The end of free trade?

[dcsmart]

Adam Turl looks at the contradictions of U.S. policy as the global slump revives criticism of free-trade deals.


FREE TRADE is magic, with the power to solve almost any social or economic ill--or at least, that's what we've been told for the past 25 years. It's an argument that's accompanied every free trade agreement (FTA) from the North American Free Trade Agreement (NAFTA) to the formation of the World Trade Organization (WTO).

Now, in the midst of a long and deep recession, FTAs are unpopular. Some members of Congress are attempting to insert a "Buy American" provision into the economic stimulus package, and President Barack Obama is under some pressure to make good on his campaign pledge to "renegotiate" NAFTA and fix other FTAs.

But will the Obama administration really change course on trade? And what kind of trade should working people demand?

In order to assess today's debate, it's worth recalling how we got here. The reality is that "free trade" has never really been free. It's always been used by rich nations as a battering ram to open up poorer nations to economic penetration that benefits transnational corporations.

At the same time, these companies leverage lower wage labor abroad to put downward pressure on higher-paid workers at home. And since the U.S. emerged as the dominant economic power following the Second World War, it has often achieved FTAs by combining the stick of economic pressure with the carrot of access to the U.S. market, often to consolidate a strategic alliance with U.S. imperialism.

These FTAs overwhelmingly favor the wealthy "triad" of rich nation-states--the U.S.-Canadian economic bloc, the European Union and Japan.

In recent decades, some developing countries have also managed to grow into major economic powers, including India, Brazil, South Korea and, especially, China. But even in these countries, the economic benefits of FTA have flowed mainly to the tiny minorities that constitute the ruling classes of those nations. In China and India, for example, hundreds of millions of people remain mired in rural poverty, and the environmental costs of economic growth have been devastating.

In the 1990s, the champions of free trade--known as "neoliberals," in the sense that they favored an open, deregulated economy--promised workers in the developing would that this inequality would be overcome over time. To workers in the wealthy countries who found their jobs shifted overseas, the free traders argued that retraining programs to attain higher skills would prepare them to take advantage of globalization.
Text

FULL ARTICLE
http://socialistworker.org/2009/02/05/the-end-free-trade

[applegrove]

1. Liberal trade is important. That is where the word liberal comes from.

The Argentinians closed their doors to trade after the second world war and it didn't go so well. That doesn't mean government contracts shouldn't go to local business. It just means we should all be part of an interconnected world and trade. As to completely free trade? I'd go slow on that.