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Thursday, June 14, 2007

Wanted: A 'new deal' for globalization


LOS ANGELES — There is no such thing as "free" trade. In truth, the phrase "free trade" is an oxymoron.

Indeed, you'd have to be pretty naive to think that anything of any importance in life was ever going to be cost-free. As the cliched saying goes: There's no such thing as a free lunch!

Nevertheless, this oft-used term, which you read about in the media all the time, flies out at us from the large closet of increasingly commonplace terms about globalization. "Free trade" hangs on the rack just next to "lower tariffs," "trading blocs," "trade negotiations" and the most dreaded of all "outsourcing."

These terms get pulled out of the closet and draped (or thrown) into stories sometimes with insufficient thought and explanation.

The reason is not necessarily malice of forethought. The swirl of international-trade, currency and other kinds of economic issues around the globe has morphed into one Earth-wide typhoon. The sole constant in motion seems to be economic and job change.

This cyclonic swirl (of the current international economic system and its effect on countless workers and professions) is the prime cause of the high cost of globalization, which includes "free-trade" agreements left and right. These pacts often do create tremendous economic efficiencies over the long run and are potentially hugely helpful in improving economic conditions.

But that's over the long run, which can tick-tock on and on like a near-endless stretch of time. As the great Lord Maynard Keynes once drolly put it: In the long run, we are all dead.

This droll observation helps us raise the searing question of the cost of "free trade" in the short run — short run meaning while many of us are still alive.

One Korean worker in April dramatized his fury over the free-trade agreement reached between his government and that of the United States in front of the Grand Hyatt Hotel in Seoul. The Hyatt was where negotiators were reaching agreements that he felt would leave the "little people" like him jobless. He set himself ablaze with a can of gasoline.

Those free-trade negotiations (finalized in early April) were sought to lace the economies of South Korea and the U.S. more closely together — reflecting a relationship much like that of California and New York. The method is to denationalize impediments of the movement of goods from one economy to the other, including products like cars, agricultural goods, beef and other such things that they would agree on.

In central Seoul, no less than thousands of people gathered to voice their fierce opposition to the free-trade agreement. Their fear: that cheaper U.S. products bound to enter the Korean market would help some Koreans, but many others would have the pay the immediate costs — their own livelihoods and jobs.

Thousand of miles away, similar fears shake American auto workers who are convinced that yet more Hyundais coming into the market will translate into fewer jobs for U.S. auto workers. Unfortunately for them, they are probably right — in the short run it will.

Now, there are all sorts of coldhearted responses to the plight of the threatened "little people" in both countries: "Get off your duff and find new jobs!" and "go back to school!" are among these responses. But it's not easy to land a job when you don't have one and it's tough to go back to school when you have hungry mouths to feed.

The tide of anger against globalization's immediate effects is swelling — dramatically. I personally felt it the other day when I was nearly inundated with e-mail over a column endorsing, as I still do, the U.S.-South Korean free-trade agreement. One writer said: "Wait until they outsource your professor's job to India — then you'll see how we feel." But just as this particular agreement faces tough going in the American Congress, all future such pacts, no matter how much economic sense they make, will face the firing squad of domestic politics unless national governments wake up.

What's needed is more funding for temporary unemployment benefits, school tuition and training of all kinds so that globalization works for more people and leaves fewer people behind. If we don't do this, the political lobby will push all these free-trade pacts into the grave.

U.S. President Franklin D. Roosevelt deserved credit for saving American capitalism after the Great Depression with a host of domestic policy innovations that helped the average working man survive the rough spots of working life and retirement. These series of programs were called the New Deal.

We now need something like that to ameliorate the negative effects of rapid economic global integration. We need a New Deal for Globalization, and we need it urgently.

UCLA professor Tom Plate is a veteran American journalist who has worked at Time, New York, Newsday and The Los Angeles Times. Copyright 2007 Tom Plate


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