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NAFTA-Style Free Trade Policy Fails


Fast track expired at the end of June. It's just as well.Officially known as Trade Promotion Authority, it authorized the president to negotiate trade agreements, which Congress could accept or reject "as is"; no changes allowed.

Congress writes all other laws -- for taxes, military spending, immigration, environmental policy, agriculture and space exploration, among other things.

Fast Track applies only to trade agreements. The executive branch writes agreements with substantial help from the business and investor communities. Congress and the public are excluded from the process.

In the past 20 years, we got WTO, NAFTA, CAFTA and many smaller agreements. Although free trade advocates promised shared prosperity and mutual gains, our actual experience has been an astronomical trade deficit, the loss of millions of manufacturing jobs, the steady de-industrialization of our economy, stagnant wage growth, and growing income inequality. Workers in Latin America and other countries similarly failed to enjoy promised rewards.

Free trade advocates promised us "access to markets." In 1995, we thought that meant access to consumers around the world who would buy goods we make in America. More often, it simply meant access to producers in low-cost countries such as Mexico, China and India, who make goods for us to consume.

One of the "free" parts of free trade has been freedom from regulation. Trade agreements shield investors and businesses from regulations designed to protect public health, the environment, worker rights and human rights. Public policy enacted by federal and state governments can bring ruinous trade sanctions. As a result, the interests of businesses and investors are placed above public interest. Public interests are fine, as long as they do not restrict trade in any way.

Is this a good thing? Most people would say no.

Our current trade policy isn't actually about "trade," in the strict sense. Instead, it's about global economic integration. Here's trade: We make something and trade it for something else we want. The clichè is, "They do what they do best, we do what we do best, and we trade."

So, what does America make that the rest of the world wants to buy? Under current trade policy, not much. We pay dollars for goods and pile up debt -- to the tune of more than $800 billion annually and growing. That's not trade.

Global economic integration is very different. For example, our 50 states form the integrated U.S. economy. The European Union is economically integrated. When you integrate a high-income region with a low-income region, you get leveling. That's why Europe won't let Russia into the European Union.

Our trade policy creates global economic integration by design. Businesses and investors wrote the language in trade agreements to accomplish exactly that. The public was excluded from every step of the process, and it shows. Fast Track is the final step. It prevents Congress from addressing the leveling issues that skew the benefits to a few and the costs to the rest of us.

With 15 years of experience, we can see that the NAFTA-style "free trade" policy has failed to serve the public interest. The last thing we need now is a fast track to more failed trade policy.

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Stan Sorscher

Stan Sorscher is on staff at Society for Professional Engineering Employees in Aerospace (SPEEA), a labor union representing aerospace engineers, scientists and technical workers, and is President of the Washington Fair Trade Coalition. He is active in trade, economic development, and other public policy issues.  Follow Stan on Twitter:

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