The Editor's Page -- Free And Fair Trade Is Good For Business

Dec. 21, 2004
FTAA offers win-win opportunity manufacturers ought to fight for.

Western Hemisphere leaders last month signed an agreement to open their markets by December 2005, forming the Free Trade Area of the Americas that will integrate the economies of 34 countries over two continents (see Dwarfing NAFTA). Avid supporters present the FTAA as nothing less than a means for strengthening democracy, as it increases the number of jobs throughout the region and improves member nations' economic productivity. U.S. President George W. Bush has gone so far as to elevate the effort to a moral imperative. Liberal-leaning critics argue that without strong labor and environmental protection -- what they call fair trade -- the accord would signal a downward spiral to low-wage jobs, miserable sweatshop working conditions, and increased exploitation of the environment. Conservative critics worry about national sovereignty. They want assurances that U.S. laws protecting its manufacturers from unfair trade practices will not be weakened. What's a person to believe? All of the above, I'm afraid. While the arguments have polarized the debate, there is evidence to support each of these possible outcomes. Each camp can point to compelling statistics from the seven-year-old North American Free Trade Agreement, which binds the economies of Canada, Mexico, and the U.S., to support their views. Those who declare NAFTA a success cite statistics showing a surge in trade, jobs, and productivity throughout the free-trade zone. People who deride NAFTA as a disaster have data that show real job losses, downward pressure on wages, and widening gaps between the rich and poor in the participating countries. The ongoing debate is a prime opportunity for U.S. leaders in manufacturing to insist that free and fair trade is good business, and to work to ensure that a free and fair agreement ultimately is reached. Contrary to popular thinking, U.S. manufacturers will benefit if labor and environmental concerns are addressed in the accord. In spite of their distaste for regulation, U.S. companies suffer when the basic rules of business are not set. Without standards U.S. manufacturers must fund additional programs to monitor working conditions in factories they do not control, while their competitors do not. Without standards companies that care little about human rights will drive wages to far below poverty levels, while U.S. manufacturers that find such exploitation deplorable will pay more than their competitors. Without standards U.S. manufacturers will fund pollution control in their factories, while their competitors do not. Without standards U.S. companies are left vulnerable to competitors that receive unlawful subsidies or that dump product in the market. Rarely does an opportunity arise where something that is so good for business also creates such huge benefits for mankind. The creation of an FTAA with strong labor and environmental protection, along with laws against unfair trade practices, offers just such an opportunity. It's a win-win that you ought to fight for. Patricia Panchak is IW's Editor-In-Chief. She is based in Cleveland

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