Will the real Bill Richardson please stand up?

Gov. Bill Richardson (D-N.M.) was the Democratic Whip on NAFTA, then he ran for president and opposed the Peru FTA (and feigned surprise at the existence of the NAFTA investor-state mechanism), and now he says this, according to the NY Observer:

Bill Richardson thinks that when it comes to Barack Obama's position on Nafta, an agreement which he calls "a plus, a slight plus, at least for my state," voters should look at Illinois Senator's record.

"He voted for the Peru Free Trade Agreement," said Richardson, who immediately proceeded to make it clear that he was in no way speaking for Obama or his campaign. "You've got to be realistic," he said, and "you've got to deal with globalization."

Richardson said that during his ill-fated candidacy, he became more aware of the antagonism to Nafta in the Midwest, and the anxiety about free trade among the middle class around the country.

"I'm a free-trade Democrat. I'm also an endangered species in the Democratic Party," said Richardson.

We reported last year on Richardson's 10% fair trade voting record while in Congress, where he only voted right on one out of 10 major trade votes. He voted right on the Canada FTA, but wrong on Fast Track a whopping 5 times (1983, 1984, 1988, 1993, and 1998), and on Israel FTA, 1991 Fast Track disapproval, NAFTA and the WTO. And here's what he told a N.H. audience when campaigning in that state last year, where he called the investor-state mechanism not terribly progressive.

Obama campaign fights back on Fortune interview

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

Say what you will about Obama's trade positions, but you can't deny that they learned the lesson of Al Gore and John Kerry that you must fight back when attacked or misquoted. The Obama campaign has established a Fact Check operation to respond to absolutely everything, including what they claim is a  misrepresentation of Obama's trade views in a Fortune Magazine interview. Particularly interesting was his statement to Nina Easton on NAFTA and immigration, which I don't think has ever been said by a major party candidate:

And by the way, just going back to NAFTA for a second, I don't dispute that there may have been some modest aggregate benefit in terms of lowering prices on consumer goods for example. But I would also argue that not only did it have an adverse affect on certain communities that saw jobs move down to Mexico but for example our agricultural section pretty much devastated a much less efficient Mexican farming system. But from a pure economic, you know if you're just an economist looking at this in an abstract way you would say well a more efficient producer displaced a less efficient producer in Mexico, there's nothing wrong with that. As a practical matter those are millions of people in Mexico who are displaced. Many of whom now are moving up to the United States, contributing to the immigration concerns that people are feeling. And so, those human factors should be taken into account. They may not override or every single decision that we make in respect to trade, but to pretend those costs aren't there, that those costs aren't real, and my job as president to take those into account, I think, does no service to free trade. And its part of what has fed the protection incentive and the anti-immigration incentive that is out there in both parts and you know I think that if we manage trade more effectively, if we're better partners, if we are thinking about the dislocations that occurs as a consequence of it, if were true to our belief that labor and environmental standards should be a part of raising living standards around the world instead of a race to the bottom, then we can have free trade and it will be sustainable and we will have political support over the long run.

Trade on the Trail: Into the General

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

There's a lotta news on trade in the trail, so let's just get into it. Just as DLC leader Al From bemoans the lack of "free trade" Democrats, Fortune Magazine's Nina Easton reports:

The general campaign is on, independent voters up for grabs, and Barack Obama is toning down his populist rhetoric - at least when it comes to free trade.

In an interview with Fortune to be featured in the magazine's upcoming issue, the presumptive Democratic nominee suggests he doesn't want to unilaterally blow up NAFTA after all.

"Sometimes during campaigns the rhetoric gets overheated and amplified," he conceded, after I reminded him that he had called NAFTA "devastating" and "a big mistake," despite nonpartisan studies concluding that the trade zone has had a mild, positive effect on the U.S. economy.

Does that mean his rhetoric was overheated and amplified? "Politicians are always guilty of that, and I don't exempt myself," he answered.

Obama is also courting labor backing today:

Obama still needs to make amends with many in the labor movement; at least a dozen AFL-CIO unions, including the powerful American Federation of State, County and Municipal Employees and the International Association of Machinists and Aerospace Workers, backed his Democratic rival, Hillary Rodham Clinton. The AFL-CIO allowed its unions to make their own endorsements during the primaries.

The labor federation has been critical of Obama's decision to hire economist Jason Furman as economic policy director because of his ties to corporate America and support of free trade. Obama said he would tell them Furman is experienced in presidential campaigns and adds to a wide range of economic views on his campaign.

"He's not whispering in my ear and he's not shaping my core beliefs about what is needed in the American economy," Obama told reporters Tuesday on his campaign plane. "He's one of my economists. And so I will suggest to them that looking at one staff person and getting nervous about it probably doesn't make sense."

Naomi Klein writes:

Barack Obama waited just three days after Hillary Clinton pulled out of the race to declare, on CNBC: "Look. I am a pro-growth, free-market guy. I love the market." Demonstrating that this is no mere spring fling, he has appointed the 37-year-old Jason Furman, one of Wal-Mart's most prominent defenders, to head his economic team. On the campaign trail, Obama blasted Clinton for sitting on the Wal-Mart board and pledged: "I won't shop there." For Furman, however, Wal-Mart's critics are the real threat: the "efforts to get Wal-Mart to raise its wages and benefits" are creating "collateral damage" that is "way too enormous and damaging to working people and the economy ... for me to sit by idly and sing Kum Ba Ya in the interests of progressive harmony".

Obama's love of markets and his desire for "change" are not inherently incompatible. "The market has gotten out of balance," he says, and it most certainly has. Many trace this profound imbalance to the ideas of Milton Friedman, who launched a counter-revolution against the New Deal from his perch at the University of Chicago. And here there are more problems, because Obama - who taught law at Chicago for a decade - is embedded in the mindset known as the Chicago School.

On the GOP side, McCain is planning tours of Canada and Colombia to vocally support trade pacts with those countries:

Canadian officials are watching the election attentively, too. Obama, who four years ago declared NAFTA had been beneficial, recently talked about reopening NAFTA to strengthen enforcement of labor and environmental standards. McCain has been thumping Obama on that, arguing that such a step not only would hurt trade, but undermine the credibility of the United States abroad.

"You know what message that sends? That no agreement is sacred to him," McCain told reporters Thursday in Boston.

And Dick Cheney weighs in:

"Some politicians seem determined to unravel the bipartisan consensus on free trade -- a consensus epitomized by the North American Free Trade Agreement (NAFTA)," said Cheney in direct reference to Obama's stated intention of renegotiating the 1994 pact between United States, Canada and Mexico if he is elected to the White House.

"In a time when even NAFTA is being called into doubt -- when candidates can draw cheers by denouncing trade deals with our next-door neighbors -- then we're at risk of going down a very destructive path," Cheney added.

In what appeared to be an underpinning of Republican Senator John McCain's pro-free trade stance in his election campaign, the vice president warned that protectionism "is the refuge of a tired, fearful nation -- and that is not the United States."

And that wily Peter Mandelson can't keep his mouth shut either:

"Who would have thought, 10 years ago, that you would hear serious U.S. presidential candidates putting NAFTA in question? Or calling into question the desirability of concluding a world trade round?" Mandelson said in prepared remarks before a business luncheon in New York.

"We need to be straight with Americans and Europeans about just how badly disengagement from the global economy would hurt their political and economic interests. And that means being honest about the extent to which protectionism is a dead end," Mandelson said.

