GUEST COMMENTARY: Fair, not free, trade
Our policy of open trade with most countries of the world became an important theme in last year's election. As it should be. Since the great opening with China under President Nixon, large corporations, Wall Street, and most economists have supported more liberal trading. As a result, manufactured goods made in other countries have displaced many American workers in textiles, clothing, appliances, steel and other sectors.
Trade does offer consumers more and often better choices. The Japanese demonstrated decades ago that many drivers would prefer smaller and more fuel-efficient cars. US auto companies began to offer the same. Many of the fresh fruits we enjoy in the winter are imported from Latin America.
But many of our fundamental American values such as freedom of speech, the right to elect our leaders fairly and competitively, and the right to organize labor unions are not honored by political systems in other countries. And herein lies the problem with "free" trade.
A country like China that does not permit its workers to organize for improvements in pay and working conditions opens the door to exploitation. Many American firms have taken advantage of these conditions, moving production overseas and laying off workers at home. Cheaper imports from other illiberal countries displace small American businesses and their workers as well.
Among other downsides, the abundance of cheap goods pits our identity and aspirations as workers against our interests as consumers. We are tempted to buy the "made in China" product that costs a fraction of the Made in America option. The boom in low-end retail in our country is not an accident. Year after year, we experience growth in retail jobs that pay minimum wages and offer only part-time work with few benefits and no paid vacations. These jobs are a consequence of trading with countries who do not honor standards and freedoms such as ours.
When we first began trading with China, a country that jails dissidents, monitors all forms of speech, and crushes trade unions, proponents of free trade argued that this would be a way for China to become more like us. But except for their investments in a huge military industrial complex and army and navy, they aren't. Like us, they have nurtured their financial sector and fostered huge and growing gaps in wealth and income distributions.
Is it inevitable that developing countries must grow through unequal trade and repression? No, it is not. Japan, an imperialistic nation that occupied and repressed Korea for more than three decades, recovered from World War II under an American occupation that demanded democracy, free speech, and freedom to form labor unions. Japan flourished over the following decades. Students, workers, and a growing middle class in South Korea, after suffering dictatorship for most of its postwar period, succeeded in a peaceful revolution that won them freedom of speech and the rights to elect their political leaders and form labor unions. South Korea is an outstanding example of how a country devastated by civil war emerged as a hard-working, freedom-loving and technologically sophisticated trading partner.
Mexico is another example. When we entered into the North American Free Trade Agreement, Mexico was already a country with a long tradition of democratic elections, freedom of speech and the right to form labor unions. Growing trade with Mexico did displace some American workers, and our programs for retraining and job placement were not good enough. But it also created many new well-paying jobs in the technically sophisticated end of the American auto industry.
And despite President Trump's harangues about Mexican workers, the truth is that in recent years, as many Mexicans and Mexican-Americans have returned to Mexico as have arrived. Why? Because fair trade has helped the Mexican economy and workers' wages to expand, offering opportunities for returnees to open new businesses there. And Mexican immigrants who have come here for the same opportunities that our ancestors did have joined the American working class, paying taxes, expanding our consumer base, and starting new businesses.
So let's work towards fair trade rather "free to exploit" trade. We treasure our American values. Our trade policies should reflect them.