I was at a conference yesterday on “Global Commerce and the National Interest” convened by Robert Kuttner and the Sloan Foundation, which brought together many of the luminaries on the left-wing of the Democratic party. I was asked to make some comments, and I organized them under the heading “What Would A Progressive Trade Agenda Look Like?” Here is a 6-point summary of my comments:
- A progressive trade agenda would embrace globalization, not reject it, be defensive about it, or be isolationist. Rather than rejecting globalization, a progressive would talk about a broader conception of globalization: globalization plus, rather than globalization minus. This is as much for rhetorical purposes as for substantive ones: progressives are not today’s Luddites, and cannot afford to be perceived as such.
- It would get real with the domestic social agenda. That means two things: more and better social insurance (safety nets) and more and better compensation. Progressives need to communicate that social insurance is the flip side of the open economy, that redistribution is logically the flip side of the gains from trade. The gains from trade do not become real unless and until there is compensation.
- It would base its proposals on the understanding that globalization anxiety is not just about material risks and losses—it is not just about money. It is also about incompatibilities between domestic values and norms, particularly as regards procedural fairness, and prevailing practices in international trade. So a progressive agenda cannot be reduced to a domestic social agenda; it has to stand also for better international rules.
- Its orientation would be multilateral, not unilateral or bilateral. The GATT was the crowning achievement of the postwar international economic order. The WTO has been the casualty of its success. The objective has to be to reinvigorate and recreate the “embedded liberalism” compromise that lay behind the GATT, not to create a new patchwork of bilateral deals.
- It has to be progressive not just for “us,” but also for the rest of the world—in particular for developing countries. That means two things. First, we need to respect others’ need for “policy space” as much as want ours to be respected. Developing countries need the policy space because it allows them to fashion the developmental policies that positions them for taking advantage of globalization (as China and many other Asian countries have done). Second, we need to elevate the role of democracy and human rights in the trade regime, not by micro-managing rules on labor and environmental standards, but by establishing some bright lines and broad principles. In short, non-democracies should not have the same rights and privileges as democracies. And with these two changes, the WTO can become a forum where democracies exchange policy space with each other (space for reconstructing domestic social compact in the North in return for space for developmental policies in the South) instead of a forum for exchange of market access.
- It would begin to chip away at the artificial distinction between the mobility of goods and capital, on the one hand, and the mobility of labor. Progressives should be in favor of expanding international labor mobility at the margin, and especially of temporary labor mobility schemes (which would spread the gains around more widely). It is possible to do this without necessarily creating an underclass of foreign workers.
At some point during the day, Jeff Madrick walked over to me and whispered “how does it feel to be a conservative?” It’s true: Richard Freeman and I both came across as rabid right-wingers.