Progressive Trade Agenda Needed, Panelists Say
Labor and civil society representatives, along with a former Democratic House Ways and Means Committee staffer, said dramatic changes are needed in the trading system, not just tweaks, to make trade a force for good in the world.
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Beth Baltzan, a former Ways and Means trade staffer and Open Markets fellow, said that in today's world, capital is mobile and can arbitrage environmental regulations, taxes and wage rates by moving to countries where all three are lower than in a company's home country. That means there's downward pressure in all those arenas. Baltzan, one of the speakers on the Washington International Trade Association's virtual panel on what a progressive trade agenda would look like, said that the backlash against globalization is really a backlash against globalization as it was constructed, not as it could be.
Cathy Feingold, director of the AFL-CIO's international department, said working people think trade agreements are negotiated on behalf of big corporations, but with the USMCA, that could be starting to change. She said the rapid response labor mechanism in USMCA must be tested. “We finally have created a tool that is meant to be effective and swift,” she said. She said Europeans are also interested in creating a similar tool for their trade agreements.
“Why do we do trade? What are the objectives of trade, and what are we trying to achieve?” Feingold asked. “You cannot just tweak the current model to deal with inequality.” Baltzan agreed. “For so long we’ve just assumed that trade was going to produce peace and prosperity that we’ve forgotten to ask how it produces peace and prosperity,” she said. She said part of the paralysis in the World Trade Organization is because developing countries tend to think that countries like the U.S., that want trade policies to protect domestic workers, are working against them. These developing countries are wondering, she said, “Are you doing this to try to deprive us of our comparative advantage in wages?”
Baltzan said the message needs to be that both governments and businesses “collude to suppress naturally rising wage rates.”
The panelists also talked about the linkages between trade and environmental goals.
Kimberley Botwright, community lead on global trade at the World Economic Forum, said that addressing climate change is urgent, and the World Economic Forum is trying to conceive how trade can serve companies' goals to decarbonize. “We really have one decade ahead of us to get it right,” she said. She said perhaps the WTO environmental goods negotiation should be narrowed to just goods that affect greenhouse gases.
Feingold said that policy that tackles climate change has to offer new jobs for displaced workers who are in fossil fuels now. “If they don’t see they have a place to go, they’re going to fight like heck to stay where they are,” she said.