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  • 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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December 30, 2009

The Return of the NAFTA Election Cycle?

(Disclaimer: Public Citizen has no preference among the candidates.)

As we throw out the old calendar and enter an election year, Democratic and Republican party leaders are busy figuring out their electoral strategies.  Various Democratic strategists, for their part, are running through the familiar arguments about appealing to independent voters versus rallying the base.  Arguing for a rally-the-base approach, Democratic strategist Steve Rosenthal reminds us that voters punished the members of Congress who pushed though a bad trade pact one fateful election cycle:

In 1994, the year Republicans swept to power in the House and Senate, union members were demoralized and stayed home because the Clinton administration had fought vigorously to pass NAFTA and backed down on health care reform.

Economist Paul Krugman also argues this NAFTA point while discussing the Republican strategy: “The idea that NAFTA was a big plus for Clinton, coming from Rahm Emanuel of all people, is just too bone-headed for words.”

Fortunately for everyone involved, the choice between fair trade and NAFTA-style agreements is not a choice among appealing to liberal, conservative, or moderate voters.  Polls have demonstrated that voters of all stripes are fed up with the NAFTA model, particularly in swing states.  Fair trade candidates elected in 2008 now have the seats in Congress to prove it, which makes clear that support of the NAFTA model is a losing strategy, while supporting the TRADE Act might be a way to win.

December 29, 2009

Trade Preferences Suspended in the Name of Democracy

The Obama administration deserves applause for suspending the African Growth and Opportunity Act (AGOA) trade preferences of Niger, Guinea, and Madagascar last week.  Under the AGOA legislation, the President has the power to deny AGOA preferences to a country that has not “established, or is making continual progress toward establishing….the rule of law, political pluralism, and the right to due process, a fair trial, and equal protection under the law.”  The Obama administration suspended the trade preferences of Niger, Guinea, and Madagascar because they have all experienced undemocratic transfers of power recently.

It’s too bad the standard trade agreement model doesn’t contain these types of democracy-preserving provisions, as Hondurans found out when their democratically elected President was ousted in a coup this June. 

Given that 70% of Honduran exports go to the United States, the threat of trade sanctions would have been a powerful bargaining chip as the U.S. tried to reverse the coup. Our reckless trade policy came back to bite us, however. In an August press call, the State Department explained the source of our powerlessness:

REPORTER: Yeah. I just wanted you to elaborate why [suspending trade preferences] is not a possibility.

SENIOR STATE DEPARTMENT OFFICIAL ONE: We have an agreement called the CAFTA agreement [i.e. the Central American Free Trade Agreement], and apparently provisions in that make it impossible – very difficult, if not impossible, for us to do that, so we can’t – it looks like we cannot go down that route.

Our trade policy should be promoting democratic governance instead of handcuffing our ability to discourage coups and dictatorships.  Signing CAFTA-style trade agreements is a surefire way to diminish our capacity to conduct effective foreign policy.

December 23, 2009

TRADE Act at the Top!

2009 has been a great year for fair traders. We've seen an upgraded fair trade Congress take office, staved off the leftover Bush deals to expand NAFTA to South Korea, Panama, and Colombia, AND made major headway on flagship reform legislation, the TRADE Act.YIR_09_Thumbnail1

As if it weren't enough to have 133 Cosponsors in the House and 7 in the Senate, the Drum Major Institute - a progressive think tank - has named the TRADE Act one of the 10 Best Public Policies of the Year:

This year, Obama had the opportunity to make [his campaign platform's] vision of robust fair trade a reality with the Trade Reform, Accountability, Development and Employment (TRADE) Act. The bill, sponsored by Representative Mike Michaud, sets criteria for reevaluating NAFTA, the WTO, and other trade pacts in the light of urgent national concerns about food and product safety, environmental protection, labor standards, national security, and other issues impacted by trade...

...For setting forth a positive vision of globalization that favors the many, we ratify the TRADE Act as one of the best policies of 2009.

Thanks to the Drum Major Institute for recognizing the leadership and wisdom of the TRADE Act! It's exciting just to ponder what other accolades and milestones the TRADE Act might receive and rack up in 2010. We can't wait to see.

December 19, 2009

Senate Hopefuls Take Note

(Disclaimer: Public Citizen has no preference among the candidates.)

