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New Piece on Peru FTA's Threat to Social Security

Alternet has published a piece by Lori Wallach and yours truly on the Peru FTA's threat to Social Security entitled "Why Democrats May End Up on the Wrong Side of the Social Security Privatization War." Here's a sneak preview:

"Congress rejected Social Security privatization in 2005 and should reject it again in 2007 -- whether it's for Americans, Peruvians or Canadians. The promise of a secure retirement shouldn't stop at America's borders."

This was the reaction of William McNary, a leading Social Security activist, after finding out that some Democrats are supporting a Bush NAFTA expansion for Peru that would give Citibank, a major Democratic donor, the right to sue the country if it reverses its failed Social Security privatization.

Fair trade activists already knew that an important part of the push to cover the planet in trade deals is to give foreign investors new "rights," including the right to sue governments for compensation when public interest regulations wind up hurting their bottom line.

But the latest Bush trade proposal goes even further. Buried in the Peru pact's hundreds of pages are provisions that could empower foreign investors involved in Peru's privatized Social Security system to demand compensation from the Peruvian government (in U.N. and World Bank tribunals) if the privatization were reversed.

To read the rest, please visit Alternet.

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CTC Statement on Peru and Panama FTAs

Here's the Citizens Trade Campaign Statement on the Peru and Panama FTAs.

Oppose the Peru and Panama Free Trade Agreements

The labor, environmental, and access to medicines amendments to the Peru and Panama Free Trade Agreements made under Ways and Means Chairman Rangel’s and Trade Subcommittee Chairman Levin’s initiative represent significant improvements to these important provisions. Despite these improvements, however, major problems of the NAFTA/CAFTA model replicated in the Peru and Panama FTAs were not addressed.

The amended text of these FTAs represent the first time that a trade agreement contains binding obligations to adopt, maintain and enforce the terms of the ILO Declaration on Fundamental Principles and Rights at Work. However, regarding the labor provisions, concerns remain because the FTAs allow discretion for FTA dispute settlement panels to interpret and apply the terms of the ILO Declaration on Fundamental Principles and Rights at Work differently than the Declaration has been interpreted and applied by the ILO itself.

Moreover, in the end even the best provisions of the amended text of these FTAs dealing with labor and environmental enforcement would be dependent on the Executive Branch for enforcement. The current administration, with a consistent record of undermining domestic labor and environmental enforcement, is unlikely to enforce the labor and environmental provisions of these FTAs and the future enforcement of the new provisions will rely on similar discretion by future Presidents.

Citizens Trade Campaign believes that the United States should not adopt any new trade agreements, including the Peru and Panama FTAs, until there is a thorough assessment of the effects of existing FTAs and a new model for trade agreements is developed that can ensure future trade agreements minimally do no further harm to working families and the environment. We are eager to support future trade agreement that benefit the majority of U.S. workers, farmers, small businesses and consumers while promoting equitable development in our trading partners.

Despite the improvements, the failure to remove certain core NAFTA/CAFTA provisions means the proposed trade agreements do not pass the most conservative ‘do no further harm’ test. We look forward to working with Congress to build on the improvements made to date so as to ensure future trade agreements can obtain broad support.

Core NAFTA-CAFTA provisions in the Peru and Panama FTAs that CTC identified in late 2006 as needing to be addressed to avoid our opposition:

Continue reading "CTC Statement on Peru and Panama FTAs" »

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TAA Politrix

Trade Adjustment Assistance (TAA), also known as burial insurance, is a targeted federal program for trade-displaced workers: hardly anyone that needs it gets it, hardly anyone that is certified as eligible for it ends up receiving it. Wage insurance, one aspect of a retooled TAA package under consideration, is even sadder, as Thea Lee of the AFL-CIO put it in March testimony to Congress:

Wage insurance does not help workers get good jobs. On the contrary, the most frequently invoked rationale for wage insurance is that it promotes “rapid reemployment” by encouraging workers to look for, consider, and accept lower-paying jobs they would not otherwise take.[1] Getting workers to take bad jobs does not fit within any good jobs strategy we would propose.

In fact, getting workers to take bad jobs is not a worthy objective at all. Our national focus cannot be rapid reemployment to the exclusion of job quality, because this would argue for the elimination of all assistance for displaced workers. It is undoubtedly true that eliminating all assistance for displaced workers would result in more higher-skilled workers finding reemployment more quickly at Wal-Mart and McDonald’s, but this would hardly be a desirable outcome for higher-skilled workers, for the lower-skilled workers they displace, or for the economy as a whole.

Across the political spectrum, over at the National Review, TAA and its associated problems are seen in little better light:

Why does a worker who loses his job to foreign competition have any greater claim on public support than a worker who loses his job to domestic competition? Or, for that matter, a worker who loses his job as a result of technological change in his industry? Or the declining popularity of his product? Sen. Olympia Snowe (R., Maine) argues that we have an obligation to help the worker who loses his job to imports because free trade is a “policy choice.” But this is no answer at all. Allowing domestic competition is a “policy choice” too... An additional problem is that much of the extra money spent will go to federal job-training programs, which may not truly constitute “help” since they rarely have any positive effects on trainees.

