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"Free Trade" is Not about Freedom

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Looking over the whole debate on Gene Sperling's book, what's striking is that advocates for trade deals accuse critics of being against "free trade"-- yet the deals they advocate are all about accepting child slavery and denial of freedom by workers to form unions as acceptable parts of the global economy.  


It the critics of these deals -- who support trade but demand that basic standards of freedom for workers be incorporated into the trade regime -- who truly support "free trade."  It is actually Orwellian that advocates for unrestricted trade with China-- where workers are thrown in prison if they advocate unionization -- can appropriate the use of the term "freedom" for their position.


What exactly is wrong with demanding that if China wants to sell goods to the US, they must extend accepted ILO labor rights, such as the freedom to form a union, to their workers?

A special 2002 Amnesty International report entitled Labour unrest and the suppression of the rights to freedom of association and expression laid out in detail many of the abuses that suppress wages for Chinese workers and means trade with that country supports anything but freedom:

Labour unrest in China continues to be widespread...Protests are often forcibly repressed by public security personnel, and labour activists, workers' leaders and those who appeared to be outspoken face detention and imprisonment. Journalists and lawyers are also targeted by the authorities and often face intimidation and arrest if they speak out in defence of protesters.
In a companion report, they listed various labor activists imprisoned in the country.


The neoliberals sign on to a range of global policies that give freedom to financial capitalists to operate unhindered around the world, yet fiercely resist any demands that the freedom of workers be given equal consideration in the international trade regime.  


And then they have the chutzpah to accuse their critics of being opposed to "freedom."


Yes, we oppose legitimating child slavery and suppression of workers free speech under the Orwellian rubric of "free trade", but that doesn't mean we oppose greater trade under a better and, yes, freer system of world trade.  But "free" should include freedom for workers, not just of the owners of capital.


Gene Sperling will grant that labor rights in trade deals might be a nice thing, but says "many poor nations think such calls are heavy handed impositions on their sovereignty." Who are those despots speaking for, their regimes or the workers whose rights they oppress?


Labor federations throughout Central America opposed CAFTA, just as labor federations around the world oppose a global WTO deal without real labor standards as part of it -- yet folks like Sperling seem to favor worry about the sensitivities of despots over the concerns of workers and their advocates in those countries.


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"Looking over the whole debate on Gene Sperling's book, what's striking is that advocates for trade deals accuse critics of being against "free trade"-- yet the deals they advocate are all about accepting child slavery and denial of freedom by workers to form unions as acceptable parts of the global economy."
 
Even if true for argument's sake, what does this have to do with trade?

  "It the critics of these deals -- who support trade but demand that basic standards of freedom for workers be incorporated into the trade regime -- who truly support "free trade."  It is actually Orwellian that advocates for unrestricted trade with China-- where workers are thrown in prison if they advocate unionization -- can appropriate the use of the term "freedom" for their position."


If anything orwellian is going on it's your reroute of the definition of free trade, which is about the free exchange of good, services, labor and capital without tariffs, quotas or subsidies for favored industries into something that by it's very nature, however admirable, is not about those things but about labor regulation.

"What exactly is wrong with demanding that if China wants to sell goods to the US, they must extend accepted ILO labor rights, such as the freedom to form a union, to their workers?"

For some, it is the belief that one unique soverign state dictating to another state how to govern to their specific preference in order to just conduct trade is beyond their scope of legitimacy. For others, it's the belief that one state can better influence the practices (in this case related to labor) of another state once an agreement has already been reached.


"A special 2002 Amnesty International report entitled Labour unrest and the suppression of the rights to freedom of association and expression laid out in detail many of the abuses that suppress wages for Chinese workers and means trade with that country supports anything but freedom:"

It supports the freedom of companies in that country to do business freely with any other country.


"The neoliberals sign on to a range of global policies that give freedom to financial capitalists to operate unhindered around the world, yet fiercely resist any demands that the freedom of workers be given equal consideration in the international trade regime."
 
That's because 'free trade' is something that occurs between states, issues of labor are relegated to individual soverign states.  

 
"Yes, we oppose legitimating child slavery and suppression of workers free speech under the Orwellian rubric of "free trade", but that doesn't mean we oppose greater trade under a better and, yes, freer system of world trade.  But "free" should include freedom for workers, not just of the owners of capital."

