Maryland v. The People's Republic of China

It began as an effort to protect the children of Maryland from unsafe toys. Now, thanks to a disgruntled Chinese government and WTO, Del. James Hubbard’s (D-Prince George's County) proposed legislation in the Maryland General Assembly on potentially harmful chemicals has entered the ranks of “barriers” to international trade.

As you may remember, last year saw a slew of recalled Chinese toys, which were found to contain dangerously high levels of lead. Hubbard, dissatisfied with the Bush administration’s response, proposed a bill that would allow Maryland to monitor its own toys. The bill, which will clear Maryland store shelves of dangerous toys, did more than raise international eyebrows. From a recent article in the Washington Post, here’s how it went down:

The Office of the U.S. Trade Representative alerted the Chinese government, which sent a letter from Beijing to protest the bill as a barrier to trade. Lawmakers in Annapolis were unfazed and passed the bill, which takes effect next month.

Then came a four-page missive from the World Trade Organization's Committee on Technical Barriers to Trade -- in English and Chinese -- opposing another of Hubbard's bills, to ban a chemical compound called bisphenol A that is central to the plastics industry. Manufacturers in the United States and China use the compound in baby bottles and other products. With testimony on both sides, the bill did not pass out of a House committee.

The Chinese said there is "no specific scientific evidence" proving that products containing bisphenol A are hazardous to children.

Hubbard said he believes both complaints were prompted by lobbyists for the chemical industry, here in Washington.

"I truly feel the [chemical] industry and the toy industry are running to China and saying, 'You ought to oppose these bills, and if you don't you'll lose out on product sales in America,'" he said.

The WTO’s signature 'trade until proven deadly' threat justification was successful, and the bill didn’t make it out of a House committee. In an interview on the Kojo Nnamdi Show on Monday, Hubbard expressed his consternation: "This was a public health issue, not a trade issue."

In the past, international trade rules have stretched an intervening hand into state legislatures on a number of important issues, including health-related environmental regulations. Yet the WTO, not to mention Chinese government's attempts to preemptively intervene in a state's legislative process is taking their vested interest to another level.

Concerned that similar legislation would receive such undesired attention in Maine, the state's Citizen Trade Policy Commission issued a letter to the USTR which received this response. Hardly reassuring, their explanation is that the WTO notification system which "normally calls for us to notify proposed agency regulations" had "inadvertly included certain state legislative proposals." They assure it will not happen again in the future.

As states increasingly feel the yoke of international trade agreements in which they have had virtually no say, legislators from around the country are seeking new ways to work together to improve the process of state-federal consultation when it comes to trade policy-making.

Special thanks to Isaac Raisner for his contribution to this post.

More fruit from the poll tree

It doesn't get a whole lot more self-explanatory than CNN's headline, Poll: Majority against free trade.

According to the CNN/Opinion Research Corporation poll, 51 percent of Americans view foreign trade as a threat to the economy -- the first time in a CNN poll that a majority of Americans report holding negative views on free trade.

That compares with only 35 percent of Americans who felt free trade posed a threat to the economy in 2000, and 48 percent who felt it was a threat in 2006.

...Nearly six in 10 voters say the country's poor economic conditions will be extremely important -- ranking the economy as the No. 1 issue in this campaign out of 15 issues tested in the poll... That finding represents a clear change from the beginning of this year, when the war in Iraq and the economy were tied as the top campaign issues.

McCain in Mordor

(Disclosure: Global Trade Watch has no preference among the candidates.)

McCain is a life-long supporter of NAFTA-style trade deals, while Obama has a better but less consistent record on the fair trade side. Is McCain trying to force Obama into a corner? That's the only explanation of why McCain would fly to the union murder capital of the world (Colombia) to promote a trade deal that Americans hate. Here are some reactions from Bloomberg reporting (guess which one is at a Democratic-backed group):

"McCain does have the opportunity to take the optimistic, pro-trade mantra,'' said Ed Gresser, a trade official in the Clinton administration and now an analyst at the Progressive Policy Institute, a research group in Washington affiliated with the Democratic Leadership Council that supports trade...

McCain's support of trade will help Obama, said Lori Wallach, president of Global Trade Watch, a group which opposes free-trade agreements.

"It's one thing to have that view, it's another thing to wave it around like a pair of red underwear,'' Wallach said, calling trade a "wedge issue'' that may push factory workers toward Obama.

Baucus chief of staff joins Obama team (slightly old news)

It's old news, but seems to have flown under the radar a bit. Courtesy of WaPo's The Fix: "Jim Messina, who is currently serving as chief of staff to Montana Sen. Max Baucus, will join the presidential operation of Sen. Barack Obama (Ill.) in a senior advisory role -- the latest addition of a longtime party operative to the Illinois Senator's political inner circle."

