Archive for Saturday, April 28, 2001

A new look at free trade

April 28, 2001


— Despite themselves, despite their conflicting ambitions, despite their different interests and traditions, Republicans and Democrats find themselves in an extraordinary position in the days after the tumultuous Quebec trade conference. Together they are trying to update an 18th-century idea for the 21st century.

That idea, free trade, has been part of the American debate since the earliest stirrings of American nationhood. But today, when the twin forces of technology and globalization have reshaped the world, the old notion of free trade is badly in need of being refurbished.

It is being done in the streets, as demonstrations in Seattle, Washington and Quebec have shown. But it is also being done in the White House, on Capitol Hill, and in the suites of trade officials and trade lawyers all across the capital. It is being done by members of both parties without facilitators, without committee chairmen, without political bosses.

The rioters and tear gas canisters in Quebec made for compelling television images, but they obscured an important development. With hardly anyone noticing, many of the biggest antagonists in the American arena have come to a remarkable consensus, not on the details that will shape the new free trade but at the least on the broad concepts that will ground it.

President Bush's remarks at the hemispheric summit put the finishing touches on the foundation: The new free trade must be tied to democratic institutions. It cannot ignore the rights and the dignity of workers. It must respect the fragility of the environment.

Trade remains one of the most contentious items on the American agenda, and it will be a struggle to fashion legislation that can win a majority in two bitterly divided congressional chambers and satisfy the critics both at home and abroad. But the new GOP president, while favoring incentives rather than what he called "codicils to destroy the spirit of free trade," has nonetheless adopted some of the labor and environmental rhetoric of his Democratic opponents.

"This is political realism," says Susan C. Schwab, a onetime GOP trade official who now is dean of the School of Public Affairs at the University of Maryland. "But it isn't caving to the forces of protectionism. It's an experiment to see whether we can maintain an open market system and accept political reality at the margin."

Free trade has roots as old as the country; it became part of the language of politics in 1776, the year economists remember not for the publication of Thomas Jefferson's Declaration of Independence but for the publication of Adam Smith's "Wealth of Nations."

Now, amid the wreckage of some sectors of the new economy and with protesters targeting every trade summit, a new question faces U.S. political economists: How can they maintain an open-market structure while still providing work and environmental standards that are consistent with American domestic values?

"The problem is that no one has yet figured out how to square the circle," says William A. Galston, a Democratic political theorist. "The principal opposition to this new kind of free trade doesn't come from us. It comes from developing countries, which see it as unfair and as a way of shutting them out."

These difficulties illuminate why trade, once a forbidding corner of politics, has suddenly become one of the most arresting areas of the policy debate. It pits American desire for cheap products against American desire for good works. It pits haves against have-nots. It forces Americans on all sides of this question to confront the contradictions of their views.

Here is one example: Americans have rules preventing workers from losing their jobs to other workers who accept wages below a legal minimum or who relinquish their workplace rights. But we do permit those same workers to lose their jobs to foreigners willing to work at wage levels and at standards that would be illegal at home.

"The question is why it becomes OK for non-Americans who work in unsafe conditions or who work 12-hour days to compete with our workers?" asks Dani Rodrik, an economist at Harvard's Kennedy School of Government. "We're allowing an American worker to be displaced from a job under circumstances we would not tolerate at home. This is the core of the issue that affronts many people, and we have yet to address it."

President Bush hasn't addressed it, either. Many of his Democratic rivals are skeptical of his preference for incentives over regulation and inspection. But the idiom of the new free trade recognizes the importance of human rights and the environment. The change may be subtle, but its significance can't be overlooked.

David Shribman is a columnist for The Boston Globe.

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