Folks in Montana are what?

There has been a series of news items over the last few months that suggest that the presidential candidates are softening their trade positions just because they don't have a No to NAFTA symbol tattooed on their forehead. Here is one example from a few days ago, but there have been others that we've written about.

Here's a quote from the recent article:

Hillary Rodham Clinton and Barack Obama have been largely silent on the issue of free trade agreements as the primary season is set to end Tuesday in Montana and South Dakota, where agriculture and exports reign supreme.

The article then references the support of Sen. Max Baucus (D-Mont.) and former Sen. Tom Daschle (D-S.D.) and some corporate ranchers for trade deals as evidence that these states are in love with the status quo.

But this is ridiculous. As we've written before, "more exports" does not equal rural prosperity. In fact, often times the opposite is true, since prices matter more than volume.

Politically, it's boneheaded analysis as well. Baucus gets unbelievable heat for his dogged attachment to the status quo, as when the Montana legislature gave him a smackdown last year over his support for Fast Track for Bush. And Democrat Jon Tester unseated Republican Conrad Burns last year with this message:

Recent trade agreements put our jobs and the viability of family farms and ranches across Montana in jeopardy by handing off trade advantage to foreign interests. Jon Tester will fight for Montana priorities in the U.S. Senate by standing firmly opposed to unfair trade agreements that hurt our communities and way of life. While Sen. Burns voted for tax giveaways to companies that outsource American jobs, Tester will protect American jobs in the U.S. Senate.

Tester stayed true to his promise by voting against the NAFTA expansion to Peru last year.

And you can bet that Daschle's spotty record on fair trade didn't help him any when the GOP ran a "social conservative" against him. If you want to set the record straight, check out on the real deal in Montana and elsewhere, check out our election report here.

Canadian NAFTA leak shake-up

Looks like NAFTA just contributed to one more job loss...

Ian Brodie, Prime Minister Stephen Harper's chief of staff, is expected to leave the Prime Minister's Office this summer, signalling a shake-up in time for a fall election...

Sources said Mr. Brodie made the decision before the delivery of a report looking into leaks of information regarding the North American free-trade agreement, which influenced the Democratic primary race in the United States. ...

It was later alleged that Mr. Brodie told reporters during the news media lockup for the Feb. 26 budget that Ms. Clinton's campaign had reassured Canadian diplomats that her tough talk on NAFTA was just posturing, although that wasn't what was subsequently reported. Mr. Harper appointed Kevin Lynch, the Clerk of the Privy Council, to conduct an internal investigation into the matter.

How to break a strike

Advocates of NAFTA argued that they pact would help keep consumer prices low and move the economy towards a more efficient allocation of resources. Just one serious drawback: such permanent tariff reductions remove political uncertainty from firms' cost-benefit calculation. Put differently, the price attached to risk was reduced. And manipulating risk levels is one of the few weapons that the working class has to gain concessions from the rich: think strikes, for instance.      

When firms can be certain that they will never have to pay tariffs on the reimportation of their products produced offshore, strikes matter a wee bit less, as this story over the weekend from the NYT summed up:

The auto industry’s longest strike in more than 40 years, a walkout at a parts supplier that disrupted production at 32 General Motors plants, will end within days if the picketing workers ratify a tentative agreement reached late Friday with their employer, American Axle and Manufacturing....

People involved in the negotiations have said they expect the agreement to call for closing two or three plants, offering buyouts worth as much as $140,000, and drastically reducing the wages and benefits of workers who remain with the company...

American Axle has said it needs to cut wages nearly in half, from about $28 an hour to as little as $14, to remain competitive with rivals that have squeezed similar concessions from the U.A.W. During the strike, the company threatened to permanently close the plants where workers were picketing and shift work to Mexico instead.

This is capping off nearly 15 years of NAFTA being used to break labor's back. Our friend Kate Bronfenbrenner did a study for the North American Commission on Labor Cooperation showing that after passage of NAFTA, as many as 62 percent of U.S. union drives faced employer threats to relocate abroad, and the factory shut-down rate following successful union certifications tripled. Such defeats provide the institutional backdrop to a generation of wage stagnation and corporate takeover of government.

Corporate takeover of everything department

And the food crisis roils on, thanks to NAFTA and WTO's neoliberalization of the food supply. Mexican farmers continue to be displaced in the wake of NAFTA:

“We migrate because we don’t think there are options,” Mr. León said. “The important thing is to give options for a better life.”

Viewed against the backdrop of rising food prices in a global marketplace, Mr. León’s fight to keep farmers from abandoning their land is much more than a refusal to give up a millennial way of life.

As Mexico imports more corn from the United States, the country’s reliance on outside supplies is drawing protests among nationalists, farmers’ groups and leftist critics of Mexico’s free trade economy. Earlier this year, as the last tariffs to corn imports were lifted under the North American Free Trade Agreement, farmers’ groups marched against the accord in Mexico, asking for more aid.

And the few that made it across the border are now getting slammed by ICE stings. And has anybody noticed that the destruction of Mexico's traditional economy and import substitution schemes have not led the way to more efficiency, but greater instances of narcotrafficking and narcoterrorism? I mean, seriously, we seem close to having a failed state on our borders.

In other news, apparently the Supreme Court is so taken over with corporate concerns that they can't even hear international human rights cases any more, most recently in the case of apartheid in South Africa. And though it's not directly trade related, I thought this piece on the Senate compromising on banning menthol cigarettes showed an outrageous form of health and environmental racism:

Menthol is particularly controversial because public health authorities have worried about its health effects on African-Americans. Nearly 75 percent of black smokers use menthol brands, compared with only about one in four white smokers.

That is why one former public health official says the legislation’s menthol exemption is a “cave-in to the industry,” an opinion shared by some other public health advocates.

“I think we can say definitively that menthol induces smoking in the African-American community and subsequently serves as a direct link to African-American death and disease,” said the former official, Robert G. Robinson, who retired two years ago as an associate director in the office of smoking and health at the Centers for Disease Control and Prevention.

McCain self censors from telling Americans what polls say they want to hear

Pew Center has a new poll out in response to this question (hat tip to Deborah James for the link):

In general, do you think that free trade agreements—like NAFTA, and the policies of the World Trade Organization—have been a good thing or a bad thing for the United States?

Bad thing: 48%

Good thing: 35%

In other news, Sen. John McCain (R-Ariz.) has come out in favor of punitive tariffs on climate change laggards, but according to the NYT:

In the prepared text of his speech, e-mailed to reporters on Sunday night and Monday morning, Mr. McCain went so far as to call for punitive tariffs against China and India if they evaded international standards on emissions, but he omitted the threat in his delivered remarks. Aides said he had decided to soften his language because he thought he could be misinterpreted as being opposed to free trade, a central tenet of his campaign and Republican orthodoxy.

As we noted a couple of months ago, McCain's (and Obama's and Clinton's) climate change policies are seriously limited by his beloved "free trade" deals.

Redundant trade, Larry Summers, NAFTA

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."

Bitter fallout, murders, dodges, rules, deals

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

Following Obama's "bitter" comment, most progressives are rallying to his defense: see Sirota here, Jane Smiley here, and Katrina vanden Heuvel here. A lot of progressives I know think that Obama was just channeling Thomas Frank. I dunno, I read the comment as throwing Frank in with the Kansans, and dismissing both. After all, trade criticism was listed right along religion as a seeming opiate of the masses. It seems, however, from yesterday's news cycle that Obama did not intend to send this message. Obama now says:

“Obviously, if I worded things in a way that made people offended, I deeply regret that,” Obama said in a phone interview with the Winston-Salem Journal. “But the underlying truth of what I said remains, which is simply that people who have seen their way of life upended because of economic distress are frustrated and rightfully so.”

