War means work for all

[Doug Millison]

ZNet Commentary
Trading on Tragedy October 12, 2001
By Mark Weisbrot

Every crisis and tragedy is an opportunity for some, as any
ambulance-chasing lawyer can tell you. We expect the Pentagon to lard its
already bloated budget, and Attorney General John Ashcroft to chip away at
the Bill of Rights, all in the name of the War Against Terrorism.

But "Trade Promotion Authority?" That seems like quite a stretch. Yet the
Bush administration is preparing to whisk this through Congress on the same
pretext, even at the risk of provoking the first post- September-11
partisan fight.

Trade Promotion Authority (formerly known as "fast track") would give the
Administration power to negotiate new international commercial agreements,
with Congress having only a yes-or-no vote on the final product. First in
line is the controversial 34-country "Free Trade Area of the Americas"
(FTAA).

"Will the Congress strongly support free trade as a cornerstone of
international leadership?" asks US Trade Representative Robert Zoellick,
the Bush Administration's point man. Well, that depends on what he means by
"free trade." Skepticism among the public abounds: in a recent poll by the
University of Maryland, 72 percent said that US officials who make trade
policy give too little consideration to the concerns of working Americans.

They have good reason to be wary. What Zoellick doesn't tell us is that the
vast majority of Americans have actually lost income as a result of our
increased opening to trade over the last 20 years, and the ways in which
this has been done.

Most economists are reluctant to admit this in public, because free trade
is something of a religion among the profession. But it is a solid
conclusion from their own research.

Economists have estimated how much trade has contributed to the upward
redistribution of income in the United States. They have also tried to
measure how much our national economy gains, in terms of increased income,
from removing tariffs and other barriers to trade.

It turns out that for the vast majority of Americans, trade's effect on
redistribution -- from the lower and middle-income groups to the wealthier
-- outweighs the gains from cheaper imports. This is true even if we use
the more inflated estimates of the gains from trade; and even if we use the
lower estimates by economists of how much trade has increased inequality.

Virtually all economists agree that trade has contributed to the widening
gap between those who have a college degree, and the three-quarters of the
US labor force that does not have one. The question is, how much? If we
take the lower estimates of how much trade has increased inequality, then
three- quarters of the labor force has lost between 1.6 and 2.4 percent of
their income over the past two decades, as a result of trade opening.

If we take a higher estimate of the effect of trade on income distribution,
then three-fourths of the American labor force has lost between 12.2 and
12.9 percent of their income.

And all of this ignores, as standard economic models do, the economic
losses due to the closing of factories and long spells of unemployment that
result from trade.

The polls reflect these economic trends. It is a striking case of the "less
educated" having a much more accurate view of economic reality than the
pundits and intellectuals who dominate the print and broadcast media. It
does not take a Ph.D. in economics to figure out that throwing the majority
of the US labor force into increasing competition with people earning a few
dollars per day will lower wages for most workers here. Nor does one have
to be overly cynical to realize that this in fact has been one of the main
purposes of our international commercial agreements.

So when Mr. Zoellick asks us to support "free trade" in the interests of
national security, he should at least be honest about one thing: he is
asking the majority of Americans to make more economic sacrifices, while
others get richer.

Of course the label "free trade" is a misrepresentation of these
agreements. Both NAFTA and the WTO have expanded the most costly form of
protectionism on Earth, in terms of both economic costs and human life.
That is the international extension of patent protection for
pharmaceuticals, against generic competition. And NAFTA gave corporations a
powerful new right to sue governments directly, which they have already
used to overturn environmental regulations.

All of which explains why we need the full participation of our elected
Congressional representatives in the formulation of international
commercial policy. And why Administration officials, now wrapping
themselves in the flag, are so eager to restrict their involvement.

Mark Weisbrot is co-director of the Center for Economic and Policy Research
in Washington, DC, and co-author, with Dean Baker, of "Will New Trade Gains
Make Us Rich? An Assessment of the Prospective Gains from New Trade
Agreements "(www.cepr.net).



Doug Millison - Writer/Editor/Web Editorial Consultant
millison at online-journalist.com
www.Online-Journalist.com