While there is a lot of focus on the results of Tuesday’s elections, I’m much more intrigued by the developments in the last two days on trade. And hoping that maybe, somehow, the developments can inject a little sanity into the debate over the rules that govern the exchange of stuff between countries.
First, the U.S. and China agreed to a deal that would put textiles back under a schedule of quotas (oh, my god, I used that awful word) through 2008. The Financial Times’ front-page story yesterday seemed to be moaning about the deal which, it said, “…comes less than a year after the end of a 30-year scheme of global quotas, which was supposed to usher in an era of free trade in one of the most heavily protected manufacturing goods.” (yeah, there seems to be a word or two missing at the end but that is a direct quote).
When I wrote about the end of the 30-year quota system, I tried to point out that quotas are a good example of global economic engineering that can make a positive difference, particularly for many desperately poor people. Quotas are a sane way to manage trade so the economic benefits of global commerce can be more evenly spread out.
Today, all the major media organs–the Financial Times, Wall Street Journal and The New York Times–are worrying about the collapse of talks over a new global trade deal, the so-called Doha Round. This particular roadblock arose after negotiators could not make a deal over agriculture. The folks on 43rd Street say, “The breakdown threatens to sink the first big global trade agreement in 10 years.”
To which I say, hallelujah. Maybe, then, we can get back to a real debate over trade. First, we can jettison the rhetoric of so-called “free trade” versus that awful idea of “protectionism.” Every trade agreement in existence IS a deal full of protections–it’s just that virtually all the protections are for capital and investment, benefitting one large global corporation or another. If we can simply start talking about who should benefit from trade, then, perhaps the conversation becomes a bit less rhetorically empty and nonsensical.
Second, we can inject some reality into the debate. For instance, if protectionism is so bad, how was it that the U.S. blossomed economically in the 1950s and 1960s when tariffs were the rage? There is nothing wrong with figuring out how to spread the benefits of what the earth offers–which means using quotas and tariffs–particularly at a time when managing resources becomes even more crucial because of the global environmental stress we read about every day.
It’s not just by chance that the objections to the U.S. vision of economic relationships is coming from Latin America, where many countries are rejecting what they see as deals that disadvantage their countries (remember, the Central American Free Trade Agreement sparked mass demonstrations in virtually every country the deal covers). Everyone wants a fair piece of the pie. Question is: can we reframe the debate so that the first thing written on the opening page of a trade deal answers the question, “How does this deal make workers’ live better?”
By the way, just across my computer came my regular little notices from the Bureau of Economic Analysis and the U.S. Census Bureau (yes, I read really gripping stuff): The U.S. trade deficit hit $66 billion in September, a rise of $6.8 billion from August (“total September exports of $105.2 billion and imports of $171.3 billion resulted in a goods and services deficit of $66.1
billion”). Egads.
