A Wrinkle in Trade?

While the news media and the markets are captivated by Our President's current game of chicken with China, the US has advanced a very unorthodox idea at the NAFTA renegotiation — and it's a surprisingly good idea.

To avoid US tariffs on automobiles produced in Mexico, manufacturers there would be obliged to pay their assembly line workers $15 an hour.  That is twice the US federal minimum wage, and considerably more than starting salaries at non-union assembly lines in the southern United States. The $15 figure is just an opening gambit, of course: nobody really wants to see underpaid Alabamians sneaking across the border for better-paying jobs in Mexico.  Nevertheless, demanding better pay for foreign workers could be a more intelligent approach to both balance-of-trade and unauthorized immigration concerns.

Labor standards have been a part of trade negotiations for many decades, but usually receive short shrift when agreements are finalized, and seldom are enforced.  Negotiated by and for multinational corporations, they rarely go beyond banning slave or convict labor — not an especially high bar.  (The TPP would have included somewhat higher standards, had it been ratified, but that ship has sailed.)

Globalization has lifted tens of millions out of abject poverty in the developing world — at least in countries like China, where not all the newly generated wealth was co-opted by plutocrats.  If the Tr*mp administration advances a new paradigm that benefits the working poor around the world, it will be ironic — but also very welcome.