In Their Opinion...

Colin Read is a professor of economics and finance and former dean of the School of Business and Economics at SUNY Plattsburgh. His fifth book, "The Rise and Fall of an Economic Empire," will be published by MacMillan Palgrave in September. He also runs an economic and business consulting company, and can be reached through his website

Colin Read: Free trade deals should benefit all

By: Colin Read, Everybody's Business

---- — Our region well understands mutually beneficial trade. The North Country has been trading with Quebec since it was called Lower Canada two and three centuries ago.

This trade was based on mutual advantage, the notion that voluntary trading partners participate only if both sides benefit, and comparative advantage, which allows us to focus on what we do well as they do likewise.

Even the North American Free Trade Act worked well for both sides of this border. Similar wealth, values, opportunities and legal principles meant both nations could freely share their endowments of resources and entrepreneurship. Granted, Canada probably benefited more as a share of their economy, but only because the mutual and balanced flow of trade between our two nations constituted a much larger share of their much smaller economy.

The United States’ free-trade experience with Mexico was a bit different. There was, and remains, a wide income gap, which translates into different sensibilities with regard to protection of the environment, of human capital and of intellectual property. Free trade is helping to level the income imbalances and is ameliorating this differences, slowly and over time. I am confident that these two nations are converging on a balance that respects each other’s values.

However, such a balancing of values takes generations, even between two countries with the historical ties and migrations of Mexico and the United States. In the meantime, international tribunals must iron out differences that often result in the adoption of lowest common denominators between competing economic or societal systems.

For instance, if domestic U.S. law conflicts with a NAFTA provision, an international tribunal must find a solution that does not frustrate the NAFTA goals. This at times either subverts U.S. law or requires the U.S. to compensate our partners for losses they might incur by having to abide by U.S. legal principles. Either solution tears at our domestic fabric by reducing our domestic sovereignty or by subjugating our values to an international economic court.

When we negotiate such treaties, we must be particularly thoughtful and wary of how international treaties will affect domestic policies and values. Of course, any treaty must offer both signatories the certainty they require so that they may best create the mutual advantages each side contemplated when the treaty was signed.

These tensions are proportional to the cultural and economic differences between treaty participants. The tensions are reduced by the extent to which the benefits are evenly divided between nations and between segments within a nation.

I believe in free and balanced trade. I also believe in creating opportunity for other nations as the best pathway for them to adopt the values of entrepreneurship and sustainability we try to balance here.

However, I am wary of opportunism disguised as free trade. We are currently negotiating a Trans Pacific Partnership (TPP) that will embrace many of the nations that border the Pacific Rim. Across these nations are a broad diversity of wealth, of cultures and of values. These potential trading partners want access to our markets, and we want their markets to abide by principles that our good for our large corporations.

I say our large corporations because the little guy hears little about the TPP. Negotiations are conducted in secret, obscure to the public. The negotiations do not exclude large pharmaceutical companies and the like that wish to extend their patent monopolies both there and here. In fact, there are provisions that create more robust monopolies rather than enhance the competition that economists prize when we espouse the benefits of free trade.

Proposed treaty provisions remain secret even to Congress. When our special interests and theirs get the language they want, the TPP will go to Congress for their “fast-track” approval as an up-or-down vote with no chance to amend the agreement.

Too often these days secrecy is employed to protect profits or political opportunism rather than to protect us all, at the price of cynicism. And, while I believe in free and balanced trade, I believe even more in our constitution, in spirited public debate and in treaties that benefit Main Street more than K and Easy Streets. Let’s fix this thing for us all, and our neighbors.

Colin Read chairs the finance and economics faculty at SUNY Plattsburgh and has published a dozen books on global finance and economics.