Obama: Making Trade Too Complex?
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Rangel speak at IIE

House Ways and Means Chairman Charlie Rangel (D-N.Y.) gave a speech last night to the Peterson Institute for International Economics.

Worth noting is the continued deliberations over what/how/if labor rights may/could/should/will be incorporated into FTAs and Fast Track. Follow the full verbatim transcript after the jump.

April 23, 2007 – Rangel Speak at Peterson Institute for International Economics

Rangel: Fred forgot to mention that the title of my book is “And I haven’t had a bad day since.” I should add that I don’t intend to have one tonight. [laughter]

I thought it would be dramatic if Sandy Levin and I would walk in with Jim McCrery and we almost pulled it off on the floor. We’re going to be doing a lot of that, because we learned or felt early on that this recent election was certainly not an endorsement for anybody. The American people knew what they didn’t want, and we have yet to give them an opportunity to show what we will be able to do.

In my very partisan way, I made it very clear to McCrery that I didn’t think he had much coattails to ride on in ’08, but I also made it clear that we as Democrats had such a track record either, and we were going to have to prove that we could work together.

So, similarly we spoke to Hank Paulson, and it became clear that he didn’t come down here to Washington for a food fight, that he wanted to get something done. And we made it clear that if bipartisanship was what we needed to do, that we weren’t afraid of the executive branch, that we felt that in certain areas we had a constitutional responsibility too, and just because I’ve been bullied for 10 years doesn’t mean that I intended to accept that in being in the majority.

Let’s make it clear that Congress has constitutional responsibilities and even though even they have the most charming ambassadors at the USTR, that sometimes they believe that, the Republicans actually is the Constitution, and that they will share with us what they are going to do.

And all we are saying is that if we can work together with Republicans, because let’s make it clear, nobody in their right mind thinks that there’s a Republican or Democratic way to deal with the problems facing our great nation today. We can’t do it. There’s no Republican way to deal with social security and health care, and there’s certainly no Democratic way as it relates to trade. So it would seem to me that the embarrassment of having the minority deal with foreign ministers on trade and presidents and prime ministers saying I’m a member of the club but I don’t have anything to say about the negotiations, is just not good for the United States of America. It’s awkward and it’s embarrassing.

So, where are we in terms of the differences, if you will, between Democrats and Republicans as it relates to trade?

Well, first of all, we believe the private sector has done just a lousy job in educating this great country about how important trade is. And that wherever we find someone who has lost a job, lost a community, and have no one to blame, then you can bet your life that they think they’re taking a good political shot – and we’ve got some new members to prove it – by saying it’s all trade that caused it to happen.

When I said in the book that we’re going to have to talk, it means that while many of us know that this country can’t live alone, that we have to be competitive, that if we don’t move forward we’re moving backwards, it also means that there has to be some overt way to show that the multinationals are patriotic too. That they are concerned about health care, and why shouldn’t they be? Maybe it could be subsidized, and if General Motors and the automobile people are saying that they put more in steel than they put in, that they put more in health care than they put in steel, somebody should say that, you don’t go to your local school board to discuss and establish a national problem. And the same thing should be true of education and health care should be things that we should work together on, that are stronger, competitive workforce so that we don’t have to take something like that to the WTO.

And what are the true differences that we have? Well, first of all we believe that no country that is suffering with any type of death threatening disease or ailment, that we shouldn’t try to work out something with our pharmaceuticals to make certain they don’t die because of a policy. And I think that we’ve come close to working out these problems with the pharmaceuticals.

I don’t think that for, I might add that for 10 years, Mr. Thomas has never asked me for a vote on any trade bill, because I think that what he was trying to do was the same thing that Gingrich was trying to do and DeLay was trying to do, and that is to establish a national policy that would be a Republican policy. And I don’t say this in criticism. Sometimes people believe in their philosophy so strongly, that they just don’t believe that there’s any room in the Constitution for their type of thinking. And if you really believe that organized labor is so bad, how could you possibly suggest that international labor standards be anywhere. But included in those labor standards are just things that we as Americans take for granted. That we will not drive a labor force, and do business with a labor force, that’s using children. That we find it repugnant to think that we’d be dealing with a country that’s involved in slave labor. That we would not want investors to have more rights in suing us than we would have if we were suing them.