So why are we even talking about this crummy program? Well, from today's Inside U.S. Trade:

Ways and Means Committee staff are discussing bringing the Peru and Panama free trade agreements, as well as legislation to reauthorize and expand the Trade Adjustment Assistance (TAA) program, to the House floor to be voted on at or near the same time in the fall, sources said... In the absence of fast track trade negotiating authority, TAA could be used as leverage for action on one or more free trade agreements, sources said. A private-sector source said discussions of this possibility are underway in both the House and Senate. He said that consideration of TAA alongside the FTAs would likely make votes in support of trade pacts easier for many Democrats.

Oh, so that's why we are having this discussion: to facilitate further NAFTA expansions. This is not the first time a TAA-for-FTA deal-making gambit but has been attempted. But as we documented in a report from a few years ago, nearly every member who has made these kinds of deals in the past has been left out in the cold, including over TAA. And as the folks over at Inclusion have been making clear for a while, progressives should be working for universal programs for the unemployed/displaced, rather than trying to do stupid and ineffectual burial insurance programs for targeted groups of workers that are going to have a very hard time accessing even the meager help available from a government that doesn't want to give it to them in any case.

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Fair Traders Dominate Hill's 50 Most Beautiful People

Ellsworth300 As we reported last November, fair trade is winning big - and not just in the elections. The Hill just released its fourth-annual list of the 50 Most Beautiful People on Capitol Hill. Interestingly enough, 100% of the senators and the majority of the representatives on the list are fair traders, with the most beautiful person on Capitol Hill none other than Rep. Brad Ellsworth (D-Ind., picture to the right from the DCCC), who campaigned last year with a lot of fair trade love:

Bad trade agreements and corporate giveaways are just sweetheart deals for big corporations that don’t need them.

Other notable fair traders include Rep. Heath Shuler (D-N.C.) and Sen. Sherrod Brown (D-Ohio). According to the Hill,

"Sherrod Brown’s combination of rumpled cool and passionate progressivism makes him the unsung beauty of the upper chamber...how could a woman not fall for an workers’-rights advocate who wears a pin with a canary in a cage instead of the ubiquitous American flag?"

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New Report Reveals How Pending Trade Agreements Will Worsen Imported Food Safety Problem

Our new report is out! You can read the press release below and here, take action on the Public Citizen homepage, and read the report (PDF).

New Report Reveals How Pending Trade Agreements Will Worsen Imported Food Safety Problem by Increasing Food Imports While Replicating Limits on U.S. Food Safety Policy From Past Trade Deals

U.S. Food Imports Double Since NAFTA and WTO, Which Set Limits on Border Inspection, Safety Requirements; Analysis of New Data Details Safety Problems With Latin American NAFTA Expansion Targets That Are Major U.S. Seafood Importers


WASHINGTON, D.C. – Remedying serious problems with imported food safety will require significant reforms to trade policy as well as improvements in domestic laws, according to a report released today by Public Citizen’s Global Trade Watch division.

The report, Trade Deficit in Food Safety; Proposed NAFTA Expansions Replicate Limits on U.S. Food Safety Policy That Are Contributing to Unsafe Food Imports,   documents the connection between trade agreements that limit domestic food safety policies to facilitate trade and the growing safety threat posed by food imports, which have doubled since implementation of the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) agreements. Available projections for the proposed Free Trade Agreements (FTAs) with Peru, Panama, South Korea and Colombia show an increase in food imports, while the deals would also replicate past trade pact limits on safety standards the United States can require for imported food and how much inspection is permitted.

“We face a perverse situation in which Congress is rushing to address serious safety problems with the growing amount of imported food Americans consume while four more NAFTA-style trade deals are pending that will undermine Congress’ ability to ensure our safety,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “This is a trade problem that is not just about China, but rather goes to a trade model that prioritizes increasing the volume of traded food over safety.”

A steadily increasing amount of food on U.S. dinner plates is imported. Nearly $65 billion in food is imported annually – almost double the value imported when NAFTA and the WTO went into effect. More than 80 percent of the seafood Americans eat is imported.   In the NAFTA-WTO era, seafood imports have increased 65 percent. Between 1995 and 2005, shrimp imports alone jumped 95 percent.   In 2005, the United States, formerly known as the world’s bread basket, became a net food importer for the first time, with a food deficit of nearly $370 million.

Continue reading "New Report Reveals How Pending Trade Agreements Will Worsen Imported Food Safety Problem" »

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Major report coming out today; CD gives teaser

This is from Martin Vaughan in Congress Daily:

Sen. Sherrod Brown, D-Ohio, said last week he will soon introduce legislation to ensure that if faulty products are recalled, there is a way to pay for it. A spokeswoman said the bill will require importers to have insurance to cover that cost. Details remain to be worked out.

While the bill would initially have focused on tires and auto parts -- a response to the June recall of 450,000 Chinese-made tires by a New Jersey distributor -- its scope might ultimately be broader. "The influx of contaminated and unsafe imports from China -- ranging from toothpaste to tires, pet food to fish, has made it glaringly clear that we must better protect our supply lines -- and hold importers accountable," the Brown spokeswoman said.

Brown today will join Global Trade Watch Director Lori Wallach and Ranchers-Cattlemen Action Legal Fund CEO Bill Bullard to release a report claiming that provisions in NAFTA and other trade agreements are partly to blame for making imported food less safe.

