Free trade is racing ahead, but it's becoming a political weapon
The issue of free trade is drawing withering fire in this year's election season, but candidates who blame U.S. job losses on the nation's trade pacts are oversimplifying the complexities of globalization, which goes forward with or without formal agreements.
That, at least, is the assessment some global business observers offer on free trade agreements, which are written arrangements between governments. A prominent case in point is the North American Free Trade Agreement, the 10- year-old pact among the United States, Canada and Mexico, which Democratic contender John Edwards said he would re-evaluate if he were elected president.
Edwards, the son of a South Carolina mill worker, is using his opposition to free trade to differentiate himself from President Bush, who is proposing more trade pacts, and Democratic front-runner John Kerry, who voted for NAFTA but denounced U.S. corporate executives who locate businesses abroad as Benedict Arnolds.
Organized labor and some political activists have long criticized trade agreements, saying they take away American jobs and contribute to poor working conditions in foreign countries.
And now in mainstream political circles, trade has been transformed from a preoccupation of policy wonks to fuel for fiery stump speeches. Campaign rhetoric aside, trade analysts say free trade agreements are blamed for creating problems and business conditions that actually exist independent of government pacts.
China, which has added thousands of low-paying manufacturing jobs as such work has left the United States, does not have a free trade agreement with Washington. Neither does India, which has recently emerged as a favorite of U. S. outsourcing operations in white-collar professions such as computer programming.
Moreover, the campaign-year politicization of trade is not being looked on favorably by America's major trading partners.
There could be some room for tweaking NAFTA to ensure it reflects current conditions, said Darcee Munroe, the senior trade commissioner at the Canadian Consulate Trade Office, in San Francisco. But re-opening NAFTA for sweeping changes is not an option for Canada, the United States' largest trading partner.
"Our government has no plans to pursue the renegotiation of NAFTA,'' she said. "From the Canadian perspective, it is in the interest of the three countries to maintain NAFTA as a very important instrument for economic growth. ''
Canada, Munroe said, has four bilateral trade pacts with other countries, none of which has ever been renegotiated after it was signed
In addition to NAFTA, the United States has four bilateral free trade agreements and is ready to negotiate more. Domestic political considerations, however, may stall, halt or significantly alter future agreements, which must be approved by Congress, experts say.
One case in point is a proposed trade agreement with Australia, which the Bush administration said will be submitted to Congress for a vote this year. U. S. Trade Representative Robert Zoellick, Washington's lead negotiator, hails the proposed pact with Australia, the United States' ninth-largest export market, as "by any standard a major accomplishment.''
Passing a trade agreement with Australia, which buys $13 billion per year in U.S. goods and services, would increase intellectual property protection, open markets to U.S. corn, soybeans and fruits and vegetables and "eliminate tariffs on more than 99 percent of U.S. manufactured goods on Day One,'' Zoellick said.
Now that trade has become nearly synonymous with job loss in American campaign rhetoric, Australian officials are careful to say that Americans jobs are not flowing into the land Down Under, with or without a trade pact.
"We certainly don't see ourselves as taking American jobs,'' said Robert Hunt, the senior investment commissioner in North America for the Australian government. U.S. companies, he said, benefit from increased round-the-clock efficiencies by planting Australian operations in the Asia-Pacific time zone and by starting joint ventures with well-educated Australians.
Due to Australia's high wages and relatively high cost of living, Hunt said, "foreign jobs don't typically migrate to Australia.''
Widespread concerns in the United States about lax environmental laws and weak labor standards don't apply to Australia, either, he said. "Australia actually has quite strict labor and strict environmental laws, on a par with U. S. law.''
In any case, trade analysts say, U.S. companies have long switched locations, even inside the United States, in search of lower costs and higher profit. The process began decades ago, when many blue-collar jobs left the Rust Belt of the Northeast and Midwest to cheaper, non-unionized Southern states.
"Free trade shoulders more of the blame for these changes than it should, '' said Bill Reich, president of the National Trade Council.
For example, "Sixty percent of the cut flowers in this country come from overseas,'' Reich said. "Thirty years ago, we didn't have an infrastructure that would allow that to happen. It's silly to blame a trade agreement for it. It's communication and transportation that allow that to happen.''
Still, Reich, whose group promotes increased international trade, acknowledged that the dislocation caused by the riptides of global commerce can hurt individuals who lose jobs and communities that lose businesses.
"The global economy is integrating very, very quickly,'' Reich said. "It's hard for people to adjust.''
Reich recommended increasing worker retraining, strengthening the public education system, and revamping the tax structure to "give incentives for businesses to stay here, not incentives for them to leave.''
Other observers say that labor and environmental concerns raised by critics of globalization could result in future free trade agreements that more closely scrutinize such issues.