Then you need to address those issues with the individual states that are suppressing the rights of labor, or you need to assist the labor forces in these states in their organization.


 "Sperling will grant that labor rights in trade deals might be a nice thing, but says "many poor nations think such calls are heavy handed impositions on their sovereignty." Who are those despots speaking for, their regimes or the workers whose rights they oppress?"
 
Probably for their regimes.



"Labor federations throughout Central America opposed CAFTA, just as labor federations around the world oppose a global WTO deal without real labor standards as part of it -- yet folks like Sperling seem to favor worry about the sensitivities of despots over the concerns of workers and their advocates in those countries."
 
Even assuming for theatrical argument's sake that every executive of a central American country is a 'despot', Unfortunately private labor groups don't get to dictate how or whether or not private companies do business.

It's just odd-- no one in a trade deal tells China how to run their country.  All we say is that if they don't respect labor rights, they don't get access to our markets.  It's their choice.


We already impose a range of rules on China-- most dramatically requiring greater enforcement of intellectual property rights -- as a condition for trade.


Yet your post reflects the double standard on labor issues.  


It's just "freedom" to impose intellectual property laws on developing nations, but it violates their sovereignty to require they respect the free speech of their workers as a condition for accessing our markets.


And it's a regulation of the United States labor market to allow goods produced under slave conditions to undercut them on price.


But thank you for the post-- it illustrates exactly why most Americans recognize the double standards of the so-called "free traders."

It's just "freedom" to impose intellectual property laws on developing nations, but it violates their sovereignty to require they respect the free speech of their workers as a condition for accessing our markets

Right ho. This is a contradiction. The answer, though, is not to say that since we feel like we can impose absurd intellectual property rules on other sovereign nations, we can therefore impose absurd rules on labor movement. That's compounding the felony.

The problem is that the OECD can't have it both ways. They can't make a principled claim about family farmers or drug patents without validating an equally principled claim about labor rights.

You're correct in identifying the contradiction. Your error lies in saying that the contradiction invalidates a free trade argument. The contradiction invalidates the claim that people who support imposition of intellectual property rights across borders can call themselves free traders.

"It's just odd-- no one in a trade deal tells China how to run their country.  All we say is that if they don't respect labor rights, they don't get access to our markets.  It's their choice."

Your first sentence is true enough. The issue is that these are private entities in respective states doing business with each other more specifically than 'China' trading with the 'U.S.'. I think the situation as it currently exists in China is awful, for more than just labor but specifically for them. However, it would beyond the pale for one state to prevent or pose barriers to one of it's private entities from freely doing business with a private entity in another state, because it doesen't agree with how that state or the particular private entity there in deals with labor.

Independent consumers may out of conscience, choose not to purchase certain goods because they object to the labor practices of the foreign company which produces them as well as the soverign state they reside in. They can lobby for others to act in the same manner and perhaps through repeated lobbying, force said company out of shame and bad PR to do something about it's abominable labor practices. But for a state to impose neutralising tariffs on goods from another state, denying it's own citizens access to cheaper goods and effectively taking the choice out of their hands is not the solution. Not to mention it makes the exporting country poorer.

"We already impose a range of rules on China-- most dramatically requiring greater enforcement of intellectual property rights -- as a condition for trade."

That's a different matter. Getting China to respect intellectual property rights deals with getting soverign states to respect and recnognize certain alleged rights of private companies and independent agents in other soverign states. That differs fundamentally from most forms of labor regulation in Intrnl. trade as lobbied for by organized labor, which is primarily about one soverign state dictating to another soverign state how it deals with it's labor laws and it's regulations of it's domestic labor corps.
 
 

That's a different matter. Getting China to respect intellectual property rights deals with getting soverign states to respect and recnognize certain alleged rights of private companies and independent agents in other soverign states. That differs fundamentally from most forms of labor regulation in Intrnl. trade as lobbied for by organized labor, which is primarily about one soverign state dictating to another soverign state how it deals with it's labor laws and it's regulations of it's domestic labor corps.

You say it's "different" but I don't see how.  How are respecting intellectual property rights different from respecting worker rights? It would seem to me to bemore rather than less compelling when you are talking about people's on-the-ground, how-often-do-you-get -a-bathroom-break rights than rates of royalty compensation on music played by rural radio stations.