The TRADE Act has just picked up another prominent endorser. Adding to the 132 House and 7 Senate Cosponsors, we now have leading Democratic Senate hopeful Alexi Giannoulias promising to cosponsor the Senate TRADE Act, recently re-introduced by Sen. Brown (D-OH), if elected.Giannoulias

As the Giannoulias campaign touted and the blog Chicagoist report, Giannoulias is running on a fair trade platform to fill the Senate seat vacated by President Obama - not unlike Obama himself.

Chicagoist reports on the fair trade developments:

As part of the announcement, Giannoulias pledged that he would co-sponsor the TRADE Act bill in the Senate. That bill would require the Government Accountability Office to review all existing trade agreements for their impact on jobs and the environment, and then requires the president to submit renegotiation plans to Congress to remedy the gaps the GAO identifies. The review required in the TRADE Act includes NAFTA and the WTO.

Its already looking like an interesting fair trade campaign cycle for 2010. EOT will keep you posted.

(Photo courtesy of Chicago Public Radio's Flickr feed)

December 18, 2009

The Building Blocks of Trade Blocs

On Monday the Office of the U.S. Trade Representative (USTR) notified Congress that it would initiate negotiations with New Zealand, Chile, Brunei, Singapore, Peru, Vietnam, and Australia to form a Trans-Pacific Partnership (TPP).  This is the first time that the Obama administration has formally initiated trade negotiations. 

Back in 2006, New Zealand, Chile, Singapore, and Brunei implemented the Trans-Pacific Strategic Economic Partnership Agreement (commonly referred to as the P4), which was originally designed to welcome new nations into the pact, gradually expanding a wider low tariff zone.  After the Bush administration expressed interest in joining the pact in February of 2008, Peru, Vietnam, and Australia moved toward jumping on the P4 bandwagon.

This is something of a new model for negotiating trade agreements, in terms of the U.S. experience.  After the total collapse of the Free Trade Area of the Americas proposal, the USTR shifted to a bilateral trade agreement strategy where it could exert maximum pressure in the one-on-one negotiations.  Instead of biting off more than it can chew, this time the USTR seems intent on taking small bites to create the same failed mega-FTAs.  Inside US Trade explains:

A statement by the U.S. Chamber of Commerce said it hopes the U.S. will join P4 and this would possibly lead, through a process known as “docking and merging,” to a version of the much-discussed Free Trade Area of the Asia Pacific. 

Negotiations begin in March of next year.


December 16, 2009

Greasing the Tracks of Antidemocratic Lawsuits

Are you a corporation who wants to sue a foreign government to strip away an environmental regulation, but can’t quite find the millions of dollars necessary to fund a legal team?  Before the arrival of Burford Capital, you would have been forced to follow the democratically-established regulations while you operated in the country. 

Now, thanks to the innovative financial spirit that brought us credit default swaps, we have an investment fund that will loan you money to pursue your lawsuit, according to a recent article in the Global Arbitration Review.  Your company and the investment fund will share the risk of the lawsuit, so you can feel free to fire away at government regulation without much commitment. Their experts will even attend the close-door hearings and give advice to guide your case.  They will want a cut of the proceeds when you win the case in court or the settlement, of course.

Why would this firm want to help corporations trump essential labor and environmental laws? One of the executives of Burford Capital answers: “Finance for international arbitration is a market we will increasingly see demand for, and one that we have a special capacity to make a contribution in.” 

International arbitration covers a wide set of law, but the most important framework for international arbitration is in the Bilateral Investment Treaties (BITs) that the US has signed with over forty countries. These BITs are agreements that allow corporations to sue governments if they think that the government is unfairly targeting foreign firms with their regulations. 

Now Burford Capital is just another layer of grease on the tracks of these antidemocratic lawsuits.

P.S. Does anyone find it a bit ironic that at a time when small businesses are having a tough time gaining access to credit, an investment firm is stepping in and helping these multinational corporations pursue their lawsuits regardless of the volume of their capital reserves?

Hodes on TRADE Act: It's about JOBS!

First-thing this week, Rep. Paul Hodes (D-NH) helped lead the charge for a new, fair, sustainable global economy that works for working people everywhere.Paul_Hodes_official_110th_Congress_photo

Early Monday Hodes announced he had chosen to cosponsor the Trade Reform, Accountability, Development and Employment (TRADE) Act, joining 131 other colleagues in the House of Representatives and 7 in the Senate.

The Manchester Union-Leader reports that the Congressman met with workers directly affected by unfair trade policies and the loss of manufacturing employment:

With New Hampshire's manufacturing economy faltering, U.S. Rep. Paul Hodes announced yesterday he is co-sponsor of a bill in Congress to address the trade imbalance.