On the right, Bill Kristol, no NAFTA opponent, writes in the NYT on the Obama bitter remark:

Obama ascribes their anti-trade sentiment to economic frustration — as if there are no respectable arguments against more free-trade agreements. This is particularly cynical, since he himself has been making those arguments, exploiting and fanning this sentiment that he decries. Aren’t we then entitled to assume Obama’s opposition to Nafta and the Colombian trade pact is merely cynical pandering to frustrated Americans?

But mostly, all was quiet on the trade angle of Obama's remarks from the corporatists, who love to use the Guns-God-Gays wedge issues while also pushing failed trade policies.

In other news, BoRev shows video showing Hillary unwilling to answer questions about her husband's ties to Colombia.

Simon Romero writes on the union killings in Colombia, showing that Citigroup employees are among the unionists targeted for murder just this year - which has seen an uptick of killings relative to 2007:

The case of Leonidas Gómez, Ms. Gómez’s brother, is one of several examples of union officials killed in recent weeks who were involved in organizing rare protest marches last month against paramilitaries. Government investigators here said they were investigating all the recent killings but had not yet identified those responsible.

Carlos Burbano was a vice president in the hospital workers’ union of the municipality of San Vicente del Caguán in southern Colombia who disappeared March 9. His body was found four days later in a garbage dump in an area considered paramilitary territory. Mr. Burbano, who had received threats before from paramilitaries, had been stabbed multiple times and burned with acid.

Like Mr. Burbano, Mr. Gómez, a member of the Bank Workers’ Union here in Bogotá, was an outspoken critic of the paramilitaries. He had also traveled throughout Colombia to speak against the trade deal, which he expected to raise salaries of senior Citigroup executives while eroding the benefits of employees, said Luis Humberto Ortiz, a fellow union official and Citigroup employee.

Mr. Gómez, last seen at a meeting with leftist politicians on the night of March 4, was found dead in his apartment on March 8, with stab wounds and his hands tied behind his back. Missing from his apartment were his laptop computer, U.S.B memory sticks and cash from his pockets, said his sister, Ms. Gómez.

Inside U.S. Trade on Friday had some interesting dissection of what Pelosi's Fast Track move last week means. Here is my paraphrasing of their reporting:

1. Pelosi - confirmed by Rules Cmte and House vote - removed the Fast Track timeline, as well as the provision that it is highly privileged and cannot be debated. This safeguards against the scenario where Rangel passes it out of Ways and Means Committee but Pelosi remains opposed. It also safeguards against any member of Congress calling for a vote when they want. So leadership will be in control.
2. The Colombia FTA is still not amendable, however, and the Senate rules remain the same: once the House sends it up, the FTA has up to 15 days in Finance Committee, and up to 15 additional days for a floor vote.
3. However, if the Senate wants, it can vote under Fast Track rules today, but then would have to formally approve it again after the House sends it up. (This happened on CAFTA, when the Senate GOP leadership just wanted to get some momentum going by passing the pact before the House, and then taking a second vote later.)
4. Because Bush has already dropped the Colombia FTA, it will have to be voted on this Congress, or it dies. Next year, if the president wanted to resubmit it, they could, but it wouldn't automatically receive Fast Track treatment. A new Fast Track vote would have to be taken if they wanted that to apply. Ed. comment: I'm betting we see Fast Track replaced by a different system, so I wouldn't expect any new Fast Track votes.

Finally, IUT cites an April 4 letter from Rice, Paulson and various cabinet secretaries to Pelosi saying that:

In seeking to identify an agreed path forward for the Colombia FTA, the Administration’s efforts have been guided by three objectives you identified in conversations with several of us that need to be met before the Colombia FTA would have the necessary support to pass the House of Representatives. They are: (1) a strong, bipartisan vote on legislation to implement our FTA with Peru; (2) a solid Trade Adjustment Assistance (TAA) reauthorization package; and (3) progress on labor violence and impunity in Colombia. As noted above, the first objective was satisfied by the strong bipartisan votes on the Peru FTA last year. [emphasis added]

That's the first time I've seen such clear preconditions on the record. Wonder if they're true?

New NAFTA facts for your brain and heart

The Bush administration is getting restless! The candidates' ongoing campaigning against the NAFTA trade model is putting quite a spotlight on their efforts to expand NAFTA to the union murder capital of the world (Colombia.) Bush's latest counterinformation is here; our latest countercounter is here. Get your facts on! Here's a clip:

CONCLUSION: Can we evaluate the promises on NAFTA? Yes, we can!

An army of think tanks and corporations spends millions every year in an attempt to muddle even the basic facts on NAFTA. We know that under NAFTA, the U.S. trade deficit is up, manufacturing jobs are down, wages are stagnant, Mexican immigration is up, Mexican growth is down, and policy space has been seriously limited. Bush administration officials and pundits can debate whether any of these facts matter, but they cannot make up their own facts, nor serve up irrelevant ones in the hope of distracting policymakers or the public from continuing to demand trade policy change.

Liability in a globalized world

Much of the U.S. consumer movement has encouraged the development of punitive damages, mostly because of the massive holes in our regulatory and social safety net structure. Now, the New York Times reports that other countries are pushing back when asked to enforce U.S. punitive damage awards.

Still, as Europe rolls back its own social safety net, some European analysts are looking more favorably on the U.S. punitive damages' system as a stopgap measure to protect consumers. Ironically, U.S. courts, as reported in the article, are rolling back and limiting punitive damages claims... but with no social safety net to take its place. Seems like both continents are moving rightward, although in Europe, the frog may be getting so slowly boiled that there's less screaming about this issue. In the U.S., we may already be too boiled to tell.

Actually, we're not just moving back to a neutral place where there are no punitive damages. Through trade deals like NAFTA, corporations are actually creating systems of corporate "punitive damages" where the force of the law is used to their enrichment. Occasionally, they're claiming corporate-style punitive damages at the same time that they're using NAFTA to attack traditional pro-consumer punitive damages. From the NYT:

Foreign lawyers and judges are quick to cite particularly large American awards. Julian Lew, a barrister in London, recalled a Mississippi court’s $400 million punitive award against a Canadian company in 1995 with scorn. “It did bring America into total and utter contempt around the world,” Mr. Lew said.

The Canadian funeral home multinational, Loewen, at the bottom of this case actually used NAFTA to try to collect investor-state damages from the U.S. government for the attitude problems of the Mississippi "jury of your peers," in a case that the U.S. lost on the merits (the overall case was won on a technicality). We document the history here. Whatever one thinks of the tactics used by the Mississippi lawyers and judge, it seems like quite an overreach to make the U.S. government liable under NAFTA for these local problems that are just part of the institutional reality of this country.

Also, as we documented in our toy report, corporations are actually using offshoring as a way to limit their liability to consumers. As even the American Enterprise Institute's Doug Besharov conceded:

“[f]or many American claimants, the full enforceability of products liability laws stops at the shoreline. The situation worsens every year as imports fill more and more of the United States market... [the lack of liability creates an] artificial price advantage [that] will help [foreign producers] build market share, at the expense of United States consumers and insurers as well as competitors.”

