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Thursday, April 17, 2008

Fair Trade: The New Political Snake Oil Sale

Among the many scummy things that unscrupulous employers will do is entice workers with the promise of bonuses and then create standards that are simply unreachable for those bonuses. I am of the opinion that backers of so called "fair trade" follow the exact same principle. Fair trade is, in my opinion, nothing more than a red herring for someone that is actually just opposed to free trade. In any free trade proposal, proponents of so called "fair trade" will proclaim that the agreement doesn't have enough safeguards for such things as the enviroment, working conditions, and the American worker. To me this is a red herring because proponents of "fair trade" can't point to one single free trade agreement that actually meets their dubious standards.

For instance, here is what Obama said about opposing CAFTA.

There are real problems in the agreement itself. It does less to protect labor than previous trade agreements, and does little to address enforcement of basic environmental standards in the Central American countries and the Dominican Republic. Moreover, there has been talk that, in order to get votes from legislators from sugar-producing states, the Bush administration may be preserving indefensible sugar subsidies that benefit a handful of wealthy growers and cripple Illinois candy manufacturers.

What are these supposed environmental standards that need to be met? Obama never really says that. Rather, he makes a very vague and nebulous statement about how CAFTA will be bad for the environment and that is why he is against it. Obama continues...

But the larger problem is what's missing from our prevailing policy on trade and globalization--namely, meaningful assistance for those who are not reaping its benefits and a plan to equip American workers with the skills and support they need to succeed in a 21st Century economy.

So far, almost all of our energy and almost all of these trade agreements are about making life easier for the winners of globalization, while we do nothing as life gets harder for American workers. In 2004, nearly 150,000 workers were certified as having lost their jobs due to trade and were thus eligible for Trade Adjustment Assistance--and this number doesn't even count service workers like janitors and cafeteria employees.

Here again we have nice sounding rhetoric but it is vague. Who are the losers and how does he propose to protect them? In Obama's world view, we can protect people from the downside of globalization by isolating ourselves from the rest of the world while the rest of the world globalizes. Of course, this is patently ridiculous but so is the idea of fair trade.

It is easy to stipulate to economic standards and protection of workers, but in reality that is utopia. In CAFTA, all our trading partners are impoverished nations. How does Obama expect a country like the Domincan Republic to be able to meet some sort of difficult and nebulous environmental standard when they can barely feed their people?

The opponents of the recent free trade agreement with Colombia cited similar environmental standards as well as civil rights violations. These were no less of a red herring than anything in CAFTA. The reality is that no country in the world has made more progress on civil rights in the last decade than Colombia. Rather than rewarding it on the progress it has made, the proponents have punished Colombia for what they haven't done. If a country isn't rewarded for making significant strides on civil rights, exactly what message are we sending? By the standard of proponents of "fair trade", the U.S. would be left to trade with a handful of nations. How exactly is a nation supposed to rise out of poverty if we create standards they simply can't meet in order for them to have access to our markets?

That's why ultimately "fair trade" is nothing more than a red herring perpetrated by the political equivalent of snake oill salesmen. The proponents of so called "fair trade" also are entirely made up of politicians beholden to the unions. The unions furiously oppose any free trade agreement. Since it isn't political viable to proclaim you oppose a free trade agreement because you are taking marching orders from the unions, politicians instead come up with this nebulous concept of "fair trade".

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