The second panel of the conference, moderated by CITD’s Co-Director, Professor Katrin Kuhlmann, focused on the concept of “Inclusive Trade and Development.” Its purpose was to encourage dialogue about the connection between inclusive (and sustainable) trade and development, to discuss approaches to integrating these issues within trade policy, and, more broadly, to explore the meaning of the terms “inclusive and sustainable trade and development,” which, as Professor Kuhlmann highlighted in her remarks, are appearing in trade discussions around the world.

To launch the discussion, Professor Kuhlmann explained that the connection between inclusive and sustainable trade has increasingly been raised in trade agreements in different countries and regions and at the World Trade Organization and other international institutions by scholars and policymakers. What is meant by “inclusive and sustainable trade and development,” however, remains unclear and varies between countries. Do these words refer to issues around labor rights, the environment and climate change, small- and medium-sized enterprises, and women? Do they refer to the United Nations Sustainable Development Goals (SDGs)? Even though this new vocabulary signals a shift in the issues that are part of international trade discussions, many questions linger. For example, how should trade be used to balance growth, inclusiveness, and development? In different ways and with different perspectives, each of the panelists explored these questions, referring to specific issues evoked by the terms “inclusive and sustainable trade and development.”

Chantal Line Carpentier, incoming Head of the Trade, Environment, Climate Change, and Sustainable Development Branch at UNCTAD (Trade and Commodities Division) spoke first. She started by reminding the audience that “the SDGs have been agreed by all of our countries.” (00:2:48). As Ms. Carpentier highlighted, when thinking about international trade, those SDGs with economic and/or trade components are typically top of mind (00:2:48). However, those SDGs with a social or environmental component are often forgotten, to the detriment of meaningful advancement on the achievement of the SDGs (00:2:48). Ms. Carpentier urged, therefore, that, rather than deal with them as independent issues, disciplines governing the environment, labor, and equality be built into trade discussions (00:3:23). We should not only combine trade, gender, and the environment, but, moreover, “green the labor,” (00:2:51) to make best use of the promise of productive capacity, she noted.

Professor Alvaro Santos, Faculty Director of CAROLA, took the floor next, highlighting some of the asymmetries in the treatment of the interests of workers. He proposed that, in the context of labor and with a view to achieving inclusion, all sectors of the economy in which labor violations are prevalent should be “evenly represented” in trade agreement formation and trade policy (00:2:56). Furthermore, he emphasized that the lens of inclusion should not only turn on the differences between developed and developing countries, but also on the many other stakeholders and interests at stake, including those that involve the differences between workers and corporations (00:3:01). Finally, Professor Santos also suggested that the concept of inclusion be used in reference to the different global markets to ensure that policies applicable to the market for goods and services and the market for labor are compatible and in sync.

Sandra Polaski, Senior Research Fellow for the Global Economic Governance Initiative at Boston University’s Global Development Policy Center, spoke next, with particular emphasis on the winners and losers from trade. As she observed, the distributional impacts arising from U.S. trade policy from the late 1980s onward have not only come from tariff reductions, but, more importantly, from deregulatory measures and pro-business policies written by powerful lobbies (00:3:04). These other aspects of trade policy not only opened markets, but also encouraged the offshoring of production and jobs, amplifying the distributive effects of trade and negatively affecting workers, minorities, and marginalized communities most (00:3:05). NAFTA, for example, displaced 1.3 million subsistence farmers in Mexico in its first 10 years, but did not come close to creating 1.3 million new jobs (say, in the manufacturing sector), deepening poverty and informality and feeding migration. The winners (both Mexican elites and U.S. offshored corporations) did not compensate the losers “in any way,” Ms. Polaski remarked (00:3:09). In terms of inclusive trade policies originating within the U.S. she called attention to the USMCA’s rapid response mechanism, an initiative that has helped empower Mexican workers, and the call for a waiver of intellectual property rules for vaccines, a move that was meant to put health interests over corporate interest (00:3:38). The polarization of the relations with China and attempts to break the world economy into blocks, however, are preventing clear thinking about what could be good trade policy that is inclusive of all (00:3:39).

Professor Henry Gao of Singapore Management University also weighed in on the topic of winners and losers from trade. According to Professor Gao, there have been many winners from trade in Asia, and particularly in China. Domestically, for example, China has been very successful in lifting 800 million people out of poverty (00:3:13). At the international level, China has been trying to spread its model with the Belt and Road Initiative. This infrastructure development policy has benefited Chinese trade significantly (00:3:14). Overall, however, Professor Gao added, the experience of China shows that inclusion is much more a matter of domestic than international policy, and there is only so much that an organization such as the WTO can do for inclusive trade (00:3:18). Furthermore, he highlighted that there is a big gap in the Asian conversation on inclusive and sustainable trade and development between developed and developing countries. Developing countries are more willing to discuss “social” issues such as climate change and the environment, but they are less willing to discuss “political” issues such as labor rights (00:3:42). When it comes to sustainable development, most developing countries focus more on the development side of things, while many developed countries focus more on the sustainability angle (00:3:43).

While it was not possible to arrive at a definitive meaning of the concept of “inclusive and sustainable trade and development” during the course of the discussions, the panel did provide some key takeaways, both for trade generally, and for inclusive trade in particular. A point that underpinned the entire session is that trade policy is not just about growth, but also, inherently, about distribution. As Ms. Polaski put it best, “trade policy is redistributive by its very nature” (00:03:02). While the distributive dimension of trade had for long been largely neglected, today it is on everyone’s mind, and it will more actively inform the direction of trade law and policy moving forward. A related theme that equally resonated with all panelists is the need to think more broadly about the tradeoffs between winners and losers from trade. Several of the panelists underscored the importance of transcending the economic and neoliberal style that had for decades been embedded into the prevailing conversations about trade. This way of thinking had led to the siloing of trade discourse and to steering it away from the issues that mattered most for inclusive and sustainable development, as well as for the environment. Likewise, several of the panelists pointed out that there are dimensions that significantly bear upon the transformative potential of
trade that have been overlooked and that need to be brought to the fore. For example, while the dimension of developed versus developing has long informed the debate, other dimensions such as those that turn on particular interest groups, from workers, to women, minorities, and other underrepresented peoples have often been overlooked. By calling attention to these other dimensions in the context of trade policy debates and empowering those whose interests have been neglected most as a result of a predominantly corporate-driven trade policy agenda, trade can be more closely aligned with the goal of inclusive and sustainable development.