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July 25, 2013

A Better Way to Think About Trade

Representative Sander Levin of Michigan, the senior Democrat on the Ways and Means Committee, which has jurisdiction over many trade issues,proposed this week that the United States make a significant change in its approach to international trade. The United States is in the middle of trade negotiations that, while still somewhat under the political radar and seldom on the front pages, have the potential to affect the economy – and many people’s jobs – in ways that could be quite negative or somewhat positive.

Mr. Levin, in remarks earlier at the Peterson Institute for International Economics, laid out a set of issues that are entirely reasonable and could well draw bipartisan support, even in the House of Representatives. (I’m a senior fellow at the institute, but I was not involved in organizing this event.) The Obama administration should pay attention, particularly as any trade deal ultimately needs Congressional support.

Mr. Levin made three main proposals that are directly relevant for the negotiations between the United States and countries on the Pacific Rim, aiming to sign a Trans-Pacific Partnership Agreement. (For a primer on that agreement, I recommend the book “Understanding the Trans-Pacific Partnership” by my colleagues Jeffrey J. Schott, Barbara Kotschwar and Julia Muir – the introduction and two other chapters are free.) The same principles are relevant for other potential trade deals.

The first point is that enforceable labor and environmental standards need to be given more emphasis in American trade agreements with other nations. Recent horrendous events in Bangladesh have driven home the unfortunate truth that if matters are left purely “to the market,” there will be very unsafe factories and dangerous working conditions. People will die, tragically and unnecessarily, producing cheap goods for American consumers.”


Read Simon Johnson’s full New York Times article here

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