The report will include an analysis in particular of seafood from Peru and Panama, two countries whose free trade agreements with the United States might see congressional action this fall.

To maximize coverage in regional news outlets, the report is being unveiled at events nationwide including ones in New Orleans, San Francisco, Texas, and the Pacific Northwest.

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Ha-Joon Chang: Let Kids be Kids, and Love Alexander Hamilton

My old prof' Ha-Joon Chang has a book coming out soon called "The Bad Samaritans," and it promises - like his other works - to be a hoot.

He has some advance teasing of the book in Prospect Magazine and in the London Independent:

I have a six-year-old son. His name is Jin-Gyu. He lives off me, yet he is quite capable of making a living. After all, millions of children of his age already have jobs in poor countries.

Jin-Gyu needs to be exposed to competition if he is to become a more productive person. Thinking about it, the more competition he is exposed to and the sooner this is done, the better it is for his future development. I should make him quit school and get a job.

I can hear you say I must be mad. Myopic. Cruel. If I drive Jin-Gyu into the labour market now, you point out, he may become a savvy shoeshine boy or a prosperous street hawker, but he will never become a brain surgeon or a nuclear physicist. You argue that, even from a purely materialistic viewpoint, I would be wiser to invest in his education and share the returns later than gloat over the money I save by not sending him to school.

Yet this absurd line of argument is in essence how free-trade economists justify rapid, large-scale trade liberalisation in developing countries. They claim that developing country producers need to be exposed to maximum competition, so that they have maximum incentive to raise productivity. The earlier the exposure, the argument goes, the better it is for economic development.

Check out the Independent to see how the story ends...

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Ron Paul: For Free Trade, Against NAFTA

The New York Times Magazine had an interesting piece on Rep. Ron Paul (R-Texas), the former Libertarian Party presidential candidate who is vying for the GOP nomination. It does a pretty good job explaining the challenges facing "big tent" candidacies of any political stripe, as well as Paul's considerable grassroots political skills. Unfortunately, the piece gives relatively short shrift to Paul's work on trade issues:

While he backs free trade in theory, he opposes many of the institutions and arrangements — from the World Trade Organization to Nafta — that promote it in practice.

Actually, Paul's position, unlike that of more opportunistic libertarians, is to oppose WTO and NAFTA precisely because they are not about so-called "free trade... in practice." As Paul said on the floor during the CAFTA debate:

If we were interested in free trade, as the pretense is, you could initiate free trade in one small paragraph. This bill is over 1,000 pages, and it is merely a pretext for free trade. At the same time we talk about free trade, we badger China, and that is not free trade. I believe in free trade, but this is not free trade. This is regulated, managed trade for the benefit of special interests. That is why I oppose it.

In fact, I think it goes further. NAFTA-style trade agreements are a little bit of free trade for select special interests (i.e. agriculture exporting companies, etc.), and a little bit of protectionism for select special interests (i.e. Big Pharma and financial service industries, etc.), used as the delivery mechanism to lock in a sweeping corporate rights agenda. They could have done it with candy, but instead they chose "trade," which is why groups all across the country with a variety of views on the desirability of "free trade" realize that NAFTA-style trade agreements are not about that, and indeed about much more.

And, in case you weren't sure, Paul is the only GOP candidate (and only one of two in the entire two-party field) to have an 100% fair trade voting record. (Except for missing a vote on the Morocco FTA.)

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Costa Rica Doing Better than Countries that implemented CAFTA

Umberto Mazzei has a pretty damning analysis of how Costa Rica is thriving without CAFTA, while Guatemala is suffering with CAFTA.

The message is overwhelming: [Guatemala] "sacrificed" itself to the Free Trade Agreement (FTA) with the United States for nothing. The CAFTA model, pushing the Central American economy toward the export of non-traditional goods to the United States, has been a pretext for imposing expensive foreign pharmaceuticals as opposed to cheap, national generic drugs, overwhelming the peasant farmer with subsidized imports, and granting extra-territorial jurisdiction to foreign companies.

Non-traditional exports in Guatemala have decreased instead of increasing—contrary to the objectives of CAFTA. In Costa Rica, which remains outside CAFTA, exports of new products and markets have grown. All indicates that the privileged share in an FTA with the United States is more a hindrance than a help.

This comes a few months before Costa Ricans vote in the world's first ever referendum on a trade deal.  If you're in DC next Wednesday morning, you might want to check out this debate between the U.S. Chamber of Commerce and Otton Solis, the fair trader who nearly became Costa Rica's president.

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Push the candidates farther on trade issues

We have a new action item out. Click here to take action. Here's an excerpt from our latest:

After seeing what a powerful issue fair trade was in the 2006 elections, you'd think that our failed trade and globalization policies - and how to replace them - would be a top agenda item for presidential candidates. After all, last November the Democrats picked up two House seats each in Iowa and New Hampshire with candidates running on trade.

While it's true that John Edwards and then later Hillary Clinton have come out against the proposed NAFTA expansion to South Korea, what about the NAFTA expansion deals to Peru, Panama and Colombia? What do they think about the undemocratic "Fast Track" trade negotiating process? Do they have a clear vision for how to make a clean break with NAFTA-style policies of the past? What is their plan to deal with WTO? China trade?

