No Hair Blog

An End to the Phony free Trade System? (Don't hold your breath.)

I am not a Trump supporter, God no. The buffoon is an embarassment. But, neither could I support Clinton with her certain continuation of neoliberal economic policy and support of the phony "free trade" regime. After the collusion of the DNC with the Clinton cabal, Sander's candidacy was doomed. But, if I can say one thing for Trump, he at least talked the talk, if incoherently, of rolling back the various free trade agreements. I doubt he will because he too benefits from lowered wages, undocumented workers, and H1-B wage slaves. But, it's refreshing that others have begun to move to this position.

For example, this piece in the Huffington Post of all places.

Free trade rhetoric almost always serves a magical function: It erases ugly, violent political realities and replaces them with clean, natural progress. To its evangelists, free trade isn’t just a way to maximize profits and production. It offers a path to the elimination of human evil. New Deal luminary Cordell Hull believed free trade offered a cooperative foundation for the prevention of war, while libertarian high priest Milton Friedman believed it cleared the way for political rights like freedom of speech and religion.


By eliminating tariff barriers with nations that had poor labor standards and a record of human rights abuses, these trade pacts encouraged U.S. companies to shift domestic jobs to countries where labor was cheap. While most of the agreements paid lip service to labor rights, these provisions were only rarely enforced in practice. In countries like Guatemala and Colombia where the U.S. eventually brought North American Free Trade Agreement-style agreements, dozens of union leaders were murdered every year after free trade agreements were signed, most of them unpunished. If new factory jobs in the developing world were designed to lift people out of extreme poverty, there were limits to the new system’s generosity, as demonstrated by the deaths of 1,100 workers in a Bangladesh factory making garments for U.S. retailers in 2013.

But though WTO architects continued to use the language of “free trade,” they had left Ricardo’s idea of free trade behind. They weren’t just talking about tariffs anymore. They wanted to reach across national borders and into the domestic political life of post-colonial nations to block potential labor, environmental and consumer protection rules before they were written while guaranteeing broad rights to international investors. The same was true for a new slate of trade pacts former President Bill Clinton began signing into law beginning with NAFTA. These rules had little or nothing to do with Ricardo’s ideas about comparative advantage. They weren’t based on natural differences in climate, culture or expertise. They were an attempt to construct an international law that favored a particular brand of inegalitarian politics.

As I have pointed out, the net result of NAFTA, CAFTA, and other deals like TPP was to allow corporations and manufacturers to arbitrage differences in countries to pay lesser wages and avoid safety and environmental regulations while maintaining their access to the American market. This, along with the failure of the government to enforce immigration laws and to allow undocumented immigrants in large numbers (chiefly benefiting the agricultural, food processing, and manufacturing constituencies of the GOP) has driven down wages in the US and decimated US working class incomes.

The corporatist Clinton "New Democrats" were only too happy to continue and promote these Reagan-Bush policies while tapping into corporate money. I expect Trump to fulminate about these "unfair" deals, then back off and declare victory whille the situation continues. Even Sanders or Democratic Socialist candidates are trapped as they can hardly "Abolish ICE" and at the same time increase enforcement of immigration laws without angering a large fraction of their constituency.

Posted by Gordon, No Hair Blog, July 23, 2018

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