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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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November 30, 2011

Now They Tell Us: Korea FTA Auto Tweaks Were Useless

In the run-up to the congressional vote on the Korea FTA, the Obama administration claimed that its small tweaks to the Korea FTA's auto provisions would lead to greater exports of U.S. autos to Korea. The relaxation of Korean environmental and safety standards for imported U.S. vehicles was supposed to soften the blow of the clobbering that U.S. automakers would suffer when U.S. tariffs on Korea vehicles were lifted under the FTA. Trusting this claim, Congress passed the Korea FTA last month. Now Bloomberg is reporting that the tweaked auto provisions were all for naught:

When Back Seung Chul bought a new car in Seoul, he didn’t even look at imported models from General Motors Co. (GM), Chrysler Group LLC and Ford Motor Co....

Back’s decision -- he bought a Sportage R sports utility vehicle from Hyundai (005380) affiliate Kia Motors Corp. -- suggests that a new U.S.-Korea trade deal won’t mean a leap in sales in the Asian country for U.S. automakers, which accounted for just 1.1 percent of the market last year. The agreement, likely to take effect Jan. 1 after it was signed by President Lee Myung Bak in Seoul today, calls for the phasing out of South Korea tariffs on U.S. vehicles.

“It is highly unlikely American cars will do well in the Korean auto market,” said Kang Sang Min, a Hanwha Securities Co. analyst in Seoul. “Local automakers like Hyundai and Kia can make good cars and offer quick, convenient service.”

The article also discusses the widespread preference for fuel-efficient vehicles in Korea, since Koreans must buy gasoline at double the price of U.S. consumers. Somewhat ironically, the Obama administration's efforts to have Korea relax its fuel efficiency standards for imported U.S. vehicles will only solidify the negative perceptions of U.S. vehicles in Korea.

In sum, Koreans' preference for domestic vehicles over U.S. vehicles - not safety regulations - is the reason that sales of U.S. vehicles have lagged. We warned about this in our comments to the U.S. International Trade Commission (USITC) about the methodology that they would use to predict the impact of the FTA upon the U.S. auto sector. Even though the USITC did not adopt the modifications to their methodology that we recommended, its report still predicted that the annual U.S. auto trade deficit would rise by hundreds of millions of dollars under the Korea FTA. Although Bloomberg's reporting on this issue can be viewed as better late than never, it is certainly too late for the thousands of U.S. auto workers who will likely lose their jobs from the Korea FTA.

November 28, 2011

Election 2012: the Candidates on Trade

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

Candidatestrade

With the budget and other scandals dominating political discourse, little space has remained for discussion of trade policy among possible presidential candidates.

To fill this void we decided to examine exactly where the politicians fall on key trade issues:


Bachmann

Although foreign policy hasn’t always been her strong suit, Rep. Michele Bachmann (R-Minn.) is pretty confident about her views on trade. Bachmann interrupted her presidential campaign and broke a streak of 88 absences to cast a vote in favor of the free trade deals with Korea, Colombia and Panama. In a press release she writes that these deals will “spur economic growth… without cost to taxpayers.” Notably, the representative voted against Trade Adjustment Assistance, which would provide support for workers displaced by the deals. Bachmann also voted against Fast Track cancellation in 2008 and in favor of the Peru trade deal in 2007.

In a blog post urging lawmakers to pass the Korea, Colombia and Panama trade deals, Bachmann writes that the “role of free trade as an expression of liberty….signifies the very principles our country was founded upon.” Unfortunately, these trade deals were negotiated under Fast Track, leaving Congress no authority to amend the agreements. (The constitution, or the document our country was actually founded upon, outlines a system of checks and balances granting Congress the power to “regulate commerce with foreign nations”).


Paul
A self-proclaimed proponent of free trade in its most pure form, Rep. Ron Paul (R-Tex.) opposes NAFTA-style trade deals because they erode U.S. sovereignty and are unconstitutional. He has voted against almost every trade deal that has surfaced during his tenure in office, including Peru, Oman, Bahrain, CAFTA, Australia, Singapore and Chile. Paul has also been an advocate of withdrawing from the World Trade Organization.

Continue reading "Election 2012: the Candidates on Trade" »

November 23, 2011

COOL Ruling Not COOL

As we noted last week, the WTO has just issued a major ruling against U.S. country-of-origin labels (COOL) on meats. The decision confirms the direst predictions when the WTO was established, which questioned the wisdom of setting internationally binding rules against consumer protection.

