The free market as we know it has long been debated on its positive and negative impacts: it is seen as a great contributor to the world’s advancement as well as the toxic, corrosive disease that weakens its victims immensely.
Take, for example, the NAFTA agreement (the North American Free Trade Agreement). It is the treaty under international law that enables free market trading between Canada, USA and Mexico by eliminating and reducing tariffs on products of trade, such as textile, agriculture and even motor vehicles. The treaty was first put in place in 1994 and since then has led to a complicated jumble of negative and positive impacts. It has been associated with a drop in poverty in Mexico but has also been blamed for the negative imapcts on farmers there or manufacturers in the USA. The NAFTA is also blamed for the fall in environmental standards and labour welfare.
Given the controversial nature of the NAFTA,both democratic candidates in this year’s Presidential race, Barack Obama and Hilary Clinton, have decided to make it a part of their campaigns’ agenda. Both of them claim they will reform parts of the treaty in ways that will benefit American workers, as well as improve labour welfare and the environmental impacts of the agreement. But, just how effective will their efforts be?
Hardly, it would seem. Marcela Sanchez from the Washington Post suggests that the government should instead embrace and support the growing trend of Corporate Social Responsibility: it should enourage businesses and corporations from the competitive private sector to continually take socially responsible initiatives because they actually do make a difference. This, she states, rather than “government regulation or free trade arbitration”, would fix and change the environmental, economical and labour impacts associated with the free market.
Sanchez gives the example of Nike, which now has its own monitors around the world that ensure that all parts of its production chain are actually meeting labour welfare regulations and environmental standards.
And, since the developing world encounters the worst impacts of the free market, it is logical to assume that CSR initiatives are most needed there. As i stated in my previous blog, the corporations in the developing nations, such as Asia, should be encouraged to embrace the new trend because not only will it eliviate a lot of the negative impacts of the free market, it would also contribute immensely towards their economical growth.
It would seem that the free market, which gave birth to globalisation and powerful, private corporations, also developed an antidote to its own disease in the process; CSR could be seen as the remedy for the symptoms of the free trade.
Obama and Clinton are both wrong. We should replace NAFTA with UFT.