Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.
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When will it stop? First, the WTO was used as an excuse to not pass a tough toy and product safety bill - now, it's been used to block Democratic legislation to have firms that export food and drugs to the U.S. market pay registration fees. According to Inside U.S. Trade, the Europeans are raising a fuss over new legislation by Rep. John Dingell (D-Mich.):
Dingell’s bill opens the door to the FDA accrediting a foreign government to certify the safety of its domestic food facilities, which is similar to the EU system. But it goes much further than EU law in terms of requirements and products covered. While the EU requires safety certification for only designated high risk foods, Dingell’s bill would require every food facility to be certified by either an accredited government or private certifier in order to avoid a 100 percent testing requirement and stringent port restrictions (Inside U.S. Trade, April 25).
On the new fees proposed in the draft bill, the [European Commission] questioned whether they complied with the U.S. WTO obligation that any fee charged should not be higher than the cost of services provided. Dingell’s draft would charge importers a $10,000 annual registration fee, as it would certified labs, and all food facilities would have to pay a $2,000 registration fee.
The commission acknowledged that the EU charges importers fees under EU Regulation 882/2004, but does not do it in the blanket way of the Dingell bill. Instead, fees are charged in proportion to the size of an import shipment, and different weight thresholds are charged at different rates. This mitigates the charges on small businesses, sources said. [emphasis added]
The WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) in Annex C, paragraph 1f states that any fees imposed on imported products should be equitable to fees charged on domestic like products and “should be no higher than the actual cost of the service.” GATT VIII, paragraph 1a, states that all fees “shall be limited in amount to the approximate cost of services rendered.”
I'll be doing a review of Jamie Galbraith's new book "The Predator State" sometime shortly, but he raises a good point in the book about the necessity of standard-setting in the fight against neoliberalism. The corporate ideologue's strategy in legislative battles like the one Dingell is involved in is to first fight the bill, then if that fails, ensure that no standard is set at all by carving out as many companies ("small" businesses, foreign companies) as possible, and then make the method of calculation practically impossible to administer. What are we left with once the carving is done? It's certainly not a standard in the historic consumer movement sense of the term.
Interesting piece in the FT on the role of trade in the elections:
Two months ago most analysts discounted the bulk of the anti-trade rhetoric coming from the Democratic presidential race as easy to wriggle out of. But as the race has got tighter and the economy has become an even greater concern to voters, Barack Obama and Hillary Clinton have become steadily more specific in their pledges...
“The specificity is unprecedented. The longer this process goes on, the more promises these candidates make,” says Christopher Wenk, senior director for international policy at the US Chamber of Commerce, which has been lobbying for further trade liberalisation. “Hopefully . . . they can wiggle their way out.”...
Francis Fukuyama, author of The End of History, which many took as a lodestar of the Clintonite 1990s, says the two candidates are only giving voice to much deeper shifts in US political attitudes during the past few years.
“There is a structural change going on,” he says. “American politics goes through generational swings and most of the electorate believes the pendulum has swung too far in a laissez-faire direction in the last two decades. No successful candidate can ignore that.”
In North Carolina's 3rd district, fair trade leader Rep. Walter Jones (R-N.C.) held off a primary challenge by a margin of 20 points - a decisive victory for the fair trade, anti-war Republican. Rep. Andre Carson (D-Ind.) in Indiana's 7th district - who took the seat a few months back in a special election and voted for fair trade on the Fast Track resolution - also emerged victorious.
In other news, the AFL-CIO has filed a complaint under CAFTA about labor abuses in Guatemala. This article by Mark Drajem in Bloomberg also touched on Colombia issues...
The complaint says four union leaders or their family members have been killed this year, and many others have had death threats. Also, workers who attempt to join a union, bargain or strike are often fired, it said...
Proponents say approving the agreement with Colombia would give the U.S. a new mechanism to improve labor rights in the South American nation. The AFL-CIO, which opposes the deal, argues that once the accord is approved, Colombia would have no incentive to continue to protect labor leaders.
``Once they take that vote, the pressure is off,'' Lee said. ``In fact, that seems to be what happened in Guatemala.''
Also, Nick Kozloff has an interesting piece in Counterpunch on the Colombia FTA and Afro-Colombians.
