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October 05, 2007

Fair traders for trade and intact machines

Folks trapped in a flat world mindset may think all this hub hub about fair trade is some sort of disguised attempt to smash the machines and shut down the borders.

That’s so 1990s. Consider just two examples from this week.

Case study 1: Costa Rican voters will vote on Sunday in the world’s first popular referendum on a trade deal (CAFTA). Polls show the “no” vote with a 12 point lead, despite the Bush administration’s considerable bullying and threats. And the hundreds of thousands of people that have filled San Jose’s streets for the “no” campaign aren’t asking for a shut down of trade, but a renegotiation so that human, labor and environmental rights can be put in, and a lot of the bad NAFTA-style provisions taken out.

Case study 2: Just this afternoon, leading fair traders in the U.S. Congress showed yet again that they’re not anti-trade, they just want a different model of trade. Reps. Raúl Grijalva (D-Ariz.) and Linda Sánchez (D-Calif.) announced plans to introduce a bill to make permanent the tiny fraction of Costa Rica’s duty-free market access that isn’t already. These benefits would be extended to nearly two dozen countries, including desperately poor Haiti. This move puts the kibosh on the Bush threats that preferences would expire, which, as I argue here, were based on lies anyway.

In fact, there’s a growing sense that, in order to save our foreign policy, we’re going to have to move away from the NAFTA-CAFTA model, which has been a largely destabilizing factor in Mexico and had painful economic costs. Sen. Bernie Sanders (I-Vt.) articulated this well in his Wall Street Journal op-ed earlier this week, as did Sen. Sherrod Brown (D-Ohio) in a moving floor speech:

Reps. Charles Rangel (D-N.Y.) and Sander Levin (D-Mich.) echoed some of these themes in a statement today (you can read it after the jump), as did Nancy Pelosi and Harry Reid earlier in the week. So did Rep. Mike Michaud (D-Maine) in a letter sent just last night to Costa Rica:

There is a growing sense in Congress and among the American public that threatening our neighbors to our South with reprisals for seeking their own economic path after a generation of lost income growth is a strategy that has largely backfired and undermined the U.S. reputation in the region.

Indeed, whoever our next commander in chief ends up being, if they want to re-establish U.S. credibility in the region, they’re going to have to start paring back the harmful interventionist habits and the trade and aid conditionalities and rules that limit local economic development. 

The Honorable Charles B. Rangel, Chairman, House Ways and Means Committee

The Honorable Sander M. Levin, Chairman, Subcommittee on Trade

FOR IMMEDIATE RELEASE

October 5, 2007

Preference Programs Are Not Conditional to FTAs

WASHINGTON - In response to inquiries about recent comments by Administration officials regarding the Caribbean Basin Initiative preference program, Ways and Means Committee Chairman Charles B. Rangel (D-NY) and Trade Subcommittee Chairman Sander M. Levin (D-MI) issued the following joint statement:

“Congress is constitutionally responsible for regulating international commerce.  As such, we reiterate our longstanding position that preference programs should not be conditioned on a country entering into a free trade agreement (FTA) with the United States. No U.S. preference program currently includes such conditionality.  Furthermore, there is no provision in the current preference program statute that would permit the President to withdraw benefits if a beneficiary country failed to implement an FTA.” 

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