Great read on Mexico under NAFTA

Gabriel Palma is one of the best progressive economists in the world. Originally hailing from Chile, he decamped to Cambridge, currently serving as one of the few Keynesians that the neoliberals that took over his department haven't kicked out. I was in his class for about a week, before I realized that in order to take graduate econometrics, you must know something about math and statistics. At that point, after spending my undergraduate years fighting the man rather than taking the tougher classes, I decided to further postpone the learning. As I take night classes these days, I am kicking myself for not having bitten the bullet while it would have been easier.

Oh well. That doesn't stop me (or you) from getting your learn on with Gabriel's work on NAFTA and Mexico. The paper is a few years old, but it remains one of the better expositions of what went down before and since NAFTA went into effect. Among his findings:

• Just nine countries account for 90 percent of manufactured exports from developing countries. Mexico is the only one of these to thoroughly go through the neoliberal ringer, courtesy of NAFTA and NAFTA-like policy changes.
• Oil used to dominate Mexico's exports, but now manufacturing (increasingly high technology) constitutes the vast majority.
• Like here at home, Mexican wages are scarcely above their 1980s' levels - whether you're looking at the maquila or non-maquila sectors. In the maquilas, you didn't have to pay anyone much of anything, since there was a bottomless pool of rural Mexicans separately getting displaced by Mexico's agriculture rules.
• Unlike here, where bubbles and debt made up for the loss of demand brought on by the trade deficit, Mexico used export growth to make up for the loss of demand brought on by wage stagnation.
• The traditional non-export manufacturing sectors have not seen hardly any increase in investment, meaning that the maquilas (which attracted tons of FDI) did not feed back into other sectors of the economy.
• It turned out to be a weak substitute for real growth, however, since value added in the maquilas and auto sectors remains about where it was before NAFTA, despite the massive increase in both maquila exports and imports.
• From just 2001-2002, 545 maquilas left Mexico for China, shedding hundreds of thousands of Mexican jobs. So much for that experiment. But as my colleague Carlos Salas shows in an upcoming paper, the few workers that got to keep their jobs have seen their wages bid up somewhat. And with absolutely none of this background, we can now see the Bush administration taking credit for the momentary respite from hell. Oh joy! A rounded development policy proposal is just around the corner, I. Am. Sure.

Now, as Rev. Jeremiah Wright might say, the chickens are coming home to roost. As CEPR documents in a recent paper, Mexico stands to lose an amount equal to 3 percent of their GDP due to the overreliance on the U.S. export market (bloated to massive deficits), which will now come crashing down thanks to our recession. Sustainable growth, anyone?

OK, so time to move on...

Yes, Hillary may have been for NAFTA before she was against it, but I'm pretty sure this applies to a large majority of the original NAFTA-boosters. And nevertheless, she voted for some NAFTA expansions, agreements that were almost word for word NAFTA or even worse, with Chile, Singapore, Australia, Morocco, Bahrain and Oman.

Obama has also denounced NAFTA in ads, in stump speeches and more, but he has also wavered, casting NAFTA expansion votes for the Bahrain and Oman FTAs.

So now what? We could, like many other blogs out there from which I'm gradually losing my vision from reading endless comments, speculate about how much of a liar either candidate is or how this is some plot to distract from Obama's "Wright" situation. But instead, it might just be better to move on and ask "what's next?" No, really. I mean I'm as partisan as the next DC partisan, but let's not dwell on this and instead do what progressives do, look ahead to what can happen with our economy, with human rights and with our foreign policy through changes to our trade policy.

And that's what both Obama and Clinton have proposed: substantial changes and new trade policies that address a lot of the problems that exist because of NAFTA and NAFTA-style agreements.

I encourage onlookers to NAFTA-gate and Clinton's records release to take a step back and really ask:

1. What do they say they will do when they get to the White House? and
2. How can I make sure they stick to what they say?

This is what economic justice advocates should be thinking about now and every day until Inauguration Day. Instead of debating minute differences and comparing past positions to new better informed trade positions, think about where we are now and what's next for our trade policy. Discuss in comments.

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

Let's not bicker and argue about who killed who

One of the funnier Monty Python scenes is in the Holy Grail movie, when a wedding (somewhat accidentally) turns into a blood bath launched by the knight Sir Lancelot of Camelot. The key line, as wedding guest after guest is murdered, is the bride's father, who does his fatherly best to salvage the occasion:

Please! Please! This is supposed to be a happy occasion! Let's not bicker and argue about who killed who. We are here today to witness the union of two young people in the joyful bond of the holy wedlock. Unfortunately, one of them, my son Herbert, has just fallen to his death.

You can see it in this video, about 5:40 minutes in.

A little bit of this quirky logic is at work in Rahm Emanuel's latest piece for the Wall Street Journal, which tries to get people to stop arguing about NAFTA (which he rammed through Congress), and instead focus on other happy things like a new social contract. Pretty heady stuff coming from a guy who ignored the fair trade sweep that happened under his nose as DCCC chair last cycle, costing the party several pick-up seats while inadvertently winning others.

First, he pretends like the end-all of the trade debate is the core labor standards debate, which is far from true. He comes pretty close to suggesting that something like NAFTA that happened in the past (even if it was willfully executed by him and a host of other humans, much like Lancelot in the clip) should not be debated in the present. Pretty odd sentiment for a week when history is in, as the country tries to sort out who got us into the recession, and when Obama's forceful reflection on the history of racism in America is moving hearts and minds.

But more importantly, there is the suggestion that somehow we EITHER focus on the debate about a social contract, or we fight for fair trade policies. Friends, as much as we've been truly moved by the stories of manufacturing decline in our country, Public Citizen simply would not be in this fight if the issue stopped there. We have gotten involved because the very domestic social contract that we've spent decades fighting for - on auto and pharmaceutical regulation, on democratic process, on consumer safety - was threatened by a trade agenda that delved deeply into the domestic sphere, limiting our policy space on domestic issues. Rahm's four domestic suggestions are: expand education, health care, green jobs, and savings. Absolutely sign me up, but first take note that these policies are limited by the WTO and other trade deals, and (though important) will not by themselves solve the problems of our fundamental lack of balance and effective demand in the economy (which will involve balancing trade and making the world safe again for regulation).

If having to talk to people like us about this fact is annoying to Rahm and others as they promise (not the same as deliver, is it?) a new social contract, - if we're the obstacle here - there is a very easy and quick solution: rewrite the rules, and don't waste time expanding them any further. It's not that talking about them is a distraction from the "real" issues, it's that so-called "trade" is a part of a "neoliberal contract" that must be rewritten as we fight for the things we want.

