export—especially garments and footwear. As a tool for helping poor people and poor countries, US trade policy isn’t very good.

At the same time, she said, US trade policy isn’t doing much for vulnerable American workers and industries. US tariffs tend to hurt poorer US consumers more than richer ones. Assistance for workers who might be displaced by imports is shrinking and ineffective. And the tariff protection that exists often protects businesses and jobs that simply don’t exist anymore. So they just raise costs on consumers without any concurrent benefit for US producers.

Elliott, a defender of multilateralism, takes what I call a “restorationist” approach. She sees progress coming from a return to core values and goals—with incremental changes. She sees US trade agreements as too complicated and comprehensive, too intermittent and patchy. She’d drop parts of the US trade agenda like investor protection and intellectual property rights and go back to basics: “make trade agreements about trade again.” A simpler, less complicated agreement would be something that more countries could participate in.

Transform trade agreements to worker power agreements?

Todd Tucker, a political scientist and fellow at the Roosevelt Institute, agreed that the institutions and norms of trade policy are terribly broken.

Trump has used “national security exceptions” liberally to abridge existing US and international rules. He has aggressively pursued trade conflicts—or even trade wars by unilaterally imposing tariffs on friends and foes alike. At the same time, the US has consciously degraded the ability of institutions like the World Trade Organization (WTO) to manage disputes. It’s the kind of world where rules essentially don’t exist any more.

Tucker has a different vision, which I call “transformationist.” He sees the crisis in the policymaking and trade institutions as partly a question of relevance. Trade policy isn’t about things like the climate crisis, worker rights, and well-being. He argues for something different: Why not transform trade agreements into “worker power agreements?” Why not transform the WTO so that it can enforce a global Green New Deal? Tucker argues that returning to what came before is no way forward when there is this much pent-up political energy behind new ideas and issues. Trade policy and trade institutions must embrace them to be relevant and gain political support.

Making trade work for working people

So which is more likely to succeed and garner political support: restorationism or transformationism?  Personally, I’m more inclined to “transformationist” political strategies. But while I’m sympathetic to Tucker’s approach, I have a feeling that Elliott’s restorationist vision is more realistic. We know that many trade agreements benefit multinational corporations at the expense of working people. It’s why this election Oxfam is calling for special privileges for pharmaceutical companies and large investors to be dropped.

The next President should pursue trade deals that produce the kind of shared economic, social, and environmental gains that allow for the cooperative resolution of conflicts. It’s the only way that trade becomes a tool that helps tackle the world’s biggest challenges while creating jobs in the US and other countries.

Learn more about other issues on Oxfam’s Dignity for All agenda this election season and join our 2020 effort.

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