The ruling and its six supporting annexes are hundreds of pages long, so going through all of them will take some time. Here are some additional items that we did not include in our longer analysis from Friday.

COOL is hearted by consumers

COOL is very popular, as the Obama team noted during the proceedings:

Numerous polls also indicate strong consumer support for mandatory country of origin labeling. Among the polls cited in various submissions received by USDA during the regulatory process are the following:

  • 92 percent of respondents in a 2007 Consumers Union poll believed that imported foods should be labeled with their country of origin
  • 88 percent of respondents in a 2007 Zogby poll indicated that they want all retail foods labeled with country of origin information
  • 95 percent of respondents in 2007 Zogby poll indicated that they have a right to country of origin information for food
  • 82 percent of respondents in a 2007 Food & Water Watch poll supported mandatory country of origin labeling
  • 82 percent of respondents in a 2004 nationwide poll conducted for the National Farmers Union supported country of origin labeling
  • 86 percent of respondents in a 2002 survey for Packer magazine supported country of origin labeling

However, the panel didn’t explicitly mention these polls. Throughout much of the proceedings, it was treated as an open question whether consumers actually wanted COOL.

Democracy is impermissibly uncertain; hortatory is the new mandatory

This WTO decision is the most recent of three cases with deeply troubling implications for consumers. In September, the WTO also ruled against U.S. efforts to reduce teenage smoking and dolphin mortalities. In the dolphin case, the purely voluntary dolphin-safe labeling scheme was deemed “mandatory,” despite the fact that tuna not having the label was and is sold in the U.S. After that ruling, we joked that “voluntary is the new mandatory.”

But this COOL ruling takes this joke to sad new levels, so that “hortatory is the new mandatory.”

Here’s why.

Continue reading "COOL Ruling Not COOL" »

November 22, 2011

US-Korea deal approved over heated opposition

After months of demonstrations and heated debate over the US-Korea trade deal, the Grand National Party called a plenary session and immediately voted on the bill before the opposition legislators could stop them. One lawmaker in particular tried to halt the vote by detonating a tear gas canister (read the details of the vote here). Still, the desperate attempt failed to detain the ruling party from passing the deal 151 to 7. As the New York Times reports,

In the 299-seat National Assembly, 170 members showed up for the vote Tuesday, most of them governing party lawmakers. The opposition members either voted against the bill or abstained.

Watch the video of the scuffle between the ruling party and the opposition:



The vote has prompted massive demonstrations in the street. Our allies in Korea reported that more than five thousand protesters occupied the streets in Seoul. The police aimed water cannons at them and arrested many activists.

Watch the video of the protest here:



Like many Americans who will hold their congressional leaders accountable for their vote on the trade deal, the Korean Alliance against KorUS FTA (KoA) and other opponents of the deal will be launching a campaign against the lawmakers who voted for the agreement in the next general election. The outrage in both countries yet again demonstrates the need to change the current unfair trade model that benefits the 1%.

November 18, 2011

Your Ignorance is Agribusiness' Right, says WTO

Consumers and the environment are at risk following a series of World Trade Organization (WTO) rulings against popular U.S. policies.

As we noted earlier today, the agency issued a landmark ruling against U.S. efforts to reduce consumer confusion about the origin of the foods they eat. This followed two decisions from September against U.S. measures to reduce teen smoking and dolphin deaths. If the decisions are upheld on appeal, the United States will have to water down or eliminate its country-of-origin labels (COOL) for meats, dolphin-safe tuna labels, and ban on flavored cigarettes directed at kids.

These rulings confirm the worst fears of members of Congress and advocacy organizations, who warned Beef wtoof the dangers of expanding the scope of trade agreements beyond border tariffs into the domestic policy arena. This expansion was pushed by anti-regulation corporations, with substantial assistance from “free-market" ideologues who saw the WTO as a delivery mechanism for light-to-no touch regulation. (Ironically, these WTO decisions have negative implications for both more “free-market” and “interventionist” oriented consumer and environmental protection policies, as we explain below.)

What this ruling means for consumers

When the WTO rules against a country's policy, that country has to change the law to comply, or risk trade sanctions. In this case, Mexico and Canada (the "complainants") were successful in their challenge of U.S. labels.