Why we should care about manufacturing employment and FTAs

There's been some fretting in the blogosphere about the NAFTA job loss numbers cited by the candidates, and generated by our friends at the Economic Policy Institute (EPI). I won't do a full response to the original American Enterprise Institute comment piece that sparked the musing. Suffice it to say that the Trade Diversion site has it right when they say that "trade affects the composition, not the number, of jobs in an economy." That's right, and tradable sectors like manufacturing lose out when there's a trade deficit. A few additional points, in no particular order:

1. There's things that you can criticize about the EPI methodology. Where people start to sound ridiculous is when they suggest that you wouldn't have more manufacturing jobs with balanced trade. You can debate the numbers, but you can't debate the underlying theory, or the political heart that EPI has after all these years trying to talk about an issue that matters to working people the neoliberal think tanks deny even exists.
2. I mean, seriously. It is amazing the kind of flak you take in this town for just trying to put a number on something that everyone knows is happening. And all over whether input-output tables like the kind you learned in matrix algebra are the best tools to use in looking at the problem! Seriously! That's what the "fuss" is about.
3. We've been running a trade deficit since before the Tokyo Round of the GATT, but it grew bigger after NAFTA and the WTO kicked in. To the extent that these deals offer incentives to offshore U.S. production in tradable sectors above and beyond that already promoted by the high dollar policy, then real people's work was affected.
4. But it's true that if the only thing you care about is reducing the trade deficit, then fights over FTAs are not a first order fight for you. They may be a second order political fight because you know that time spent negotiating and passing FTAs is time not spent fighting the trade deficit, i.e. you may think it's a good indication of absolutely backward political priorities in Washington. And that's right: it seems pretty clear that the 110th Congress will have spent a year working on the Peru FTA, and will have done nothing on the trade deficit. The chief first order reason to oppose FTAs remains that they're atrocious neo-liberal policy that do the wrong things for development, for democracy, and for regulation.
5. Bosses could use the threat of relocation to hold back wages, which because we have a national labor market, contributes to wage stagnation for everyone, not just manufacturing workers.
6. There's a startling lack of sympathy in much of the punditry's discussion of blue collar workers. Think to a time when you had a rough personal year - maybe you got fired, had a relationship fall apart, struggled with sickness. These are years that you will remember for the rest of your life, even as you try to forget them. They carry a deep psychic toll that you may never fully recover from. This is just a fraction of what many people who lose manufacturing jobs go through. Its a real cost to our economy and our democracy and civilization, and a major cost to these people's lives. It perpetuates the injuries of class that make progressive movement building very difficult.
7. Manufacturing is pretty sweet because it - like fast food jobs - doesn't require a lot of advance education. This is good, since most Americans don't have that much education. The thing is, there's simply not that many highly educated workers that the economy needs, with most jobs "of the future" projected to be in hospitality and related services. At a manufacturing plant, you can get on the job training, and have a pretty good shot of making a middle class income and being covered by a union contract. Whether you care about innovation or national security, manufacturing is also pretty important.
8. Some pundits like to say that manufacturing isn't in crisis because manufacturing output is at high levels. But this stat measures that total value of shipments coming from our manufacturing facilities, and doesn't take into account the value of imported parts. U.S. manufacturing value-added, a more appropriate measure, increased 13 percent between 1993 and 2006 – the exact same rate as between 1980 and 1993.
9. I have friends in service sector unions that say that it's important for progressives to talk about making bad service sector jobs into good jobs, just like was done with manufacturing. I don't disagree with that (I'm an SEIU member!), and I don't think that this contradicts any of the things that I've said.
10. If you don't think that manufacturing matters, then you may not care about a small trade deficit. But if you value macroeconomic stability and predictable trade flows (something more important if you've a developing country trying to to figure out the right degree of export orientation), then you should worry about a large trade deficit in the world's largest economy. In fact, you should worry about it a good deal more than the U.S. federal budget deficit, which is about half as large as the trade deficit.
11. If you think that having 2.3 million Americans or 1 in 100 Americans (and one in nine prime age black males) being behind bars is a national tragedy, then you might think it would be a good idea to have more entry level manufacturing jobs in the inner city. In fact, if we had a trade deficit that was the size of the budget deficit, we could (conservatively) create 1 million jobs. Wouldn't that be a good place to put some of those non-violent offenders?

Musings on Spitzer, trade and sex trafficking

The news that Gov. Eliot Spitzer was caught on a wiretap soliciting sex across state lines is shaking the country. If you're like me, the most surprising thing is that politicians think they can get away with this kind of thing, especially when there is a paper and phone trail. My wife informed me at my birthday dinner last night that she would not attend the news conference if I ever attempted something like that!

But the news on this got me thinking about human trafficking, which, as far as I know, is not at all what Gov. Spitzer is being investigated for. No, it's because I recently saw this Kevin Kline movie Trade, which is not the best movie in the world, but which is based on stories of real-life trafficked women in the article "The Girls Next Door" by Peter Landesman. According to estimates in the article, there are as many as 10,000-50,000 individuals kept in sex slavery in the United States every year, mostly trafficked from Eastern Europe and Latin America and then brought across the U.S.-Mexico border.

The whole article is chilling, but this paragraph provided some context:

Donna M. Hughes, a professor of women's studies at the University of Rhode Island and an expert on sex trafficking, says that prostitution barely existed 12 years ago in the Soviet Union. ''It was suppressed by political structures. All the women had jobs.'' But in the first years after the collapse of Soviet Communism, poverty in the former Soviet states soared. Young women -- many of them college-educated and married -- became easy believers in Hollywood-generated images of swaying palm trees in L.A. ''A few of them have an idea that prostitution might be involved,'' Hughes says. ''But their idea of prostitution is 'Pretty Woman,' which is one of the most popular films in Ukraine and Russia. They're thinking, This may not be so bad.''

This recalls the 14 years of Juarez murders, where women that were thought to be trafficked were murdered. A lot of advocacy groups on the border relate this to NAFTA, because of the boom in border maquiladora activity, at the same time of a general decline in rural employment and developmental state strategy in the 1980s and 90s locked in by NAFTA. This of course parallels what has been happening generally in developing countries and the former Soviet Union, where NAFTA-WTO like policies have been adopted over the last several decades.

Mainstream media editorial boards might not have a problem ignoring the men who lose manufacturing jobs as a result of economic restructuring. But these trafficked females are the other side of a move towards more precarious social structures in the NAFTA-WTO period. As everyone from Karl Polanyi to Saul Alinsky recognized, anyone concerned about the majority's economic welfare has an interest in trying to mediate the pace of even otherwise benign economic change. How much more so with our trade policy, which is plainly not benign for the majority? When you read the stories of desperation brought on by restructuring, the call for global full employment and industrial democracy becomes all the more pressing.

Fair trader replaces Denny Hastert in special election

Yep, a big surprise over the weekend as former Speaker Dennis Hastert (R-Ill.) - an anti-fair trader in 20-out-of-20 votes over nearly as many years - was replaced in a special election by Democrat Bill Foster in a very GOP-leaning district west of Chicago.

Foster, like so many of the candidates that have run for office in the last few years, campaigned heavily on critique of the trade status quo, even running paid ads on trade, which you can see here.

Day before Ohio

Our regular readers will have noticed that we have not been rounding up all the back and forth between Clinton and Obama on the NAFTA issue. Indeed, by sheer number of press hits, NAFTA is the top story in the country.

Part of the void at EOT is that I've got a pretty insane fever and am bedridden, while some of our other contributors are also out. But it's actually for a reason: there's been quite a bit more heat than light in much of the coverage, and it would be exhaustive to try to correct all the errors in the coverage and reporting, as the media grapples with a story that has been all but shut out of the mainstream debate over the last 15 years.

Take the ongoing story about the memo leaked from the Canadian government supposedly showing Obama gave a wink-wink on NAFTA. As the Cleveland Plain Dealer reported, citing one of our own:

Lori Wallach, director of Global Trade Watch, a group that is sharply critical of U.S. trade policy, said she is drawing no conclusions from the memo.

"What it means about any U.S. candidate is really hard to decipher because it's all coming through the lens of a right-wing Canadian government," she said.

Wallach said she sees no difference between the trade votes of Obama and Clinton, and thinks both have moved closer to her group's position during the campaign. "Neither of them started out as great champions of trade reform," she said.

