Rev. John L. McCullough
Photo: T.Abraham/CWS |
From the Executive Director's Desk...
Free Trade Is Unfair Trade – Part 2
April 2007
By Rev. John L. McCullough, Executive Director and CEO, Church World
Service
Congress is once again seriously considering ratification of several bilateral free trade agreements, while also facing the imminent expiration of the President’s broad trade negotiating authority. Democratic leaders have introduced a “new” trade agenda as a basis for negotiating with the Administration on these deals and extending Trade Promotion Authority. As I discussed in my October essay, Church World Service believes that “free-trade” agreements (FTAs) must be evaluated on the basis of how they affect broad-based economic development around the world as well as the U.S. Unfortunately, while an improvement, the Democratic vision falls short of the moral imperatives to “do justice” and to love our neighbor as ourselves.
“Let us then pursue what makes for peace and for
mutual upbuilding.”
Romans 14:19
The U.S. government has negotiated a series of free trade agreements with developing countries designed to promote the exchange of goods, services and money. Asking what builds community -- what makes for peace, what is mutually beneficial, and what helps lift up people in poverty – provides a moral lens for evaluating these agreements. This should also be the basis for informing the discussion around granting the Administration renewed Trade Promotion Authority (TPA).
The emerging trade debate
The stage has been set this spring for heated political drama in Washington. Bilateral trade deals with Peru and Colombia, have been signed and are awaiting Congressional approval. FTAs with Panama and South Korea have been negotiated and may also come before Congress. Bilateral agreements with other developing and middle-income countries are in various states of progress.
Global trade talks at the World Trade Organization (WTO) have stalled, in part because the U.S. and European Union are at loggerheads over reducing support for their agriculture sectors. It appears that the Doha Development Round talks may collapse. A former U.S. trade official publicly has admitted that it never really was designed to promote development. A global trade agreement that truly benefits developing countries would require profound changes in the U.S. negotiating position.
Furthermore, the President’s TPA authority expires on June 30. The Administration would like TPA to be extended because it essentially requires only an up or down vote by Congress – with no amendments. This gives the President much greater freedom to pursue a trade agenda without meaningful consultation with Congress – and therefore makes trade policy less accountability to the American people.
A new trade agenda?
The new Democratic congressional leadership is forcing a re-examination of at least the Peruvian and Colombian agreements and calling for what they consider to be a new course for trade policy.
Some of the directions they have set forth are positive for development:
- requiring U.S. trade partners to adopt, maintain, and enforce basic international labor standards
- promoting sustainable development and combating global warming by ensuring partner countries implement multinational environmental agreements they’ve signed (rather than abandon them in the name of promoting exports and foreign investment)
- re-establishing the importance of protecting public health in relationship to the patent interests of pharmaceutical companies
To be meaningful, the labor and environmental principles will need some teeth. Legislators are of various minds about how to do this and have not yet revealed convincing practical mechanisms to ensure enforceability. Moreover, it seems unlikely that these provisions would be sufficient to stop such atrocities as the killing of 400 union activists in Colombia since its current president took office in 2002.
If Democratic leaders are serious about protecting human health globally, then they must demand that the provisions related to patent rights in the Colombia and Peru agreements be renegotiated. The U.S. Trade Representative aggressively pursued and won language in these agreements that makes it more difficult for countries to produce or procure safe, generic versions of medicines that poor people can afford. This was unconscionable and unnecessary.
A short-sighted goal
One of the areas in the “new” Democratic trade agenda that is most problematic for development appears to be the blind, universal push to open all markets to more U.S. exports and investment. Developing countries must have the ability and right to determine how to grow their own agriculture, manufacturing and service sectors -- and promote the livelihoods of their citizens -- without unfair, job-destroying competition from U.S. imports. Ironically, this blunt demand can backfire hugely in terms of long-term U.S. interests if not tempered according to each individual trading partner.
For example, the Peruvian and Colombian FTAs undermine conditions for family farmers and farm workers by requiring these countries to lower tariffs on agricultural imports. The U.S. government subsidizes production of many U.S. agricultural commodities that can be sold overseas at prices that undercut local producers. Andean farmers and farm workers are worried that they will face the same fate as 1.3 million Mexican farmers who were displaced when U.S. agricultural products flooded the Mexican market after NAFTA was signed.
The resulting corporate consolidation by U.S. investors in the Mexican corn market helped spur the dramatic escalation of tortilla prices earlier this year. It has also meant that Mexico has lost its food sovereignty – the government’s ability to ensure a sufficient, affordable food supply for its citizens.
Insensitivity to this concern is, sadly, a bi-partisan malady. For example, earlier this year, Sen. Charles Grassley, the ranking Republican member of the Senate Finance Committee complained in a statement on the floor of Congress that Bolivia and Ecuador are "withholding market access from U.S. exporters."
Free trade agreements as currently written encourage export-driven agriculture. This ultimately benefits a relatively few U.S. agribusiness processors and traders and very large farms. This system accelerates agricultural consolidation, further undermining family farmers in the U.S. and in developing countries.
In addition, these bilateral FTAs likely will worsen the problems of coca production and narco-trafficking, if competition from artificially low-priced U.S. agricultural imports prevents small farmers in Peru and Colombia from earning a living producing legal crops.
We can also expect forced immigration to the U.S. to increase, if free trade continues to expand. Almost all people everywhere want to stay in their home country, but when economic conditions destroy their livelihoods, they move to where they can work to provide for themselves and their families. Larger immigration numbers need to be viewed in the context of the U.S. government’s promotion of economic policies that are a critical factor in uprooting people from their homes.
Fair trade, not free trade
As the rhetoric and maneuvering over trade intensifies, it is important to look behind the words and emotions to the underlying assumptions and visions. Politicians use the term “fair trade” but often mean trade that is beneficial only to certain sectors of U.S. society.
What makes for community, peace and prosperity? Not free trade agreements in their current form. Because of their detrimental impact on resource-poor people, these agreements are unjust and ultimately will undermine U.S. security. Our security in the United States is enhanced when people everywhere are able to prosper as members of the human community, and it suffers when others are plunged into deeper poverty and despair.
Let us be about the work of promoting trade agreements that support socially and environmentally sound development around the world and here at home.
[CWS has been working to advance fair and just trade policies through a variety of efforts. Congress may soon vote on the Colombia and Peru Free Trade Agreements. Visit the advocacy alert in our Speak Out section to make your voice heard.]
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