No one questions a right to intellectual property, the entire matter is the strength of the right. A United States dominated by its big businesses argues for international rules in their favor, so for'excessive' intel prop rights that will funnel profits back to US international corporations. It's just a matter of power and who benefits; a matter of degree so there is no fundamental philosophical/theoretical dispute.

Again, I hope no one questions basic rights for labor (let's say, for example, a right not to be a slave), so the idea of labor rights is not the question. Once again the strength of the rights protected is what matters (by not allowing goods from places with weaker labor rights). Those in favor of expanded benefits and incomes for the working and middle classes in the US argue for restrictions on imports from nations not allowing a certain amount/degree of labor rights. In this way, it is argued, US jobs are protected.

Making this matter an argument over rights avoids the obvious: power over the US political system is what matters here. The majority of the population needs to take that away from the wealthy and big business. The left needs to get clear-headed about this: we don't need to argue _against_ anyone's rights: we need simply to argue for reshaping rules (not rights) in favor of the bottom 80%.

"Independent consumers may out of conscience, choose not to purchase certain goods because they object to the labor practices of the foreign company which produces them as well as the soverign state they reside in."

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If independent consumers can find out which products were made in abusive conditions that is.

The Fair Trade NGO's are good, i dont' know how powerful they are other than with coffee and chocolate.

I reserved a domain name which would be for a fair trade organization that imposed by consumer organized power, "shariffs" which is my word for a consumer tariff that adds say 25 cents to a walmart T-Shirt and the 25 cents goes entirely to the seamstress.  Easier said then done - or enforced.  But the item can be labeled as having a shariff or being fair trade certified.  Which you can buy coffee and chocolate that is fair trade certified (organic is a separate labeling and they don't always have to be both but can be also both organic and fair trade.)

I would like the fair trade organizations to use the shariff idea.

http://www.transfairusa.org is one such organization that I think also does certification.  There are several.  I think there are 2 certification/labeling organizations.

Nathan


I am curious to you favor lifting the embargo with Cuba and allowing trade with that country?

... The issue is that these are private entities in respective states doing business with each other more specifically than 'China' trading with the 'U.S.'. I think the situation as it currently exists in China is awful, for more than just labor but specifically for them. However, it would beyond the pale for one state to prevent or pose barriers to one of it's private entities from freely doing business with a private entity in another state, ...

 Try forming a private business to manufacture very-high-vacumn laboratory pumps, then sell some to Iran (or China for that matter).  You will very quickly find out that nations-states do indeed restrict business between private entities, and you will have 30 years to contemplate the meaning of this discovery.  If you can stay alive for 30 years in Marion Federal Penitentiary.  So I would say that while your point is still arguable, your underlying position is a bit weak.

sPh 

Nathan, I'm with you on this one. I remember (coming up on two decades ago) when I worked for Citizen Action--the folks who call you during the dinner hour and try to raise money--that we had a speaker talk about outsourcing. He proposed that the solution was not to resist or fear the workers in other countries taking our jobs, or drive our own wages and benefits down, but instead to support them to organize, so they can raise their wages and standard of living to more closely match ours, thereby evening the playing field. I've never forgotten that talk, because it seemed such a civilized and non-fear-based solution to an otherwise emotional situation.

And then on the people saying "one unique soverign (sic) state dictating to another state how to govern to their specific preference in order to just conduct trade is beyond their scope of legitimacy." I believe that what environmental protections we still have come out of a direct contradiction to that. It was not acceptable for mines in one state to gain an economic advantage over those in another by being willing to pollute their own environment (or often that of neighboring states).

I think there are principles larger than making a buck. And yeah, I don't think it's so terrible to say to China, go ahead, do what you want, but we won't buy your products. Of course, if they decide to call our debt, then we're going to be in a bit of a bind...

Advocates of “free trade” are most often advocates of a completely unregulated free market economy.  They claim the right to pursue a profit without either government aid or interference.  In fact they claim it’s their obligation to pursue the maximization of profit.

