?False Impressions Rule in Flawed Free Trade Deals

The United States, as we all know, is mired in one of the worst recessions in its history. Unemployment remains stuck at more than 9%, with 6 million Americans being out of work for at least six months, 4.5 million of them for a year or more. All told, about one in six Americans are either out of work or working at inadequate jobs.

Housing prices continue to fall, meaning that the wealth of average Americans also continues to decline at a time when corporate profits remain robust and the top 1% rakes in the dough.

And how do our politicians deal with this? They don’t. For all the talk about President Barack Obama’s jobs bill – Democrats say it will fix things (it won’t), Republicans say it will bankrupt us (it won’t) – an awful lot of energy is being expended on pursuing the failed free-trade strategies of the last three decades.

Congress recently passed Obama-promoted free-trade pacts with South Korea, Columbia and Panama, which protects investor rights of the pact’s signatories. Passage of the pact ignores the nearly three-decade history of NAFTA-style trade pacts, which have done little more than make it easier for corporations to shift jobs to low-wage nations and evade environmental protections.

Of course, the Republican presidential candidates are endorsing this failed notion of free trade, as well. Mitt Romney, the former Massachussets governor and de facto front-runner, calls free trade “one of the best routes to accomplishing our goals” and says we need to build on the free-trade system.

That we keep touting the benefits of trade pacts that have offered few benefits is mind boggling. As Roger Bybee wrote recently on the In These Times web site, NAFTA has led to the loss of 4.9 million jobs and the closing of 43,000 American factories. For free-traders, this is not necessarily a bad thing, because it leads to lower-cost goods and is supposed to be part of a larger shift to higher-paid service-oriented work.

That promise, of course, has been a sham, with white-collar jobs now heading overseas, as well. There is no doubt that trading across borders can have a positive impact on American jobs, but only if trade pacts are structured to support workers and consumers and not to create a race to the bottom of the wage barrel.

That’s why unions and much of the manufacturing sector have been opposed to new trade deals with Pacific Rim partners and other nations. The problem with the pacts, as critics point out, is that they are designed to allow companies to chase labor and have little to do with expanding markets.

“We don’t have a free trade agreement with Great Britain, which could actually buy American products,” Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, told the New York Times. “Instead we have this penchant for doing free trade agreements with countries that are low-cost manufacturing centers. Why? Because multinational companies aren’t looking at this and saying, ‘It will be great to make things in Ohio and send it to South Korea.’ No, they’re looking at this and saying, ‘It will be great to make things in South Korea and send it to Ohio.’ ”

Making things in South Korea may make them cheaper, but it means fewer jobs here — and the ones that do remain end up paying less. That flies in the face of Henry Ford’s dictum that you have to pay your workers enough to allow them to buy your products.

The problem is that we have bought into the false notion that we can have truly free trade and that free trade implies a lifting of rules. The fact is, all trade pacts have positives and negatives — and even the freest of trade operates under specific rule sets. What we think of as free trade today is a pro-corporate construct that only considers cost. A different set of rules is possible that could prioritize sustainability, high-paying jobs, workplace safety, etc.

The trade issue, like so much of what happens in our economy, has been framed in such a way as to benefit the corporate classes and not the rest of us — which is just another reason the #occupywallstreet protests continue to grow.

Hank Kalet is a poet and the regional editor for in central New Jersey. Email; see


From The Progressive Populist, November 15, 2011

News | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 2011 The Progressive Populist
PO Box 819, Manchaca TX 78652