Multimedia | Trade and Globalization

Who benefits from international trade agreements?

From time-to-time, EPI contributes segments for broadcast on Workers Independent News. In February 2016, EPI Communications Director Liz Rose interviewed Research and Policy Director Josh Bivens. Listen to audio above. A lightly edited transcript is below.

Liz Rose:

A recent New York Times article resurfaced something that has been known for some time: globalization — and the trade agreements that write the rules of the game of globalization —  are not a given “win-win.”

Instead, globalization and trade agreements both give and take – and in the U.S. there are lots of reason to believe that they’ve taken a lot more — and from a lot more people — than is generally acknowledged in our limited trade debates.

We’ve asked Josh Bivens of the Economic Policy Institute to unpack this for us.

Josh Bivens:

That’s right.

Even genuine free trade – removing discriminatory barriers to foreign goods coming into the U.S. – could likely be pretty tough on most American workers. Given that workers without a 4-year college degree are a LOT more abundant in the global economy than in the U.S. economy, economic integration has put substantial downward pressure on non-college wages in the U.S.  And this isn’t just a story about manufacturing. Landscapers and construction workers might not get replaced by imports, but their wages are hurt if they have to compete with textile and steel workers whose jobs did get displaced by trade.

But the trade agreements we sign and debate – like the proposed Trans-Pacific Partnership – have almost nothing to do with free trade. These agreements are really just selective protectionism. Some participants will get exposed to the full brunt of global competition – like U.S. factory workers. But some will have the rules protecting them from competition made even stronger – like some pharmaceutical companies. They use these agreements to force developing country governments to serve as bill collectors to enforce their patents, which drives up drug costs.

Worse, there are really pressing economic challenges in front of us that smart international agreements could help solve. For example, we could harmonize international taxes on corporations and boost enforcement across countries to address the problem of tax havens. And we could institute measures to stop countries from managing their exchange rates for competitive gain – a practice that has ballooned the U.S. trade deficit in recent decades. And we could adopt a harmonized approach to pricing carbon to make mitigating global climate change more efficient.

But instead we seem determined to march forward with agreements that give to the already affluent and take from the rest. And then act surprised when this happens.


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