Meeting with out-of-state manufacturing workers and labor leaders at the Airport Diner in Manchester yesterday morning, Hodes (D-NH) said the TRADE Act will set tough new standards for trade agreements.

"It's a jobs bill," he said, "We need to recognize we are in a huge transition."

[CORRECTION - workers were real live Granite Staters, NOT out-of-state as reported].

The real human face of the manufacturing crisis was highlighted at the event. The Union-Leader goes on:Closed factory

Marlie Merrill was there to hear what the congressman had to say. Merrill, a machinist, is on furlough from Kingsbury Corporation in Keene, which used to have 1,200 manufacturing jobs and now has 90. He is a member of the United Auto Workers Local 2232.

He said his employers cannot get loans because they do not have contracts and they cannot get contracts without loans.

"It's a vicious cycle," Hodes said. "We need to take a new approach of rewarding those for creating jobs in America."

The TRADE Act sets tough new standards for trade agreements to make sure that they benefit American workers and businesses, Hodes said. The proposal also calls for a detailed review of every international trade agreement, and their impact on American workers and families.

Merrill said he knows of two fellow employees who have lost their jobs homes. [Correction mine].

He has been struggling to pay health care costs while out on furlough.

And further:

Gail Kinney of Canaan was at the roundtable and listened. She is a member of UAW Local 1981 and goes around the state helping those dealing with unemployment. While the watch word is "re-training," she said, "at this point the question is training for what? There is a sense of quiet desperation."

NH AFL-CIO President Mark McKenzie said in 35 years, he has seen a tremendous change.

In Manchester alone, he said you could walk both sides of the Merrimack River and see thousands working in shoe and sweater manufacturing. Now, those jobs -- which paid enough to keep people buying cars and houses -- are gone, altered by trade agreements such as NAFTA.

Its great to see Hodes getting out in front on the TRADE Act. Hodes is not just cosponsoring the bill, but hitting the streets, and connecting with affected residents and organize for a new model of the global economy that puts people over profit.

December 15, 2009

DC's Bailing Out Them Bankers, as the Farmers Auction Ground

One of our favorite jam's around GTW this fall has been country artist John Rich's tune "Shuttin Detroit Down." Few songs capture better the anger that many in this country feel against the bankers that ruined the economy by infecting all sorts of institutions with toxic assets, and then going on to "take their bonus pay and jet on out of town."

But one issue that hasn't gotten a lot of attention is how our bank bailouts constitute subsidies that can be disciplined by the World Trade Organization.

The Scheduling Guidelines to the General Agreement on Trade in Services (one of 17 WTO agreements) state that the national treatment obligation “applies to subsidy-type measures in the same way that it applies to all other measures." This obligation targets policies that modify "the conditions of competition" in a way that - even inadvertently - favors domestic service providers.

There's been some uncertainty in policy circles as to how much bank bailouts might be carved out the subsidy obligations. Are these even subsidies, or are they just special programs for a special sector?

Looking back on over a decade of writing by the WTO Secretariat, it's pretty clear that - not only are bank bailouts considered subsidies - but they are some of the most frequent GATS-relevant subsidies. The WTO's Working Party on GATS Rules, over a set of five biannual reports, have targeted the following policies:

Continue reading "DC's Bailing Out Them Bankers, as the Farmers Auction Ground" »

December 14, 2009

Andean Trade Preferences: Uncontroversial, Safe Vote

Today, the House will be voting on H.R. 4284 - Andean Trade Preference Extension Act of 2009, cosponsored by Chairmen Rangel and Levin.

The bill is uncontroversial - everyone from Wal-Mart to the faith groups to the AFL-CIO is either supporting it or not opposed. All it does is extend the trade preferences for Colombia, Peru and Ecuador for one more year, through the end of 2010. It's been standing policy since 1991 to give these countries a little extra help to ensure regional stability and employment.

(One other note: a little over a year ago, the Bush administration suspended Bolivia - a country statutorily included in the ATPDEA - from receiving benefits under the program. The Obama administration has continued this policy, which is a taste of ham-fisted diplomacy in a region reeling from insufficient U.S. action on the recent coups in the region. However, as the Center for Economic and Policy Research recently showed, even despite the loss of these preferences, Bolivia has one of the top performing economies in the region - and a growth record that has surpassed the country's performance for over a generation.)