Ohio Democratic Sen. Sherrod Brown, an outspoken opponent of U.S. trade policy who hasn't endorsed a candidate, said he regards the memo as "much ado about nothing" because it comes from a conservative Canadian government.

Brown said he doesn't see much difference on trade between Obama and Clinton despite the two campaigns' fierce fighting over the issue.

"I don't think anybody's going to vote on the difference between Hillary and Barack on trade," he said.

Or take the editorial by Jagdish Bhagwati in the Financial Times, where he lays out the neoliberal case for Obama:

Mr Obama’s main union support comes from the Service Employees International Union and the Teamsters, neither of which is protectionist: the SEIU’s membership is in the non-traded sector and, except on the issue of Mexican trucks coming into the US, Teamsters do well as trade expands. By contrast, Mrs Clinton’s support comes heavily from the AFL-CIO, which holds strong anti-trade views. This matters because the IOUs you sign during campaigns provide a straitjacket that can restrict your policy options.

Uhh, I don't know even know what these terms mean, but I do know that Change to Win was the federation that actively opposed the Peru FTA last year, and the Teamsters are one of THE most active members of the Citizens Trade Campaign, which has been extracting commitments from the candidates all throughout the race. And if you're worried about restricting your policy options, the WTO poses a much bigger threat to Hillary and Barack than do unions, as we showed in a report last week.

What we're seeing is the mainstream press and elite commentators trying to grapple with a perspective that is very common in middle America, but all but shut out from news outlets. They're getting the facts and the players wrong; they're misrepresenting the issues at stake. The fact that the Democratic primary dragged on this long - to the point where people in Wisconsin and Ohio are actually making a difference in selecting the nominee - means that fair trade issues have to be addressed. Is there a way we can make this happen every four years?

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

New report: Clinton, McCain, Obama - can we go a little deeper?

As long promised, we published a report today that Mary Bottari and I wrote that looks in detail at the Clinton, McCain and Obama plans on health care and climate issues. Our focus is on what changes need to be made to the WTO, NAFTA, and other trade pacts to allow for needed policy space in this area. Here's the press release for the report:

To Implement Domestic Campaign Policy Priorities on Health Care and Global Warming, Future Presidents Must Alter Existing U.S. Trade Commitments

New Public Citizen Report Identifies Changes to WTO, NAFTA Rules Needed to Facilitate Candidates’ Proposals on Health and Climate

WASHINGTON, D.C. – Public Citizen today identified changes needed to World Trade Organization (WTO) rules and the investment provisions of the North American Free Trade Agreement (NAFTA) to implement a dozen of the presidential candidates’ key health and climate policy proposals.

The changes were detailed in a report, “Presidential Candidates’ Key Proposals on Health Care and Climate Will Require WTO Modifications, Overreach of WTO Highlighted by Potential Conflicts with Candidates’ Non-Trade Proposals,” released today, available at http://www.citizen.org/documents/PresidentialWTOreport.pdf

“Growing public ire about our current trade and globalization policies’ damage to Americans’ economic prospects has played an enormously important role in this election, with most candidates committing to reform NAFTA,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “But candidates and voters have little idea that some of the candidates’ domestic policy priorities on health care and climate change could be limited by the overreach of so-called trade agreements like the World Trade Organization. The need for a comprehensive overhaul of the WTO could not be more urgent.”

Although they have nothing to do with trade, key health care cost containment proposals on the creation of health insurance risk pooling mechanisms, reduction of pharmaceutical prices and electronic medical record-keeping, a proposal to expand coverage by requiring large employers to provide health insurance and a proposal to establish tax credits for small employers as an incentive to provide health insurance fall within WTO jurisdiction. In addition, proposals that address climate policy, such as increasing CAFE (Corporate Average Fuel Efficiency) standards, banning incandescent light bulbs, establishing new regulation of coal-fired electric plants and establishing national renewable portfolio standards (RPS), green procurement proposals and green industry subsidies come under the jurisdiction of existing U.S. WTO commitments.

“Corporate lobbyists, previous U.S. presidents, and ‘free market’ think tanks worked hand-in-hand to lock in corporate privileges on health care, energy and other domestic policies and shield them from small ‘d’ democratic reforms of the kinds proposed by Clinton, McCain and Obama,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch division and an author of the report. “Now is the moment presidential candidates must stand up for their important domestic platform priorities and commit to renegotiate the WTO and other flawed trade deals.”

Moreover, the candidates haven’t addressed the need to renegotiate other provisions in trade deals like the WTO, NAFTA and other NAFTA-style trade deals that severely limit future presidents’ policy space to enact legislation on non-trade issues.

“Trying to work within the tiny policy space permitted by existing WTO rules would result in the challenges surrounding America’s health care debacle and the global climate crisis being defined so narrowly as to ensure real redress is impossible,” said Wallach. “The candidates must reject corporate calls for watering down their proposals and instead emphasize opening up the much-needed policy space to provide real solutions to pressing domestic concerns.”

Trade back-and-forth in OH

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

Clinton and Obama's showing in last night's Democratic debate gave us a few more glimpses into the candidates' plans for redirecting our trade policy. The highlight of the debate was both candidates' commitment to renegotiate or threaten to opt out of NAFTA. Though neither would commit to pulling out of NAFTA in the six month time frame, this is still a dramatic statement that we have not seen from either of the candidates previously. For more background on their stances, check out David Sirota's primer from yesterday.

This news will come as a great big sigh of relief for many Americans who have seen their lifestyles turned upside-down by our misguided trade policies - including NAFTA and almost a dozen clones that we've seen materialize since.

The CNN Political Ticker notes the moment and Ohio Senator Sherrod Brown's reaction:

Both Hillary Clinton and Barack Obama were asked if, as president, they would opt out of NAFTA in six months. Both candidates said they supported restructuring NAFTA and would use the threat of opting out of the agreement as a negotiating tool.

"They said it exactly right," Brown told CNN. "I want trade and more of it. I want it under different rules."

Brown voiced loud opposition to NAFTA during his 2006 Senate campaign, in which he unseated GOP incumbent Mike DeWine.

"If we say we want a different NAFTA," Brown continued, "they will negotiate, always with the threat of opting out if they don't, and that's exactly the right position. And I was thrilled, because I have not heard either of them specifically say that and they answered the question directly."

MLIVE, a Michigan news service, says that their state sympathizes with "Ohio's special beef":

Until now trade generally has been a low-profile issue in the long Democratic campaign. But Ohio has a special beef with U.S. trade policy, which union activists and many Democrats blame for a steep manufacturing decline.

Only Michigan has suffered a greater loss of manufacturing jobs than the 265,000 (23.7 percent) Ohio over the past seven years, mostly as a result of corporate outsourcing and plant closings. It's the worst jobs loss in Ohio "since the end of the Great Depression," according to the American Manufacturing Trade Action Coalition, a manufacturers association.

"Trade is an issue here," said Amy Hanauer, executive director of Policy Matters Ohio, an issue think tank, "and NAFTA is a proxy for trade. ... It may hurt Hillary Clinton."

The political consequences were made abundantly clear two years ago when Democratic Rep. Sherrod Brown unseated Republican Sen. Mike DeWine handily, chiefly by denouncing U.S. trade policy.

