On fair trade: Do you want to be a leader or a hypocrite?
By Paul Hogendoorn
As our governments consider new free trade agreements with other nations, the fair trade arguments resurface, but seemingly with increased intensity.
The term fair trade means different things to different people. To some, it includes the issues of human rights, working conditions and the environment. To others, it includes government regulations, protectionist laws or government support. And to others, it is just a matter of the trade balance or imbalance among trading nations. It is a concern that crosses all party platforms and covers the entire political spectrum – from the far left to the far right. The difference lies in the priorities that each party or individual applies to the various issues.
In regards to basic human rights, Prime Minister Stephen Harper weighs in on the fair trade side. During his recent visit to China and Korea, he made it very clear to his counterparts in those countries that Canada expects its trading partners to honour and value human rights, and that Canada will not compromise its human rights values in pursuit of the almighty dollar.
The environment is also a significant part of the fair trade debate. In Canada and the United States, there are increasing regulations and elevating standards aimed at protecting our environment. Even though we are nowhere near to achieving our Kyoto objectives, our industries, companies and utilities do operate in accordance with existing environmental standards that are far higher than in most countries.
I see this first hand whenever I visit my office in El Paso, Texas. The office is a mile from Mexico, sharing the border with Juarez, Mexico’s largest industrial city in the north. Looking north, east or west, I still see beautiful clear blue skies. Looking south, it’s a blanket of brown, reputedly caused largely by a coal burning power plant a hundred or so miles to the south. As a society, we are not where we are supposed to be either, but where our western society fails the green test has a lot more to do with our individual appetites for fuel and other natural resources than it does in the way that our factories and utilities operate. The pollution reduction goals that we set for our industries and utilities should be proportionate to the goals that are set for John Q. Public.
There are others that say fair trade is simply a matter of having the same access to your trading partners’ marketplace as they have to yours. There are many examples of suggested unfair trading practices by some of our trading partners, even our best partners. While some would point to the lumber and livestock disputes we have had with the United States in the last few years as examples, others wonder why we have heard so little about trade issues with Korea. From some reports, we purchase $150 of automotive products from them for every $1 of products they buy from us. This is certainly more than a simple cost or quality issue; part of it could be cultural. But there is also the general belief that these markets are protected by strong influences from their countries’ governments.
Few people are still arguing against the benefits of free trade, and NAFTA in particular. The reason it has worked so well is because it was between two countries that by and large had the same standards on the things that really matter.
Whether your fair trade position is a matter of human rights, the environment or equal access to your trading partners’ markets, there is yet another question that further divides the debate: what should be done about it? Some suggest trade limiting legislation or tariffs. Others suggest no free trade at all. And others suggest that it depends on the development state of the partner nations – if their economies have benefited from a free trade relationship, then perhaps it’s time to raise the bar in the other areas, too.
Free trade agreements can be used not only as tools to stimulate mutually beneficial economic activity, but also to motivate other regions to strive to reach ever increasing standards that benefit the planet and its inhabitants.
It all comes down to leadership and integrity. Do we as a nation choose to be a leader to other nations and say, “Do as we do; let’s continually value human rights and the environment above those of simple profits.” Or do we choose to lose all integrity and say, “We want to keep our high standards over here while we encourage you to leverage your advantage exploiting your people and the earth to improve our profits?” Which do we want to be; the leader or the hypocrite?
Free trade, done fairly, can be a tool for more than just economic stimulation and growth. However, free trade without any standards to protect or encourage common core values leads us in the wrong direction, both economically and otherwise.
While we can encourage our government leaders to make the right choices, we too must be willing to make the right choices. Give careful consideration to your supplier choices, because after all, your decision to do business with them is your endorsement of their business practices and value system. We know that governments can be notoriously slow to react or to lead, but that doesn’t mean we have to be.
Paul Hogendoorn is president of OES, Inc. and chair of the London Region Manufacturing Council. He can be reached at firstname.lastname@example.org. For more information about the LRMC, visit www.manufacturinglondon.com.