by lpierce_ on December 11, 2015 - 10:44am
Free trade is one of the most difficult global issues to take a non-biased approach to. In a perfect world, free trade would work to benefit everyone, for a net gain. Any disparity in capital traded between countries would be eventually offset, so no country would have a clear-cut advantage. For example, Chinese manufacturing would eventually flood our market, but our money would flood their economy, lowering the value of their goods. In this perfect world, everyone experiences lower prices. However, in a land of corruption and general governmental incompetence, there are many factors that undermine free trade. Governments can simply print more money, meaning both inflation and no lowered prices. Then manufacturing stays cheaper in some countries, and jobs are lost. Additionally, citizens don’t see the benefits. In the ideal world, governmental profits could be used to create stimulus packages, which would offset any lost jobs. However, as we saw during the 2008 downturn, the US government gave a woefully inadequate stimulus package that only restored 2 million of the roughly 10 million lost jobs. The money given to the people then gets reinvested into banks, which can in turn give loans and further strengthen the economy. Therefore, my assessment is that in an idealistic world, free trade is perfect. Even if a country does not have a comparative advantage over any other country, they can always specialize their production. However, as it stands, government subsidies and low environmental regulations allow some countries to dominate the market with extremely cheap goods, there is a largely negative sentiment towards stimulus packages, and American banks will often sit on their money rather than give loans. Right now, free trade threatens workers and farmers in many countries, including our own.
Bearing this in mind, there are certain provisions that must be created in the TPP. It’s extremely hard to take an utterly unbiased approach to this, but these steps address the best global economy and not necessarily the best American interests. Subsidies for many products must be decreased. Not only will this allow rural farmers from other countries a chance to compete, but it will also allow the US a greater debate position on the global scale. By proving that we are able to lay aside our own interests for the benefit of the world, other countries may do the same and we can approach the ideal world where free trade could truly benefit everyone. However, if we lay aside our subsidies there should also be provisions that guarantee stimulus packages to citizens that would be impacted by the lower profits. There should also be guidelines for high environmental standards, in order to ensure that no factory cuts corners in order to make a greater profit. Human rights is hard to address in a trade agreement and near impossible to assess without an invasion of national sovereignty, but some clause should be included where countries agree to hold their factories to high level working conditions. If these steps are taken, we can finally approach a world where free trade is beneficial to everyone.