Current trade agreements are great at creating more billionaires, not so much at protecting the interests of workers.
On Thursday, President Trump flipped his position on the Trans-Pacific Partnership trade agreement, suggesting the U.S. might want to rejoin the pact. His announcement sent Wall Street indices shooting upward in jubilation and angered labor leaders. It left China—which has been sorting out how to respond to Trump’s announced steel and aluminum tariffs—even more bewildered as criticism grows of its “Made in China 2025” initiative to dominate the high-technology sector.
Trump’s about-face is especially striking given that exiting the TPP was a crucial plank in his economic agenda on the campaign trail and one of his first acts as president. That pledge played well to the frustrations of people who know the global economy is ripping them off and are understandably angry.
Trump was right in his claim that trade agreements such as the TPP are bad for American workers. They are not written by or for workers. The key players in their negotiation are transnational corporations that are looking to increase their profits by guaranteeing their unimpeded access to cheap labor, resources, and consumer markets, and freedom from taxes and regulations.
Trump is convinced that other nations are not playing fair. There too he is right. But they are not playing to benefit their workers, either.
Let’s look at China. Are Chinese workers ripping off American workers? Chinese workers work long hours under often grueling and dangerous conditions. The pay is miniscule, and sometimes workers toil in conditions akin to modern slavery. The air in many major Chinese cities is dangerously polluted.
Adding insult to injury, few Chinese workers can afford to buy the products they make. These products are produced for the benefit of wealthier consumers, including those in the United States. Ironically, many Americans can only afford to buy cheaper Chinese goods, because their jobs have been eliminated by automation or shipped overseas to low-wage markets, including China.
So who is benefitting? According to Forbes, China now has more billionaires than the United States, and is creating two new ones every week.
Current trade agreements work great if the goal is to create new billionaires. They fail dismally if we assume their goal is to benefit working people—regardless of nationality. We have a desperate need to agree on new rules. Pitting nation against nation in trade wars is not the answer. We need more cooperation, not more competition.
How might that work?
Try this thought experiment: Imagine the world’s leaders all wake up one day and realize that they should work to meet the needs of people everywhere and repair the damage to the Earth and the environment. They would realize quickly that they would have to reorganize the economic rules and structures that put corporate interests above people’s needs and bar national and local governments from acting otherwise.
Imagine these insights lead them to work out a plan aimed at framing international agreements that allow nations to meet these new targets within their respective jurisdictions: a healthy and secure environment, full employment with living wages and high health and safety standards, robust social safety nets, modern energy-efficient infrastructure, human rights protections for all people, political transparency, and democratic accountability.
Nations can only achieve such goals if they have sufficient control of their own economies. Fair and mutually agreed-to tariffs that promote local ownership and give preference to local businesses that pay local taxes, provide good jobs to local workers, and secure the health of local ecosystems will surely play an important role.
“Made in China 2025” can be positive for everyone if it means China prioritizes the use by Chinese people of their own labor and resources to meet their own needs while honoring the right and responsibility of other countries to do the same for their people. Given the current reality, an assumption that such a conversation among world leaders might occur of its own volition is pure fantasy. It is less fanciful, however, to imagine ever-expanding circles of ordinary citizens joining in such conversations throughout the world supported and connected by the communications technologies now in place. As the ideas gain momentum from the bottom up, leaders eventually will be compelled to follow or become displaced themselves.
The president’s ever-changing positions on trade won’t get us there. Only we the people, organized and active, can build the momentum to restructure the world’s economies to work for everyone.
About the author
David Korten wrote this article for YES! Magazine. David is co-founder of YES! Magazine, president of the Living Economies Forum, a member of the Club of Rome, and the author of influential books, including “When Corporations Rule the World” and “Change the Story, Change the Future: A Living Economy for a Living Earth.” His work builds on lessons from the 21 years he and his wife, Fran, lived and worked in Africa, Asia, and Latin America on a quest to end global poverty. Follow him on Twitter @dkorten and Facebook.
This article is republished under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International license