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Obama on Free Trade

The Daily Telegraph:

Free Trade Cartoon - (Barrie Maguire at Boston.comObama voted in the US senate against the Central American Free Trade Agreement, is a critic of the free trade agreement with China, and expresses strong reservations about trade deals in general.

He has even threatened to withdraw the US from the North American Free Trade Agreement – which created the largest trading bloc in the world – if the other members, Canada and Mexico, do not agree to renegotiate its terms.

This statement is reinforced by an article on Obama’s website; an article he wrote for the Chicago Tribune in 2005.

Globalization is not someone’s political agenda. It is a technological revolution that is fundamentally changing the world’s economy, producing winners and losers along the way. The question is not whether we can stop it, but how we respond to it. It’s not whether we should protect our workers from competition, but what we can do to fully enable them to compete against workers all over the world.

At first this stance seems like a case of Obama’s protectionism gone awry. But is it? Is DR-CAFTA really free trade? I’m sure Stiglitz would agree with Obama on this one. Is it more important to fight to provide fair trade agreements, or to just have free trade agreements in place?

Without fairer trade agreements, the benefits from trade will not be realized. NAFTA and CAFTA will increase poverty because they prematurely open markets to US agricultural goods which are subsidized, making local farmers unable to compete with imports, and the nations in question do not have the ability to bear the costs of switching resources with their available capital, nor deal with the consequences of even short-term unemployment. These agreements have been more geo-political than economic, and the essential problem with recent bilateral agreements, including CAFTA, is that they are not free-trade agreements. More generally, bilateral agreements fail to produce all the benefits expected, in part because of the inequality of the negotiating position of the parties involved.

In this case, I believe Obama is fighting for the just cause and not just the cause that is most beneficial for Americans.

(The final quote is adapted from the Opposition section of the DR-CAFTA entry on Wikipedia. It discusses the main points of Joseph Stiglitz’ opposition to the DR-CAFTA free trade agreement. The paragraph is flagged as requiring citation, but if you have read Stiglitz’ Globalization and its Discontents or Fair Trade for All you will know that it follows his views pretty closely.)

One Comment

  1. Posted July 12, 2008 at 11:17 | Permalink

    lloyd u hav way 2 much time on ur hands. ud better vote mccain as a liberal super power in the 21st century will be a political disaster – america will be the new bum boy in town and get fucked by a great big middle eastern dick. is that what u want?? is it?? McCain for the white house x