We need to get presidential candidates on the record now on the important trade and globalization policies with which the next President must grapple. And, with two imminent debates asking for the public to help create the questions for the candidates, now you have a chance to do so.

This comes on the same day as some interesting news reports on the Edwards campaign's plan to unveil policy proposals on trade and globalization. Jonathan Tasini has the write-up here.

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Dead-end trade deal nears dead end

We recently received this brief paper on CAFTA's impact on Nicaragua from Ben Beachy at Witness for Peace Nicaragua, who summarizes its findings thusly:

The US sold CAFTA to the Nicaraguan public on the promise that the agreement would spawn a wave of new jobs, particularly in textile maquilas. That promise has proven empty. In the last six months, a rash of maquila closings and mass firings have meant the alarming loss of 3,880-4,120 jobs, while new textile maquilas have provided a mere 176 new jobs. Factory owners and managers point to the fact that U.S. clothing brands are rapidly shifting business to China's cheaper labor. Incredibly, just over a year ago CAFTA was passed as a gift that would allow Nicaragua to create jobs by further exploiting its comparative advantage in cheap labor. Such a model, beyond being inherently exploitative, is short-lived. As soon as free trade is redefined to include other, more desperate developing countries, the comparative advantage evaporates along with the jobs.

You can read the full paper as a PDF or after the jump (sans footnotes).

Continue reading "Dead-end trade deal nears dead end" »

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Hoyer on Deathstar timing

The latest from BNA:

House Majority Leader Steny Hoyer (D-Md.) July 17 said he expected Congress to consider the Peru FTA in the early fall. Asked at his weekly briefing whether there was any chance for FTAs with Latin American countries to get to House floor before August recess, Hoyer said simply, "No."

"That does not mean, as [House Speaker Nancy Pelosi (D-Calif.)] has said, that we're not going to pass them. The speaker said we're going to do Peru and Panama [FTA] in particular. My expectation is early in the fall," he said.

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Bankers talk tough while they hide behind their mommy

Lou Uchitelle had a great piece over the weekend on the Return to the Gilded Age brought on by our current economic and trade policy, with a special focus on the very richest Americans like Citibank's Sanford Weill.

Pig_01_web These days, Mr. Weill and many of the nation’s very wealthy chief executives, entrepreneurs and financiers echo an earlier era — the Gilded Age before World War I — when powerful enterprises, dominated by men who grew immensely rich, ushered in the industrialization of the United States. The new titans often see themselves as pillars of a similarly prosperous and expansive age, one in which their successes and their philanthropy have made government less important than it once was.

“People can look at the last 25 years and say this is an incredibly unique period of time,” Mr. Weill said. “We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.”

This is pretty tough talk for a guy whose titan status relied on having his buddies in the Clinton administration and Congress help him compete by changing U.S. laws to favor his group. The self-reliance myth is a total joke: corporations like Citibank rely on extensive government coddling. The latest instance of this? The provision in the government-negotiated Peru FTA that gives the green light to Citibank demands for taxpayer dollars if their "investment" in Peru's privatized social security system fails. Aren't we supposed to allow the free market to punish investors that make stupid investments? Oh, that's right: we don't have a free market; we have a market for the benefit of the rich with the coddling by the government, by any means necessary.

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Something that most English-language media somehow missed

This week massive Peruvian strikes and protests shut down Peruvian cities and put pressure on President García to reconsider Peru's pending trade agreement with the U.S.

According to IPS News,

The people who are protesting are desperate because the economy is growing but nothing in their lives has improved. Their demands will continue until wealth is better distributed," Víctor Gorriti Candela, deputy chief of the General Confederation of Peruvian Workers (CGTP), told IPS... 

The first victim of the escalating protests was a 13-year-old girl who was killed during clashes between police and teachers in the southern Andean region of Apurímac...

In a jungle area in the central Andean region of Junín, farmer Alcides Huamaní Rivero was shot to death by the owner of a store where weapons were sold. The owner was trying to prevent a group of protesters from entering his shop. The government Ombudsman's Office reported that eight other people were wounded in the incident.

A teacher died Wednesday night in the Lima hospital that admitted her last Friday. She had been beaten by police, according to spokespersons for the striking teachers...

In the context of the social uprising, about 5,000 strikers occupied the international Manco Cápac airport in Juliaca on Wednesday. They set fire to furniture, office equipment and local workers' houses, in spite of the presence of nearly 300 police who attempted to contain the protesters.

And how did Peruvians find themselves in this mess?

What we are seeing is a movement that is socially and regionally highly diverse, with the common factor that everyone wants to get back what was taken from them in the last 20 years, particularly under Alberto Fujimori's government in the 1990s," political analyst Carlos Reyna, a professor at the Pontificia Universidad Católica, told IPS.

In this expert's view, during the Fujimori regime (1990-2000) Peruvian workers lost "much of their buying power" as well as labour rights, owing to the free-market economic model that was applied.

NAFTA expansions to Peru will only make it worse for Peruvians and Americans alike. To strengthen our relationships in Latin America, don't you think that our foreign policy needs to take into account the sentiment of the populations with which we're negotiating?

