Going Downhill, Fast


The annoying nerviness of House Republicans continues to show up in matters large and small. One matter that sounds small, but is in fact large, is now moving slowly, and with zero fanfare, through the House Ways and Means Committee. Ostensibly an obscure procedural issue ("fast-track re-authorization"), it actually represents a fundamental choice about America's future connection to the world.

The "fast-track" procedure, you may recall, has long been a kind of straitjacket Congress places on itself -- a way of fighting its tendency to decorate trade agreements with special-interest amendments. Under fast-track, Congress can either nod or shake its head in response to any trade pacts a president submits; it can't touch them. Votes on both the North American Free Trade Agreement and the World Trade Organization came under fast-track rules, but the rules have now expired. This gives Republicans an opportunity to change the rules. Uh oh.

The proposed rules would prevent presidents from including labor and environmental accords in trade pacts under fast-track consideration. For example: Suppose you're negotiating a free-trade deal with Mexico that will spur manufacturing across the border and thus boost air pollution that will then drift northward into your lungs. Suppose you wisely include a provision compelling both nations to adhere to tight pollution standards in factories near the border. The Republican fast-track language would make this, in effect, undoable.

If you ask Republicans to justify this position, their first-line defense is that trade and environmental law are two distinct issues and shouldn't be mixed. But obviously, they're inherently mixed; in the above example, a trade pact creates a transnational environmental problem that, one would think, the pact might therefore legitimately address. Besides, what would be wrong with using a trade agreement as a carrot to induce Mexico to clean up a pre-existing mess that affects Texans or Californians? Since pollution isn't offensive enough to warrant a military invasion, economic levers are about the only ones we have.

The fallback Republican defense of the proposed fast-track rules is that if you let liberal activists get their hands on a trade pact, they'll try to rewrite the laws of our trading partners wholesale, showing little discernment about when trade and environmental concerns are and aren't connected. For example, Chile, which ++ wants to join NAFTA, doesn't share a border with us. So only a few of its environmental issues spill over into America -- deforestation, say, which worsens the greenhouse effect. Yet, Republicans note, environmentalists are already talking about how Chile needs to clean up its strip mines.

Well, let them talk. Remember, the fast-track process is expressly designed to keep zealous interest groups at bay. And so far it's done a pretty good job.

Moreover, on close examination, issues like strip mining usefully remind us that trade and environmental law are in fact linked in various nonobvious ways. When manufacturing costs in developing countries are kept low by lax environmental policy, conservatives are politically strengthened in arguing for relaxing our environmental laws: We have to keep America competitive, they say. Thus, by exposing American manufacturing more directly to foreign competition, freer trade exerts downward political pressure on our environmental standards.

A similar dynamic applies to labor standards. A low or unenforced minimum wage in Chile or Mexico can ultimately exert downward political pressure on some American wages.

This connection between trade on the one hand and environmental and labor standards on the other is inherent; the only question is whether trade agreements are structured mainly to exert downward pressure on the standards of developed countries or upward pressure on the standards of developing countries.

Now, obviously, if you go too far in the latter direction, the whole exercise becomes self-defeating. If you raise Mexican labor or environmental standards so high that Mexico can't produce anything more cheaply than the United States, then you've negated the effect of lowered tariffs on Mexican exports; you've nullified Mexico's main "comparative advantage." But no one's talking about that. Among the more radical aspirations of America's embattled labor movement these days would be simply to guarantee, via trade agreements, the right of foreign workers to bargain collectively. Would any of the pseudo-populist House Republicans like to stand up at a union hall and explain what's so dangerously un-American about that?

Of course, even simple collective-bargaining guarantees would eventually raise wages and thus manufacturing costs in developing nations, blunting to some extent the effect of lowered trade barriers. But that's OK. Although freer trade boosts overall output for all nations involved, it obviously has narrow dislocating effects -- on, for example, some low-skilled American workers.

Wanting to soften those effects is one thing that distinguishes liberals from conservatives; and international labor and environmental accords are vastly superior to alternative softeners, such as keeping tariffs high -- or even raising them with the "social tariff" Pat Buchanan favors. Tariffs have this nasty way of provoking counter-tariffs.

Robert Wright is a senior editor of The New Republic, in which this article first appeared.

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