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June 17, 2008

Making Fair Trade Policy

Rising oil and food prices are raising questions, even among free trade supporters, about the benefits of the NAFTA/WTO model of globalization. In a remarkable article on Friday, Bloomberg reports that the free-trade era may be nearing an end. The story quotes Fred Bergsten of the pro-free trade Peterson Institute for International Economics as saying, "It'll take years to rebuild the foundations of free trade policy."

If the free trade era is ending, then it must be time for the fair trade era to begin. What would a "fair trade" policy from the U.S. look like? After extensive consultations with labor, environmental, consumer, faith and family farm organizations, Senator Sherrod Brown and Representative Mike Michaud introduced the Trade Reform, Accountability, Development and Employment (TRADE) Act earlier this month. The bill is a sharp contrast to the full speed, no-holds-barred effort to liberalize trade characterized initially by NAFTA.

The bill requires an honest full-cost assessment of how successful our existing trade agreements have been, using a series of economic, environmental and social indicators. This seems like common sense, but the idea of an actual on-the-ground assessment is a surprisingly radical idea when it comes to trade policy. It hasn't been done in comprehensive way for NAFTA or the WTO, despite over a decade of experience to draw from.

The bill goes on to include a detailed description of essential provisions in future trade pacts, covering rules for labor, the environment, affordable medicines, farm policy, foreign investment, government producurement and food safety.

From IATP's perspective, the bill includes some important flexibility for countries to protect their farmers and food security. It allows each country "to establish policies with respect to food and agriculture that require farmers to receive fair remuneration for management and labor that occurs on farms and that allow for inventory management and strategic food and renewable energy reserves, to the extent that such policies do not contribute to or allow the dumping of agricultural commodities in world markets at prices lower than the cost of production." IATP has long documented the damaging effects of export dumping by U.S.-based agribusiness corporations. This legislation explicitly protects the right of each country to prevent dumping through border regulations or other mechanisms.

IATP's Dennis Olson commented in a Minnesota Fair Trade Coalition press release, "For too long, trade agreements have deregulated agricultural markets to promote exports at any cost. This bill outlines a new approach that establishes the right of all countries to increase food self-sufficiency based on independent family farm agriculture and sound conservation practices."

You can read what a whole host of other organizations are saying about the TRADE Act at the Citizens Trade Campaign web site.

Ben Lilliston


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