The Bush administration had hoped to use last weekend's summit of 34 heads of state of the Western Hemisphere to restart the long-stalled negotiations toward a Free Trade Area of the Americas. But it didn't turn out that way. Not only was there no agreement, but there wasn't even agreement on when to resume talks.
What scuttled the summit? Some think it was the grandstanding of Venezuelan President Hugo Chavez, who used the occasion to cement his place as heir to Fidel Castro in the pantheon of Yankee-go-home heroes. But take a closer look and what you see is mounting resistance to free trade in much of Latin America -- in fact, in much of the developing world.
Remember the so-called "Washington Consensus" of the 1990s that promised that trade liberalization would bring growth and prosperity to South America, Asia, and elsewhere? The Clinton administration (of which I was a member) pushed it. The International Monetary Fund, basically controlled by the United States, pushed it. Mainstream economists pushed it.
It was as logical as economics 101. Trade is good. Markets are good. The free flow of products and services across borders makes everyone better off.
It hasn't exactly worked out that way. Yes, developing economies have grown. But the benefits often haven't trickled down to ordinary people. Most of the beneficiaries are at the top -- among those who own most of the natural resources, most of the land and real estate, and the biggest companies.
Those hurt by trade are often small farmers, local producers, and shopkeepers who find they can no longer compete. And the winners haven't been especially eager to share their winnings with the losers -- in the form of education, health care, social insurance, and more progressive systems of taxation. As a result, in many of these nations, inequality has widened.
It hasn't helped that the United States and other rich nations still subsidize their own giant agribusinesses, making it harder for poorer nations to export their produce. Or that the United States is perceived by much of the rest of the world, including Latin America, as a super-powered bully.
But the real lesson for proponents of trade liberalization is that economic growth alone won't convince the developing world that free trade helps ordinary folks.
It no longer convinces even average working people here in the United States, where support for free trade is dropping off the map. NAFTA, the North American Free Trade Agreement, passed Congress by 34 votes in 1993. CAFTA, the recent Central American Free Trade Agreement, cleared the House last July by just 2 votes, and that was with a Republican Congress.
Free trade is good for America overall. But it's been much better for high-wage, highly-skilled American professionals than for American blue-collar workers, whose jobs are vanishing and whose wages are becoming less and less secure. And, just as in developing nations, the winners from trade in the United States haven't been willing to share their winnings with the losers.
So, whether in South or North America, don't expect a new world trade agreement any time soon.
Robert B. Reich is co-founder of The American Prospect. A version of this column appeared on Marketplace.
