Winning a good trade deal: Sears

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March 26, 2017

Winning a good trade deal: Sears

Published in The Toronto Star on March 26, 2017. Click here to read the original.

It’s an irony for which progressives should blush. They hold right wing populists’ claims in the deepest contempt, with one exception: trade deals. How is it possible that Donald Trump, Marine Le Pen, Bernie Sanders and Jeremy Corbyn are all bosom allies in opposing every trade agreement?

Protectionism, by definition, is an effort to protect the wealth and markets of those who own them — principally domestic producers. Among the praises of the new pharaoh on the Rosetta Stone was his pledge of a strong defence against non-Egyptian farm products. The stones placed at temple entrances were homage from rich landowners. Not much has changed in several millennia.

It is additionally ironic that progressives fought capitalist protectionism in campaigning against tariffs. In the 19th century they fought French mercantilism and British imperial preferences as exploitative of colonial workers.

The infamous Corn Laws, designed to protect English landowners by keeping the price of English bread artificially high, were also a left/right divide. European social democrats led by Jacques Delors, the EU’s most bold and dynamic leader, fought for the European Single Market to break down protectionist barriers keeping prices and profits high.

What is it that makes all trade agreements so inimical to today’s progressives?

Jobs did leave the industrialized North and moved further East and South — to China and then further east. But to countries with no trade agreements! Now they are moving to the latest countries trying to climb the development ladder, again to places with few trade agreements. Wouldn’t we be better off with some rules, beyond the nuclear weapon of World Trade Organization anti-dumping wars.

Oh, but trade deals harm the environment and encourage the abuse of human and labour rights!

Well, no, actually. Both the Comprehensive Economic and Trade Agreement (CETA) and Trans-Pacific Partnership (TPP) have very detailed commitments on each of those issues. If TPP were to go ahead it would force upgrades in environmental protection. Could they be improved? Of course.

 Yes, but the disputes settlement mechanisms are biased toward multinationals!

Several American corporations have lost NAFTA cases over the years. A long expensive battle ended in defeat for one last week. Dispute settlement systems have independent panels staffed by trade experts and judges expert in trade law, named by the signatories to the agreement. Without one, in the U.S., you pray that a local American judge might take the political risk of finding against your opponent, likely a large American corporation.

That’s why Donald Trump hates our NAFTA version. Do the powerful attempt to tilt trade agreements to undermine weaker competitors? Of course, just as they attempt to do without one. The difference is that modern trade agreements are designed to make it harder.

So what would a progressive trade agreement look like?

First, we need to ensure that inequality is reduced, not exacerbated, by the agreements and the globalization of economic partnerships they foster.

Second, we need to focus on openness and accessibility in their design and operation — they have been too secretively arrived at in too many cases.

Finally, let’s ensure that we make partnerships with one country when that makes sense, and submit to the greater compromises of a big regional deal only if it delivers greater benefits in areas important to us.

So how to launch such a modern progressive trade partnership?

You might start with the EU Single Market. It contains anti-monopoly, pro-labour and rights protections. Add tougher language on environmental protection than in the TPP drafts. Tighten protections for labour and the environment.

One might even add the right of unions to nominate a judge to the Investor-State Dispute Settlement (ISDS) panel, and/or an environmental expert if there are climate change issues in a dispute.

In other words, design an agreement as any progressive government designs legislative and regulatory regimes governing domestic commerce — incorporating measures that deliver on their values.

As politically comfortable as it is to blame jobs lost to automation, wanton environmental destruction, and the abuse of factory labourers on a trade deal, perhaps progressives might want to ask themselves this: Don’t you think your voters might be a little disappointed hearing the same message from Marine Le Pen, Geert Wilders and Donald Trump — and you?

Why make every progressive party vulnerable to the attack that the centre-left is so economically illiterate they oppose every effort to regulate international trade and investment?

Would it not make more sense to create and defend a progressive vision of a modern open, trade agreement designed to share benefit more equally and to defend labour and environmental rights more robustly?

Robin V. Sears, a principal at Earnscliffe Strategy Group and a Broadbent Institute leadership fellow, was an NDP strategist for 20 years.