Democrats, Free Trade and Fair Trade

Keywords: Bart Mongoven; free trade; outsourcing; unionists; environmentalists; Democratic Party; Seattle coalition; Francisco Wulff; fair trade

A smart paper by Stratfor’s Bart Mongoven clarified a lot for me about the political support for free trade in the US. (I assume that it’s similar in other countries, including Canada, but he doesn’t say so.)

The thing is, free trade doesn’t line up along the usual left-right political dimension. There are supporters and opponents in both sides. I had assumed that most free traders were Republicans, but that is not true even now, and is becoming less true all the time. It seems that unionists and environmentalists, who are of course important constituencies within the Democratic Party, are increasingly convinced that there are advantages to be gained from free trade agreements.

Outsourcing of jobs may be tapering off (he doesn’t try to prove that, but only suggests it) and so union people don’t fear it much nowadays, especially since it has not caused the economic hardships they expected. The US economy continues to be strong.

Environmentalists see that the earth is often ravaged worse in poor countries than in rich ones, and that a good free trade agreement with rigorous environmental clauses is a powerful tool. (My former student Francisco Wulff, working as an environmental economist in Latin America, told me at least ten years ago that NAFTA was great for the environment, since it held Mexico to standards that would not have been possible without it. Apparently the American activists have come round to that opinion in considerable numbers, though not as a consensus.)

The task Democrats are facing is the job of creating a program that will unify the party. Free trade is not one of their issues because it is still divisive. The answer to this is to raise the banner of “fair trade’ — to write trade agreements with clauses protecting liberal values such as the right to organize, the prohibition of child labor, and the protection of the environment. As a rhetorical device, this is an attractive solution, and indeed if it is carried out it will generate truly desirable substantive benefits.

However, as Mongoven points out, when you get past the slogan and into specifying the nature of forthcoming trade agreements, there will be strong differences of opinion. If the party accepts what Mongoven calls “realistic” (but another person might call limited) demands for trade agreements, it will have implicitly come round to accept free trade, and there will be conflict within the party. If the demands are what he calls “onerous” they will make it difficult to negotiate treaties and will, therefore, amount to a protectionist stance on the part of the Democrats.

It will be some time before this matter is sorted out, but I am grateful for the update on changing opinions about the matter in the US. I suppose I’m as ambivalent as most others of my political stripe. My environmental feelings are stronger than my opinion about protecting jobs, and I take comfort from the fact that environmentalists now do not entirely seek to block free trade but rather prefer, as I do, to carry it forward internationally under rigorous terms. Only the “Seattle coalition” — the radicals who blocked the WTO meetings in Seattle — are dead-set against free trade. Personally, I just want to see the terms of trade limit the dominance of US interests, especially in agriculture.