December 04, 2009

Reflections on Seattle WTO Anniversary '09

I'm on my way back from Seattle, having just attended the actions and people's summit celebrating the ten year anniversary of the WTO shutdown in 1999. Ten years ago this week, the Millennium Round of WTO negotiations to further bind the worlds' democracies to profit-over-people corporate policies - nearly identical to the current Doha Round - was stopped in it tracks.WTO IR Action N30 09

So much has happened since teamsters and turtles alike took over the streets of Seattle, labor marched, and tree sitters blockaded the convention center. During the weekend at the People's Summit, put on by the Seattle +10 Organizing Committee, Community Alliance for Global Justice, and the Washington Fair Trade Campaign, folks traded fond recollections of creative protest and dancing in the streets, chemical weapons and near misses, thoughts on broken widows and built alliances. You couldn't help but wish you had been there.

But it's true that much has changed since Seattle '99. Here are some thoughts, rooted in the past, that occur to me as we all look forward to the 21st Century Movement or Global Justice:

1) Support for trade justice has grown tremendously since 1999. We're right to be proud that we've stopped further WTO expansion since 1999, nearly stopped the Central American Free Trade Agreement, and have kept at bay the most damaging Bush-negotiated FTA deals with Colombia, South Korea, and Panama. We got stuck with the Peru FTA - but many organizations fought back and made clear that passing even economically tiny trade deals now requires a massive political cost.

2) Despite these victories, the damages of the WTO/NAFTA model are ongoing throughout the world. We can't forget that in addition to economic meltdown and joblessness in the U.S., that the food and climate crisis are already devastating the Global South. Add to these most glaring manifestations of the WTO-ified global insanity the cultural upheaval of widespread immigration, violent displacements of whole peoples for mining, megaprojects and monoculture, and wars of occupation for resources, and we still only start to get an accurate picture of the tattered world of 2009.

3) Its past time to return to direct denunciation of corporate power. In yesterday's global justice movement, we unabashedly called out the corporate powers as illegitimate and retrograde. Our primary gripe with the WTO, IMF World Bank, and FTAA, whether you were a student sweatshop activist, a tree-sitter, a manufacturing worker or a school teacher, was that those institutions gave more power to corporations to fell the old-growth, outsource and offshore, build more sweatshops, loot the public coffers and privatize our public services. Rhetorically, we made no bones about these institutions being vehicles that serve the corporate elite at the expense of the rest of us. We said if corporations were the ones doing the globalizing, we'd collectively resist their agenda. And that we have, uniting under common banners against a common opponent, one named corporate power. If we don't return to this footing, we'll remain fragmented as a climate movement, development and international solidarity, immigration rights, and food sovereignty movements.

4) Copenhagen = Seattle? The more I hear this comparison, the less I am sure. And note that I say this as someone who's increasingly convinced that the need for climate justice is the top challenge facing the global economy. What separates Seattle '99 and Copenhagen '09 is a clear understanding by social movements that corporate influence is rotting the process to the core. In Seattle, activists were clear that the WTO's development agenda was a trojan horse for corporate profits. Expanding corporate power was the aim of the talks, and the reason we shut it down.

Continue reading "Reflections on Seattle WTO Anniversary '09" »

December 01, 2009

More Seattle 10th Anniversary

There's a lotta Seattle retrospectives going on.

  • Here's a Greg Palast video, where he actually interviews Pascal Lamy, head of the WTO, who admits that countries can face retaliation if they try to reregulate finance:


The trade fights of the future are not between US workers and Koreans; they are between a corporate agenda that encourages race-to-the-bottom profiteering and a popular vision of fair trade that respects workers, farmers, consumers and citizens in all countries. The electoral results of 2006 and '08 tell us that Wellstone was right: Americans are ready and willing to support a politics that seeks to civilize the global economy. Now, if we could just get a Democratic president to work with a Democratic Congress to offer them that politics...
  • Our own Lori Wallach has a fantabulous piece in The Nation on the WTO entitled "Obama's Choice."
As Americans committed to global justice, we must present the choice facing Obama in the stark terms it represents. Will he stand with the majority of Americans and implement his campaign commitments to change the rules of the global economy so they no longer "favor the few rather than the many"? Or will he side with the banksters and other global elites and fall back into the failed status quo? To repeat a popular refrain from the streets of Seattle: the whole world is watching.


That really is the question. You can plug into the growing call for a WTO Turnaround here.


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