In Honor of Pope Francis
These are remarks I delivered at an African health conference in 2023, hosted by African Jesuits. My remarks quote Pope Francis’ critique of neoliberalism.
***
“the marketplace, by itself, cannot resolve every problem, however much we are asked to believe this dogma of neoliberal faith . . . . {T}his impoverished and repetitive school of thought always offers the same recipes . . . resorting to the magic theories of “spillover” or “trickle” . . . as the only solution to societal problems. There is little appreciation of the fact that the alleged “spillover” does not resolve the inequality that gives rise to new forms of violence threatening the fabric of society.”
It is an honor to be with you here today for the launch of the Afro Health and Economic Transformation Initiative.
As you all know, the pandemic exposed fault lines in the global economy. This very Initiative has emerged from the recognition that today Africa remains too dependent on medicines and medical goods supplied from outside the continent.
We are keenly aware that during a global health pandemic, when worldwide demand for medical goods outstripped supply, Africa was left behind. Even vaccines produced on the continent were often committed to markets outside the continent, aggravating vaccine inequity and tapping into feelings that the global economy is an unjust economy.
But the pandemic exposed fault lines that go beyond access to medicines. It exposed flaws in the very philosophy that has governed economic thinking over the past 25 years.
That thinking focused on creating maximum space for the market to allocate resources, in pursuit of efficiency. Many in Africa will know all too well the thinking that underpinned what became known as the “Washington Consensus.”
The pandemic showed where this focus on short-term efficiency has taken us: fragile supply chains, based on a “just in time” delivery strategy that sought to minimize inventory and production capacity – even as many companies made extraordinary profits. Today, however, “just in time” is giving way to “just in case.” The Washington Consensus is no longer the consensus.
In 2020, that first year of the pandemic, Pope Francis issued an encyclical letter called “Fratelli Tutti,” on fraternity and social friendship. He stated that “the marketplace, by itself, cannot resolve every problem, however much we are asked to believe this dogma of neoliberal faith . . . . {T}his impoverished and repetitive school of thought always offers the same recipes . . . resorting to the magic theories of “spillover” or “trickle” . . . as the only solution to societal problems. There is little appreciation of the fact that the alleged “spillover” does not resolve the inequality that gives rise to new forms of violence threatening the fabric of society.”
In a similar spirit, President Biden and Ambassador Tai have been clear that trade must deliver real opportunities for everyday people. We must do trade better – to pursue equitable growth; to bring more people in; and to help ensure that all our citizens benefit from our innovations.
These values were once a part of the conversation, when the modern international trading system was being formed in the 1940s. The Global South had an important voice at the negotiating table, and wanted to ensure that the system included enforceable labor rules, because of fears that in a liberalizing economy, their people would be exploited by foreign investors. They also wanted domestic policy space to encourage their own development, because they wanted to move up the value chain and felt that under pure market rules they wouldn’t be able to catch up to more developed economies.
They got their asks. These rules – and others, like curbs on monopoly power -- were embodied in the International Trade Organization Charter. But the ITO Charter ultimately never entered into force. Nor were these rules incorporated into the GATT or the WTO, so the revisionist history, intentional or not, led us to assume that the original post-war vision for trade was a laissez-faire model, focused on little more than cutting tariffs in pursuit of free market utopia.
In many respects, then, the economic reckoning that is occurring under our very feet today is a return to the wisdom that prevailed after the Great Depression and World War II. We lost our way; but we are finding our way back.
“[h]unger and political instability go hand in hand . . . . And who can say that people who have always been slaves to hunger will not put food before freedom?”
That wisdom recognized that the economy isn’t just supply and demand curves, but people. An economic paradigm in which workers are nothing more than a cost center is an economic paradigm under which democracy becomes fragile. This is why the Biden-Harris Administration is pursuing a worker-centered trade policy – a human-centric vision to place workers and ordinary people at the center of our policies, to make trade a force for good.
People. So often in trade we view inequality through the prism of a North/South axis only. It’s true that inequality across borders remains serious, and the pandemic has reversed some of the gains made in reducing that inequality. But it is also important to recognize that inequality exists within our borders as well.
That’s also the case in the United States. One of the first things Ambassador Tai did as USTR was to ask the U.S. International Trade Commission to look into the distributional effects of U.S. trade and trade policy. And the USITC study not only recognizes the concerns over devastating impacts concentrated in certain communities in the United States, but it also shows disproportionately negative effects for non-white American workers.
Let us recognize, then, that there is solidarity between American workers, and African workers.
So, the question is, where do we go from here?
At USTR, we’ve been hard at work to build a trade policy that is centered on resilience, sustainability, and inclusion. And these core values have been at the heart of all our engagement, including with our partners on the African continent.
President Biden hosted the African Leaders’ Summit in Washington in December, where he said, “African voices, African leadership, African innovation all are critical to addressing the most pressing global challenges and to realizing the vision we all share: a world that is free; a world that is open, prosperous, and secure.”
When chairing the African Growth and Opportunity Act Ministerial meeting that same week, Ambassador Tai echoed the President and said “the future is Africa.” She emphasized Africa’s youth, the entrepreneurial spirit, the innovative drive, and the importance of our partnership.
We need to work together – as partners – to overcome today’s challenges and to build a tomorrow that lifts up our working people. We recognize that it’s impossible to realize this vision without African contributions and leadership. And that’s exactly what we’re doing, whether it’s through the MOU we signed with the AfCFTA Secretariat in support of continental economic integration, or through our new and innovative trade initiative with Kenya.
This also includes our collaboration to address the COVID pandemic. Building on the groundwork laid in response to the obstruction of African efforts two decades ago to use TRIPS flexibilities to address the HIV/AIDS crisis, we were able to work together at the WTO to deliver an outcome on COVID vaccines – an outcome which we supported at the request of our African delegation partners. That outcome demonstrated that, together, we can make the WTO more relevant to the direct needs of our people. It is also a step toward laying the foundation to make in, and for, Africa.
And that’s why this Initiative is so important. It comes at a time when we are working to put people back at the center of our economy; where we want to make sure our supply chains are strong and resilient; where we understand the need for Africans to have greater independence in meeting their own demands for essential medicines.
This year marks the 60th anniversary of the creation of the agency that would become USTR. The very first U.S. trade representative, Christian Herter, recognized that inequality – that extreme poverty – would make it difficult for democracies to survive, or even to take root. To quote him:
“[h]unger and political instability go hand in hand . . . . And who can say that people who have always been slaves to hunger will not put food before freedom?”
The free and fair world we envision cannot be built by a single government. This is truly a partnership, not just between governments, but also with civil society, industry, academics, and other stakeholders.
Thank you so much for the privilege of speaking with you today.