For the two decades after the collapse of the Soviet Union, elite pundits worshiped free trade with a reverence bordering on the comical. As New York Times columnist Thomas Friedman declared in 2006, “I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative [sic]. I didn’t even know what was in it. I just knew two words: free trade.” That was about the intellectual level of neoliberalism at its moment of peak political hegemony.

But things have changed a lot. The shine has come off so-called “free trade,” and Democratic presidential candidate Elizabeth Warren is now proposing a bold overhaul of how the U.S. conducts its trade negotiations. It’s only a matter of time before the old trade paradigm dies an ignoble and well-deserved death.

Dan Drezner, an international politics professor at Tufts and a Brookings Institute fellow, provides a good view of the crumbling neoliberal consensus in a recent Washington Post column. He savages Warren’s plan, calling it a “terrible, horrible, no good, very bad trade program” that “would actually be more protectionist in its effects than Trump’s, something that I did not think was possible.”

But Drezner is talking through his hat. For starters, it is ridiculous to characterize Warren’s plan as protectionist. Its major focus is on changing the way trade deals are made, especially who is involved. As my colleague Jeff Spross details, she would replace the current wildly business-slanted negotiation process with one that is carried out in the open, and prioritizes “labor rights, human rights, environmental protection, combating climate change, heading off international tax avoidance.” (As an aside, Paul Krugman is flagrantly incorrect to assert that the current “fast track” trade negotiation process, which largely cuts Congress out of the process in favor of corporate elites and the executive branch, was created by FDR. It’s a product of President Nixon and the 1974 Trade Act.)

Critically, Warren would also include the welfare of other countries as part of the considerations. As she writes, “millions of people in our trading-partner countries don’t gain the benefits of higher standards — and companies can easily pad their profits by shifting American jobs to countries where they can pay workers next to nothing and pollute the air and water freely.” Half the point here is to raise the living standards of U.S. trading partners — unlike NAFTA, for example, which harmed both American workers through deindustrialization and Mexican ones by trapping them in a low-wage, non-union export paradigm. We can call Trump protectionist because he is trying to win a trade war by harming the rest of the world (though his efforts have been so haphazard and uncoordinated that it seems to be harming everyone, America included), but Warren is far more internationalist.

Drezner further argues that Warren’s approach would “sabotage any set of negotiations” because conducting negotiations in public would “scare off partners who prefer to negotiate quietly before introducing a final draft.” Involving Congress would …read more

Source:: The Week – Politics


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The old Democratic trade paradigm is collapsing. Good riddance.

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