So what are basically talking about? These things are not Democratic principles. These are American principles. And sometimes our business groups would rather bark at the moon and put out releases than to find out what is going on, as Mr. McCrery and I are trying to work out language that would be acceptable to the House of Representatives. With all due respect to the lobbying groups, sometimes when you lobby too fast without knowing the facts, you’re really not helping anyone, especially the interests that you do have. And one of the major things that we were concerned with is being sensitive and truthful and using the experts who deal with these subject matters each and every day.

And so as so often Sandy Levin would be saying, we are not going to allow new trade agreements to take away agreements that we already have. Agreements that were already negotiated by President Carter, and agreements that, and Clinton, and agreements that are in the declaration of the International Labor Organization. We’re not talking about the conventions, we never did talk about the conventions. As a matter of fact, the ILO only came up as an issue after all of the parties reviewed the papers, and I was able to take it to my caucus, and they agreed to that. And then after that, of course, we had some members of the minority party that thought that slave labor could mean that Hugh Chavez could put some money into Peru and sue Senator Grassley for having kids working on the farm.

And there was a lot of imagination involved in some of these things. It’s that if you don’t like labor here, I can fully appreciate why you don’t like it anywhere. But the question isn’t what you like, it’s what do you want your country to look like? What do you want America to look like? And it just seems to me that since we’re not talking about labor standards here, that some of the countries we go into… Sandy can tell you, sometimes we’ve had tears in our eyes to see the peasants and the farmers and the priests and the ministers that came from the Central American countries begging for us to approve those agreements. Showing how poor they were, and the hopes and the aspirations they had, to one day perhaps come close to America. But they say, please don’t endorse any agreements that we’re not in. That we have a hard time in our country, that we want to be able to organize. We’re not talking about AFL-CIO, we’re just talking about principal standards, some of which we don’t find in Colombia today, as we take a look at that agreement.

And so, where are we now? We’ve accomplished most all of the things, and now we’re right back to where we started, and that is international labor. And so far, I don’t know how to describe this, but we have not been discouraged – right Sandy? – in terms of talking with the Republicans and the Republican leadership and talking with McCrery, that the language is very sensitive because we have people who are looking at the language to try to find a problem with it.

But, we’re very hopeful that by the end of this week, and that’s all I can say, hopeful, that we can overcome the last obstacles we have – that is finding some way that America can be certain that we’re not vulnerable to any attack by any foreign country, and certainly to make it abundantly clear that no country is going to substitute their language and their laws for the United States Congress. It seems to me that anyone who would believe that doesn’t have much confidence in the House of Representatives, or the Senate, who we’ve tried to work this out with.

In conclusion, the Ways and Means committee, Democrats and Republicans, have never had a better rapport. We are convinced that we will have these agreements, but we also think that it’s healthy for the committee and for the Congress, and certainly for the country, that whatever disagreements we have, that we would be respecting the differences of different political parties to have different views without having to be disagreeable. And of course, once someone came to one of our hearings – we’ve had three bills, all of them bipartisan – and they said, what a different atmosphere we have here. We used to come into this committee room and it was like walking into a divorce court, that no matter what one said, that you could bet your life that the other was going to oppose. And someone, McCrery says, well, “we’re not exactly out of the divorce court, but we are in serious reconciliation.” [laughter]

And so that’s where we are, and Sandy and I would be only too glad to answer any questions you have, because I came in late and I wanted to leave some time for you to respond. But I appreciate the invitation. Jim McCrery apologizes for not being here, and now we’ll take questions.