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Department of Unintentional Truth-Telling

Just weeks after the Bush administration made clear that the main reason to pass trade agreements is because they are "deregulatory tools," the vice president of Panama, who is demanding that the Democratically-controlled Congress pass the Panama FTA, tells The Financial Times another unintentional truth:

...the deal would provide solid guarantees and a stable, predictable environment for US companies looking to use Panama as a base to capture regional markets. "It gives companies the sort of legal framework the [sic] look for when operating outside their home countries," he said.

Yeah, it's a perfect legal framework for companies looking for outrageous rights in an adopted foreign market that go far beyond democratically-set national laws and for companies looking to unload some of their U.S. workers in favor of workers that make a tiny fraction of the wage.

I guess the only thing left to be explained by the VP is why members of Congress representing constituents who stand to lose from that equation should vote instead for the interests of offshoring companies...

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The Skinny on May 10 Chronology and Labor

In confirmation of some previous reports, from today's National Journal's lobbying blubs (they get the date wrong, fyi, it's May 10):

It's not nice to surprise John Sweeney. The AFL-CIO president was on a conference call with union chiefs on May 11, explaining the federation's ongoing talks with House Democratic leaders on trade policy, when word came that this self-same leadership was at that very moment announcing a bipartisan trade-policy deal at a press conference. Worse, the deal didn't sound quite like the one that labor leaders thought they had agreed to. Sweeney's next phone calls were, you guessed it, to Capitol Hill.

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Polls and Pols Beginning to Take Import Food Safety Seriously

Threats to food and product safety have been all over the news lately, and although China has been getting much of the heat, the New York Times reports that many other countries are experiencing problems with their exports. According to data from the FDA, inspectors have stopped more food shipments from India and Mexico than China in the last year. And CAFTA partner Dominican Republic is not far behind, with massive seizures of pesticide-infected produce, something that the WTO and CAFTA make it harder to have rigorous prevention-based screens against:

"The reality is, this is not a single-country issue at all," said Carl R. Nielsen, who resigned from the Food and Drug Administration in 2005, after 28 years..."What we are experiencing is massive globalization."

Meanwhile, no matter where this food is coming from, a new poll shows that 92% of Americans are in favor of country-of-origin labeling. Presidential candidate John Edwards has also come out with a new proposal on increasing food safety, which would include requiring country-of-origin labeling, strengthen the FDA and food inspection, and require safety systems abroad. You can find out more about Edwards' plan here.

Sen. Dick Durbin (D-Ill.) and Rep. Rosa DeLauro (D-Conn.) have also just proposed a food import safety bill, which would require importers to begin to pay fees for inspection. Durbin summed up his approach thus, “If you want to sell in America, you have to meet American standards.”

UPDATE: Sen. Sherrod Brown (D-Ohio) is also participating in the new imports bill. You can read his release after the jump.

Continue reading "Polls and Pols Beginning to Take Import Food Safety Seriously" »

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Peruvians stage 2-day national strike against FTA

Here's Public Citizen's statement on the strike:

Two-Day Nationwide Strike Against U.S. Free Trade Agreement Rocks Peru, Reveals Broad Peruvian Opposition to NAFTA Expansion

Mass Resistance in Peru Reinforces Announcement of Opposition to Peru, Panama FTAs by U.S. Latino Civil, Immigrant Rights Groups; CAFTA's First Anniversary Also Protested in Dominican Republic

WASHINGTON, D.C. – While the Bush administration attempts to pressure Congress into quick consideration of a U.S. Free Trade Agreement (FTA) with Peru, a nationwide strike in Peru against the controversial NAFTA expansion reveals the depth of opposition to the pact, which also has failed to garner support from a single U.S. union or environmental, consumer, health, anti-poverty, faith or family farm group, said Public Citizen.

Today’s strike is being led by teachers' unions, peasant farm groups, indigenous organizations and unions representing mining and manufacturing workers. Conveagro, an organization composed of nine million farmers and rural workers of the coast, highlands and tropical forests of Peru, last Thursday launched a series of events to lead up to today’s national strike. Daily demonstrations in Lima and other cities across the country have culminated in the two-day strike in which numerous organizations are participating. Civil society leaders in Peru demanded that the Peruvian government cease the Peru FTA consideration and implementation process.

"It is a great irony that the Bush administration has once again fallen back on that desperate argument of last resort – that the deal is good foreign policy – just as public opposition to NAFTA expansion is intensifying in Peru, and the FTA is a source of growing resentment against the United States," said Lori Wallach, director of Public Citizen's Global Trade Watch division. "If the United States hopes to build a stronger relationship with Latin America, it needs a policy agenda that reaches across borders to the Peruvian people – not just the Peruvian counterpart of the U.S. elites who support the NAFTA model."

Continue reading "Peruvians stage 2-day national strike against FTA" »

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Sherrod Brown and Tom Allen Demand Pro-Public Health Trade Policy

Well, Sen. Sherrod Brown (D-Ohio) and Rep. Tom Allen (D-Maine) have done it again. While the Deathstar Deal is needlessly splitting party unity on trade, they are showing the positive fair trade alternative. Check out this Dear Colleague that they are circulating, and go to the Essential Action page to learn more about the issues at stake.

July 9, 2007

*Support our Nation's commitment to the Doha Declaration on TRIPS and Public Health*

Dear Colleague:

We write today to invite you to co-sponsor a resolution that reaffirms the commitment of the United States to the 2001 Doha Declaration on TRIPS and Public Health (S. Res 241) and (H. Res 525).