Don Cazayoux, the Democrat who just won the Louisiana-6 House seat long held by the GOP, campaigned and won on a fair trade platform. Here's what he told the Daily King Fish:
I support fair trade agreements that raise labor standards for all workers - both here in the United States and abroad - while ensuring that American businesses remain competitive. I will vote to close tax loopholes that reward companies for moving our jobs overseas. I oppose the Colombian Free Trade Agreement in its current form and believe that we need to renegotiate CAFTA and NAFTA to include more protections for our workers.
Cazayoux takes the open seat vacated by Rep. Richard Baker (R-La.), who voted against fair trade on 18 out of 18 votes in his 22 years in Congress, including NAFTA, WTO, Peru FTA, and CAFTA (which even many GOP in La. opposed, including now-Gov. Bobby Jindal, who William Kristol says might be McCain's running mate).
UPDATE: Special elections this cycle have been good for fair traders. And as we documented back in March, fair trader Rep. Bill Foster (D-Ill.) took Denny Hastert's seat. Foster ran paid ads on trade. Also, fair traders were able to keep several more seats that were opened up through the special elections of Reps. Andre Carson (D-Ind.), Laura Richardson (D-Calif.), Jackie Speier (D-Calif.), and Niki Tsongas (D-Mass.). This crew all voted for fair trade in the Fast Track cancellation vote in April.
The poll points out what many observers already know. From the first presidential contest in Iowa to early state battles in South Carolina and Wisconsin to Tuesday's approaching primaries in Indiana and North Carolina, trade has and continues to play a dominant role. This follows a 2006 election when 37 congressional challengers calling for a change to our status quo trade policies replaced NAFTA-supporting incumbents.
(Disclosure: Global Trade Watch has no preference among the candidates.)
This piece in the Times featured an issue that we will be doing a report on soon: redundant trade.
Cod caught off Norway is shipped to China to be turned into filets, then shipped back to Norway for sale. Argentine lemons fill supermarket shelves on the Citrus Coast of Spain, as local lemons rot on the ground. Half of Europe’s peas are grown and packaged in Kenya...
Increasingly efficient global transport networks make it practical to bring food before it spoils from distant places where labor costs are lower. And the penetration of mega-markets in nations from China to Mexico with supply and distribution chains that gird the globe — like Wal-Mart, Carrefour and Tesco — has accelerated the trend.
But the movable feast comes at a cost: pollution — especially carbon dioxide, the main global warming gas — from transporting the food.
Under longstanding trade agreements, fuel for international freight carried by sea and air is not taxed. Now, many economists, environmental advocates and politicians say it is time to make shippers and shoppers pay for the pollution, through taxes or other measures.
“We’re shifting goods around the world in a way that looks really bizarre,” said Paul Watkiss, an Oxford University economist who wrote a recent European Union report on food imports.
He noted that Britain, for example, imports — and exports — 15,000 tons of waffles a year, and similarly exchanges 20 tons of bottled water with Australia. More important, Mr. Watkiss said, “we are not paying the environmental cost of all that travel.”
Larry Summers had a must-read piece in the FT:
growth in the global economy encourages the development of stateless elites whose allegiance is to global economic success and their own prosperity rather than the interests of the nation where they are headquartered. As one prominent chief executive put it in Davos this year: “We will be fine however America does but I hope for its sake that it will cut taxes and reduce regulation and put more pressure on young people to study in the ways that are necessary for it to be able to keep competing successfully.”
The chief executive was sincere and he captured an important truth. Even as globalisation increases inequality and insecurity, it is constantly and often legitimately invoked as an argument against the viability of progressive taxation, support for labour unions, strong regulation and substantial production of public goods that mitigate its adverse impacts.
In a world where Americans can legitimately doubt whether the success of the global economy is good for them, it will be increasingly difficult to mobilise support for economic internationalism.
And Lori makes a point in the WSJ that a lotta folks have been missing:
Regardless of the ebb and flow of concern over free trade, some globalization critics say the dangers to the accord are real.
Next year's North American summit would be "an opportune time for a President Obama or a President Clinton to follow through on their pledge to renegotiate," said Lori Wallach, director of Public Citizen's Global Trade Watch division. She said either leader would be "under enormous pressure to make some changes in those agreements," in part because of the potential impact on domestic-policy priorities such as addressing climate change or the health-care crisis.
"The real issue that could threaten [Nafta] isn't politics, but the agreement's actual outcomes," not just for workers in the U.S. but also in Mexico in particular, she said. "People don't have a problem with trade -- it's this version of the rules."
