Using Trade to Develop Nations and Protect Workers

Daniel C. Adkins

 

Our current trade treaties focus on building a global market dominated by multinationals and soon a mercantile China.  This market is used to pit nations and workers against each other while maximizing profits for the few.

 

A different approach could be a trade goal to create a more equal development of the world’s nations.  There is no good reason that trade could not aid the development of India or a trade group of South American or African nations.  If there were a more even development of nations, then a major crisis, like climate change, would be less of a threat to global stability because nations would have more equal capabilities and self-reliance.  

The current neoliberal focus of trade treaties gives less interference to multinational companies’ projects and even allows them to sue countries for a loss of business when their plans face domestic interference.  These treaties are a boon to transnational profits, but do not promote analysis of potential economic disruptions, because all economic sectors and actors are not represented in building the treaties.  Some of the negotiating countries lack the ability or desire to analyze the agreements in order to protect them.  Market externalities are not covered, resulting in poverty, health problems, and now a giant climate crisis.  

 

In designing the treaties, no one talked about the impact on Mexican farmers by subsidized American agriculture industries.  After NAFTA was introduced, the subsidized US farming industry undercut Mexican agriculture, leading to immigration to the US as Mexican markets were crushed.  This has been a problem for both Mexico and the US.  Developed countries have heavily subsidized agriculture and are a trade hazard to Africa and Middle East markets.  Also, the US steel industry has been undercut by the expansion of China’s industry, which produces steel beyond Chinese needs.  The goal of maximizing profits doesn’t lead to stable national growth or social cohesion and multinationals just do not care.  They care about profits.  That produces inequality, emigrants, and poverty.

 

A more stable and less disruptive trade and development policy would occur if we set the goal of treaties to lead to a more equal spread of national industries.  This would be complicated but could produce a more stable and resilient world.  In a global crisis, there would be more self-protection if countries were capable of self-reliance.

 

Countries could be allowed tariffs on a certain percentage of its imports.  The goal would be to allow for a base of industry in each country.  If a country doesn’t produce its own cars from national industry or domestic production of a foreign national’s factory, then it would be allowed to impose a tariff protecting its own industry.  For instance, if a country yearly buys three million cars a year but only makes two million, it would be allowed to place a tariff on the million imported cars. The exact tariffs and percentages would have to be debated, analyzed, and negotiated in treaties.  If a country tried to produce more cars than it used, then that country’s cars would likely face foreign tariffs.  The goals of equal markets protect domestic industries.  China has been selling photovoltaic panels below cost and wiping out the US industry, and that could be remedied by the above policy.  Protecting the US PV industry is needed now at least as much as China needs its own PVs so its people can breath.

 

There would have to be many negotiations on many variables, such as how to count the domestic production of a foreign carmaker’s cars in your own country and how to count domestic production when many of a unit’s parts are imported.  A negative result could be protections that allow obsolete industries to survive, but this would be balanced by the ability for a country to satisfy its consumers’ desires.

 

The world faces a major challenge with climate change, which could be addressed more effectively if all countries had viable industry and education.  Climate change is already with us, as seen in vast forest fires and stronger hurricanes.  It will diminish as renewables replace fossil fuels.  Although several countries and areas are making progress, this progress will be speeded up by the development of local and national industries and education, which aid the elimination of poverty and also add self-reliance in major emergencies.

 

The world needs a system that does not use only greed or money as the motivator.  Doing a good job, using our expertise, and serving the people motivate most of us.  We humans also need to think in longer terms if we are to do justice to our planet, our children, and ourselves.  We need a new system that rewards service and innovation.  Let’s find that new way.

 

Daniel C. Adkins, an active member of Washington, DC DSA, has been a member of the Laborers’ International Union of North America and the American Federation of Teachers among others.   

Individually signed posts do not necessarily reflect the views of DSA as an organization or its leadership. Democratic Left blog post submission guidelines can be found here.

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