I did want to add that I have so many new friends since I became chairman. That a group of chairmen and CEOs of about a dozen multinationals visited with me last month to find some type of way that they can make a contribution in terms of math and science and education and working out some private-public way that we can make certain that during our lifetime we don’t have to become dependent on foreign intellect in order to do our businesses. And I’d just like to say that I’m not going to be shy about asking, what are we going to do about 50% of our kids dropping out of high school. I mean, I’m 77, I’m okay. But what happens in the next 10 or 20 years? and why do we just have on the business agenda issues of taxes, when we should also have on that same agenda how we can make this great country strong, and how this is so related to our ability to produce, and to be competitive, and the losses that we take, when people drop out of school. We can make sure there’s no door there to open. I know that with the military being the only option they have, having unwanted babies, the violence that’s involved, the jails that’s involved, certainly it has to be on businesspeople’s agenda how we can keep our nation strong and productive and I will be asking as you ask me, let’s see the full agenda that you’re carrying so we can work together.


Fred Bergsten, IIE: Let me start off the question with a follow up to where you just left off. When you were talking about new trade legislation, you did not mention any direct or explicit links to domestic assistance for dislocated workers. On education, I know that’s been a big priority of yours for many years. as I told you many years ago, I think that was exactly the right linkage to trade, because without better educational system, people can’t take advantage of globalization. They feel victimized by it.

Rangel: But you told me that when I was in the minority. [laughter]

Bergsten: And now I’m reiterating it. But what about, you’ve worked with McCrery, you’ve worked with the administration, what about the worker programs, the trade adjustment assistance, the unemployment insurance, the programs that do link directly to provide safety nets to workers that are dislocated, by trade or maybe anything else, is that part of the package…

Rangel: You bet your life it is.

Bergsten: Is that part of the package, why don’t you elaborate on what you’d like to see in that regard.

Rangel: Well, I, in a recent conversation that I was having with ambassador Schwab, it was just the three of us, McCrery, me and the ambassador, and I was saying that, in listening to Lou Dobbs, every problem we have in the United States that’s economic, they attribute to trade and bad trade agreements. And I said, it really doesn’t make any difference what… no, no, but the ambassador said, but I want you to know that many of these towns that have lost their industry, it’s globalization and has nothing to do with any trade agreement. And McCrery said, I don’t think you get it ambassador. He is talking about the power of the perception that it’s related to trade.

I’m here to tell you. There were Democrats who got elected just running against trade. And Sandy and I talked about the ILO, they don’t know anything about the ILO. They just say, that if you have to explain it, you’ve got a political problem.

And so, it just seems to me that as we have adventurous Americans, entrepreneurs, going into these developing countries, they’re asking for degrees, they’re asking, what have you got to work with, because we want to work with you. And so I asked the trade ambassador, when you are negotiating this agreement, is all America sitting at the table? You can have the greatest agreement in the world, and know you’re wiping out a city. Maybe it’s Buffalo, maybe it’s Cincinnati, or Cleveland. Are you thinking that you’re our ambassador too? Are you thinking what can we do? Maybe someone else has to be sitting at that table to get that community to know that it cannot survive. Maybe we can bring some of the technology we have and say, what can you do in that community. Maybe we can get some good paying jobs. Why can’t you tell these kids that, fortunately, just like I tell the story in the book, my grandfather was an elevator operator in the district attorney’s office in the criminal court building in New York. They all made it, he’s a big shot, the head starter, and they automated it and it broke his heart. But when he saw his son come back as an assistant DA, and he’s paying. [unintelligible] And some of these things you can do, by going to work with the community, seeing what you can do, using tax incentives, using your technology, and even though it’s not totally related to trade, it’s not totally unrelated to the United States of America. And sometimes when I look at the health and education situation, who should be our better partners than you? Let’s get together and see what we can do together. And you can call it trade adjustment, I call it the American way.

We want to take advantage of the knowledge that you have, and we don’t want to make it a tax and spend situation. We want to be able to get a common agenda to move our country forward. And they’re working now with George Miller. Because a lot of companies have done a good job with their foundations. So how can we do it so that it’s a partnership of people, not to create a socialistic program.