The U.S. will have to get rid of COOL, or water down the policy to Canada and Mexico's satisfaction. Mexico's position was that the U.S. should simply revert to voluntary COOL, or utilize a weaker standard utilized by a global body known as Codex Alimentarius. But this is what the U.S. used to have that consumers wanted to move past. So it's unclear what would satisfy those countries.

The Obama administration may appeal the ruling, although the track record of successful appeals is very limited: the WTO rules against challenged policies 90 percent of the time, and upholds these rulings at the appellate stage an even higher percentage of the time.

The broader worry is that this ruling leaves the door wide open to attacks on similar consumer policies - not only in the U.S., but all WTO member countries - many of which use COOL.

After the jump, we provide more background on how we got here.

Continue reading "Your Ignorance is Agribusiness' Right, says WTO" »

WTO Rules Against Country-of-Origin Meat Labeling Law: Third Ruling Against U.S. Consumer Safeguards in 2011

The World Trade Organization’s (WTO) ruling today against another highly popular U.S. consumer policy – country-of-origin labeling (COOL) for meat cuts and products – will only intensify public opposition to more of the same backwards trade pacts, Public Citizen said. A panel report released today announced that Mexico and Canada have succeeded in their WTO attack on the labeling rule; today’s WTO ruling is the third this year against popular U.S. consumer or environmental measures.

“Today’s ruling makes very clear that these so-called ‘trade’ pacts have little to do with trade between countries and a lot to do with our major agribusiness corporations being free to sell mystery meat in the United States, with neither consumers nor our elected representatives in Congress able to ensure its safety, much less even know where it is from,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

After 50 years of state efforts to institute COOL for meats, and federal experimentation with voluntary COOL for meat, Congress passed a mandatory COOL program as part of the 2008 farm bill. In their successful WTO challenge, Mexico and Canada argued that the mandatory program violated the limits that the WTO sets on what sorts of product-related “technical regulations” WTO signatory countries are permitted to apply. In their filings to the WTO, Canada and Mexico suggested that the U.S. should drop its mandatory labels in favor of a return to voluntary COOL, or to standards suggested by the Codex Alimentarius, which is an international food standards body at which numerous international food companies play a central role. Neither option would ensure that U.S. consumers are guaranteed the same level of information as the current U.S. labels.

Today’s decision follows WTO rulings this year against U.S. “dolphin-safe” tuna labels and a U.S. ban on clove, candy and cola flavored cigarettes.

“These three rulings – with the WTO slapping down safe hamburgers, Flipper and children’s smoking prevention policy – make it increasingly clear to the public that the WTO is leading a race to the bottom in consumer protection,” said Wallach.

In today’s ruling, the trade panel specifically found that COOL labeling requirements violated the Agreement on Technical Barriers to Trade (TBT), one of 17 agreements administered by the WTO. While the WTO has ruled on nearly 200 disputes, the TBT had played a major role in only a few cases thus far.

“There has been widespread concern that this provision could empower a WTO panel to second-guess the U.S. Congress, courts and public by elevating the goal of maximizing trade flows over consumer and environmental protection,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch. “Today’s ruling shows that consumers’ concerns were well-founded.” 

“The Obama administration is in the process of negotiating its first-ever trade deal – the Trans-Pacific Free Trade Agreement – and so far it looks like it will replicate many of the anti-consumer rules present in the WTO terms and the North American Free Trade Agreement,” noted Wallach. “These WTO rulings show the need for President Obama to start fulfilling his campaign pledges to create a trade policy Americans can believe in and stop expanding the old trade pact model.”

###

November 17, 2011

Showdown in Korea Over Trade Deal's Investor Provisions

Tensions in Korea are still mounting over the US-Korea trade deal. The agreement passed in the US Congress despite the vast majority of Democrats voting against the bill. Now all eyes turn to Korea as Korea’s Democratic Party opposition leaders and the ruling Grand National Party come to a standstill over the Investor-State Dispute clause in the trade pact.

While Korean corporate groups are pushing for speedy ratification of the trade pact, opposition is mounting over what the opposition party sees as a threat to its domestic laws. The Investor State Dispute clause has become a point of contention. The Korea FTA Industry Alliance claims, “It is necessary to protect the $21.7 billion that it has invested in the United States over the past 5 years.” Yet, the opposition party sees the investor state claims as an affront to Korean sovereignty and its ability to enforce domestic policies.