 "So the question is, do corporate executives, provided they stay within the law, have responisbilities in their business activities other than to make as much profit for their stockholders as possible?  ane my answer to that is: no they do not."  Economist and Nobel Prize recipient Milton Friedman, 1974

The reality is that they fight government interference and welcome government aid in pursuing the maximization of profit at both home and abroad. 


For instance the “at-will employment” status of workers is considered standard fare in an unregulated market.  Unions (two or more employees combining to put a proposal to increase wages before their employer) were first outlawed in the US in 1806 by a judge in Philadelphia using not statutory law (because none existed at that time governing this aspect of the employer/employee relationship) but rather using imported English common law to make the combination of two or more employees putting a proposal to increase wages before employers a “criminal conspiracy!”

 
The same love of government aid is appreciated when trade agreements are made protecting real and intellectual property and the right to search the world in the quest for evermore cheap components of production. That protection is not seen as aid…it is taken for granted.  When others say that the protection of workers and the environment in which they live from exploitation that is considered an unfair burden on free enterprise.  


In the US, the unfettered market gave us chattel slavery, child labor, unequal pay for equal work, to name but a few.  It gave workers the freedom to starve.  Government intervention into the marketplace in the form of legislation that imposed some modicum of fairness and justice in the employer/employee relationship (NLRA, OSHA, ERISA, ADA, FMLA, etc.) is still bemoaned by advocates of an unfettered market.

 

Those of us who are concerned with the idea that the (yet unfulfilled) ideals on which our country was founded (inalienable rights for everyone anywhere in the world and a system of justice that applies equally to everyone) shouldn’t get caught up in the fight over what is FREE trade.  We should not be shy about talking about FAIR trade…after all it is closer to the ideals on which this country was founded.

"However, it would beyond the pale for one state to prevent or pose barriers to one of it's private entities from freely doing business with a private entity in another state, because it doesen't agree with how that state or the particular private entity there in deals with labor."

Free trade is not a right, anymore than is free immigration. A country has a sovereign right, and a responsibility, to manage the flow of goods, capital, and people across its borders. That right supercedes the right of corporate citizens to do business wherever they please. Corporations are, after all, entities that have been chartered and granted rights by the state.

When corporate entities relocate their operations to a country like China, why do they do so? In large part it is to escape the laws that American society has mandated for the ethical operation of business.

That is essentially what we are dealing with... corporations relocating production and finance so that they can enjoy the advantages of being an American company, and full access to the American market, while escaping the responsibilities that American society (used to) demand for that privilege.

Regulating trade in this instance is a legitimate function of government because the ability of our citizens to unionize, have environmental laws, minimum wage laws, and a decent standard of living are undercut by corporate globalization. We should not allow ourselves to be forced by our own corporations into competition for jobs with workers in countries that don't give their people the right to organize.

Such competition pits the hard-won rights of the middle class in a democracy against what is essentially slave labor. A corporation will always choose to employ cheap labor if it can do so without sanction; and consumers as a group will always choose a cheaper product made with slave labor, particularly when it's the only choice they are given.

By choosing NOT to regulate trade and corporate globalization, we are forcing our corporations to compete by moving to those parts of the globe that have the lowest standards, and thus costs. This redeployment of corporate production undercuts all the gains that American progressives have made in social legislation over the last century, and will continue to exert a downward pressure on the standard of living of workers.

As a progressive Democrat... that bothers me.

But those of us who advocate "fair trade" should be much more aggressive in talking about freedom as well.


The freedom to form a union is not less important than the right to sell goods without tariffs-- in fact, they are connected, since artificially lowering the price of Chinese goods by the government throwing workers in jail who demand higher wages is an unfair and "unfree" form of competition.


There is a global debate over how direct financial subsidies distort the international trade system.  Use of the police to bust unions on behalf of private businesses is also a government subsidy, so why shouldn't it be on the table in trade negotiations?


For FREE AND FAIR TRADE.

Two questions.  Is the goal to try to make America the low cost producer?  It would seem to me that if we succeeded as you propose the jobs would not return to the United States but would go to Malaysia or Mexico.  Afterall despite the claims that it was NAFTA that has cost Mexico jobs it seem more likely it has been China.