Mac Destler: congressman, thanks for being here. Thanks for what you’re doing on bipartisanship. I want to ask you a specific question, and that’s got to do with the specific negotiations. If you’re correct that it’s a wild scenario that would have people using provisions of free trade agreements with Peru or Panama to change American labor standards, why can’t we just agree to allow Republicans to put in the “safe harbor” provision? Give me the reasons why you can’t include that provision.

Rangel: well we don’t want to admit that we have worse laws than anybody, but as we said, if you as an expert share our view that the conventions are not an issue, are not vulnerable to a suit, why don’t you accept what Democrats believe, and that’s that we have a right to set this policy? In other words, we don’t feel as strongly against the word “labor” as other people do. You know?

And so, if we put the language in indicating that this doesn’t apply, and I’m not saying we’re going to do it, that this doesn’t apply to the conventions? You know. But why do I have to deal with the National Association of Manufacturers publicly? I mean, that’s not the way other people do business. And so, it would seem to me when I say we’re working on it, there are different people that oppose this for different reasons. The left who doesn’t want us to do anything, and the right who just say, why can’t you do this without putting labor in it? So, this thing could have been dealt with easily if we didn’t have this history of confrontation dealing with this, and if we become involved [unintelligible]… we’ve been working on this for how long, Sandy? A long long time. No, ten years they wouldn’t talk to us. No we were working, but no one was working with us. So, and now we’re down to fine-tuning it politically. So the answer to your question is a lot of wordsmiths and lawyers and negotiators could work this out a long time ago if it weren’t for the sensitivity of the language that has to be acceptable to all parts of our party. And McCrery is, he’s a good soldier.

Question: [Basically, how to win goodwill abroad? Suggests Cambodia model as possible alternative.]

Rangel: [consults with table of members and ambassadors. Praises USTR.]

Sandy Levin steps to mic: Just very briefly. The Cambodia model was one where there were incentives, but it’s interesting how effective it was. It was basically saying that workers being a part of globalization process was important in a country that had a command communist economy, and also had a so-called labor movement that was tied completely to the ruling party. That was a relevant experience and approach for Cambodia. Interestingly, eventually, really, rather soon, the labor movement participated in sending somebody there to work with. So incentives can be part of it, but only in certain circumstances, not the whole thing.

And if I might just say something very briefly, and there’s a difference of opinion about this. I think for Democrats, if you ask how long we’ve been working on this, it’s been 10 years on our side, trying to promote this view that in order for globalization to work, you have to spread its benefits. And I think Nigeria is probably a good example of how that isn’t happening, if I might say so, with all of it’s oil wealth. Because too many people there aren’t seeing the benefits of globalization in that sense. And that’s what we have been about: trying to make sure that, as these trade agreements are put together, that there is an involvement in terms of the basic rights in the declaration of workers. And that has been a basic position in this idea of shaping globalization. It isn’t a response to any special interest, it’s a response to the basic U.S. interest of making globalization work better.

And the reason, in answer to the earlier question, why not a safe harbor? The answer is we signed onto the declaration in 1998. We signed on to it. We promised that we were going to take steps to bring it about. And when we come to an FTA, we don’t want to sign off of a declaration that we signed onto. The basic 5 standards. As Mr. Rangel our chairman said, we’re not trying to change American labor law through an FTA. Only another government could bring a complaint, not the AFL-CIO or any other group. It would have to affect trade. and I think most importantly of all, what we’re saying is that we want to move this process ahead. To expand those who participate and benefit. And a safe harbor sends the wrong message to what we’re about. That it’s okay for you, but don’t talk to us. That isn’t the principle in any other part of a trade agreement. There’s a mutuality involved, and we want that as a basic principle, so let it be clear that’s where we’re coming from.

And our chairman has been working, working, working to make this happen. And if I might close with this. We would like a Peru FTA. We would like a Colombia, although there are different issues there, the violence. We would like one with Panama. We haven’t talked about Korea, and I’ll sit down. There are some disagreements there.

