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Have you noticed that Free-traders always present the issue as "You are either with us or against us."?  

Whatever happened to evaluating a free trade agreement on its individual merits?  Why can't critics say, "Look, I'm not against free trade.  I'm just against this agreement."  

The usual response goes something like this: "If you oppose this agreement, you'll set the whole free trade cause back for years.  So get on board."  I love how globalization is called "unstoppable," except when someone is opposing an agreement, at which point, the whole free trade enterprise becomes imperiled.  

This is ridiculous.  There is such a thing as a free trade agreement that isn't worth signing.  For instance, I'm against any trade agreement that doesn't guarantee rights to collective bargaining.  Does that make me anti-trade?

The Washington Post article you link to is a joke. Ezra Klein tears apart the article here.

Moreover, the fact is that DR-CAFTA is a horrible trade treaty full of bonuses to pharmaceutical companies and ways to decrease labor standards throughout Central America.

For a more in-depth look at the biggest problems with DR-CAFTA, please see my post about it on my weblog or the article I wrote on it for Thought Mechanics.

The Democratic Party's ability to appeal to what was once referred to as the working class, depends on the Party's credibility on solidarity issues, on "we're all in this together" issues. Those who argue, correctly imo, that international trade is a good thing, need to respect the Party's need to demonstrate that its FIRST committment is to solidarity with the middle class, and that free trade is a means to that end. Economists and other technocrats on the Democratic side of the aisle could help with that by refraining from condescending. And, they could get serious about figuring out how trade negotiations and industrial policy at home translate into improving the terms of trade for the U.S.

Right now, the best thing the Democrats can do, is to criticize the corrupt Republicans for negotiating a trade agreement, which has nothing for average Americans, or even average central Americans, and everything for capital and business.  All "free trade" agreements are not created equal, and the kind of "free trade" agreement, which corrupt Republicans will negotiate is something Democrats, in solidarity with the middle class, will have to reject.

Democratic economists and technocrats need to get with the program.

I think the Democratic Party should fully support "free trade" within the framework of balanced trade. In other words, make it so that the US will have a net zero balance of trade with the rest of the world.

Give the rest of the world trade credits, essentially in the amount of US goods allowed into that country, that can be used to send products to the US. Give extra credits to developing countries.

Allow these credits to be traded among other countries. For instance, if Germany wants to send more Mercedes luxury cars here, they will have to buy credits from some other nation that doesn't need their US trade credits.

I would have the balanced trade apply only to trade based on foreign labor. A foreign company that builds a Mercedes plant in the US and uses US labor would not have that counted against their trade credits.

Okay, this is just a rough suggestyion, but I think we could acomplish a lot of things that would help labor here, and help labor elsewhere in the developing world, with such a system.

It's simple.


The issue isn't free trade. It's fair trade.

Fair trade means agreements where the environment is protected so some nations cannot unfairly undercut competetion by ignoring environmental standards so that the whole planet suffers.

Fair trade means protection for worker's rights so some nations can not use near slave labor and exploited labor to undercut competition from nations that respect an individuals right to a decent wage and decent working conditions. This doesn't mean that low wage nations will prohibited from using low wage labor. It means that in the context of that nation's wage and living standard structure workers will be treated fairly.

Fair trade means that governments will be prohibited from using anti-competitive practices in taxation and subsidies to distort markets.

Fair trade means that these protections are written into trade agreements in an unambiguous and enforceable way, or that agreement gets no support.

It's fair trade, not free trade.

Got it? now repeat: It's fair trade, not free trade.

I wrote about this topic in my blog a few weeks back. My premise is that it is not helpful for Democrats to oppose improvements in economic efficiency that comes from free trade and automation in the name of protectionism. However, the Republicans are worse on this matter because one essential element of accepting free trade and automation is the need for a social safety net (social insurance or economic security in the recent terminology) to allow those who are displaced in the changing economy to survive and retrain towards the new economy.

I don't think there's any such thing as free trade. But let's admit it: there are plenty of Dems who don't want trade because they don't want people to make money and buy stuff. I know that's not everybody, but it's plenty.
 
There are people who don't want you to buy an SUV because they don't like other people having bigger, nicer cars.

As others have pointed out above, it isn't Joe Sixpack who gets 'free trade'; it's the corporate interests. They get the vast majority of the benefits, and we get 'always low prices' at Wallyworld - and lost jobs, and downward pressure on wages.

We should make it clear that we've got nothing against free trade - but part of the price is that the benefits of free trade must be widely shared.  Greater protection of the right to unionize, both abroad and here at home, should be part of the deal, IMHO.

