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The results are in: ‘Free trade’ is simply bad public policy

By Stan Sorscher

In a somewhat contentious Town Hall meeting, some of my Congressmember’s constituents, including me, were challenging his adherence to “free trade” policies. In his defense he said, “Go watch ‘The Constant Gardener’.” So I did.

Many scenes are shot in Africa, with vivid images of urban slums and timeless poverty, where people express dignity, strength and courage every day. A foreign pharmaceutical company is conducting drug trials using legions of Africans as test subjects. The experimental protocol ignores the villagers’ interests, killing many of them, providing none of the protections we would normally expect of clinical trials in a Western democracy.

The African city has no institutions of civil society (other than the inherent good nature of the people) — weak and distant government, bribery, police corruption, overwhelmed hospitals, a primitive public health agency, no scientific community, no free press or journalism, organized social or political activity… except for the local police, who serve the drug company. Every mother, father and child in the clinical trial is reminded of his or her own insecurity. Everyone dreads being singled out for anti-corporate behavior.

Things go badly, as you might imagine.

The movie is a work of fiction. What it tells us about trade is this: Public policies – trade policy included – create winners and losers. In this case, the winner is a multinational company acting with very little intervention from civil society. The losers are people and their communities who have no voice in choosing their own future.

To be clear: I am 100% in favor of trade. The question is not “trade or no trade.” The question is “good trade policy or bad trade policy.” I know a good trade policy when I see it: It will raise my standard of living. A bad trade policy lowers my standard of living.

Western democracies succeed because we have a strong middle class and strong institutions of civil society. We have the political balance to protect clean water and clean air. We regulate drugs, food, banks, and many consumer goods. We invest in public infrastructure, education, and R&D. We provide workplace safety, minimum wage, unemployment insurance, free speech rights, and more.

From the ’60s until now, South Korea enjoyed extraordinary growth using well-designed industrial policies, consistent with their strong cultural values of national identity and social obligation. South Korea’s industrial policies effectively balanced business interests with the public interest. This is the opposite of free trade.

By design, free trade agreements give investor interests highest priority — above the environment, human rights, labor rights, public health and financial regulation. Free trade agreements are full of rights for business, but conspicuously downplay rights for workers, people or the planet.

Under free trade rules, a mining company can overwhelm the resources of a small country, ruin the water supply, and clear forests over the objections of local governments and people. Political power steadily concentrates in favor of those with the most money, while the middle class erodes and communities are weakened.

It would never occur to us to dismantle the balancing controls that make capitalism work well. We would never concentrate unchecked power in the hands or multinational businesses, and investor interests. Would we?

Twenty years ago, many of us recognized the unbalanced design of free trade, but we thought, “It couldn’t happen here!” Our strong middle class and strong institutions of civil society would protect us from harm.

Now, we can see that it worked the other way. As global businesses acquired more political power, living standards have steadily eroded for workers, families, communities and Main Street businesses. We see growing wealth inequality, deindustrialization of our economy, and reduced prospects for our children.

For many Koreans, the US-Korea Free trade agreement represents a historic break in policy. Under the Korea-US Free Trade agreement, Hyundai, Samsung and other large Korean companies can drop their social duty, and move toward the global view that shareholders and business executives get their piece of prosperity first, while everyone else can wait for their share to trickle down.

Under the US-Korea Free trade agreement, we may soon see South Korean products built with North Korean labor from the Kaesong Industrial Complex. This would make scenes in The Constant Gardener look like a workers’ paradise.

It is happening in America. It will start happening in South Korea. It has long since happened in Colombia – a textbook case of civil society crushed in favor of a wealthy elites and global capital. The US-Colombia free trade agreement will be a bitter pill for most Colombians.

Free trade is not an issue of workers in one country against workers in another. Instead, the issue is civil society in both countries being swept aside by investors and global corporate interests in both countries.

Why did my Congressman recommend the movie? I think the movie touched his heart. He is an advocate for good health care. I think he developed great sympathy for people in Africa, when he was posted there with the State Department. He feels strongly that America’s middle class is under threat.

We need policies for foreign trade that look like the policies that industrialized America, Korea, Japan, Singapore and much of Europe. Those policies were designed to create strong communities, opportunity and fairness, shared prosperity and investment in the future. For the most part, those policies focused on domestic investment and respect for the environment, human rights, labor rights, public health and financial regulation.

Free trade makes sense to market ideologues and it works sensationally well for the top 1% in each country, at least in the short term. Free trade is bad for workers, bad for communities, bad for long-term prosperity, and bad public policy.

Stan Sorscher is labor representative at the Society of Professional Engineering Employees in Aerospace (SPEEA), a union representing more than 24,000 workers in Washington, Kansas, Oregon, Utah, Texas and California.

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