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Given the destructiveness of runaway climate change and rising inequality, we cannot afford to wait until the current international trade system is reformed before acting. (Photo: Shooting Chris / Flickr)

Given the destructiveness of runaway climate change and rising inequality, we cannot afford to wait until the current international trade system is reformed before acting. (Photo: Shooting Chris / Flickr)

What Kind of Trade Policy Should Progressives Support?

NAFTA 2.0 simply locks in existing drives toward ecological collapse and social inequality. A better deal would put people—and nature—first

The extraordinary surge in popular support for expanding public health care, a “Green New Deal,” and other progressive policies demonstrates a powerful public appetite for meaningful social change. Decades of neoliberal austerity and “the market made me do it” politics, which boosted inequality in most countries, have also created pent-up demand to change the rules of globalization and international trade.

Our new report, Beyond NAFTA 2.0: A Progressive Trade Agenda for People and Planet, addresses a key question: What kind of trade — and what kind of trade agreements — might complement the growing demand for better social programs, more ecologically sustainable production, and more egalitarian ways of living?

What kind of trade regime, in other words, should progressives support?

The extraordinary expansion of international trade and globalized supply chains over the past several decades clearly exceeds the planet’s ecological limits. Rapid climate change is simply the most alarming symptom of multifaceted environmental destruction and unsustainable resource exploitation — of fossil fuels, forests, farmlands, and fresh water — that are at the heart of this system. At the same time, the economic gains from growth in trade have been overwhelmingly captured by a tiny elite.

To now, free trade agreements have been employed by governments and corporate lobbyists, in the interests of this elite, to lock in those harmful (but profitable) ways of producing and exchanging goods and services. For those pursuing social change, it is imperative that we rethink free trade ideology and the prevailing template for the agreements that govern globalization.

Progressives can and do seek to preserve the benefits of trade, but at the same time to embed trade agreements in a new legal ecosystem of rights and obligations that looks first to the rights and health of citizens, workers, communities, and the planet. In other words, progressives insist on trade rules that give priority to human rights and the rights of nature over corporate rights.

A reformed international trading system must be inclusive, and tolerant of different ideas about how our economies and societies are organized. Through special and differential treatment, trade rules must accommodate the development aspirations of the Global South. A progressive trade model would also redress the long-ignored rights of excluded and disadvantaged groups everywhere to productively participate in the global economy. The harmful secrecy surrounding trade and investment treaty negotiations must be replaced by an open and transparent treaty-making process that no longer gives the upper hand to corporate lobbyists and other insiders.

Another overarching theme in our report is the demand for a new trade treaty framework that supports core progressive policy priorities such as universal health care, strong public services; robust environmental protection and resolute action on climate change; full employment in meaningful work that provides a good standard of living; strengthened labor standards and trade union rights; the primacy of universal human rights, especially the rights of women, indigenous peoples, and all those seeking equity; and the greater democratization of economic decision-making.

Realizing this policy vision will clearly mean defying and ultimately dismantling key corporate-biased aspects of existing trade treaties, such as investor–state dispute settlement. It will also require organizing politically to thwart corporate-driven efforts to expand the current, deeply flawed model into new areas including digital trade, e-commerce, data privacy, regulatory cooperation and expanded intellectual property rights.

For too long, trade treaties have been instruments of policy suffocation, key tools for enforcing a neoliberal policy monoculture.

For too long, trade treaties have been instruments of policy suffocation, key tools for enforcing a neoliberal policy monoculture. This must end. The existential threat of climate change and the corrosive effects of inequality have exposed current trade treaties as counterproductive and dangerously out of sync with today’s challenges and priorities. It is critical to reverse the prolonged “mission creep” through which trade agreements have strayed far from basic trade matters, such as tariff reduction, to instead become instruments of corporate control and privilege in all areas of governance.

Despite Trump’s populist and anti-establishment rhetoric, his unilateralism is clearly aimed not at undoing but at deepening the pro-corporate biases of the current trade regime. The evolution of NAFTA into the USMCA is proof of that. The approach advocated in our report could not be more different.

Through close analysis of the USMCA (CUSMA in Canada and T-MEC in Mexico), trade experts and activists explore how that agreement and the current neoliberal trade regime set back progressive aspirations across the policy spectrum. This analysis is guided by four basic principles: recognizing the primacy of human rights over corporate rights; respecting the policy space of democratic governments to ensure trade contributes to national and local economic development; safeguarding public interest regulation; and adopting a climate-friendly approach to trade.

This positive, progressive trade agenda proposes the following actions (among others):

  • eliminate ISDS and investment protections that undercut the right of duly elected governments to regulate in the interests of their citizens and the environment, and establish binding investor obligations;
  • enshrine binding, enforceable obligations to reduce and mitigate the effects of climate change in all international commercial agreements and safeguard greenhouse gas reduction and climate protection initiatives from challenge by foreign investors or governments;
  • replace excessive intellectual property rights with balanced protections that encourage innovation while supporting user rights, data privacy, and access to affordable medicines;
  • replace non-binding, unenforceable labor provisions with strong, fully enforceable labor rights and standards that enable citizens and trade unions to take complaints to independent international secretariats, which should also have the authority to proactively investigate labor rights abuses;
  • fully recognize and respect gender and indigenous rights, including prioritizing women’s employment and economic well-being, and recognizing indigenous title to land and resources and the right to free, prior, and informed consent;
  • ensure international trade agreements respect food sovereignty and the livelihoods of small holdings and family farmers by giving priority to local producers and providing a fair return for small-scale agricultural producers;
  • encourage policy flexibility for those industrial and community economic development strategies striving to ensure that trade and foreign investment contribute to good jobs, local economic benefits, healthy communities, and a clean environment;
  • pursue international cooperation that respects regulatory autonomy and aims to harmonize to the highest standards, instead of the current corporate-dominated regulatory cooperation agendas that erode autonomy and harmonize to the lowest common denominator;
  • remove the pressure under current services and investment rules to privatize public services and instead fully protect the right to preserve, expand, restore, and create public services without trade treaty interference; and
  • end the current secrecy in trade negotiations and privileged access for vested interests, and establish procedures that provide full disclosure, transparency, and meaningful public participation.

A final theme of our report is that while the existing trade and investment regime needs to be transformed, policy alternatives can and must be pursued immediately. Given the destructiveness of runaway climate change and rising inequality, we cannot afford to wait until the current international trade system is reformed before acting. Recognizing the obstacles that current trade and investment rules pose to a just economic and ecological transformation should never imply giving in to their chilling effect.

Our working paper is meant to be a roadmap, not a blueprint. We hope it will be a living document, subject to discussion, criticism, and revision, and a tool for stimulating deeper debate and discussion about trade alternatives in civil society, trade unions, and social movements.


© 2021 Foreign Policy In Focus

Ethan Earle

Ethan Earle is a former program manager at the Roxa Luxemburg Sitftung (New York Office) and now works as a freelance political consultant based in Paris.

Manuel Pérez Rocha

Manuel Pérez Rocha is an associate fellow at the Institute for Policy Studies.

Scott Sinclair

Scott Sinclair is Director of the CCPA’s Trade and Investment Research Project.

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