The difference between intellectual property rights and fair trade rules is relative leverage.  We want to sell software, movies, music to China and they both want them and want to sell items to us.  Thus there are grounds for compromise.  What is the basis of leverage for negotiation with China?  That Americans are prepared to pay more for goods from China?  That America will borrow less money from China?

I'm for ending the embargo-- and enacting trade rules that would exclude those goods from the US if Castro violates free labor rights of Cuban citizens.  


And I would encourage Europe to apply the same rules in their trade with Cuba (and every other country around the world).

What about not economic advantages of lifting the embargo or any embargo?  


Another question what will stop buisnesses from moving to more hospitable locales?

There are definite advantages to lifting the embargo-- and the lure of those advantages would hopefully encourage Castro to improve labor rights more than a flatout open-ended embargo would.


One advantage of an internationally-agreed system of labor rights is that it would not be part of one nation's unilateral foreign policy, but based on internationally accepted and enforced rules.  


I'm all for as open trade and zero tariffs on every commodity with every nation willing to protect the right of free speech of workers and minimum environmental standards.  

But the notion that the U.S. government may not forbid its citizens from buying items made by slaves is (1) ridiculous, and (2) a position so extreme it actually harms the cause of freer trade.


The domestic labor policies of other countries are quite the business of the U.S. if Americans, through their elected representatives, make it their business. Simple as that.

Advocates of “free trade” are most often advocates of a completely unregulated free market economy.

That’s a complete myth. It’s true some very pro-corporate interests try and shape free trade to their maximum benefit, but it’s a mistake to think they’re the only people who are free trade, or that all the good guys are protectionists. That’s completely mistaken and the opposite is actually the fact.

All serious economists are free trade advocates because the protectionist alternative is far worse for everybody including labor in the long run. Paul Krugman for example is about as social services, pro-worker, pro-quality of life as it gets. He's pro-regulation, pro-social security, pro-universal health care, and on and on. And he's a free trader because he knows protectionism is suicide. So are all serious economist, left to right.

There are disagreements about how much can be done to soften the blow, transitional programs, etc. For example a Krugman is way more supportive of social nets than many of the conservative Chicago economists you’re thinking of. But nobody serious about macro economics is a protectionist because it would bring about a massive recession. 

The protectionists opposed to free trade are almost universally tied to organized labor. They think very short term and don't even know what they wish for. They’ve been dogmatically protectionist for decades, it’s like religion for them.

I support organized labor generally, but they're way too biased on this issue and it's far too complex for the second rate "economists" labor employs to shill for protectionism. They're hacks roughly equivalent to the "scientists" Big Oil pays to shill against global warming, and just like Big Oil, they’re blinded by their short term interests and would screw us all in the long term with their foolishness.

NNewman is a labor activist, he's not a macro economist. His bread is buttered with making union people happy in the very short term and he's blinded by that.

quick question, nathan mentioned this but i didn't notice if anyone picked up on the argument.

so here's my question to those posting that nathan and co. are just pro-labor hack economists.

 should the US maintain total lack of anything, let's say quotas or tariffs etc, when the trading partners do not reciprocate this. so for instance, as nathan mentioned, china is well-documented for doing all sorts of things to depress wages, artificially. non-labor market things that depress wages.

 calling the chinese economy a free market is a joke. the structure of the thing has next to nothing to do with market dynamics, or market based labor regulation, etc. they also have pretty massive.

so i'm really less interested in these fake free market situations and more interested in how we deal with trading partners who artificially depress wages, let's say by creating a massive rural exodus into slum labor forces through, let's say, paramilitary groups or private guards of plantation owners, as happens throughout the world, or more specifically to china, through local CP bosses driving peasants off their lands by the millions. or through the maintenance of a massive gulag labor system, or through complete government intervention and support of industries.  

now for this to work, doesn't depressing wages by brute force screw things up a bit?

i mean i'm not an economist, i'm really curious about this, because it just seems like it'd cause problems if one nation makes cheaper goods only through non-market, forced reduction of labor costs. like that might be a fake advantage that wouldn't really enhance general productivity or whatever.

is that really off?


I guess then that if you find an economist who is not for "free trade" then you define them as not a serious economist?For one, try Thea Lee of the AFL-CIO (or at least she used to work there).

Thea Lee of the AFL-CIO

Is obviously a biased special interest any anyone can see.

