By Jamshid Damooei
Our recent presidential election brought about a rare accord between the progressive and the populist fronts in rejecting the Transatlantic Trade and Investment Partnership. I have no problem with the rejection of a trade agreement that focuses primarily on the interests of transnational corporations, international financial centers, agribusiness and giant chemical companies and raises many questions about how it may serve the interests of the overwhelming majority of people in our country.
People have the right to have a say in what is going on in their own country, to refuse to accept erosion of their food safety and to maintain protections of the natural environment.
Now, the question is whether we should reject every other trade agreement and support isolationism and autarky. People often take points from a good argument and confuse the real issue to come up with a policy that is wrong. I call it the confuse-and-misuse trick for political gains.
Should we solely blame trade agreements for the decrease in American wages and the disappearance of good-paying manufacturing jobs?
Free trade has the potential to bring countries together, promote fair competition among companies, enhance innovation, promote economic development, lift people from poverty, facilitate export diversification, open up new markets, expand choice, lower prices for consumers, and even improve the quality of labor and environmental standards through increased competition and the exchange of best practices between trade partners. On the political side, it can help reduce tension and pave the road toward international peace.
We are experiencing many of the positive impacts, such as lower prices, but it is easy to ignore this because they are not the types of results that bring people together within a political movement. Helping misplaced workers to recover is much harder than taking advantage of their plight and using it for political gains.
Free trade has winners and losers. To assess the impacts accurately, people need to look beyond their own short-term needs to fully understand our economic system and the institutions that support it.
Poverty throughout the world can be reduced through free trade, but that doesn’t concern many people in different countries. Why should those who lost their jobs and didn’t get help care about the benefits to others? A country eager for gainful employment that doesn’t have institutions dedicated to protecting natural resources can lose sight of safeguarding the environment. People in exporting countries benefit from short-term drops in production costs and immediate job growth.
However, for such short-term gains, the entire country has to pay many times over through devastating long-term environmental damage, erosion of their health, rising health care costs and lower quality of life. But who is counting once the production is done, wages are paid and lots of profits are made on both sides of the trade? As one wise post-World War II economist said, “Life is too short and, in the long term, we are all dead.”
The race to the bottom on wages and other negative consequences are inevitable outcomes because the voice of labor has been removed from the equation as the result of the long and successful fight against unions in the 1970s and 1980s. Supporting unionization is equal to supporting mobs and being a criminal in the mind of many.
Anti-union movements divided us and turned us against ourselves and we all are paying the price.
Yes, indeed, it is much easier to blame free trade than to take a good look at the economic system that supports all such activities. It is much easier to confuse and misuse issues for political gains.
We can wage an all-out war against international free trade agreements in the name of better lives for our workers and build a wall around us to protect us from the danger outside, but the real danger is on our side of the wall — confusion about how our economic system works.
• Jamshid Damooei is chair of the Department of Economics, Finance and Accounting and co-director of the Center for Leadership and Values at the California Lutheran University School of Management in Thousand Oaks.