Sunday, December 21, 2008

Free trade that is not one-sided

For 15 years, we have operated under more and more free trade agreements that have indeed opened up economic ties and created more cross-border commerce.

This has been good mostly for U.S. consumers and retailers, who have been able procure more goods, for less. These deals are the reasons many Americans have more TVs than they can watch, more toasters than they deserve toast, a new cell phone every two years.

In the realm of stewardship to the environment and laborers as it relates to manufacturing, these trade deals have served to squelch the many years of progress made in the U.S. When manufacturing is sent overseas, quite often the plants do not have to adhere to the same standards regarding wastewater management, proper disposal of hazardous waste, safety and decent pay for employees.

When Obama introduced former Dallas mayor Ron Kirk as nominee for chief U.S. trade negotiator, Obama insisted that future deals will take a keen look at their effect on labor and the environment, according to this story. Obama has suggested that Canada, Mexico and the U.S. renegotiate NAFTA, with an eye towards these reforms.

Obama seems to recognize that our economy has not gotten back what it has given in trade agreements. He has criticized the recent trade deal with S. Korea because it would permit more S. Korean autos to the U.S. but does not open the S. Korean market to U.S. autos.

Some think Obama's stance toward trade will put a crimp on the Doha round of trade talks, with developing economies that export consumer goods worried that rich countries will use labor and the environment as excuses to block their goods.

If that's the case, so be it. I've been to China, Mexico, Guatemala and many other poorer nations that have industries devoted to exports. To a degree, many of the products are safe for consumption. But in my travels, I always asked what sort of wages the workers made. Most will make less in a day than someone at Best Buy makes in an hour.

This is why we have retail shelves chock full with cheap TVs and cheap food. And don't forget that sometimes this cheap food causes illness, that the cheap TV you buy today might last less than five years (Last year, wallowing in the relative luxury of a five TV household - for two people - I finally gave away a U.S.-made TV from about 1981 that still had a great picture. It probably cost $400 back then, which would be much more in today's dollars.).

Do I long for a future where U.S. consumer goods are more expensive? Not really. But I do long for fair trade that does not needlessly destroy U.S. manufacturing capability for the sole sake of filling shelves with cheaper goods. Nor do I believe we need to be making TVs, unless those TVs consume considerably less energy than others.

I do long for a U.S. where the emphasis is put on creating products that reduce our dependency on foreign energy, products that can likewise be exported to energy hungry developing nations. And I want trade deals that will enable us to actually get our products into those countries, to compete on a fair basis.

If Ron Kirk can help make that happen, I wish him a speedy confirmation in the Senate.

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