Wednesday, July 02, 2008

"Trading Spaces"

The US economy and global trade is a hot topic this Presidential election. As contenders Senator Obama and Senator McCain travel the world and show-off their foreign policy skills, as globalization rears its head.

Many economists predict the US economy could fall into recession this year, as the 4% growth rate from last year has dropped to almost one-half of one percent! The gap between the wealthy and the poor is ever-widening, as many of the rich receive tax cuts while spending programs increase dramatically.

Looking internationally, McCain's trip to Colombia included an emphasis on the importance of free trade and encouragement for support of a US-Colombian bilateral trade agreement that would lift most tariffs on goods exchanged between the two nations. McCain spoke against protectionist and isolationist policies, citing historical examples of failure. Democrats, on the other hand, voice concerns over the loss of US jobs and violence, such as that against trade union leaders in Colombia. Obama promises to renegotiate the North-Atlantic Free Trade Agreement (NAFTA), a highly controversial multilateral trade bloc created by the US, Canada and Mexico. It is unclear however, if this promise holds weight, as there have been reports of aides apparently making different comments on the side.

While it is today the largest trade bloc in the world based on purchasing power parity and has made great leaps in opening up the global market, critics of NAFTA cite many concerns, including the ties to illegal immigration, energy and environmental problems, growing income disparities in all three nations, weak growth in employment wages, trafficking, and human rights abuses. Trade agreements around the world have often resulted in larger, more powerful nations and major corporations taking advantage of less powerful nations and their resources. As many times the case in the relationship between developed and developing nations, developing nations are left worse off than before, as developed nations and big companies reap the benefits.

There is no easy solution. I'm all for free trade - or more accurately, economic freedom - but not at the expense of others. With economic freedom and our increasingly globalizing world comes the responsibility to provide fair trade, alleviate poverty, and promote sustainability. Determining priorities and national strategies to reform policies is necessary. As the elections progress, it will be interesting to see how our delegates deal with trade and our economy, especially as it strongly connects to other important issues.


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