Supporting labor is one thing. Supporting the idea they know what's best for the long term economy as opposed to what's best for thier members in the short term, is another thing entirely. I don't think the Hoffas of the world are economic geniuses. 

Regardless, an economist paid by labor to evaluate trade is about as objective as a scientist paid by big oil to evaluate global warming. Big suprise, they find trade protectonism is good, and global warming ain't happening.

Yes, Thea Lee works for the AFL-CIO. And, most " serious economist" work for think tanks (special interests) or universities. University departments of economics have their own very special interests.  I went over to the American Prospect and watched the lectures by Friedman and           refered to in the original post.I also participated in this debate back at the time of NAFTA. AS was pointed out, it is fine to argue for free trade when it is not your job being outsourced.  Most established economists are not having their jobs outsourced. it reminds me of the old saying, a recession is when you get laid off, a depression is when I get laid off. I do not buy the domination of the economic professionals toward free trade.  The Economic Policy Institute on NAFTA is well done and thorough.  Free trade benefits some (business) interests and hurts some (labor) interests.    I have taught at a university for 35 years and read the "serious" economists.  They usually can not even describe real economic life.   Please tell me of some serious "economists" who are not working for a special interest. 

the name I was looking for in the 4th  sentence above was Gene Spirling. 

Dustin, you wrote: "...That differs fundamentally from most forms of labor regulation in Intrnl. trade as lobbied for by organized labor, which is primarily about one soverign state dictating to another soverign state how it deals with it's labor laws and it's regulations of it's domestic labor corps."

Jay Ackroyd wrote in his reply: "You say it's "different" but I don't see how.  How are respecting intellectual property rights different from respecting worker rights? It would seem to me to bemore rather than less compelling when you are talking about people's on-the-ground, how-often-do-you-get -a-bathroom-break rights than rates of royalty compensation on music played by rural radio stations."

To build on Jay's point, the right to organize is a human right recognized in at least two international agreements the United States is a signatory to, I believe.  I will go and back that up with the cites if somoene wants me to.  So on what legal or moral basis do IP rights trump the right to organize? 

This is strictly about the lack of any real counterweight in the US to the power of multinational corporations whose political clout on trade issues overwhelms that of any other organized interests at the moment. 

The way it seems to work is that, notwithstanding all the rhetoric offered for public consumption about the virtues of "free trade", corporations--and their unions where there is a union in the mix--fight for, and are often successful in obtaining, special privileges in trade agreements which directly affect their interests.  There seems to be a sort of "gentlemans' agreement" among the rest of the business community not affected by the provision to stand aside and let them have their way if they can get it. 

But one thing all the large multinationals agree on and support one another wholeheartedly on is that there must be no hardline US position insisting on the right to organize in other countries, either in bilateral, regional or world trade talks.  That must be beaten back with a frontal assault on the evils of "protectionist" trade policies.  Not that they've needed to worry about such a prospect.  

It would be an understatement to note that notwithstanding the human rights agreements we've signed our name to, we in the US are not exactly committed to protecting, operationally, the right to organize in our own country.  As it is, it's easy for employers to fire those who try to do so and get away with a slap on the wrist, at worst.
And so it would be shocking indeed if the US labor movement were able to secure in trade agreements what it is presently unable to achieve, in practice, in domestic labor law enforcement.

Proponents of the course we are on might label it the "low price, low wages/benefits" scenario and claim it will serve us and the rest of the world better than a "high price, high wages/benefits" course.  They could be right about that. 

It might be worth noting, though, that with wage increases lagging productivity and GNP growth, with the already scant American security net continuing to fray, and with prices of many goods ordinary folks need rising substantially, it might be perceived by many Americans as closer to a "high price, low wage/benefit" reality, gloss aside. 

So at what point does a critical mass of such people break through and surmount the many barriers to getting a hearing for their issues in Washington?

Ask not for whom the pink slip is issued, it could, one day, be issued to thee. 
Finally, I agree with Nathan that this is a matter which would have to be addressed internationally or not at all.  Otherwise, corporations will just keep going to where the costs are lowest.  To try to identify the people who make these corporate decisions as "bad people" amounts largely to a distraction.  They are for the most part--not talking about crooks here--doing what the system and the logic of the system drives them to do. 

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