Time to Take a Second Look at Our "Free
Trade" Agreements
By Mark WeisbrotÂ
This op-ed was distributed by McClatchy Tribune Information Services on September 17, 2008, and published in the Fresno Bee and other newspapers. If anyone wants to reprint it, please let CEPR know, by replying to this message.
"Battle
in Seattle" opens September 19-26 in movie theaters across the
country, a rare combination of high drama and history-making events as
they actually happened when thousands of protesters shut down the World
Trade Organization in Seattle nearly nine years ago. It has an all-star
cast including Oscar-winning beauty Charlize Theron, Woody Harrelson,
Michelle Rodriguez, Ray Liotta, and Andre Benjamin (of Outkast hip-hop
fame). Perhaps most unusual for a feature film, it gives the protestors
credit for what they accomplished: they changed the debate over what
has been deceptively marketed as "free trade." They were beaten and
jailed, choked with tear gas and shot with rubber bullets, but they
succeeded in raising awareness about what these organizations and
international agreements really do.
Prior to the Seattle protests in
1999, almost nobody knew that the World Trade Organization was not so
much about "free trade" as about creating new rights and privileges for
corporations at the expense of the environment, public health, and the
public interest in general. The WTO and NAFTA's provisions on
"intellectual property," for example, are the exact opposite of free
trade, according to standard economic analysis. They increase the cost
of medicines by extending and protecting the patent monopolies of big
pharmaceutical companies and stifling international free trade in
generic medicines, some of which are desperately needed in developing
countries.
The debate has widened and now the
Democratic presidential nominee, Senator Barack Obama, has proposed to
renegotiate NAFTA. And why not? This agreement was approved in 1993,
before anyone knew what was in it. Among other things, it contained
"sleeper" provisions that enabled corporations, for the first time, to
sue governments directly for environmental regulation that affects
their bottom line.
We also have nearly 15 years of
experience with NAFTA and it clearly did not deliver on most of its
promises. It was sold as a job creator, but the United States has
actually lost jobs, especially in manufacturing, as our trade deficit
with Mexico has grown. Even more importantly, NAFTA has helped
perpetuate the downward pressure on wages that have made the United
States a much more unequal society over the last three decades. From
1973-2007, wages in the United States barely grew at all, as compared
to a 74 percent increase from 1948-1973.
This change in the economy is
partly the result of subjecting the majority of the American labor
force - the more than 70 percent that do not have a college degree - to
increased international competition, while maintaining protectionism
for highly paid professionals such as lawyers, doctors, and upper
management. It is also what standard economic theory would predict. Yet
almost every newspaper editorial board in the country has someone who
took an Econ 101 course and thinks they learned that increasing trade
must be good because it makes "countries" better off. The late A.M.
Rosenthal, a long-time New York Times editor and columnist,
summed it up while NAFTA was being debated in Congress: "how they would
howl, those journalistic and academic supporters of NAFTA who have
shown so little care, compassion or understanding about the fears of
working people who might lose their jobs, how they would howl if their
own jobs were in danger ."
Unfortunately NAFTA does not
appear to have helped Mexico either, where growth since it was
implemented in 1994 has been sluggish, wages stagnant, and hundreds of
thousands of families displaced from farming as they were forced to
compete with U.S. agriculture.
NAFTA did, however, increase
trade. But trade is not an end in itself; the goal is to improve
people's living standards.
So by all means, let's renegotiate
NAFTA - and the WTO agreement too. We're likely to end up with better
agreements now that people know something about what is being
negotiated.
Mark Weisbrot is Co-Director of the Center for Economic and Policy Research, in Washington, D.C. (www.cepr.net).
-- Michael A. Lebowitz Professor Emeritus Economics Department Simon Fraser University Burnaby, B.C., Canada V5A 1S6 Director, Programme in 'Transformative Practice and Human Development' Centro Internacional Miranda, P.H. Residencias Anauco Suites, Parque Central, final Av. Bolivar Caracas, Venezuela fax: 0212 5768274/0212 5777231 http//:centrointernacionalmiranda.gob.ve mlebowit@xxxxxx