The 2001 Doha Declaration on the TRIPS Agreement and Public Health, to which the United States and all WTO members are signatories, "affirm[s] that the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all." This international agreement properly emphasizes the importance of public health considerations in implementation of patent rules.

However, the Bush administration included Thailand on its 2007 Special 301 Report for intellectual property violators, citing "a weakening of respect for patents."

Continue reading "Sherrod Brown and Tom Allen Demand Pro-Public Health Trade Policy" »

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The Nation: Deathstar Deal "not a good start"

The Nation's William Greider has a piece criticizing the Deathstar Deal:

Democrats were rightly alarmed. Doing a deal with Bush and the multinational lobby suggested Pelosi and senior colleagues were ignoring the rebellious content of last Fall's election and prepared to put the new voices in their place. At a time when Bush's base is imploding, it did not seem smart politics to splinter the Democratic party on such a pivotal matter.

The leadership was pursuing business-as-usual, Washington style, in the name of accomplishing something, however flawed. In fact, they were embracing the same failed model for trade agreements that produced horrendous losses of US manufacturing production and jobs during the last fifteen years. The model includes the scandalous special privileges for multinational capital and corporations, the so-called "investor-state" provisions that began with Bill Clinton's NAFTA...

If they are wise, the party leaders will let the Peru-Panama agreements die quietly without a roll call. The economic stakes are trivial, but the principle is not. What is the point of giving George Bush a cheap victory when half or more of the Democratic caucus will likely vote against their own leaders? Not a good start for a party trying to reinvent itself and restore its reputation with the public.

A truce now leaves the substantial issues on the table for the real fight later. Democrats in Congress seem divided almost along generational lines. Those who endured all the hard years in the wilderness as the impotent minority naturally want to legislate now that they can. The newcomers who want big change are understandably suspicious of incremental measures that continue down the wrong road.

For Pelosi and other leaders, the choice is about more than emotional loyalties to the old guard. The new crowd represents the party's potential for real growth and a working majority. Lose them and you lose the future.

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Hawai'i Legislature Beats Back GOP Governor Veto on Key Fair Trade Bill!

Yesterday, the Hawai'i legislature overrode Gov. Lingle's veto of HB 30 to establish that only the legislature has the authority to approve or reject the procurement terms of international trade agreements. This makes Hawai'i the third state after Maryland and Rhode Island (both of which also overrode Republican governors' vetoes) to pass this cutting-edge legislation!

This has been a long battle for Hawai'i - they passed a similar bill last year that was also vetoed, and this year the governor's office has been at war with the legislature over the bill (and many others - Lingle vetoed 27 bills!). The lieutenant governor put out an op-ed in the Honolulu Advertiser (sorry, not linkable) claiming the bill would be "restrictive and damaging to Hawai’i’s economy” and would “improperly curtail the executive authority of the governor.” Despite the use of these scare tactics, the Hawai'i legislature passed the bill in May and overrode the governor's veto in a special session on July 10th.

Procurement is just one aspect of the many terms of "trade" agreements that have nothing to do with trade. Many common state policies, such as laws to prevent the offshoring of jobs, "Buy Local" or "Buy America" policies and preferences for renewable energy or recycled content, are threatened by the procurement terms of NAFTA-style trade agreements. These constraints on state regulatory authority undermine state sovereignty and our system of federalism. Luckily for Hawai'i, the legislature can now practice its democratic rights over procurement policy.

The Hawai'i State House has also passed a resolution calling for Fast Track replacement earlier this year. With Fast Track now dead and buried, Hawai'i is leading the demand from states around the country for a new direction in trade.

Read our full press release after the jump.

Continue reading "Hawai'i Legislature Beats Back GOP Governor Veto on Key Fair Trade Bill!" »

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Slippery slope continues with Baucus Colombia statement

Reuters has the latest on the ongoing slippery slope that some of the Dems have set up by cutting the Deathstar Deal:

A senior U.S. Senate Democrat said on Tuesday he was confident of finding some way to overcome opposition in his own party to approving a free trade agreement with Colombia.

"We are going to find a way to get Colombia passed. It is very important," Senate Finance Committee Max Baucus, a Montana Democrat, told reporters.

Yes, THAT deal. The country with which labor and human groups said there would be NO acceptable deal, now getting the "very important" treatment from the top Senate Democrat on trade. Where does the line get drawn? We're still waiting.

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Scheve and Slaughter move the trade debate forward

There's been some buzz about the recent piece by Kenneth Scheve and Matthew Slaughter in Foreign Affairs. Slaughter in particular served on Bush's Council of Economic Advisors, making his opinion particularly noteworthy. Among the highlights of their piece, which are major concessions to the fair trade side of the aisle:

  • "Less than four percent of workers were in educational groups that enjoyed increases in mean real money earnings from 2000 to 2005; mean real money earnings rose for workers with doctorates and professional graduate degrees and fell for all others. In contrast to in earlier decades, today it is not just those at the bottom of the skill ladder who are hurting. Even college graduates and workers with nonprofessional master's degrees saw their mean real money earnings decline. By some measures, inequality in the United States is greater today than at any time since the 1920s."
  • "The two most commonly proposed responses -- more investment in education and more trade adjustment assistance for dislocated workers -- are nowhere near adequate. Significant payoffs from educational investment will take decades to be realized, and trade adjustment assistance is too small and too narrowly targeted on specific industries to have much effect."