Rep. Bob Inglis (R-S.C.) was one of the CAFTA 30 - the most unlikely reps to vote for CAFTA back in the summer of 2005 by one vote. We predicted that these members would be hearing about their vote for a long time.
We turned out to be right. The Spartanburg Herald-Journal reports that Inglis has a primary challenger who is bringing up the CAFTA issue:
Energy, high gas prices and the future of fuel highlighted the first debate between Republican Rep. Bob Inglis and his primary challenger, Charles Jeter, Wednesday night at the University of South Carolina Upstate...
Jeter also criticized Inglis for supporting the Central American Free Trade Agreement, or CAFTA, saying such a policy was responsible for draining Upstate jobs.
In other news, the Bush administration has failed to live up to its promise of supporting Alabama's sock industry after getting Rep. Bob Aderholt (R-Ala.) to vote for CAFTA on that basis. This week, they announced a safeguard on Honduran socks, several years later and at a lower rate and for a shorter time period than promised.
I'm just getting back from vacay, but there's a few things I wanted to drag out of my email backlog and share.
First, in case you hadn't heard, the Jubilee Act passed the House. This is a major victory for the global justice movement, as it not only expands debt cancellation for 24 additional impoverished countries, but also rolls back some of the conditionality that has been used to turn developing countries into basketcases. The vote was 285-132, with many GOP joining the vast majority of the Dems in passing the legislation (only Reps. Jason Altmire (D-Pa.), Chris Carney (D-Pa.), Brad Ellsworth (D-Ind.), Kirsten Gillibrand (D-N.Y.), Nick Lampson (D-Texas) and Gene Taylor (D-Miss.) among Dems voted no - the first 5/6 are freshmen!)
I recently asked some friends who work on IMF issues to rebut the statement: "The IMF is dead." A few have responded. Mark Weisbrot also had a good column in the LA Times talking about how the IMF is dying, but is still not dead yet:
The collapse of the IMF creditors cartel has been a huge blow to U.S. influence. It was most pronounced in Latin America, where most of a region that used to be referred to as the United States' "backyard" is now governed by states that are more independent of Washington than Europe is.
The problem is that poorer developing countries, especially in Africa, remain dependent on foreign aid from the IMF (and the World Bank and other sources) to fund their basic budget and import needs. This can be harmful to their development and their people. In recent years, the IMF -- insisting that such measures are necessary to hold down inflation -- has imposed conditions that limit their public spending and, according to the fund's own internal evaluation, have prevented these countries from spending aid money on urgent needs, such as healthcare and education.
These countries need to join the rest of the developing world in breaking free of the IMF's policy conditions. The U.S. Congress may consider legislation that would pressure the IMF to use some of its huge gold reserves for debt cancellation and to limit the IMF's control over policy in poor countries. These would be important steps forward for the world's poor.
Our bud Rob Weissman had a similar piece at Huffington Post:
Although the Fund has promised that it would reform the way it imposes conditions on poor countries, a new report from Eurodad, the European Network on Debt and Development, finds that, over the last six years, IMF conditions have not changed in number or kind.
One thing has changed, however. Impressed by the IMF's repeated failures, middle-income countries have paid back their loans to the Fund, and are not taking out any news ones.
This in turn has two consequences. For now, at least, the IMF has lost its hold over most middle-income countries -- but it maintains its iron grip on the world's poorest countries. And, the Fund is experiencing a financial crunch of its own. It had depended on the interest payments from middle-income countries to support its budget.
Developing countries are not shedding tears over the IMF's financial distress. "At long last, the IMF is experiencing first hand serious budget cuts," says Cheikh Tidiane Dieye of Environment and Development in Africa (ENDA), based in Senegal. "The poetic justice of this is palpable. In Senegal, the IMF has mandated budget cuts for years. As a result, we have been unable to invest in health care, education and other essential services. If the IMF's loss of financial power is accompanied by a loss in political power, this could be good news for all Africans."
Up next, the Democratic presidential primary contest moves to Indiana and North Carolina. Hoosiers and North Carolinians will go to the polls on May 6th.
Both of these states have felt the severe costs of NAFTA-style trade policies on their economies and their communities and voters will be thinking about trade policy when they go to the polls.
Here are the facts.
Indiana:
North Carolina:
(Disclosure: Global Trade Watch has no preference among the candidates.)
