What is Trade Justice and how does it relate to Labor Policy?

December 16, 2018: Donald Trump’s rejection of trade agreements and aggressive use of unilateral tariffs, and One Nation’s similar policies in Australia have tapped into resentment of current neoliberal trade policies, which for many people have not delivered promised jobs and growth, and have contributed to growing inequality.

Trump and One Nation have mobilised this resentment from a conservative and racist perspective, fanning ultra-nationalist and anti-immigrant sentiment. But their simplistic responses of high tariffs on imports will not magically restore lost jobs. Building walls and discriminatory migration policies based on fear will not improve peoples’ lives but will bolster militarism and the danger of war.

AFTINET is part of the global movement of progressive groups supporting peace, human rights and global solidarity. We are not opposed to trade, but want a more just global trade system

What Trump’s rupture with some neoliberal trade policies does demonstrate is that they are not immutable economic rules resulting from market forces, but political decisions that can be changed. As advocates for trade Justice we must seize the opportunity to challenge bad policy and develop alternatives which benefit the majority, not just the top 1%.

What’s wrong with current trade policy

Fundamentalist neoliberal trade policy as practised by the Coalition Government aims to achieve not only zero tariffs but also zero “other barriers” to all trade and investment.

Each country should specialise in its most narrowly-defined ‘competitive’ products or services, import everything else at the lowest possible prices, have no active industry policies and minimise other government regulation. Australia would be a farm and a quarry, with deregulated service industries like tourism and financial services.

This policy culminated in former Treasurer Joe Hockey’s  admission that his government decided to end all assistance to the car industry to reach trade deals with Korea and Japan, a decision which has devastated regional economies in Victoria and South Australia. Such assistance is provided in all other competitive car industries, including in the US, Europe, South Korea and Japan, because of both the strategic economic role of the car industry and the jobs it provides.

Deregulated global production chains have resulted in job losses in industrialised countries, and a race to the bottom as low income countries compete for investment in export processing zones with no effective workers’ rights, health, safety or environmental regulation.

The end result is the 2013 Bangladesh clothing factory disaster, where workers with no rights were ordered back into a substandard building which then collapsed, killing 1300 mostly women and children. This factory was one of many supplying major Australian retailers.

Global corporations want trade rules that suit their needs, and have strongly influenced trade deals like the TPP.

These agreements, negotiated in secret, have a common corporate agenda.

With low or zero tariffs in Australia and many other countries, global corporations want the TPP and other trade agreements to restrict governments from regulating in the public interest, in areas ranging from medicine prices to industry policy, workers’ rights, environmental protection and food regulation. 

Pharmaceutical companies want stronger monopolies on medicines which benefit pharmaceutical corporations but delay the availability of cheaper medicines, and stronger monopolies for corporate copyright holders at the expense of consumers. These monopoly provisions are of course the opposite of free trade.

Many global corporations want Investor-State Dispute Settlement (ISDS) to give special rights to global corporations to bypass national courts and sue governments for millions in compensation in unfair international tribunals, if they can argue that domestic laws or policies harm their investment, including health and environmental laws. Under the rubric of free trade, these agreements strengthen monopolies and corporate rights at the expense of peoples’ rights.

These agreements also include arrangements for increasing numbers of temporary workers who are vulnerable to exploitation because they are tied to one employer, without testing if local workers are available.

Community campaigning has influenced Labor policy to oppose many of these policies which strengthen monopolies and restrict the right of governments to regulate in the public interest.

In the TPP campaign, we were asking Labor to implement its own policy, which opposed many aspects of the TPP.

We campaigned for eight years through community education, social media, public meetings, protests and political lobbying.

We contacted and met with more MPs and Senators from Labor, crossbench parties and independents than ever before and presented evidence to four parliamentary enquiries, as did many of our network organisations Thousands of individuals sent messages to MPs and Senators through our networks and through organisations like GetUp and ActionAid. This means that there are more people and more parliamentarians, includng Labor parliamentarians, who are aware of the issues and prepared to speak about them than ever before.

But we did not achieve a majority in the parliamentary Labor caucus, as the leadership was not prepared to vote against a trade deal.

The huge union and community backlash against the caucus decision has pressured Labor to make stronger commitments in foreshadowed legislation to ban harmful clauses like foreign investor rights to sue governments, stronger medicine monopolies and Increased numbers of vulnerable temporary workers in trade deals from now on. They also promised to attempt to change these provisions in the TPP-11 if they win government.

Labor’s stronger policy should mean that they will oppose harmful TPP-like provisions in future trade deals like the Regional Comprehensive Economic Partnership, RCEP, which will continue to be negotiated through 2019. The RCEP is far bigger than the TPP because it involves China, India, Japan, South Korea and the 10 ASEAN countries, covering half of the world’s population. Japan, South Korea and Australia are pushing TPP-like proposals but these are being resisted by countries like India and some ASEAN countries like Indonesia. If Labor wins government their stronger trade policy should mean they will join other governments to oppose harmful provisions in the RCEP, resisting pressures from both the trade policy establishment and from global corporations. 

Implementation of any progressive trade policy will not happen without our constant vigilance, holding government to account and campaigning for more just trade policies. So what are these policies?

Trade Justice Policies

Firstly, the purpose of trade as part of balanced economic policy is to contribute to employment and higher living standards in an inclusive and environmentally sustainable society that rejects racism and respects human rights. This should mean a range of jobs in manufacturing, services, agriculture and other sectors, supported by high quality education, health and other services.  

Secondly, trade rules should be agreed through a multilateral system which includes all governments in open democratic processes, not secret deals behind closed doors.

Thirdly, trade agreements should not prevent governments from regulating in the public interest.

Fourthly, trade agreements should not give additional legal rights like ISDS to global corporations that already have enormous market power, and should not be used to extend monopolies.

And finally, trade agreements should be based on internationally-agreed and enforceable labour rights and environmental standards.

Some aspects of Labor’s policy are consistent with this vision, others need improvement, but as we have seen it will take constant vigilance and campaigning for the policy to be implemented.

In the Australian context, fair trade policies which put people and the environment first provide a positive alternative to both failed fundamentalist policies pursued by the Coalition Government and the narrow knee-jerk nationalism of Trump and One Nation. Their implementation will depend on our sustained activism.

Dr Patricia Ranald, Research Fellow, University of Sydney and Convener of the Australian Fair Trade and Investment Network