What to make of this? Baucus, of course, is the chairman of the Senate Finance Committee. In the Senate, Finance has jurisdiction over trade. This is, shall we say, inconvenient for fair trade activists since Baucus deep down (and not so deep down) thinks the NAFTA-WTO model is just fabulous (with a few labor and environmental carrots thrown in). For instance, at a speech he gave to the centrist New Democrats last year, he said:

I have long called for negotiations with commercially significant economies.  The Korean Free Trade Agreement is a good start.  But we should not be afraid to think bigger.  We should continue to pursue negotiations with Malaysia, Taiwan, Indonesia, India, and Japan.  We should not shy away from more daunting measures like regional agreements with ASEAN or APEC.

...Behind every American strength and success are American ideas.  We should take ambitious measures to enhance their protection and enforcement domestically and globally.  We should begin to negotiate a plurilateral intellectual property agreement in the World Trade Organization that goes beyond our existing TRIPS obligations.

More NAFTA expansion! More protectionism for pharmaceutical companies! Hooray!

So, the appointment of Baucus' chief of staff to a high-level position within the Obama campaign should rightfully put fair traders on their toes just a little more.

Disclosure: Global Trade Watch has no preference among the candidates.

McCain's Brain

(Disclosure: Global Trade Watch has no preference among the candidates.)

Sen. John McCain (R-Ariz.) is on his way to Bogota to push Bush's NAFTA expansion to Colombia. And it appears like, much like Clinton with her Mark Penn snafu earlier, McCain has a ton of advisors with links to the murderous regime there. According to Sam Stein at Huffington Post:

McCain's chief political adviser, Charlie Black, represented the oil-giant Occidental Petroleum from 2001 through 2007, in the process earning $1.6 million in fees for his firm, according to lobbying records. Among the issues on which he lobbied included the Colombia Free Trade Agreement (though also general energy topics concerning Middle East countries). Occidental gained a certain amount of political infamy when its security company was accused of bombing a Colombian village and killing 17 civilians in 1998. The company, which works with the country's military forces to protect an oil pipeline, denied involvement in the attack. But in 2007, Occidental again found itself in the midst of a human-rights mess, this time accused in congressional testimony of being "complicit" - with several other major corporations - in the murder of three labor leaders.

Black isn't the only McCain confidante with connections to companies pushing for free trade with Colombia. Kirk Blalock, a bundler who has raised at least $250,000 for the Senator, lobbied on behalf of American Forest & Paper Association, Ford Motor company, General Pharmaceutical Association, and Miller Brewing, all of which have championed the Colombia Free Trade Agreement.

Peter Madigan, another top fundraiser for the presumptive GOP nominee, was described as a lobbyist who "works for the government of Colombia" to "promote a U.S.-Colombia free-trade agreement" by ABC News. A lobbyist at Johnson, Madigan, Peck, Boland & Stewart, Madigan's clients include Philip Morris, Arthur Andersen, Charles Schwab, Goldman Sachs, Shell Oil and Verizon. His firm, ABC wrote, has "distributed papers defending Colombian President Alvaro Uribe against allegations of ties to paramilitary groups, and promoting the controversial anti-drug program 'Plan Colombia' as achieving 'strengthening human rights.'"

Meanwhile, Susan Nelson, McCain's finance director, and Tom Loeffler, the recently resigned national finance chairman, both lobbied in the past for the Colombia FTA on behalf of Footwear Distributors and Retailers of America. In the process they earned tens of thousands of dollars for their firm, The Loeffler Group.

"It seems that McCain's entire brain trust is pushing for these trade deals," said Bill Holland, deputy director of Global Trade Watch. "And after the primaries, when we have seen that Americans are overwhelming rejecting the current model, to have all these advisers pushing it is a bad sign."

Take this job: amazing fair trade econ opening

The Center for Economic and Policy Research is one of the few good think-tanks in town, and I don't say that just because I met my wife while working there. Their stable of full-time and associated economists and policy analysts are that rare mixture of talent and political commitment that perform an outsize role in a country/world where Thomas Friedman is seen as an expert on globalization. While they are sober and non-partisan, they are also about the only progressive public intellectuals that don't seem to rejoice in kicking advocates in the face just to sell books or make a name for themselves. Not that I have any experience with that or anything. ;)

Anyway, CEPR's hiring an international economist, and if you're a PhD economist and you like this blog, you should strongly consider applying.

Real World of Fair Trade

(Disclosure: Global Trade Watch has no preference among congressional candidates.)

Some of you may recall that Rep. Ed Towns (D-N.Y.) was one of the CAFTA 15, in reference to the 15 Dems who betrayed their party's base and supported the NAFTA expansion to Central America back in 2005. Towns attracted several progressive challengers in the 2006 elections, and skated by with under 50% of the vote in a three-way primary that included Charles Barron and Kevin Powell from MTV's Real World's first season.

