BRIC a BRAC

When former Dallas mayor Ron Kirk went to Washington as US Trade Representative, some wag suggested he take along a good book. It was an apt comment. It did look like he would have some time on his hands. International trade was going nowhere. Agreements negotiated during the Bush administration were gathering dust, the Doha round of WTO talks was stalled with no progress expected, even NAFTA was threatened. There really didn’t seem to be much to negotiate and in fact not much happened for two and a half years.

But over the last couple of months there has been a startling resurgence in trade developments. First a ban on Mexican trucking in the US was lifted, at least temporarily, and Mexico dropped a number of retaliatory tariffs. Then long dormant agreements with South Korea, Panama, and Colombia were approved by congress and signed into law. At a meeting in Hawaii President Obama announced he expects to complete negotiations early next year for US participation in the eighteen nation Trans Pacific Partnership. Japan applied to join shortly after. Canada may soon follow. In two weeks Russia will almost certainly be invited into the WTO and, lastly, the US has entered into talks for a deal with the European Union. I hope Mr. Kirk finished his book.

Free trade purists and advocates for the poor like me would prefer all this be done through the WTO in part because, with the exception of Russian accession to the WTO, none of it involves the BRICs, the four major emerging economies that many expect to be the juggernauts of the new century. But maybe there is a silver lining here. Brazil, Russia, India, and China all have to be apprehensive at being excluded from trading blocs that account for so much of the world’s commerce. And a major reason Doha stalled is that under developed members balked at additional reforms required to move it forward. The majors are essentially saying OK, we will do it without you. If that prompts some rethinking among the BRICs, so much the better.

I wish the church had more to say on this. The USCCB Pastoral Letter Economic Justice for All dates from 1986 and, aside from setting out a few principles and expressing special concern for the poor, it hardly mentions trade. Other than an endorsement of fair trade practices, the bishops have had little to say on specific trade proposals. Fair trade’s potential to overcome poverty is minuscule in the grand scheme of things. Looking back over the years since WWII, expanding international trade has had a great deal to do with the emergence of untold millions from abject poverty into the middle class. It looks to do it again over the coming decades. If we are as concerned about the plight of the poor as we claim to be, we should be at the forefront on this issue. We have an opportunity to do real good and instead we sit on the sidelines.

It seems to me increased integration of the world’s most developed economies, and a significant number of the not so developed, would provide powerful incentives for BRICs and others to join in, and to adopt market, legal, and social reforms entry would require. That would be good, right? It is exactly what happened with the WTO and, imperfect as it is, WTO has been a healthy development for all its members. By actively promoting such arrangements the church would be in a better position to influence terms, and to help protect the interests of the poor who are often the most vulnerable to increased outside competition, at least in the short term. Shouldn’t we be doing that rather than be left complaining about negative effects after the fact?