[CTC] Hillary Clinton calls for ‘smart and fair trade.’ What is that?

Mon Oct 3 12:46:12 PDT 2016

https://www.washingtonpost.com/posteverything/wp/2016/10/03/hillary-clinton-calls-for-smart-fair-trade-what-is-that/?utm_term=.7bd8c4da9321 <https://www.washingtonpost.com/posteverything/wp/2016/10/03/hillary-clinton-calls-for-smart-fair-trade-what-is-that/?utm_term=.7bd8c4da9321>
Hillary Clinton calls for ‘smart and fair trade.’ What is that?

By Jared Bernstein <http://www.washingtonpost.com/people/jared-bernstein> October 3 at 6:00 AM
Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of the new book 'The Reconnection Agenda: Reuniting Growth and Prosperity.'
 <>It’s not for me to score last week’s debate, but I will say this: I watched it with my 14- and 16-year-old kids, and I used the occasion to point out to them: “See, this is the difference between doing your homework and winging it. The road to success is paved with preparation.” The fact that this just got me another in a long series of teenage eye-rolls does not negate its truth.

The only part where Hillary Clinton was less convincing was on trade. Donald Trump has a clear, powerful and deeply misguided message. He aspires to take America back to the 1950s, when trade flows were a trickle. To achieve this nostalgic vision, he’ll tear up trade agreements, kick our trading partners’ butts (especially China’s) in some unspecified way, build walls and raise tariffs. He threw in some incoherent (and incorrect <http://krugman.blogs.nytimes.com/2016/09/27/trump-on-trade/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body>) stuff on VAT taxes for good measure (border-adjusted “value added taxes” do not, as Trump suggests, give our trading partners an unfair advantage).

Clinton pushed back, arguing for “smart and fair trade.” That’s a fine subject heading, but it needs filling in. I’ve been trying to do that for a while, most recently <http://prospect.org/article/new-rules-road-progressive-approach-globalization>with Public Citizen’s Lori Wallach. What’s needed is an alternative to Trump’s bombast that truly addresses people’s legitimate anxieties about the downsides of globalization without allowing the benefits of trade to get lost in the crossfire.

So let me give that a try.

The key starting point is what’s wrong with today’s trading regime: The rules of the road for international trade have been hijacked by corporate interests, at the expense of workers and consumers.

For example, trade agreements like the Trans-Pacific Partnership include a plan to settle international disputes in a way that can override our environmental laws and expose our taxpayers. As we speak, the Canadian company that wanted to build the now-canceled Keystone pipeline is using this tactic to sue <https://www.washingtonpost.com/news/monkey-cage/wp/2016/01/08/transcanada-is-suing-the-u-s-over-obamas-rejection-of-the-keystone-xl-pipeline-the-u-s-might-lose/> the U.S. government for damages. If we lose that case, U.S. taxpayers could have to pony up $15 billion.

Why should U.S. taxpayers and environmental laws be in the crosshairs of these deals? Because the investors have used their seats at the negotiating table to put our skin in the game while keeping theirs’ out.

And how is it that “free” trade deals extend patents on medicines, putting their prices out of consumers’ reach, especially in emerging economies? That’s also in the TPP, and it’s why Doctors Without Borders calls the deal <http://www.doctorswithoutborders.org/article/key-latin-american-countries-must-reject-harmful-tpp-agreement-will-keep-medicine-prices> “the worst trade deal ever for access to medicines.”

Again, that happens because Big Pharma takes up a big seat at the negotiating table. In fact, according to The Washington Post <https://www.washingtonpost.com/news/wonk/wp/2014/02/28/how-companies-wield-off-the-record-influence-on-obamas-trade-policy/>, 85 percent of those who gave input to our TPP negotiators were from “corporate interests and their trade associations.” With a meager 15 percent of the input left to noncorporate interests, no wonder working people are being left out of the deal.

That ratio has to be flipped.

Next, let’s be a lot more careful about choosing who we privilege with these trade deals. Smart, fair trade starts with selecting trade partners based on their countries’ records in international labor, environmental and human rights, their records with respect to currency manipulation, their prosecution of public and private corruption, including tax evasion and money laundering, and any potential national security concerns. While no country has a perfect track record on these issues, there is a well-understood continuum of compliance, and known bad actors should be barred from the negotiating table until they’ve made proven, effective efforts to clean up their acts.

These and other changes will help us rewrite trade deals with very different interests at their core. But that’s a long-term agenda. In the short term, we must take seriously the fact that trade often creates winners and losers.

Whether the elites know it or not, the implicit contract they’ve pushed is that the winners will compensate the losers (and still be better off). The problem is that the winners have failed to keep up their part of the bargain; they haven’t adequately financed our safety net, for example, which provides important support to many people but isn’t catching enough families and communities that lose high-value-added jobs. In addition, globalization’s winners funnel their excess profits through our pay-to-play politics to further insulate themselves from the losers. They buy politicians and policies — tax, trade, regulatory — that ensure that trade continues to advantage them as they further consolidate their winnings.

It’s long past time we used the proceeds from progressive taxation to help low- and middle-income families. This approach is decidedly not about a sprinkling of “trade-adjustment assistance,” which displaced recipients aptly write off as “burial insurance.” It’s a ratcheting up of work supports in affected communities, from wage subsidies to help with child care, health care, housing and college. It’s investments in infrastructure with targeted jobs for those displaced by trade. It’s apprenticeships in new industries, including advanced and green manufacturing, where younger workers can earn while they learn a new, cutting-edge trade.

Whether you’re shopping in stores flush with aisles of goods flowing from the global supply chains we tap, or whether you’re part of that supply chain, moving goods through ports or working in an exporting sector, you know there are benefits to globalization. But for years, political and economic elites denied the costs, insisting, contrary to the experience of many, that globalization was all upside.

Now that the truth is out, we have an opportunity: not to reject globalization, but to reshape it. There is a fleshed-out, realistic agenda <http://jaredbernsteinblog.com/wp-content/uploads/2016/09/The-New-Rules-of-the-Road.pdf> that hits the key pressure points: more representative trade deals designed to preserve the benefits of trade while steering them toward the poor and middle class, alongside a real attempt to help those who’ve been hurt. That’d be “smart, fair” trade.

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