What are the implications of the Trump administration’s decision to withdraw from the Trans-Pacific Partnership and to re-negotiate the North American Free Trade Agreement (NAFTA)? How does the rise of China affect global free trade? And perhaps even more importantly, what should labour’s position on free trade look like? In this blog post, I publish the interview, which I gave to Bruno Dobrusin from the Argentine Workers' Central Union (Central de Trabajadores de la Argentina, CTA) addressing these and related questions about the future of ‘free’ trade agreements.
Bruno Dobrusin, CTA: The WTO Ministerial meeting happened in Buenos Aires in December 2017; why is this organization relevant?
Andreas Bieler: The WTO Doha negotiations round failed in 2008 at the latest. Nevertheless, the WTO has continued supporting an expanded ‘free’ trade regime including not only trade in goods, but also services, public procurement, intellectual property rights, agriculture and trade related investment measures as well as the highly contentious investor-state dispute settlement mechanisms. In short, it continues to undermine national sovereignty restricting states’ right to determine their own development strategies. At the same time, it is clear that there are many divisions between WTO members about the way ahead in view of the ministerial meeting in Buenos Aires. Agreement on individual issues is anything but assured (see WTO, 24 October 2017).
The WTO’s involvement in free trade in agriculture is one of the key areas, which highlights its negative impact on developing countries. Despite the danger of import dependence in relation to food due to fluctuating world market prices, the WTO continues to support free trade in order to achieve food security. As its Deputy Director-General Alan Wolff stated in October 2017:
‘It is widely acknowledged that trade openness can make a positive contribution to each of the four dimensions of food security as espoused by the FAO, namely availability, access, utilization and stability. Trade openness increases the availability of food by enabling products to flow from surplus to deficit areas, connecting the "land of the plenty to the land of the few". It enhances access as it contributes to faster economic growth, higher incomes and higher purchasing power. Indeed, in response to the transmission of unbiased price signals, it encourages an effective allocation of resources based on comparative advantages, thus limiting inefficiencies’ (Wolff, 24 October 2017).
Bruno Dobrusin, CTA: What can we expect from China's role regarding the WTO?
Andreas Bieler: Since its accession to the WTO in 2001, China has increasingly orientated its economic policy in line with the WTO. Considering its heavy export dependence, the country is highly unlikely to try pushing the WTO into a different direction. There may be disagreements over individual issues, but as such China is likely to continue supporting the ‘free’ trade system.
Bruno Dobrusin, CTA: How has the election of Trump, Brexit, and the rise of the right-wing in several European countries come to challenge multilateral trade projects?
Andreas Bieler: Neo-liberal globalisation, of which the expanded ‘free’ trade agenda has been one of the key components, has resulted in increasing inequality within and between countries. This has also included an increasing gap between the rich and the poor in industrialised countries with many people losing out as a result of an integrated global political economy. These ‘losers’ of globalisation have become a fertile ground for right-wing, often xenophobic political parties. As I see it, this will not result in an end of the ‘free’ trade system or a more equitable distribution of wealth. Instead, the danger is that migrant workers are being used as scapegoats for the general hardship larger and larger parts of society experience. These are dangerous times for the labouring classes, with capital intending to downplay its own role in causing economic hardship by driving a wedge between different parts of the working class.
Bruno Dobrusin, CTA: Trade agreements have come under fire from the left and right. The US pulled-out of TPP, NAFTA is being renegotiated. Do you think there is fundamental change ahead? Are we moving away from a free trade-oriented global politics?
Andreas Bieler: At first sight, the US has moved away from ‘free’ trade under Donald Trump. From a workers’ perspective, I think we have to be careful and should not expect improvements of the situation of the labouring classes. Partly, because of the racism and xenophobism, which has come with it (see above). And partly, because we can already see now how the interests of transnational capital become re-asserted in the renegotiation of NAFTA. ‘Rather than put good-paying jobs, better wages, and human rights at the center of NAFTA’s renegotiation, as unions and others have demanded, big corporations are pushing to “modernize” NAFTA in ways that strengthen corporate power’ (Stamoulis, 31 October 2017).
Bruno Dobrusin, CTA: Where do you think workers' movements fit in within this debate? Unions in the US and Canada are arguing for 'stronger labour and environmental provisions' in the renegotiated NAFTA. Is this a possible road?
Andreas Bieler: Stronger labour and environmental provisions would definitely be a positive step from a workers’ perspective. As the current renegotiation of NAFTA, however, indicates, this will be difficult to achieve. And even if it was achieved, these would be mainly flanking measures, unable to challenge the generally underlying ‘free’ trade dynamics, which have proven to be so disastrous for workers in all three countries involved.
Bruno Dobrusin, CTA: You have worked on alternatives to neoliberal free trade; how would these look like?
Andreas Bieler: Ben Selwyn in his book The Global Development Crisis (Polity, 2014) has outlined, correctly in my view, that neither market-based nor state-led strategies of development benefit workers. In fact, both have been characterised by super-exploitation of workers. Instead, what we need is labour-centred development for and by labour movements.
Clearly, various national labour movements find themselves in rather different locations within the global political economy. Unsurprisingly, they have often found it difficult to adopt a common position on specific ‘free’ trade proposals. Hence, in my report ‘From “Free Trade” to “Fair Trade”: Proposals for Joint Labour Demands towards an Alternative Trade Regime’for the Futures Commission of the Southern Initiative on Globalisation and Trade Union Rights (SIGTUR) I have focused on joint demands, which can potentially be supported by labour movements from all over the world in the collective struggle for a “fair trade” regime. One set of potential demands is suggested around the re-assertion of national sovereignty, including the democratisation of trade policy-making, the right to food sovereignty as well as the national right to decide independently on the use of a country’s raw materials. Another set of potential demands is directed against the increasing structural power of transnational corporations, including the core ILO conventions, the demand to close tax havens, the exclusion of key resources such as water, medicines and education from trade agreements, and the end to investor-state dispute settlement mechanisms.
Adopting joint principles of this kind may allow labour movements from around the world to play a much stronger role in trade negotiations. They may provide the first steps for going beyond amending the current trade regime towards its complete transformation in the service of the labouring classes.
Professor of Political Economy
University of Nottingham/UK
Personal website: http://andreasbieler.net
24 January 2018