The Observer, April 4, 2008
Volume XL, Issue 23
On The Left: Free trade should be gradual transition
Economies are more than statistics, pie charts, or supply and demand graphs. They are people's livelihoods. We have equations for maximizing profits and increasing efficiency, but government trade policies must reach deeper. If our country continues to pursue free trade agreements and less restrained commerce, American families will face unavoidable change. They already are.
Overall, free trade among the international community of nations has a net positive impact on everyone's welfare. However, there are steps our government must take to blunt the painful changes coming to the American economy. If we assume free trade is a beneficial force and that fewer restrictions will lead to the outsourcing of American manufacturing jobs overseas, then new government policies should focus on a few core areas.
Too often in today's outsourcing, companies relocate to escape the stringent environmental standards developed nations impose on them. We are letting companies exploit the inexperienced and sometimes corrupt governments of developing nations. Industrialized countries have had over a hundred years of experience in dealing with the pollution of industry. Even now the United States continues to struggle with large-scale pollution. We shouldn't simply export the pollution to these developing nations while reaping the benefits of the global industry through trade and imports. If environmental protections are worthwhile in the United States, they should be worthwhile elsewhere.
The largest potential benefit of free trade is the improved quality of life for the people living in developing nations. We need to be careful this turns into a reality. Lower labor costs shouldn't just mean higher profits for companies. A relative quality wage should be guaranteed to workers wherever they live. The United States must insist that the corporations give back to the communities and countries they relocate to. Let's invest in the housing, health care, and education of these countries, as well.
Finally, we need to make sure that the implementation of free trade agreements is as painless as possible for American workers. Transitional policies should be gradual and moderate. The livelihoods of millions of people in our country depend on industries that are outsourcing jobs to developing countries. We can't simply ignore their welfare for quick economic gains. We should slow participation in free trade agreements to allow our workforce to adapt. Older workers should be given the opportunity to retire in their current occupations, if possible. We need to promote educational opportunities, so that service and white-collar positions stay competitive in the global market. Pension and healthcare guarantees should be strengthened so that workers need not worry about retirement if their job is outsourced.
Free trade policies have the potential to improve the lives of billions of people around the world, and if done correctly, it can be a less painful transition. Economies are not zero-sum games; everyone can benefit. However, we can't always count on free trade to fix all economic and social welfare problems. The United States should take a leading role in promoting responsible and gradual free trade policies.
