Free-trade agreements. Tariffs. Capitalism.
What’s not to like about them?
Keep reading, dear reader.
The astute observer of the writings of the present scribe will note that he has taken our accidental president to task on many an occasion and that he believes the rascal should be put out to pasture, forthwith. Therefore, it may come as a “yuge” surprise to said observer that ye olde scribbler actually agrees with the said rascal on one issue. And, in point of fact, the scribbler’s take on this issue came into being long before Donald J. Trump ever arrived on the scene.
The issue is free-trade agreements. The Donald stated repeatedly throughout his presidential campaign, and after his election as well, that these agreements were “bad deals.” And so they are. The North American Free-Trade Agreement (NAFTA), the Central American Free-Trade Agreement (CAFTA), the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and Investment Partnership (TTIP), and many bilateral agreements all had one thing in common. They were written by representatives of multi-national corporations for the benefit of multi-national corporations. The rights and protections of domestic factory workers and farmers never were taken into consideration. Environmental protections never were taken into consideration. Local economies never were taken into consideration. These deals were gentlemen’s agreements for the economic elite of the world.
The worst aspect of these deals, however, was the creation of tribunals, staffed by corporate lawyers, which decided who was violating the terms of the agreements and what the punishments should be. In particular, the tribunals had the authority to veto national and local legislation if such legislation laid an undue burden, lost profits, on the multi-national corporations and to levy fines to be paid for from public money.
How the Donald would change these deals is known only to himself. I suspect that he has no idea how or even the inclination now that he is the president. But The Chas knows.
Because free-trade agreements are unequal deals, we must change them into fair-trade agreements. We take workers’ and farmers’ concerns into consideration. We take environmental concerns into consideration. We take local economies into consideration. And we eliminate the tribunals and write the multi-national corporations completely out of the equation.
Free-trade agreements deal with tariffs. They are anathema to free-traders, simply because they make trade less free. Tariffs serve three purposes: Protection of a fledgling segment of a national economy against foreign competition; a source of revenue; and punishment of a foreign country which violates the rules, written and unwritten, of trading in order to gain an unfair advantage. During the early days of the Republic, high tariffs were the norm in accord with No. 1 and No. 2. When the United States became a world power, tariffs were lowered to the level of acting as the costs of handling the imports. No. 3 was used only occasionally and temporarily.
Besides, as a source of revenue, thereby keeping taxes low, tariffs increase domestic employment. On the other side of the ledger are increased costs to consumers of imported goods; an increase in the value of the national currency, thereby increasing the costs of exports; and trade wars. Obviously, then, it behooves a country to think long and hard about levying high tariffs. No tweeting allowed!
I have never understood the need for every country in the world attempting to sell the same products to each other. Proponents will say that competition is a good thing because it lowers costs. Perhaps, but as history will attest, the capitalist imperative drives toward monopoly; that’s why there are mergers, leveraged buy-outs, and free-trade agreements which benefit only multi-national corporations. In an ideal world, a country would sell only those products which no other country could manufacture for itself and buy only those products which it could not manufacture for itself.
Current events demonstrate that we do not live in an ideal world, dear reader. To do so, we would have to abolish capitalism and replace it with something more equitable, and humane.
Just a thought.