The New York Times reported this morning from the famous Midwest stumping-ground:

“We’re sick and tired of the empty promises and the same old story line about Youngstown and the mills,” said Phil Kidd, 28, a blogger and community activist who has sold 10,000 T-shirts that shout “Defend Youngstown” over the image of a steelworker wielding a sledgehammer. “The problem is that this is a rubber-stamp Democratic area so they know it’s almost a guarantee they’re going to get our vote. We just have to hope that this time whoever wins won’t forget about us.”

Both Democratic candidates have promised to remember, kicking off their Ohio campaigns here with fiery populist speeches they hope will appeal to the 100,000 Democratic stalwarts who live up and down the Mahoning Valley, the cradle of the Ohio steel industry and a place that has been shedding union-wage manufacturing jobs for the last 30 years...

Mr. Obama has also honed his message to tap into the anger and despair heightened by growing unemployment and the foreclosures that have felled 79,000 homeowners in the state. In a speech at Youngstown State University, he told the crowd he would give generous tax breaks to the middle class, establish a $10 billion fund to help homeowners facing foreclosure and provide incentives to companies that invest in struggling cities.

“Everywhere I go — not just in Youngstown, but everywhere — you see people who have worked in a plant for 20 years, put their heart and soul into building profits for shareholders,” he said. “Suddenly, the rug’s pulled out from under them; the job’s shipped overseas. They don’t have health care. They don’t have a pension. They’re trying to compete with their teenage kids for a job paying seven bucks an hour at the local fast-food joint.”

If the after-work crowd at the Golden Dawn tavern is any guide, Mrs. Clinton still enjoys solid support from the men whose rough hands and plain-spoken ways put them in the coveted demographic that analysts say hold the key to winning Ohio next Tuesday.

Many of the men who were sitting at the bar and salting their goblets of beer had clearly absorbed Mrs. Clinton’s contention that her opponent is too inexperienced to be president.

From The Washington Post, an elaborate lie-detector scale:

You would not think so from the way they have been attacking each other, but Clinton and Obama are not all that far apart on NAFTA. They both believe in free trade, but they both contend that the United States has gotten a bad deal from the way NAFTA and other trade deals have been enforced. Both candidates have used quotes selectively to slam each other. Two Pinocchios apiece.

ONE PINOCCHIO: Some shading of the facts. TWO PINOCCHIOS: Significant omissions or exaggerations. THREE PINOCCHIOS: Significant factual errors. FOUR PINOCCHIOS: Real whoppers. THE GEPPETTO CHECK MARK: Statements and claims contain the truth, the whole truth and nothing but the truth.

Is it all about whitey?

"White Men Hold Key for Democrats", blared the Wall Street Journal headline, in discussing the Obama and Clinton's camp supposed courting of the white male "blue collar" vote in Ohio. Speaking as a white person (okay, and someone who had a class in whiteness studies led by a Korean guy who studied lesbian Iron Maiden fans in Appalachia), we're not that used to having our race pointed out to us quite so openly. That's what makes my new favorite blog, Stuff White People Like, such a hoot. (It's so true! I do totally heart standing still at concerts! lol lol, etc.)

Clearly, though, white men are a demographic group that left the Dems first in the 1960s-1970s, and again following the Dems' support of NAFTA in 1993-94, as Ruy Teixeira and Joel Rogers aptly showed in their 2000 book. This is a group that cares a lot about trade policy and economic security, and appealing just to the "latte-drinking, Prius- driving, Birkenstock-wearing, trust fund babies" crowd is not likely to play that well in Ohio, as evidenced by the Machinists' president using that as an epithet against the supporters of one candidate.

But, c'mon people, it's not just about white people, as a new study released today from my buds John Schmitt and Ben Zipperer from the Center for Economic and Policy Research shows. Among its findings:

Today, only 15.7 percent of all black workers are union members or covered by a union contract at their workplace. Twenty-five years ago, that share was 31.7 percent. Part of the reason for the decline in unionization among African Americans is the decline in U.S. manufacturing. But even within manufacturing, unionization rates have been falling. On average, manufacturing workers are now no more likely to be in a union than workers in the rest of the economy.
 
The study, which analyzed data from the Census Bureau's Current Population Survey, found that the share of African Americans in manufacturing jobs fell from 23.9 percent in 1979 to 9.8 percent last year. From 1983 to 2007, unionization rates among African Americans dropped from 31.7 to 15.7 percent. Unionization rates also dropped among whites (from 22.2 to 13.5 percent) and Hispanics (24.2 to 10.8 percent) during the same period, but the declines were not as steep as those for African Americans.

So it may be more apt to say that "The Economy Holds the Key for Democrats," or indeed for anybody wanting to compete in states where manufacturing and unions matter.

Global justice on the move, with global ambulance chasers right behind

I am pretty jazzed from a great weekend spent with the Citizens Trade Campaign, whose far-flung organizers from around the US came to town this past weekend for a national meet-up. These coalitions - from Oregon to Maine, from Texas to Minnesota and all parts in between - are truly the front-line for the campaign to overhaul our trade policies to align them with the public interest. There was a lot of fascinating presentations on the trade-linkage to immigration, climate change, labor, and higher education issues, which I think will be fueling a lot of interesting work in the year ahead. Indeed, the resolutions and other policies that this group will be pushing - especially at the state level - are part of those educational building blocks that will help us move towards our goals over the coming decades, which is what it will take to fundamentally change the way we approach global warming policy.

Incrementalism is also a feature of the other side's approach to the issue. As ITN documents in their latest issue, corporate interests have made some calculated gambles on a series of investment cases which - even if they don't produce an immediate win - chip away at the public interest by building very pro-corporate case history.

The first was a NAFTA case brought by a Canadian corporate cattlemen group against the U.S. border shut down following the episodes of mad cow disease in Canada. This coalition maintained that this US action - even though they had no observable investment in the US - violated their investor rights in the US. The NAFTA panel ruled against jurisdiction on the claim, even though they have done nearly the opposite in the SD Myers case where there was little or no overseas investment. And they also left the door open to challenge of the US food safety measure under other parts of the NAFTA agreement. So, lost the battle, but well positioned for the war. (Note that these precedents aren't binding on future panels, so unpredictability reigns!) 

The second item of interest is the advice being given to Internet gambling companies that are dismayed that the Bush administration bowed to pressure and removed gambling services from WTO jurisdiction. The global "ambulance chasers" - out to help corporations claim victimization and bilk all sorts of payments out of the corporate handout that is our "trade" policy - are advocating that these companies use bilateral trade and investment agreements to get compensation for not being able to serve U.S. gambling addicts their online fix. This is precisely the kind of corporate checkmate that our "trade policy" allows - first we get you at the WTO, then under CAFTA, then we let investors privately get you under other treaties, etc. - all the while getting payments from taxpayers. When are we going to see some elected officials willing to face down these jerks and kick over the chess table?

The field narrows, and advice from Feingold

This just in... Romney to pull out... On trade, Romney started out his campaign by talking about how great offshoring was, only to end up in Michigan talking about fighting for manufacturing jobs. A strange thing, democracy - when it works, it ends up changing the positions of those in power.

Even Huckabee, who as governor of Arkansas signed his state up for the procurement chapters of NAFTA-style deals, channels some of our own Holly Shulman from earlier in the week:

When President Bush agreed with House Democrats on a stimulus package centered on big tax rebates, for example, Mr. Huckabee raised the hackles of supporters of free trade by arguing that the plan in effect subsidized the Chinese manufacturers of imported consumer goods. And he argued that the money would be better spent building roads, bridges and other infrastructure projects at home, irking proponents of limited government.