Mark and Dean have already gone through some of the few shortcomings of the piece at Huffington Post, worth a special read because of their recent work dissecting the productivity numbers (hint: even on productivity, the U.S. neoliberal economy is underperforming previous economic policy models). And we've already talked about how bogus the $500 billion trade benefit number is, which seems to serve as Scheve and Slaughter's primary evidence for maintaining much of the trade status quo.

But there are some other points worth making. Scheve/Slaughter want to save the current trade model, and they propose to do so by a massive boost and overhaul of the way we use the tax system to distribute income. It's true that there would probably be less anxiety about trade if we had European-style income redistribution mechanisms (i.e. strong unions, strong wage and labor market policies, socialized medicine, etc. - not that they're proposing these measures, they're talking about cutting taxes, which is a subject for a whole other post.) Not only that, but we'd probably be more competitive in international markets too.

But the real purpose of current trade policy is not necessarily to put downward pressure on U.S. wages, although that is a very important effect of trade that very much dominates the debate. The real purpose of current trade policy, in the words of the Bush administration's John Veroneau at a Washington think tank, is to serve as a "deregulatory tool," i.e. to compel the destruction of democratically-agreed policies and to chill the enactment of progressive policies in the future. So while progressives are thinking about what our big legislative fight is next week, corporations long ago started thinking about how they could put provisions in trade deals that could help them counter policies that a John Edwards administration - or an Evo Morales administration - might enact if progressives were ever able to catapult them into office.

Pielady It is that model that Scheve and Slaughter are out to save through the creation of income redistribution mechanisms that the elites can control from above, rather than waiting for discontent to bubble up into a democratic upheaval from below (that could demand not only a bigger share of the economic pie, but a bigger role in deciding what kind of pie we're going to be serving and how it's going to be baked.)

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How to bury a lede; How to ignore alternatives to neoliberalism

You can read through 90 percent of today's New York Times piece on Argentina without having discovered the most important piece of news. When it finally comes:

Mr. Kirchner has recently acknowledged the crisis but also says there is “no reason for drama.” He portrays the energy shortages as merely a temporary bottleneck that is a consequence of the success of his economic policies.

“Thanks to having grown 50 percent over the past four and a half years, we have a strong need for this product,” he said this week. “Sometimes growth brings us problems,” he added, but “an Argentina that grows, with jobs and consumption” is preferable to the depressed economy he inherited when he took office.

The rest of the piece, which is about fairly typical election year woes in Latin America, makes it seem like Argentina is some kind of basket case of a country. Au contraire, Argentina since 2002 is one of history's biggest economic success stories as a result of their casting aside IMF, World Bank and WTO-style advice. Reading the piece, which is one of the longest and most in depth pieces on Argentina I remember seeing in the Times for some time, this fact barely comes through, and when it does, there is no context, and it is presented merely as the claim of an outgoing president.

This piece is an illustration of why the "there is no alternative" argument to neoliberalism is bogus. There are plenty of alternatives, but lack of adequate coverage often buries them. This radio silence in turn shapes the TINA perceptions among some readers.

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Steelworker forum shows sharp differences on trade

Yesterday and today's Steelworker forum gave the Democratic candidates for president a chance to pronounce themselves on trade. Here are their statements, from strongest to weakest. Without clicking on the links, see if you can match the gender pronoun-less position with the candidate!

  1. "[The candidate] criticized, but not by name, other candidates who have either voted for or supported foreign trade agreements such as NAFTA, or who have proposed "fixing" those trade agreements to stem the loss of millions of American manufacturing jobs. "You can't fix NAFTA... You have to repeal it and start over." Any candidate not willing to take that position should not be taken seriously."

  2. "[The candidate] told the crowd that a priority for [the candidate's] administration would be to reform trade agreement like NAFTA. "The last thing we need are more trade agreements like NAFTA."

  3. "[The candidate] avoided discussion of the North American Free Trade Agreement, which [the candidate's spouse], former President [Wile E. Coyote], backed and which unions blame for the loss of jobs. [The candidate] promised to make sure trade agreement provisions are kept to ensure fair trade... Unlike fellow Democratic candidates... who spoke to the conference Thursday and took questions from the floor, [the candidate] left without participating in a question-and-answer session planned by the union.

In other candidate news, Wonkette had a pretty funny write up of the Clinton machine and trade over here, Mitt Romney continues to dodge any meaningful discussion of anything including trade, and frequently rumored candidate Wes Clark puts himself on the really wrong side of history by not only covertly endorsing NAFTA expansion to Panama, but actually writing a column about it.

Answers: a) Rep. Dennis Kucinich (D-Ohio); b) Former Sen. John Edwards (D-N.C.); c) Sen. Hillary Clinton (D-N.Y.).

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Left wearing nothing but socks

As we warned over two years ago before and after the CAFTA vote, you simply can't trust the executive branch deal-for-vote promises on trade policy - over 90 percent over the last two decades have been broken.

