Reich says “The problem isn’t trade
itself. It’s a political-economic system that won’t cushion
working people against trade’s downsides or share trade’s
upsides. In other words, a system that’s rigged.”
I agree that the problem isn't trade
itself, but rather that trade agreements are being written in a way
that undermines Democracy and common sense fairness.
What goes by the name "Free
Trade", or sometimes "The Washington Model for trade
agreements" is based on obsolete and discredited economics.
This is because the Ricardian Comparative Advantage doesn't take
externalized costs of production into account. We should be basing
our trade on the true cost of production of goods and services. A
manufacturer or service provider in a country like the US has costs
that include contributing to health insurance cost, Social Security
and Medicare taxes, unemployment insurance, and those associated with
meeting environmental, occupational safety and health regulations,
product safety standards, building and fire safety codes, labor
standard, etc. regulations. An additional cost, the "cost of
carbon", should soon join this list.
It would be better to risk a possible
trade war than continue down the path toward a lowest common
denominator, highly unequal, economy that we are on.