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Issue #15 - free trade or regulated global economy

The concept of free trade may not be appropriate in a world where national economies differ greatly in the level of wages, hours, and environmental permissiveness. Trade should be reasonably balanced. Exchange of goods and services for debt is not real trade. Instead, representatives of debt-giving nations (especially the U.S.) have let the horses out of the barn - and they do not yet have enough sense to close the door!

We must deal with international trade in a cooperative manner. All nations face the problem of persistent unemployment and environmental degradation. These are global problems. One nation’s unemployment should not be pushed on another by running trade surpluses. Free-floating currencies will help to correct the problem somewhat; but it will not solve the problem. Instead, national governments, acting in concert, should retain tariffs and other regulatory tools.

Employer-specific tariffs can be used to encourage export-producing firms to raise wages, lower working hours, and limit their degradation of the natural environment. These would require international inspectors to ascertain conditions at the plant level and to build a tariff structure that reflects those conditions. The better the wage-and-hours offering, the lower the tariff. The worse these are, the higher the tariff. The importing nation, with the permission of the exporting nation, essentially regulates business operations in another country.

The U.S. government needs to begin discussions with other national governments on adapting the world’s trading system to the needs of working people and the natural environment. The world community should replace free trade with a system that uses tariffs and other trade rules as a regulatory mechanism to enhance jobs.


See Also:

a model of trade oriented toward labor and the environment

a search for labor-standards auditing in international trade

How close is America's demise? by Paul Craig Roberts



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