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Gail Ablow tackles the question, “What is the difference between Fair Trade and Free Trade”…and discusses the oft-mentioned Tran-Pacific Partnership (TPP)
Fair traders are in favor of government policies that protect workers, farmers and the environment, and they will pay a premium for fair trade-certified goods. Free traders favor less government regulation and fewer trade barriers between countries and want the market to determine the price of goods in the hope of having the most choices at the lowest prices. The two terms are not opposites, but in the real world “free trade” comes with costs — and the TPP trade agreement that the Obama administration recently finished negotiating is, in the view of many critics, a shining example of that.
All trade is political. All trade is about power.
When you buy something — a car, clothes, coffee, computer, a hamburger, you name it — international trade agreements affect the price and determine who profits from it. Proponents of free trade say businesses should thrive or fail in an open market without government interference such as protections, tariffs or subsidies.
But trade is about much more than the price of your shoes. In practice, the parties who craft trade agreements are less interested in unfettered markets and far more interested in increasing corporate profits and pursuing international strategic goals. “There is no such thing as free trade,” says Barry Lynn, director of the Open Markets Program at the New America Foundation. “The idea that there is a self-regulating marketplace out there is fundamentally wrong, as opposed to a bunch of power relationships between large corporations and nation-states. Put simply, free trade is a myth.”
According to Lynn, the main reason people promote this “myth” is to push the idea that “government should not regulate the large corporations that run the marketplace. The two groups who push this argument in a coherent manner are the libertarian right and the neoliberal left.”
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Big Pharma benefits because the TPP extends patents, copyrights and other monopoly protections to companies that want to profit for as long as possible. In an interview with Bill Moyers in 2013, economist Dean Baker explained there is nothing “free market” about these corporate safeguards against competition that will prevent millions of people around the world from getting cheaper generic medicines. “If this was really about trade,” he said, “we’d be going, ‘How can we bring those prices down?’
Firms that want to sue governments also benefit. The TPP creates an extra-judicial process known as an investor-state dispute settlement (ISDS). Foreign investors would be able to sue governments for compensation if they impose environmental, health and safety, and even labor regulations that result in lost profits to the company. These suits would be arbitrated by international tribunals that aren’t subject to US laws. There is no appeals process. Putting ISDS into such a sweeping deal, writes Sen. Elizabeth Warren (D-MA), “would tilt the playing field in the United States further in favor of big multinational corporations. Worse, it would undermine US sovereignty… America’s current trade policy makes it nearly impossible to enforce rules that protect hard-working families, but very easy to enforce rules that favor multinational corporations.”
(click here to continue reading The Free Trade Myth, Explained – BillMoyers.com.)