In the wake of Edwards losing the race, there are now new power centers pushing on Clinton and Obama to fair trade it up. As John Nichols writes:

"Talking about experience and idealism is so much conversation for Wisconsin people," says Feingold, a three-term U.S. senator who serves with Obama and Clinton and who flirted with making a presidential run of his own this year. "We'd like to hear something about what they're going to do. It's amazing to me that this campaign has gotten as far as it has without getting down to specifics. But Wisconsin voters expect more from the candidates than the slogans." Like what?

Feingold says that the two remaining serious contenders for the nomination need to bone up on trade policy -- and its impact of real people in places like Wisconsin.

"I would urge them to be aware of the devastation that has occurred for people in the state over the past twenty years as a result of trade policies that were forced through Congress without any concern for working people in states like Wisconsin," says Feingold, who has since coming to the Senate in 1993 consistently opposed the free-trade agenda of both the Bill Clinton and George W. Bush administrations.

The campaign — especially on the Dem side — could get pretty interesting as the candidates grasp at something — anything — to differentiate between the two. Feingold's suggestion seems pretty savvy to me.

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

Pre-Super Tuesday reflections

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

A lot of folks are offering their reflections the relative merits of the candidates (see here, here, here, and here.) I was able to share mine at San Francisco's NPR station a little earlier today.

As I see it, we should evaluate trade policy on three overlapping dimensions:

1. Who is affected
2. How is it made
3. What are the "surprise" implications for non-trade policy

On the first front, I'm thinking of how our trade policy has resulted in (or not helped us avoid) a skyrocketing trade deficit, largely stagnant wages and farm prices, and the loss of millions of manufacturing jobs, hundreds of thousands of family farms, and an increasing number of service sector jobs. Nearly every candidate touches on this part of the issue - even Huckabee and Romney with their comments on manufacturing. (McCain has spoken about compensating losers through TAA.) With the exception of Ron Paul (who calls for scrapping the WTO, NAFTA, etc. directly), the whole field talks about the losses from trade policy for many people. They are largely silent on the trade-wage connections.

The second category relates to how we make trade policy. For four decades, our trade policy has been conceived under the undemocratic Fast Track mechanism, which takes away Congress' constitutional authority and responsibility to set our trade policy, and gives it to an executive branch that sets the terms and picks the partner countries and writes the deal, leaving Congress only an up or down vote. Obama has talked about replacing Fast Track, while Clinton has said she will hold off from asking for Fast Track until she reviews past agreements.

Finally, as we have long been arguing, trade policy these days is only marginally about trade. Much of the 600-page texts of the WTO and FTAs has to do with how we adopt policies domestically. Thus, a move to universal health care could be challenged as a limitation on market access for health insurance companies. Under our FTAs, investors can demand taxpayer money for public interest policies that limit their future expected profits. Obama has addressed investor-state, consumer protection, and domestic regulation. We haven't heard much from the other candidates on this dimension.

As we'll document in an upcoming report, both the Dem and GOP health care and climate change proposals could face WTO challenge. More specific responses to these and other questions can help voters can make an informed choice.

The Colombian Corporate Agenda... from the inside

Today, at an event at the Council of the Americas, a corporate organization, I was introduced to a delegation of corporate CEOs from Colombia: David Bojanini of South American Insurance, Manuel Carvajal of the Carvajal Corp., Antonio Celia of Promigas and Francisco Diaz of the Corona Organization.

The event was introduced as a discussion of whether the "free trade agreement" would help improve Colombia, but amongst the diverse panel made up entirely of CEOs of Colombia's corporations (but from different geographic regions, perhaps? Though not even sure about that...), no one said that the FTA would be a bad idea, omitting the perspective of most civil society groups in Colombia and not leading to much of a discussion.

Each businessman outlined their commitment to improving life in Colombia. Antonio Celia said, "we provide jobs...hoping that they [workers] will be compensated with commitment and personal reward." (I'm sure most Colombians would prefer a living wage)

They also said that as opposed to Mexico pre-NAFTA, Colombia's corporations have a real sense of social responsibility and the problems were different in Mexico. (a  reminder that drugs were one of the major issues during the NAFTA debate and last I heard most of our cocaine still comes from Colombia...?)

Bojanini said that he is "very concerned about the well-being of our employees. We have deep respect for our labor unions - many of our companies have unions. We support free association." (and still the most dangerous country for unionists in the world)

After going on about all the contributions of what they admitted was not a representative sample of Colombian CEOs, Francisco Diaz strained to say, "we're trying to tie this into the FTA..."

There was also the obligatory exchange about Venezuela and Chavez (that "purveyor of false populism" Bush mentioned last night in the State of the Union). The CEOs cited that the #1 market for Colombia corporations is the U.S. and #2 is Venezuela. The businessmen also said that the private sector has no control over this and will continue to send the "wrong signal" by exporting to Venezuela, but the government can't send the "wrong signal" by rejecting the trade agreement, because the top two exporters might switch places and then the world will end!!! ahhh!! This was an especially interesting statement given the frame of this forum as about Corporate Social Responsibility, but I guess by this point they had forgotten the corporate responsibility part...

The CEOs were also excited to announce that they were adopting a few conventions of a Human Rights Code of Conduct that they had written. I would think that since they wrote it they would sign up for all of it, but apparently some of the private-sector written Human Rights Conduct just went too far in supporting human rights.

And then they assured the people around the table including a few reporters that this forum and this trip was in fact "not a PR effort." (Well, at least with only the two reporters who showed up and the arguments full of holes, it wasn't a very successful PR effort.) 

New(ish) intelligence on trade

When Congress is in recess, it's always a good time to catch up on some of the academic and think-tank writings on globalization. Hey, it's definitely more interesting than the horse-race among the 2008 candidates for president, now in it's second year.

• Bruce Campbell of the Canadian Centre for Policy Alternatives takes a look at the corporations operating in Canada that pushed for the Canada-U.S. FTA in 1988, which paved the way for NAFTA in 1993. (Here in the U.S., the Canada FTA counted among its supporters: John McCain (and Biden and Dodd), and had among its opponents Duncan Hunter and Bill Richardson (in a rare fair trade vote).) Campbell finds that, despite the promises of these companies at the time, they have actually reduced their number of employees by 20 percent, while increasing revenues by nearly 130 percent. (CEOs have also seen their pay relative to workers more than double since 1988, during which time workers' wages have not budged in inflation adjusted terms.
• Ann Helwege and Melissa Birch from the Global Development and Environment Institute at Tufts University take a look at Latin America under neoliberalism, and find that the claims that poverty has been reduced are highly suspect. Namely, once you exclude Mexico and pre-96 Brazil (and even these are contested), most major economies in Latin America have seen rising or stagnant poverty. Moreover, as they point out, no one should be getting a cookie for modest poverty reduction even where it may have occurred: the lives of folks making $2.01 a day versus those making $1.99 a day are broadly comparable and desperate, even though $2.01 is considered above the poverty line. Moreover, if income is increasing (which it nearly always does), we ought to see poverty decline. The rate of improvement is what matters. In some of these cases where poverty has actually increased (in some cases while income has increased), we have a major problem.
• Josh Bivens at the Economic Policy Institute summarizes some of his recent work looking at claims of benefits from trade from major trade boosters, and finds them sorely wanting. The point made by Josh and in related work is that, if we're going to pursue a trade policy that contributes to massive stag