Well, Powell is back, and going after Towns again. And apparently, he has the support of Chris Rock, Dave Chappelle, and a bunch of other incredible Brooklyn residents. We'll stay tuned to see what happens.

Obama's folks talking to fair traders

(Disclosure: Global Trade Watch has no preference among the candidates.)

According to today's Inside U.S. Trade,

Members of the House Trade Working Group, which opposes the U.S.-Colombia free trade agreement and other trade deals negotiated by the Bush administration, late last week told a representative of the Democratic presidential candidate Sen. Barack Obama (D-IL) that his campaign would gain political support if it endorsed a new trade policy...

Members argued in a June 19 meeting with Obama campaign adviser Jason Furman that a more forceful rejection of Bush administration trade deals would help to connect with working class voters in crucial swing states such as Ohio, Pennsylvania and Michigan...

The members in the meeting also talked with Furman about the TRADE Act [...] Furman said the campaign is still reviewing the legislation...

In other news, some of you may remember when Obama went all Bill Cosby on poor black parents last week. But Obama seems to be embracing a bit more structural critique, joining Sens. Jim Webb (D-Va.), Hillary Clinton (D-N.Y.) and Bernie Sanders (I-Vt.) in co-sponsoring a bill on paid parental leave for federal workers. The bill, which passed the House last week, is a real victory for economic justice. Go Congress!

First WTO post-Y2K Climate Challenge?

Our recent report looked at the WTO preemption issues surrounding green and climate policies, noting that:

Cap-and-trade programs could be challenged under existing WTO rules. Indeed, this is far from a hypothetical problem: in January 2008, the Bush administration pressured the European Union to drop the import provisions of its cap-and-trade program. According to Inside U.S. Trade,

“Backing U.S. opposition to the proposal is the possibility it could retaliate under the WTO
…Under existing jurisprudence on the General Agreement on Tariffs and Trade (GATT),
tariffs imposed based on the means of production constitute WTO violations. Therefore, the EU proposal, which like tariffs also would have increased the price of imports, could in the end constitute a WTO violation because it was directed to products that used large amounts of carbon in their production.”

In response, the European Commission’s new package of carbon control policy package “did not contain a proposal opposed by the U.S. to require European importers of carbon-intensive products to buy carbon allocations in the EU’s cap-and-trade system.” Instead, the new plan shelves the import aspects of the plan “in favor of a study to be completed in 2011,” thereby postponing vital international policy innovation in that area for at least several more years.

According to today's NYT, it looks like the first major post-Y-2k climate policy challenge at the WTO is just around the corner.

The European Union reached a landmark agreement Thursday to cap emissions from aircraft, raising the stakes in an increasingly ferocious battle with the United States over how to regulate global greenhouse gases.

In the first requirement of its kind, all airlines arriving or leaving from airports in the European Union would be required to buy pollution credits beginning in 2012, joining other industrial polluters that trade in the European emissions market. That includes non-European carriers like American Airlines and Singapore Airlines.

Including airlines in the system is the boldest move yet by Europe to stamp its environmental policies on the rest of the world...

American officials warned that the requirements probably would be illegal under the convention governing international civil aviation.

“The mandatory application of the European Emissions Trading System to U.S. airlines and airlines of other non-European countries is, we think, both contrary to international law and ultimately unworkable,” said Robert Gianfranceschi, a spokesman at the United States Mission to the European Union in Brussels...

The transport association spokesman, Mr. Concil, said the costs to the airline industry of buying permits to comply with European emissions regulations would be more than $4 billion. Imposing new, costly rules on airlines was “incredible” at a time when the industry is expected to lose more than $6.1 billion this year, he said.

As the article notes, it's possible that this pact could come up under non-WTO agreements. But it's huge money. We'll be staying tuned.

Sirota: The Growing Power of the Fair Trade Uprising

David Sirota gives a shout-out to the ever-expanding U.S. fair trade movement, saying it "may continue to be ignored by the media (and, frankly, much of the blogosphere), but it represents one of the most encouraging transpartisan developments of the last few years."

Over the last few years, polls show the public has moved to something of a consensus position on trade: full-on opposition to NAFTA-style pacts. That's for good reason as this Associated Press report shows. Tearing down tariffs and protections without regard for the consequences is not only a dangerous departure from the policies that built America's economy, but also a deliberate way to force American and foreign workers into a wage-cutting, environment-destroying, union-busting race to the bottom.

...Meanwhile... trade fundamentalists like Tom Friedman and Fareed Zakaria flaunt their supposed environmentalism and humanitarianism by publicly worrying about issues like global warming and the erosion of human rights in the developing world - even though the domino effect they cheer on creates pressure on governments to reduce their pollution controls and human rights in order to retain foreign investment.