The Democratic Party is determined to carry forth with this effort that so many of us have participated in. I sit down saying this point blank: anyone who calls this gentleman, as has sometimes been heard, an isolationist, is nuts. Anybody who says that all we’re interested in is, essentially, a narrow interest – no, it’s not that at all. Mr. Rangel has worked to expand CBI. Was one of the parents of AGOA. We believe in expanded trade. we believe that, as you expand it, you have to share those who benefit from it. And one of those who haven’t benefited enough have been the workers in various countries. We stand for that principle, including workers in this country, benefiting from free trade agreements with everybody else. Thank you.

Bergsten: Sandy mentioned the Korea FTA.

Rangel: I didn’t. [Laughter]

Bergsten: I’m going to ask you if you have any observations on it. And just to speculate on this a bit, that there are some rumors that you might propose a free trade agreement with Japan.

Rangel: We haven’t received the Korea agreement. And we have big concerns about three things: automobiles, automobiles, and automobiles. And we don’t know how those [unintellible], tariffs removed because there could be some issues. How does this happen? We haven’t had a lot of people coming to us asking for support, but maybe, I don’t know right now.

I would like as many agreements, as I said in the book, that gives us a fair advantage over anybody, and I’m not thinking of going to China and looking for a job. I want those jobs here in the United States of America. So if there’s a good agreement, I’m for it. But the new theory that I’m talking about, we can’t have just a lobbyist for the companies, no matter how good the agreement is. And if the ambassador needs other people sitting at the table, so be it. But at the end of the day, we should have constituents coming to members saying, we want you to support that. But we don’t have people marching in front of our congressional offices saying, I got my job through NAFTA. They’re not there. So we’re going to have to think of some way to educate people that maybe the benefits aren’t as direct as they would want, but when we are talking about something that’s good for the united States, it doesn’t have to be through a treaty, but it could be through the economy so that we could have people be associated with new technology, new business, or something where somebody can say, hey I’m from the United states government, and I’m here to help, and no one’s laughing.

Question: [Question about labor standards, if it’s a straw man argument.]

Rangel: Well, it’s our understanding, that’s not been challenged, that we have already signed onto the declarations. So we’re not asking for anything new, we just want it spelled out so everyone see its. In addition to that, the conventions, which opens itself to a challenge perhaps about the difference in our courts and the difference in our negotiating partners, are not a part of what we asked to be in the congressional trade policy.

Now, there are people who are still negotiating the language. But what you stated is the major problem we’ve had for the last few months, and that’s people walking away feeling sincerely assured that what you mention cannot and will not happen. And any assurances you can give us to say that might help to say that, or get a legal interpretation of the declarations. And if you’re satisfied with the declarations, don’t ask me to beat up on labor, just get a lawyer. And if Bill Coleman says that this is not a partisan issue, but is just based on the facts and his knowledge of international law, then accept it. I don’t think really that on this and a lot of issues, a lot of people have accepted the fact that Democrats have won. I can understand that: 10 years is a long time. But they should be, as they’re doing now, to establish, not a Democratic policy, but something that they believe is in the interest of all Americans. And unfortunately, the confusion is on very sensitive language.

[Bergsten allowed NAM to “apologize.” Rangel preempts by accepting apology, which actually isn’t offered. Instead, Vargo praises Rangel’s “style” and gives him “style points.” Mentions telephone call to Rangel from Gov. Engler, NAM president.]

Rangel: I called the governor right after I got the copy of his letter to make it clear that I intended to be pretty rough on the way he indicated the language he was working on. But I told him that I was doing it to try to educate people that really didn’t know the difference, and he should receive the letter in that style, because a telephone call doesn’t get in the Washington Post, but the letter did. So it showed the differences in what people perceived we were talking about, and that’s all we were doing, and it’s not actually done. I think it served a purpose for NAM and for me, but that’s not the way McCrery and I have been working.

Vargo: Thank you for paying attention to our view.

Rangel: Thank you, and I look forward to working with you.

