Newswise — Citizens who have rejected the idea that free trade is always in their best interest might change their minds if free trade agreements included provisions to address economic inequality, according to a Vanderbilt University researcher.
“An ‘Economic Development’ chapter in future trade agreements would commit developed countries to addressing their own problems with economic inequality at home,” said Timothy Meyer, professor of law at Vanderbilt Law School and author of the study Saving Free Trade, to be published in April by the Vanderbilt Law Review. Critics claim that globalization and free trade fuel economic inequality.
“An Economic Development chapter would create international obligations for member states to establish fiscal programs, such as education and infrastructure spending, designed to boost economic opportunity for those left behind by growing inequality,” Meyer said.
TRUMP & TRADEPresident Trump made renegotiation of the United States’ trade deals an issue during the presidential campaign. Since taking office, he has pulled the United States out of the Trans-Pacific Partnership (TPP) and made overtures about renegotiating the North American Free Trade Agreement (NAFTA).
“President Trump has made infrastructure spending a major domestic priority. He might be willing to have economic equality obligations as part of free trade deals going forward,” Meyer said. Doing so would build support for his domestic agenda while fulfilling his promise to make American trade agreements work for all Americans.”
REGULATING REQUIREMENTSThe economic inequality requirements would be monitored through reporting and monitoring requirements, similar to human rights treaties. Dispute settlement provisions could lead to a loss of market access, which is normal for trade agreements.
Some national leaders who favor free trade might not appreciate being pressured into working toward economic equality in an era where social safety nets and investment in infrastructure are dwindling, Meyer said.
“But if politicians continue to argue in favor of greater trade liberalization without supporting efforts to distribute the gains from such provisions, then perhaps globalization’s critics are correct,” he said.