Here's Why Free Trade Absolutism Hinders Environmental Goals - And Why Compromise WIll Help The Planet And Increase American Jobs

virtues of free trade image

Virtues of free trade. Image credit:Boston Globe

US free-trade advocates have mostly had their way for years. Having heard recent calls for recipients of US Federal 'bale out' money to make and buy "In The USA," free trade advocates are setting up a familiar defensive position. For a well framed example, see the recent opinion piece in the the New York Times, If We Buy American, No One Else Will. The headline tells it all. A compromise position, to 'Make Trade Green," is the middle ground, perhaps the only defensible ground in a climate crisis.Free trade advocates frame their defense with the all-out-war metaphor, based on trade lessons taken from the 1930's. The argument is that once 'One side takes a protectionist stance; trading partners will up the ante; and this leads to a "trade war" that 'sinks all boats.' Reminiscent of cold-war 'mutually assured destruction' isn't it?.

An unreserved 'Buy American' stipulation would give all home-assembled products a convenient boost - this would include items made with low carbon foot print and which operate more efficiently, as well as Hummer-like products - glossing over how to identify 'green industries' and how to define 'green jobs.' Identification of "green industries" to be favored in trade policy is a dead end hope. For explanation,see "Mirror Mirror On The Wall, Who Counts Green Jobs Best Of All?"

Carte blanche trade protections based on environmental metrics are not needed. Neither are narrowly targeted, highly restrictive protections on specific products needed. Such tactics would amplify the powerful 'trade war' metaphor, once again snatching defeat from the jaws of environmental victory. Can you see the free market-defending headlines that would result?

Environmentalists Demand Tariff On Carbon Intensive Imports, Starting Trade War
A 'carbon footprint' or similar metric is not available to support such a system. Developed nations have not reached consensus on methods for estimating carbon emissions.

Third-party certification procedures for such metrics, a must for linking tariffs to the carbon footprint of specific goods, are not in place either, and may not be for decades.

A completely different approach would bypass the product metric and war metaphor issues. That would be to link climate action to existing international trade agreements. Stepwise, here is the rough outline of how this would be accomplished:

Three-step program to link climate action and trade policy.
Step 1.) US retakes its former position of the world's leading advocate of balanced environmental management, including but not limited to climate treaties. This would mean that the US would also seek global regulatory harmonization for food safety protections, for management of chemical hazards (especially with the EU's REACH program), and marine fishery conservation, for example.

Step 2.) US leverages existing international trade agreement by providing a variety of incentives for any businesses that distribute or sell in the USA, products made in nations that have demonstrated continuous progress against commitments made under Kyoto Convention or successor treaty. This would provide a strong incentives for businesses to drive positive change in Asia and South America, for example.

Step 3.) US offers tax incentives for businesses that manufacture products in the USA and which simultaneously import components or raw materials from nations that have demonstrated continuous progress against commitments made via international climate treaty (Kyoto Convention or successor treaty).

How might this approach look on the ground? Consider a current example. According to a recent headline from the Latin American Herald Tribune, General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program . At first glance, that's a headline that takes the outrage needle up a notch if you are a US taxpayer. But take a deeper look at the article and you can see why GM is making the business decision to pump US taxpayer bailout money to Brazilian operations: faster returns will lead to more rapid loan payback and stabilization of operations.

Were the trade-climate strategy deployed, GM could only make such a decision if Brazil had previously signed on to Kyoto, had already set emission reduction goals for greenhouse gas equivalents, and had showed third-party verified evidence of progress against those goals. If GM wanted to make the investment before those were accomplished, you can be sure they would be "working with" the Brazilian government to get systems in place ASAP.

Summarizing the benefits of this approach...
Trade mechanisms are international, so that there will be no loopholes, no "leaking" of production to rogue (anti-climate action) nations.

Trade agreements are already needing of some updating. By linking climate action to trade in this manner, there would be added impetus to "get going" from two audiences.

By focusing on nations and corporations instead of product footprints, 'trade war' provocation is a far lower risk.

More interested players negotiating and compromising at Earth's table (as pictured above).

More free trade from TreeHugger archives.
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