Kim Elliott, IIE: This is for the chairman and Frank. This whole debate over whether having core labor standards in a trade agreement could affect U.S. laws, it’s the first time that I actually went and looked at one of the implementing legislation from one of the free trade agreements. Right up there at the front it says, nothing in this agreement unless it specifically says so changes U.S. federal law, or U.S. state law, or creates a private right of action. So what I’m wondering if what you’re suggesting is that the Democrats would not include that provision in future trade agreements, or to Frank, if you did include it, why is that not good enough to solve this problem?

Rangel: What I was trying to suggest to you is that we’re negotiating with the White House, with the USTR, with the Republicans and Democrats, but we were not doing it publicly. That’s why the governor and I had a problem, because, I’m new at this, and when people say we’re going to work at this until we get it right, it really doesn’t help for people to tell us what to do. They can suggest, and give us advice, but they really can’t condemn us for doing something that we didn’t do. So I don’t want to make any news here tonight, I really don’t. [laughter]

Bergsten: Let’s try again. You said last week I believe that you were ready to consider the extension of trade promotion authority, at least for the Doha Round, if there was enough progress in store for the Doha Round to make it worthwhile. Assuming you can get through the discussions on labor standards, etc., what would it take by way of progress in the Doha Round for you to feel that it was worthwhile to support? Is the current deal that’s being discussed…

Rangel: I don’t know what’s being discussed. We will depend a lot on our USTR meeting; we’re meeting tomorrow with the head of the WTO, and we expect everyone to be optimistic. There are serious problems that have been going on for years. What we really want to do is to get away from, “we’re not giving the president fast track.” What we’re trying to find out is, what power of attorney are we giving the president. No matter who the president is, if it’s still in the constitution a congressional responsibility, then like with anything else a lawyer would do, we’re giving you the authority, now how you gonna use it? Because this is what we could do if there were 535 of us negotiating. And I think it’s a good way to do it, but you just can’t say yes or no. now the WTO people are trying to have us believe that if it fails it was because the president didn’t have fast track. So maybe we have to go back to the table to talk with people to see how we do nothing negative to do everything positive to push the talks, but not just to give fast track without any restrictions.

Bergsten: Let me ask. If you were able to resolve the issues we’ve been discussing – environment, labor, etc. – would you then be willing to extend fast track in the general sense and not limit it just to Doha?

Rangel: Yes. I would have to back to the committee, but once we establish principles, you know, he’s our president, that’s our USTR. We don’t check, we you get a lawyer you don’t check out their party affiliation. That’s why I like Bill Coleman so much. You just want to say we’re here, we trust you, and that’s something you have to build on, we trust you to do the right thing. And sometimes that doesn’t fit into the ideology of the party of the president, but if you have a fair person negotiating on your behalf, and the country, and this is especially true when we’re going through what we’re going through now, which is building on trust, and talking three times a day, then what difference would it make giving president fast track authority if you knew he was representing all of America.

We just… you have no idea. People say, you waited this long to become chairman, I know how happy you are. I say, it’s just like somebody not hitting you in the head with a hammer. It had nothing to do with the chairmanship. It had a lot to do with seeing the precious Congress that you know so well – with Rostenkowski, with Tip O’Neill – we work everyday. And sure, you protect your party’s principles, but not with the hatred and hostility and partisanship. And so, we’re doing okay so far. We don’t know, or it doesn’t appear as though, we have a lot of that between the House and the president. But we do have it with USTR, so we taken advantage of that. Thank you!

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Charlie just doesn't seem to get it.

Globalization -- defined as an economic system with giant companies doing business in many nations, weilding substantial political power, comoditizing labor and ruining the environment -- is a major, if not the major, source of problems for the masses of people.

Time continues, but don't be fooled into believing that "progress" does. America needs manufacturing jobs to be a strong nation. Glabalization has weakended us. While corporate health (and power) has benefited immensely, the health of our people has deteriorated.

The first line of defense in protecting our nation is to ensure that all of our people earn a living wage. Globalization reduces wages by shifting jobs to places where people are willing to accept the lowest wages. Globalization knows not decency.

Mr. Rangel, bipartisanship is nice but it doesn't sound like the solution to what America needs most.

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