World Trade Day: Globalization needs ‘human face’

Bryant University’s 20th annual World Trade Day drew scores of business executives, government officials and entrepreneurs concerned about China trade, currency issues, supply chain management, outsourcing, technology and global competition.

They discussed strategies for making the most of low-cost Asian labor, getting the cheapest materials and breaking into bustling new markets. They commiserated about tariffs, and got courted by international communications firms, financial companies and law firms.

Then they sat down to lunch, and a man who’s made a career in global trade reminded them of the little guy.

“Unless globalization has a human face, unless it’s seen as lifting people up,” it won’t succeed, Thomas “Mack” McLarty, one-time chief of staff to President Clinton, told them. Even if overall, global trade is making a country richer, he said, “people don’t live in the aggregate. They live on the individual level. And too many people genuinely believe that even as globalization moves forward, they’re being left behind.”

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A frequent public speaker, McLarty has an extensive background in business and global affairs. A native of Hope, Ark., and lifelong friend of Clinton, he built his family’s business into one of the nation’s largest transportation companies, then served as chairman and CEO of Arkla, a Fortune 500 natural gas company. He served on the National Petroleum Council and the National Council on Environmental Quality under the first President Bush.

Then, under President Clinton, McLarty served as chief of staff and as special envoy for the Americas, representing the United States on more than 50 trips and at the 1998 Summit of the Americas. He also attended several G-7 and APEC summits, and traveled to the Persian Gulf.

Since leaving the White House in July 1998, McLarty has been back in the corporate world, as chairman of the McLarty Cos. and president of Kissinger McLarty Associates, which provides strategic advisory and advocacy services to U.S. and multinational firms.

McLarty is a strong believer in global trade, and he spoke enthusiastically of how it has boomed since the end of the Cold War, with U.S. exports growing from $290 billion 20 years ago, to “well over $1 trillion, and growing every day.”

Technology has “collapsed time and distance,” McLarty added, bringing about great progress but also an interdependence that has “profoundly and irreversibly changed our world.”

At its best, he said, globalization can create jobs and create “tremendous opportunities” to spread prosperity. A large share of Rhode Island’s own manufacturing jobs are geared to exports, he noted, serving markets “from Turkey to Togo.” And abroad, McLarty added, the promise of trade with America can promote “the advancement of free-market democracy.”

“Commercial exchange can be a powerful weapon against extremism,” McLarty said, explaining that not only can it encourage regimes to establish at least “some measure” of order and democracy, but it builds ties among nations, and develops communities.

For the United States, McLarty said, continuing to develop foreign trade is critical because the economic landscape “is changing in a rather dramatic way,” with new countries emerging as the powerhouses, and old powers fading. By 2020, of every 100 people, 56 will be from Asia, 14 from Africa, and only 4 from the United States, he said.

America has “formidable and great strengths,” McLarty said, “but as we all know, we cannot rest on our laurels.” Foreign competition is going to keep growing, he said, and technology makes it very easy to outsource even service jobs.

“Realistically, I don’t think our response can be to throw up roadblocks or hunker down in a defensive crouch,” he said. Instead, America needs to focus on better preparing its own workers, he argued, ensuring that they have the math skills, for example, to advance “as far ahead as their potential can take them.”

The United States also needs to back away from some crucial mistakes it has made in recent years, McLarty said. The surplus President Clinton left five years ago has not only evaporated, but it’s been replaced with a $400-billion, and growing, deficit. As America’s debt accumulates, he said, that creates “a real danger to our country,” because it produces “fiscal disorder” that can affect not only this country, but other nations that invest here.

“It is time – in fact, it is past time – to deliver some bipartisan cooperation on this issue,” McLarty said. Right now, tax collections are 16.5 percent of the gross domestic product, the lowest level since 1960, he said, while spending is about 20 percent of the GDP. “That’s an unsustainable equation.”

Another big mistake, McLarty said, is to alienate other countries. Instead, Americans should be working to encourage other countries to want to cooperate with them, he said. It’s a “strategic imperative” to be able to persuade others to support U.S. interests.

That’s where remembering trade’s “human face” is crucial, McLarty said. At home and abroad, the policies the United States pursues can make a huge difference in people’s lives. Addressing agricultural issues could “lift millions out of poverty.”

“We need not abandon our Main Street values as we venture on a global path,” McLarty said. “We certainly don’t have to choose between self-interest and our mutual interest. Even as we reach out abroad, we must deepen our sense of community at home. That is what makes America good, and that’s what will keep America great.”

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