Public Citizen also raised the investor state dispute settlement clause as one of the fundamental flaws in the Korea deal. The Investor state clause would allow for Korean and US multinational investors to have disputes heard before foreign tribunals, despite the fact that both countries have strong domestic court systems. These clauses allow investors to be awarded taxpayer-funded cash compensation if environmental or health policies get in the way of their expected future profits.

In order to ease tensions, President Lee, in a rare move, addressed parliament and has agreed to renegotiate the investor state clause with the US three months after the agreement is ratified. The Democratic opposition party is not backing down and is echoing the sentiment of the thousands of daily protestors that have gathered in Seoul to protest the trade deal. Party spokesman Lee Yong Sup stated that the party will not agree to ratification of the FTA before the investor state clause is renegotiated.

November 14, 2011

Songs of Protest Occupy APEC

While world leaders met inside well-secured hotels and facilities last weekend during the Asia-Pacific Economic Cooperation, the streets of Waikiki were occupied with voices of dissent.

First, on Friday, union workers from the International Brotherhood of Electrical Workers (IBEW) went on strike against the phone company Hawaii TelCom. Striking workers protested against the company’s export of Hawaii jobs to Saipan and its demand to reduce crucial worker benefits.  The opportunity to demonstrate the connection to APEC and the current negotiations between the Trans-Pacific Free Trade Agreement (FTA) countries was not lost on workers and civil-society. IBEW and UNITE-HERE Local 5 sponsored a rally and teach-in on the FTA that was attended by labor groups, international allies and local activists. Hundreds poured in during the rally to denounce APEC’s conference of bankers, corporations and politicians and the secret negotiations seeking to expand a NAFTA of the pacific.

The following day many more protesters and Occupiers marched from Honolulu to the center of Waikiki chanting and voicing their opposition to APEC’s free trade talks. (Read more about the march here.) But the most creative outlet to decry the summit’s intent on corporatizing the world came from renowned Hawaii guitarists and singer Makana. The artist was invited to perform at an APEC gala held inside Hale Koa hotel. He surprised world leaders by not only wearing a t-shirt that read “Occupy with Aloha,” but also by singing protest ballad called “We are the Many.” Check out the performance below:


Read more about Makana occupying APEC here.

November 11, 2011

Korean Public Still Resilient against US-Korea deal

After the trade deal with Korea was approved in Congress in mid-October, I received a message from one of our close Korean activists and member of the Korean Alliance against the KorUS FTA (KOA). He wrote: Now, it is our turn.

Grassroots activists, civil-society groups, and labor unions (all members of KOA) along with students, OccupySeoul, and dissenting politicians have lived up to their rhetoric. Against all odds, they have successfully delayed the vote on the trade deal using an array of political tactics and civil disobedience.

08095302_2
Last week, opposition National Assembly members from the Democratic Party and Democratic Labor Party occupied the hearing room of the foreign affairs committee, which must make a preliminary vote on the trade pact before it is voted on by National Assembly. In occupying the room, they prevented the committee from voting—sending a clear message of defiance to Korea’s ruling party and key FTA supporters.

On the ground, the Korean Alliance, students, and Occupiers have been holding mass demonstrations and daily candlelight vigils in the streets of Seoul. Several times they have marched in protest and have been confronted by police (see more pictures and videos here).

08094746_YJW_4280
On November 10th, a disturbing observation from KOA was sent to us, reporting, “At the protest held today near the National Assembly building, the policemen turned a water-cannon to shoot protesters. This caused one of the protester's eardrums to rupture. And 11 were arrested.” (See video here.) One of the protesters arrested is a member of the Korean Confederation of Trade Unions (the equivalent of the AFL-CIO) who visited Washington, DC earlier this year and spoke with members of Congress about the Korea trade deal’s economic impacts on the auto industry.

Although protesters are being confronted by police officials almost on daily basis, the Korean Alliance and other activists will continue to demonstrate. This weekend another mass protest will take place as plans for an international day of solidarity are currently in the works with Occupiers and other groups in the US.

Japan Forces Down Value of Yen, Raising Concerns on Trans-Pacific FTA

Last week the Japanese central bank undertook the single largest intervention in its currency market since at least 1991 when it bought about $100 billion in U.S. dollars. The intervention was designed to push down the value of the yen, and it worked: the value of the yen fell five percent against the dollar, the largest single-day drop since the depths of the financial crisis in October 2008.

