Fair Sustainable Trade

When it comes to trade agreements, fair trade is usually the objective, but it seems to be rarely the outcome. One side always seems to benefit more, usually as a result of not playing by the rules of the agreement, either to the letter or the intent. The rules may be circumvented by going literally through another country, or using other means like underwriting costs with subsidies, waiving internal taxes, or finding alternative means of supplementing the true production expenses so that there is essentially a tariff imposed on all imports of goods on the trading partners.

Temper Tantrums Don’t Work

So what is a country to do in the face of a world where “unfair trade practices” are normal? Deal with it! Life—and trade—is unfair. Anyone that ever said the playing field is always level, that the game is always referred equally, or that both sides of a game win, doesn’t live, play or work in the real world, but in some Utopia where fiction rules.

In the real world, where the rules of the game not only change but also get rewritten mid-game and probably aren’t going to be followed to the letter anyway, the name of the real game is to

Be better at what you do and how you do it.

You can’t change how the other guys play. Face it; you can’t change them. You can’t make them play by different rules. You really can’t even influence them significantly. This is a new era. In most instances, these are other governments making and influencing the rules.
Face it; this is a different world that will keep having more players, who will in turn play this game on other players. What goes around comes around, so become more efficient. Become leaner. Become more productive. Find new resources. Find new ways.

No one is going to go back to “fair play and fair trade.” There isn’t enough leverage to make them and let’s be honest: Who is really asking them to: You? Me? The worker who lost his or her job and is being told to “get with the times” and retrain to “become a knowledge worker” or to “transition”? Certainly not our Regress—oh, I mean Congress …

Homonym, Anyone? Sounds Like “Fair” but You Pay For It

“The price you pay for a ride”: fare. I personally think it may be more appropriate that certain trade agreements be labeled “fare trade.” Yes, we need trading partners and this is a global economy; I’m not an advocate of protectionism. I do believe that businesses aren’t entitled to business strictly by existing in a particular country. They must be competitive, but they shouldn’t have to be un-fare-ly (spelling intended) disadvantaged.

Since it really is unlikely there will ever be balance in world trade, businesses must be competitive under the unbalanced conditions—and that is always the name of the game. In a playing field that is uneven, how can you gain an advantage back, keeping in mind that it has to be something that will be hard for someone else to replicate, and that the “other” player on the field that is in your corner (your government) has been—and continues to be—”negotiating on your side”?

Intellectual property is one area that comes to mind. If you can develop protected rights to product and/or process innovations that you can either not share (trade secret) or patent (legally protect and prevent others for using for a period of time), you can gain significant advantages in some instances. (Note that this doesn’t happen every time, because sometimes the market isn’t willing to buy or pay for the new technology. Also, you have to keep in mind that this presumes the other guys are going to honor their commitments to agreements about intellectual property rights recognition.)

Going back to the original premise, we have to get better at what we do, becoming more productive and more efficient, managing cost structures and lowering prices. This requires a coordinated effort amongst government, capital sources, labor sources, and other input market sources (not an insignificant challenge, as demonstrated repeatedly by the automotive and airline industries in the United States).

Another opportunity is to differentiate in the eyes of the customer with other features and services and be able to charge the higher market price. If we can’t move the cost structure, then let’s move the revenue point that we can ask by being innovative, creative, and connected to the customer. Let’s develop new, different, and unique products, services, and technologies that only we can deliver. Let’s create new demand, new opportunities … and let the world run to catch up.

Is It Too Late to Innovate?

We hear it every day that the United States and the “First World” markets are being left behind. Our education systems are failing. Our governments are in debt. Our “leaders” are busy with entitlement programs that increase our tax burden and provide disincentives to change, achieve, and succeed. We need “knowledge workers” and seem incapable of generating them in sufficient quantities and in the right mix to meet the need. Our infrastructure is aging and the pork programs are building bridges to nowhere and parkways in corn fields where no one wants them. The most consistent way to get rich is to be elected to Regress—oops, Congress.

Grants that can fund innovation and small business are being opened up to fund companies that are less small business and more likely to be big venture and big business-owned entities. The nature of competitiveness and innovation for programs will have more “success” not by addressing the program’s deficiencies and innovating the curriculum, but by changing the composition of who is in the program … in other words, “stacking the deck.”

Fair Sustainable Trade, Fair Sustainable Businesses

The first rule of business in the United States should always be open competition, equal access. That should be true of its programs internally and its trade agreements internationally. When anything interferes with the level playing field, it is ultimately bad business. If you can’t compete, don’t play. But in a world where the playing field is tilted, where the dice are loaded, where the cards are stacked, where you may have both hands tied behind your back, then the only answer is to be better, stronger, faster, smarter, more innovative. That’s what the United States was known for in the past, and where we should be headed in the future. It’s time for business to get back to the business of innovation and trade will be like a day at the Fair: the State Fair.

© 2008 Focus Resource, Inc.

All Rights Reserved

%d bloggers like this: