Will International Trade Pacts Promote Shared Prosperity?

Dean Baker, Center for Economic and Policy Research, Martin Gilens, Princeton University, Charles Hankla, Georgia State University, Kristen Hopewell, University of Edinburgh, Tamara Kay, University of Notre Dame, John A. Miller, Wheaton College, Harley Shaiken, University of California, Berkeley

There are renewed efforts to tackle the issue of trade, with many voicing concern not only over the substance of trade agreements, but also over the manner in which they may pass through Congress.

 

As negotiations proceed on two new international trade agreements – the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Pact – President Obama and proponents such as the Chamber of Commerce are calling for Congress to pass “fast-track authority” to allow the White House to finalize pacts on which Congress would have to vote up or down, with no amendments. But many labor, environmental, and citizens’ groups are opposed to such fast-tracking. As the issue heats up, SSN scholars explain the history and downsides of elite-brokered international trade agreements – and suggest alternative ways forward.

 

Cautionary Tales from Previous Agreements

Proponents promise that fast-tracked free trade agreements will help all businesses and workers in every country involved. But closer looks by SSN scholars raise important questions. Trade usually does expand, but promised benefits such as new jobs, higher wages, and higher levels of economic productivity have proved elusive.

The Trade Agreement Piñatas
Truthout, December 22, 2014
Dean Baker, Center for Economic and Policy Research

In a recent OpEd, Baker argues that fast-tracked pacts have not really been about “free trade,” but rather about granting a free hand to businesses with little input from supporters of economic, environmental, and labor protections. A more inclusive process is needed, he suggests.

The North American Free Trade Agreement Expanded Trade – But Did Not Deliver Jobs or Shared Prosperity
SSN Key Findings, January 2015
Harley Shaiken, University of California, Berkeley

The closest historical precedent to the trade agreements now being debated is the North American Free Trade Agreement of 1994. Shaiken offers a cautionary tale of the unrealized economic benefits from that controversial agreement.

The Misleading Case for Unmanaged Global Free Trade
SSN Key Findings, January 2015
John Miller, Wheaton College

Looking at historical and statistical data across many countries, Miller notes that growth has actually slowed as international free trade policies have spread.

America’s Politicians are Listening to the Rich
SSN Spotlight, July 2013
Martin Gilens, Princeton University

Gilens highlights the disproportionate influence the affluent have over the policies supported by elected officials. Even when the middle class and the poor align in opposition to trade agreements, policymakers still side with the rich.

The Story behind Brazil’s Campaign against Rich Country Agricultural Subsidies at the World Trade Organization
SSN Key Findings, January 2015
Kristen Hopewell, University of Edinburgh

Brazil is challenging agricultural subsidies enjoyed by famers in the United States and other developed nations – arguing that freer international trade would help all developing countries. But Hopewell finds that Brazil would reap most of the gains from any agricultural trade liberalization.

 

Alternatives to Fast-Track Authority

Since 1974, Congress has repeatedly granted presidents expedited authority to shape international trade agreements. But as the 114th Congress begins, a coalition of progressive lawmakers, environmentalists, unions, and human rights advocates led by U.S. Congresswoman Rosa DeLauro of Connecticut are kicking-off a campaign to oppose fast-track authority, arguing that Members of Congress must be able to openly debate, scrutinize, and offer amendments – to make sure that new pacts include economic, environmental, and labor protections. SSN scholars provide essential analysis and context for this debate about democratic decision-making.

The Value of Democratic Debate about International Trade Agreements
SSN Key Findings, August 2014
Tamara Kay, University of New Mexico

Kay makes the case that wide-ranging democratic discussion of trade agreements can prompt deeper evaluation of critical issues – such as worker safety, environmental safeguards, and consumer protections.

Rethinking Roles of Congress and the President in “Fast Tracking” U.S. Trade Negotiations
SSN Basic Facts, July 2014
Charles Hankla, Georgia State University

Hankla describes the evolution of fast track authority, explains why the system may need revision, and suggests specific reforms Congress might adopt. In a recent article, “Updating ‘Fast Track’ is Key to Getting a Trade Deal in 2015,” Hankla expands on points made in his brief and considers prospects for new trade agreements given the new Republican control of both houses of Congress.

February 2015