Even in ordinary times, this intervention would concern U.S. policy makers, as it will likely boost the U.S. trade deficit with Japan as Japanese imports become cheaper and U.S. exports to Japan rise in price. But now in particular it should give pause to policymakers since Japan has expressed interest in joining the Trans-Pacific Free Trade Agreement (FTA) talks. U.S. trade negotiators will be meeting with their counterparts from other countries to discuss the Trans-Pacific FTA during the Asia-Pacific Economic Cooperation summit this weekend in Honolulu, and Japan's interest in joining is sure to come up. As of yet, there is no sign that the Trans-Pacific FTA will discipline currency manipulation, so the U.S. could end up signing a trade deal with a country that is willing to massively intervene in the currency market, leaving U.S. businesses and workers vulnerable to artificially cheap imports.

Japan has a long history of intervening in its currency market for trade advantage. According to the Congressional Research Service, Japan has intervened heavily in its currency market to hold down the value of the yen in the periods 1976-1978, 1985-1988, 1992-1996, and 1998-2004. During the last period of heavy intervention, stretching from 1998 to 2004, the Japanese yen was undervalued by about 20 percent, or about 600 percent greater than the average U.S. normal trade relations tariff of 3 percent. To put this into perspective, GM estimated that the undervaluation of the yen amounted to a subsidy on Japanese autos sold in the U.S. of about $3,000 per vehicle in 2003. This virtual exchange rate subsidy likely hurt sales of U.S.-made vehicles in the United States and cost jobs.

The latest estimates of the equilibrium yen exchange rate suggest that the yen is undervalued against the dollar by about 10 percent, contributing to the $60 billion U.S. trade deficit with Japan. And those estimates were developed before Japan initiated its latest round of currency intervention. Will U.S. policymakers blindly sign a trade deal with a country that manages its exchange rate for trade advantage, like they did with Korea? Or will they steer the Trans-Pacific FTA negotiations toward the 21st-century fair trade model that the Obama administration has promised?

November 10, 2011

Sherrod Brown Tosses the Panama FTA

Well, not quite. But, man, that FTA text does look pretty heavy, and like it could put a hurtin' on some of the senators in the room that are against fair trade.

But here's a floor speech from fair trade champion Sen. Sherrod Brown (D-Ohio) on the night the Senate voted on the Panama, Korea and Colombia trade deals. It's about 30 minutes, and a very eloquent description of why these trade deals are no longer primarily about "trade," but about how we regulate our domestic economy. Brown's TRADE Act would go a long way to getting "trade" policy right.

November 04, 2011

Benefits from WTO Doha Round are a MIRAGE

As the next WTO ministerial meeting in December approaches, the debate over the economic effects of the Doha round proposals is heating up again, for the umpteenth time. (For previous rounds of handwringing and number-crunching, see here and here.) On Monday, CEPII-CIREM, a French think tank, published the results of a modeling exercise using the MIRAGE model that attempted to measure the global effects of the implementation of various Doha proposals. The EU, which commissioned this study, somehow convinced Reuters to publish their sunny spin on the results.

Here’s the short of the CEPII-CIREM study. Even under optimistic scenarios, many developing countries will be worse off because of the Doha Round, which (on average) would bring annual income growth of only a dollar to each of us.

Discouraging results from latest round of modeling of Doha Round impact

The main result of the study is that the Doha proposals on goods and services liberalization and "trade facilitation" will only lead to an increase in global GDP of about two tenths of one percent - $152 billion - by 2025.  (The press release of the EU Trade press office bizarrely focuses on the expected rise in trade flows, as if the movement of goods across borders with the associated environmental costs is beneficial in itself.)

Even assuming the study's predictions would come to pass, $152 billion is a paltry sum for a policy project that has soaked up so much energy.  It amounts to an average annual growth in global GDP of about $11 billion per year over the 14-year implementation period. Considering the Doha Round was launched in 2001, we should really amortize the $152 billion over a 24 year period, bringing the gain down to growth of $6.3 billion a year. Divide that by every person on the planet, and it’s not quite a dollar per year. So, you can get the Doha Round and risk losing your job or you can get a Coke. Your choice.