I'm a free trade Democrat. I supported NAFTA. However, I decided, on reflection, that that might have been a mistake, not because my views about free trade changed, but because I found out about NAFTA's odious Chapter 11, which allows companies to sue countries for profits lost as a result of (e.g.) environmental laws, have their cases heard before a closed tribunal, and win. 
The moral, I thought, was: next time, read the fine print. So I tried to. I mean, I actually downloaded the text of CAFTA and tried to read the whole thing. Even though I have read all sorts of hard things -- the Critique of Pure Reason, for instance -- CAFTA defeated me. So I tried to find out about them from other sources. I wrote about what I found <span class="Apple-style-span"><A HREF="http://obsidianwings.blogs.com/obsidian_wings/2005/06/
cafta.html"><span class="Apple-style-span">here</span&gt</A> (if anyone is interested, skip the first five paragraphs or so). The upshot: it has a bunch of quite bad provisions: famously, on labor and the environment; less famously, on IP and debt relief, and it also has an analog of NAFTA's chapter 11.</span&gt<span class="Apple-style-span">
</span&gt<span class="Apple-style-span">So, in short: I do not support this treaty because I think it's a bad treaty. I still support free trade, with adequate labor and environmental standards, but supporting free trade in general does not mean supporting any trade treaty, even bad ones.</span&gt

Free Trade would actually be a pure positive for Americans if it was inextricably tied to a commitment by Congress to fully exploit the benefits that FT can only offer as a potentiality.

The essential economic benefit that FT offers is the same benefit that advances in technology & efficient offer. Human resources are freed up that can then be used to produce more things of value. The problem with free trade is not that it eliminates jobs; firm investments in machinery do the same thing. The problem is that something else is not also done to fully exploit the opportunities that FT offers in the interests of those who work for a living.

If Congress were to commit itself to the goal of creating and maintaining a labor shortage---an economic environment where there are more jobs available than there are people to fill them---most objections to FT would be completely silenced. In such a labor market, workers would enjoy the best of all possible worlds. Jobs would still be lost, but it wouldn't matter.

New jobs would be easy to find. Market forces would put upward pressure on wages & benefits, obviating the need for government band-aid remedies like minimum wage legislation. An optimal level of national wealth would be produced, benefiting everone---in real terms---both rich & poor.

There's just one problem. The financial sector of the economy if infected with an irrational fear of inflation. I won't go into an exhaustive discussion of inflation right now, but let me just make a couple of important points.

First, no matter how grave the warnings you may hear about the "evils of inflation", the ultimate truth is that inflation is always and everywhere harmless when it comes to the purchasing power of consumers (there are a few exceptions, but they are remarkably easy to fix).

Second, there is actually a zero percent chance that a moderately-high inflation rate (say, 5%-19% range) could ever balloon into hyperinflation in any economically advanced nation that is willing to impose intelligently designed credit controls.

What I'm talking about here is not just an "initiative" that would appear to appease organized labor, but a fully-thought-out alternative approach to Trade Policy. Reach for everything that FT has to offer and do it in a way that rewards Average Americans instead of throwing them into ever greater economic insecurity.

Thanks to all for responding to the post and to the TPM Cafe folks for putting it up. Obviously, free traders are a scarce breed around here. I appreciate the objections to the current trade policy advanced by the Bush administration. Saying “no” to CAFTA and Bush-negotiated free trade agreements may well be sound policy in the short run. I would like to see tougher labor standards and better trade adjustment assistance, and a broader vision for how to address living standards in countries we trade with.
But most of the comments go well beyond the specifics of CAFTA or the negotiating strategy of the USTR's office and display a general hostility towards open trade, multinational corporations, etc., traditional targets of the left. I don’t hear much in the way of alternative approaches to trade. "Fair trade" is a nice concept, but is exceedingly vague. What should the default Democratic Party approach be? More tariffs and quotas? Wait until we have a Democratic president who can negotiate more equitable agreements?  
 
Returning to the other point of the post, if there is no affirmative Democratic strategy on how to handle the challenge globalization and open trade, especially with the developing world, then there is a big hole in the Democratic agenda. Bill Clinton was adept at harmonizing an open trade agenda with traditional Democratic concerns. Of course he sort of ran aground on the issue late in his presidency. But where are Clinton’s heirs on the issue? The fact that the pro-trade position has become almost untenable within the party is going to be a problem for the 2008 Democratic nominee.