Businesses as well as consumers benefit from relatively open international trade as long as the rules are fair. Done right, trade brings consumers low prices, brings markets a wider variety of choices, and enables economic development. In contrast, intensely protectionist trade policies may help a specific, narrow stakeholder base (such as employees, owners and investors of a business threatened by imports) but they often have a negative effect on the overall economy.
Getting trade policy right requires a balance. Too much protectionism may hurt but so does too much openness. Some level of protection is needed to protect other things we value, for example worker safety, living wages, economic diversity, robust local economies and a competitive playing field for companies large and small.
Over the past century, trade negotiations have successfully lowered tariffs and removed other barriers. But today’s most important trade discussions push openness to an extreme that dismantles and destroys healthy trade practices.
Negotiations such as Transpacific Partnership (TPP) and its Atlantic counterpart are destructive in at least two ways. First, in the guise of lowering barriers and improving competition, they do not expand trade but constrict it. They do so by favoring dominant industries and thwarting fair competition from smaller companies that are more nimble, innovative, and committed to sustainable methodologies. For example, when local-scale, sustainable farming is beaten out by large- scale agribusiness, the price of agricultural commodities may drop, but at the cost of major negative externalities. Among these are rising unemployment caused by numerous farm failures, destruction of soil, overuse of poisonous pesticides and widespread corruption in countries where regulatory structures are immature and weak.
Second, the current generation of trade proposals let powerful multinational corporations cripple governments’ ability to represent the interests of citizens and companies within their borders. They thwart trading partners’ efforts to pass and enforce laws that, for example, prevent child labor or water supply pollution, or ensure the safety of food and prescription drugs. Americans’ appreciation for the value of sound regulations has hit home in recent years, as dangerous products of all kinds have been revealed and then recalled. Campaigns for freer trade undermine important protections that democratic governments have enacted, as companies shop around to find the least restrictive venues in which to operate. As the risks come to light, more consumers are choosing not to support firms that harm people or the environment. Unsustainable trade agreements undermine these responsible intentions. And they undermine competition where the best product wins.
ASBC believes a balanced approach to trade is a powerful catalyst for beneficial worldwide growth, and that we cannot allow negotiations to be dominated by giant multinational seeking to seeking to efface governments and squeeze out competition. Free but fair trade welcomes companies of all sizes and considers all of stakeholders in the economy. It balances short-term, economic efficiency with sustainability, the robustness of an economically diverse economy, environmental stewardship, and the unique needs of each trading partner nation.