Compare this “gain” to what we could harvest from investing our policy energy elsewhere. The Global Financial Integrity Project of the Center for International Policy, for instance, estimates that global illicit outflows of money from developing countries due to corruption, tax haven activity, and other illegal activities amounted to $1.26 trillion in 2008. That's over ten times the global economic growth that CEPII-CIREM expects from the Doha round. In other words, taking strong action on tax haven abuse and corruption would yield much greater economic gains.

The small size of the overall impact is not the only concerning part of the results. The topline number on the supposed boost to global GDP does not delve into the distribution of these gains among countries or within countries. According to the study, the Doha proposals on goods and services liberalization will actually cause the economies of Sub-Saharan Africa, Mexico, and the Caribbean to shrink.  Both skilled and unskilled workers in Mexico will see their wages fall under all "core" scenarios - goods and services liberalization and trade facilitation measures. Workers - either skilled or unskilled - in Brazil, the Caribbean, North Africa, Sub-Saharan Africa, Paraguay, and Uruguay will experience falling wages under some scenarios.

Doha Round vs. 6 hours of stimulus spending, and more!

Some other discouraging results:

Continue reading "Benefits from WTO Doha Round are a MIRAGE" »

November 01, 2011

NAFTA is the One Ring of our Democracy

Steven Pearlstein and Paul Krugman have nice pieces about the 25th anniversary of the Economic Policy Institute, arguably the leading labor market-focused center-left economics think-tank in D.C.

A prominent narrative is that EPI has grown to prominence for its analysis of the factors driving inequality, including trade policy. As Pearlstein writes:

While EPI and its labor allies have clearly lost the policy battle over free trade, economists have finally come around to its view that trade has had a significant role in widening the U.S. income gap. Even the Institute of International Economics acknowledges that some of the $1 trillion in benefits the U.S. economy gets every year from trade should be used to help the millions of workers who are hurt by trade.

Krugman chimes in on this point:

Since Pearlstein makes a point of mentioning some ancient disputes I had with EPI, I guess I should say something about where all that stands. The main thing, I think, is that trade policy — where I still have some differences with EPI — is much more peripheral an issue than it seemed to be in the early 1990s. I once had a conversation with Bob Kuttner in which we agreed that while we were arguing about NAFTA, Sauron was gathering his forces in Mordor.

If the point is that NAFTA and similar deals are not the only cause of rising inequality, I couldn't agree more. But that's actually the wrong question to be asking. The main raison d'etre of NAFTA-style deals is to set in place a body of rules that become the "new normal" in domestic regulation and international law. As Lori Wallach and I write in a piece published in the American Prospect yesterday:

Since NAFTA, trade agreements have grown to encompass thousands of pages of text, and only a minority of the provisions deal with tariffs—trade policy’s historic remit. Today’s so-called “trade” deals set constraints on how governments can regulate inside their own borders. For instance, the recent pacts ban "Buy America" policies that ensure tax dollars are used to purchase American-made goods and allow corporations to challenge environmental policies for cash compensation. They include such severe limits on financial regulation that the financial services industry celebrated the Korea deal in particular as “the best financial services chapter negotiated in a free trade agreement to date,” according to Citigroup.

These constraints on domestic regulation have a corrosive effect on democracy, and begin to shift the center of political gravity away from elected officials and towards unelected global bodies and corporations. Over time (and we see this every day on Capitol Hill), policy proposals are watered down in order to avoid conflicts with our trade agreements. 

Krugman and Kuttner are right that NAFTA is not to the labor market as Sauron is to Mordor. Rather, NAFTA and the WTO are to our democracy what the One Ring is to Mordor. Sauron, in this analogy, represents corporations.

As Tolkein fans know, the One Ring was designed by Sauron, and draws whoever bears it back to his Oneringdarkness. Its inscription reads: "One ring to rule them all, one ring to find them, One ring to bring them all and in the darkness bind them." The ring represents a set of dark rules that are difficult if not impossible to wield for good, and were designed with Sauron's narrow interests in mind (not all of Mordor's).

Our trade agreements provide the legal and ideological underpinning of neoliberalism. Our government (like Frodo) put these shackles on voluntarily, but now it finds its trajectory negatively influenced by the force. It is of course difficult to hypothesize whether neoliberalism would be destroyed if we got rid of NAFTA-style deals or the WTO. But the system's proponents would have to justify their corporate goals on some basis other than "it's the law."

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