Changing the way global trade works: the Elizabeth Warren proposals
We live in a hyper-globalised world. When we go shopping we buy products from all over the world, this is doubly true for fashion and clothing.
However, the opening of the global economy (while bringing multiple benefits) has also brought negative side effects and problems that are causing damage to the environment and allowing workers across the world to not get the improvements in their lives that they were once promised. One of the areas this can be most seen is in the clothing industry.
In countries across the world clothes are being manufactured in factories where workers wages are low, the working conditions are dangerous and environmental protections and safeguards are weak, if not close to non-existent. When you buy new clothes you are often buying items made in these sorts of conditions. And there's a big reason why: these clothes are cheap, they're made more cheaply than they could be in the UK or another Western country. This is because in the UK or other Western countries wages are higher, working conditions are better and companies must adhere to stronger environmental protections and safeguards.
Now, there's a perfectly good economic theory that exists as to why our government allows this trade between ourselves and these other countries. The theory is, we get access to more affordable clothes and other goods and overtime the money being invested into these poorer countries will gradually raise living standards and working conditions for the people there. Unfortunately, the practical results and reality show a much patchier picture.
Some countries are not making the improvements, this can be for all sorts of reasons. Lack of proper democracy or representative government, endemic corruption, weak law enforcement... Either way, the money that is invested in the form of contracts to local factories doesn't result in that money benefiting many of the ordinary people, instead the money gets stuck with the already wealthier members of the country. This is something we as consumers can do something about by buying clothes and goods from places that are committed to treating workers well, being socially responsible and protecting the environment. But it will always be difficult for consumers alone to make the changes on a large enough scale.
However, changes in trade policy on a global basis could create a much fairer global economic system. This is something Democratic presidential nominee, Elizabeth Warren has started talking about. Calling for:
- Higher labour, human rights and environmental standards for the countries the U.S. negotiates with as a condition of reaching a trade agreement.
- A new “border carbon adjustment” tax on imported goods made by corporations that shift production to countries with weaker greenhouse gas emissions standards.
- An end to “investor-state dispute settlement” arbitration that allows corporations to challenge laws enacted by countries on grounds that they violate trade deals the countries have signed.
All of these proposals could go a long way to improving things. When rich countries, like the US and UK, make trade deal with other countries we should put pressure on the governments in these countries to ensure higher protections for workers, environmental protections and CO2 emission reduction. Not only will this make life better for many normal people in these countries but it also creates a more level playing field for companies that make sure their products are being sourced from places that are socially and ethically responsible. To get this to happen, pressures needs to come from the most influential countries: The USA being the obvious player.
Elizabeth Warren might never become President. But the fact that these subjects are now being debated in the race to be President when the old global trade model is being questioned the world over is a good thing.
Elizabeth Warren proposals on trade reported by CNBC, more information can be found here: https://www.cnbc.com/2019/07/29/elizabeth-warren-wants-to-rewrite-the-rules-on-negotiating-trade-deals.html