We Need Fair Trade, Not Damaging “Free Trade”
The North American Free Trade Agreement (NAFTA), undemocratic and secretive trade regimes like the World Trade Organization (WTO), and border tax inequities allowed by the WTO, are destroying our economy under the banner of “free trade.” U.S.-based manufacturers simply cannot compete. The are Drowning in the explosion of cheap, foreign-made products flooding our markets. Businesses are closing down, jobs are being lost, and entire cities that once were known for their manufacturing capabilities are being transformed into desolate wastelands due to outsourcing. It is clear that our “free trade” practices are harmful, which poses the question, what about “fair trade?”
What’s the difference between Free Trade and Fair Trade?
“Free trade” means unrestricted, uncontrolled access to our economy, tariff- and duty-free for goods made for $4-per-hour or less. We cannot compete with these wages so we are forced to choose between going bankrupt, outsourcing nearly all of our manufacturing or simply selling out. The U.S. is the largest consumer market in the world. Opening our doors to “free trade” agreements has resulted in job losses, enormous trade deficits, and the extinction of many powerful, valuable U.S. businesses.
Free trade also led to the largest transfer of wealth in the entire world. Trillions of American dollars have been lost due to the absence of tariffs, resulting in the alarming trade deficits we have today. Tariff-free imports are one of the largest barriers to free-trade. The absence of tariffs tends to favor the country with lower wage-rates. This results in the lower wage-rate country enjoying a transfer of production benefits from the higher wage-rate country.
There are a number of other barriers to free trade and “trade weapons” that a country can utilize for their own benefit. These include currency manipulation, technology transfer requirements, joint-venture policies, selective customs policies, and underhanded government subsidies. With all of these so-called “trade weapons” available for foreign countries to use, it is difficult to believe that the United States actually continues to rely on faith-based economic policy with other nations. But it does.
Instead of “free trade,” our leaders could explore the benefits of “fair trade.” According to the Charter of Fair Trade Principles, fair trade is “a trading partnership, based on dialogue, transparency and respect, that seek greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. Fair Trade Organizations, backed by consumers, are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.”
Fair trade has global support from organizations such as the Fair Trade Federation and the International Federation for Alternative Trade, who believe fair trade practices alleviate poverty, enhance gender equality, improve working conditions, the environment, and distributive justice. They believe that trade between and among nations occurs in coercive and uneven ways. Even if nations trade freely, smaller nations suffer because they become increasingly reliant on richer states who deplete their natural resources, consequently slowing third world development.
While much attention is directed towards smaller, undeveloped nations as the victims of “free trade,” so too have our leaders allowed the U.S. to suffer under dangerous trade agreements like NAFTA, KORUS, and the WTO. Perhaps now is the time to heed other methods, like “fair trade” practices, to alleviate the pains of “free trade” that have played a large role in our current economic decline. Contact your congressperson and demand them to consider “fair trade” in place of “free trade”.
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