Must-Read: Lawrence Summers: Rescuing the Free-Trade Deals

Must-Read: Lawrence Summers: Rescuing the Free-Trade Deals: “Perhaps success can be achieved if the TPP’s advocates can acknowledge that rather than being a model…

…this debate should lead to careful reflection on… trade agreements in America’s international economic strategy…. First, the era of agreements that achieve freer trade in the classic sense is essentially over…. What we call trade agreements are in fact agreements on the protection of investments and the achievement of regulatory harmonization…. There may well be substantial gains to be had from such agreements, but this needs to be considered on the merits area by area. A reflexive presumption in favor of free trade should not be used to justify further agreements…. Second, there needs to be a balancing of the political costs of legislating trade agreements against those of other forms of internationalism. If a small fraction of the U.S. political capital that has been devoted to the Trans-Pacific Partnership had instead gone to support reform of the International Monetary Fund and adequate funding for international financial institutions and the United Nations, these objectives could have been attained–and with greater benefits….

Third, there needs to be careful consideration going forward of the ramifications of trade agreements that include some countries while excluding others…. Fourth… a generation ago… trade agreements that encouraged the adoption of market institutions in developing economies and enhanced those countries’ access to the industrial economies were crucial to creating a truly global economy. Today, we have such an economy…. Our challenge now is less to increase globalization than to make the globalization we have work for our citizens…. Trade diplomacy… must be only one component of a broader approach that has as primary stakeholders not just global companies but also those concerned with economic equity, protection of the environment, opportunities for workers to migrate and financial stability…

June 14, 2015

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