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June 15, 2005

"Smart" Trade Policy
Posted by Heather Hurlburt

The week's shout-out for intelligent progressive thought on trade goes to Dan Tarullo, Dan Restrepo and the good people at the Center for American Progress for their memo on the DR-CAFTA free trade agreement.

Dan T. earned his free trade chops:  he held senior economic policy jobs at the Clinton White House and State Department.  You can't call him a closet protectionist.  When someone with those credentials says that "... this trade agreement, and the policies surrounding it, fall so far short of a much-needed smart trade policy" progressives should start taking notes.

The memo's definition of a smart trade policy is a good start toward helping progressives rebuild our consensus on trade:

"The basic principles of a smart trade policy arise from the reasons for seeking trade agreements in the first place.  Trade agreements should provide significant gains for U.S. workers, consumers, and businesses.  They should support development, democracy, and the rule of law in our trading partners.  Because trade agreements inevitably create losers as well as winners, smart trade policy requires that steps be taken to ensure economic opportunity for all those who may be displaced by trade.  Finally, a trade policy cannot be smart unless it can be sustained, both at home and abroad.  At home, this means pursuing trade agreements in a bipartisan fashion.  Abroad it means exercising U.S. leadership so as to bring the benefits of trade to all countries, including the poorest."

Another Clinton Administration economic guru, Gene Sperling, has been pushing a new trade consensus for a while.  In Googling for links for this item, I discovered that even the bloggers over at Mother Jones, or some of them anyway, think there might be some hope for a new progressive middle ground on trade.  (Based on a post I did here a while back, no less.  Don't you love the web?)

Perhaps this CAFTA mess is an opportunity.  What our smart trade folks have been saying makes a lot of sense.  It's time for the rest of us to start picking it up.

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Comments

Let's have democratically elected boards of advisors to oversee and complement trade agreements and international financial institutions.

Let's have elections from WTO countries for a board to provide citizen input on the WTO.

The USA, Canada and Mexico can elect a board to make recommendations about how to standardize national policies in a way that uplifts everybody.

But democracy is probably too radical for most of the "free trade" set. Citizens aren't really smart enough to understand their own interests in international trade issues.

Once again the Democratic Party looks hemmed in by its affluent Neo Liberal supporters.

Thanks for the link to the memo, it was a good, reasoned approach. I can't help have some misgivings, though. When he writes of pro-free-trade (presumably Democratic) members of Congress:

"they may now feel their only recourse is to vote against DR-CAFTA - not because they oppose a trade agreement with those countries, but because this trade agreement, and the policies surrounding it, fall so far short of a much-needed smart trade policy."

that's true for some Democrats. But the public discourse on the bill isn't rallying around Tarullo's "smart trade" policy. It's about defeating this trade agreement and not allowing another NAFTA to happen. The anti-free-trade wing of the party has learned to dress up its arguments a bit, and learned not to sound outright protectionist, to say of course it wants trade, just "smart" trade when in fact if they have an opposite diagnosis of how trade and economic development works from mainstream economists and even from Mr. Tarullo. This new "concensus" is only an illusion brought about by the combination of people with specific objections to CAFTA (Tarullo) and those with quite general ones in the guise of specific ones (I'd put the Mother Jones bloggers in this category).

By the way, the Economist has an interesting analysis of the economic policy choices Democrats are facing: http://www.economist.com/World/na/displayStory.cfm?story_id=4064589

Both the Clinton and Bush administrations have supported the destruction of millions of US manufacturing jobs so we can all go to Wal-Mart and buy cheap underwear.

Sound too simplisitic?

Not to the millions of unemployed and underemployed US workers.

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