Back on the trial

Sunday’s handing out of pamphlets was perhaps less informative and surprising than Friday’s picketing. We stood outside a local supermarket with a table and a mass of papers to hand out. I would claim that it was a moderate success–we did not engage people directly because we did not wish to anger the managers of the supermarket. Nevertheless, many people asked for information about the candidate, and we did run out of flyers. On the other hand, people were cranky–even supporters. It was not a fun day interacting with the local voters. The most extended interaction occurred as a “mini-debate” concerning US trade policy and the inclusion of standards of workers’ rights and environmental protections in trade treaties.

This little exchange, which lasted ten minutes, got the bug in me to learn more about trade issues. It is not that I don’t already know a lot, but I find that some of the information can be contradictory.

What are the arguments?

• American companies use free trade provisions to send American manufacturing jobs oversees where workers get squat for a wage. These workers have no workers’ protection and therefore lack benefits that American workers have. Furthermore, these countries do not deploy any environmental protections–they are contributing to the pollution of the planet with industrial technology that is antiquated, especially by American standards. The American companies profit thereby from the cheap, exposed laborers and absence of ecological regulations.


• Western countries (the US and the Europeans) strangle third world countries with bilateral trade agreements that lock the latter out of the Western countries’ markets for industrial goods. The Third World countries (hereafter TWC) are forced to sell only non-industrial goods (raw minerals and agricultural products) to the western countries. These non-industrial goods have a lower value than they could have had they been refined or processed. As a result, the potential value of these products is drained away from the TWC. There is no incentive to industrialize in the TWC because they have no markets to sell such products. However, the western countries can dump their industrial products (for which they have used the TWC’s goods) in the TWC, and with the added value. This represents an overall loss of pruduction for the TWC.


• The American and European governments subsidize their own farmers. This causes the cost of their products to decline on the world market because of the artificial supports that the farmers receive. The TWC cannot sell the same products at the fair market price because of the artificial ceiling placed on the price. They cannot get full price, and their products lose value (see Oxfam for an example concerning cotton subsidies in the US.)

This is, of course, a loose summary of the different arguments that are thrown out there. I hope to gain a more sophisticated understanding in the following weeks. Why does this bother me? It appears that, in spite of the first argument, the US gains from free trade policies. The money that comes in improves the financial capabilities of the US and its citizens. The country on the other side of the agreement declines into economic dependency. The first argument appears to be less morally significant than the other two.
Yes, Yes, Yes, there is the issue of the loss of manufacturing jobs. I wish that the US could keep manufacturing jobs at home. But it is not a simple matter of the cost of labor abroad and the different standards of protections. The examples that people draw upon are usually Thailand and Vietnam (or whichever southeast Asian country that Nike is making its shoes in this week.) But they seldom deal with China and India. These countries are the up-and-comers of the century. Their advantages cannot be characterized in the same ways. Labor is cheap, but the people are more likely to afford health services out of pocket that American workers can only get through group insurance plans (the costs of medical services have increased with respect to wages, making it difficult for workers to pay for medical care from their own savings; furthermore, these services will tend to be less personalized than they were in the past.) If medicines and technology are lacking, it is more because of the prohibitive costs–they would be rare regardless. If their factories pollute, it is because the countries must still evolve through the early stages of capitalism–otherwise they would have to buy eco-friendly technology at prohibitive costs . Furthermore, China and India are bigger domestic markets than the US–this is an advantage that they will keep no matter what trade measures are placed upon them.

Anyway, these are opening reflections. I hope to learn more about this in order to come to a more complete picture. Without losing sympathy for the plights of American workers, I have problems with the nationalism that is at the core of the concern over trade agreements.