Shocking, but some members didn't listen to lil' ol' us. The latest broken promise comes from Alabama on CAFTA, and it's shaking up the GOP base in the "Sock Capital of the World" there in a big way:

[Rep. Robert Aderholt (R-Ala.)] two years ago was convinced, at the last minute, to vote for the Central American Free Trade Agreement based on assurances from the Bush administration that it would negotiate a change to phase out the [sock] tariffs from CAFTA countries over 10 years rather than immediately. That deal, which requires the approval of the affected countries, has not been signed.

94503_sock_on_wrist "The longer we wait, the worse off we are and the harder it is going to be for them to bring into enforcement what they promised," said Charles Cole of Alabama Footwear Inc. in Fort Payne. Cole was in Washington last week on behalf of the domestic sock industry, a key to the economy of northeast Alabama.

About 4,300 people, down from 7,500 in 2005, work in the industry in Alabama.

Cole said imports from Honduras alone are up 50 percent and domestic production has dropped 20 percent since CAFTA took effect, and jobs are being lost.

"We just feel like it's time," Cole said. "They, again, told us they were committed to taking action as was warranted, but we feel like right now taking some action would be better than words."

As Andrew Wolf and I documented last year (PDF), thousands of U.S. sock and apparel jobs have been lost thanks to CAFTA, which has barely been in effect for a full year. In addition to the thousands in Aderholt's district, CAFTA job loss has hit the districts of CAFTA-supporting Reps. Terry Everett (R-Ala.), Mike Rogers (R-Ala.), Ed Whitfield (R-Ky.), Ron Lewis (R-Ky.), John Tanner (D-Tenn.), and Harold Rogers (R-Ky.). And CAFTA opponents Reps. Heath Shuler (D-N.C.) and John Barrow (D-Ga.) made the CAFTA job loss in their districts a major issue in their slams on their corporate opponents last year.

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Let the watering down begin - Korea, enviro deal

Just weeks after the legal text of the Deathstar Deal has been released, the Bush administration is already backing away from the minimal concessions it gave to some congressional Democrats in exchange for their consideration of pending FTAs. Here's from today's Inside U.S. Trade:

The United States last week accepted two changes to South Korea’s obligations under a bilateral free trade agreement signed on June 30... Specifically, the U.S. ... signed a second side letter that environmentalists say appears to decrease the likelihood that the U.S. would bring an environmental dispute settlement case against Korea...

Private-sector sources speculated that this environment letter was sought by Korea as a way to ensure that the U.S. will not seek dispute settlement against it for not enforcing the MEAs to which it is party...

These sources said Korea is likely in compliance with the MEAs already, but that the side letter could be a non-binding gesture by USTR designed to assure Korea that dispute settlement is unlikely in any case.

Environmental sources said the letter may be intended to give the U.S. government domestic political cover if it gets criticized for failure to launch an environmental dispute settlement case against Korea despite compliance problems.

Regular readers that a similar Bush administration side letter by none other than Bob Zoellick eviscerated the Jordan FTA's better-than-NAFTA labor standards. Is this latest Korea side deal a sign of more watering down to come? The pick-and-choose-on-NAFTA model members better hope not.

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Hamilton Reading for a Happy Fourth!

Happy Fourth of July! We won't be posting for a few days, but thought we would send you off with a classic of American historical literature, Alexander Hamilton's Report on Manufactures (check the bottom).

Reading Hamilton, the author of many of the Federalist Papers that made the case for the U.S. Constitution, you will find a lot of what developing countries and scholars now say when they talk about "kicking away the ladder"... while not very much in common with the latter-day Hamilton Project. (As Kevin Phillips explains here, naming a nominally Democrat-aligned think-tank after the guy who helped give birth to what would become the Republican Party is about as strange as naming a "free trade"-promoting think-tank after the father of American infant industry policy. Robert Kuttner also has a piece worth reading here.)

Here's an excerpt from Hamilton's third report to Congress, which lays out his arguments for the desired economic-industrial basis of American freedom:

From these circumstances, collectively, two important inferences are to be drawn: one, that there is always a higher probability of a favorable balance of trade, in regard to countries in which manufactures, founded on the basis of a thriving agriculture, flourish, than in regard to those which are confined wholly, or almost wholly, to agriculture; the other (which is also a consequence of the first), that countries of the former description are likely to possess more pecuniary wealth, or money, than those of the latter.

Facts appear to correspond with this conclusion. The importations of manufactured supplies seem invariably to drain the merely agricultural people of their wealth. Let the situation of the manufacturing countries of be compared, in this particular, with that of countries which only cultivate, and the disparity will be striking. Other causes, it is true, help to account for this disparity between some of them; and among these causes, the relative state of agriculture; but between others of them, the most prominent circumstance of dissimilitude arises from the comparative state of manufactures. In corrobation of the same idea, it ought not to escape remark, that the West India Islands, the soils of which are the most fertile, and the nation which, in the greatest degree, supplies the rest of the world with the precious metals, exchange to a loss with almost every other country.

As far as experience at home may guide, it will lead to the same conclusion. Previous to the Revolution, the quantity of coin possessed by the colonies which now compose the United States appeared to be inadequate to their circulation; and their debt to Great Britain was progressive. Since the Revolution, the States in which manufactures have most increased have recovered fastest from the injuries of the late war, and abound most in pecuniary resources.

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Women's groups' on Peru and Panama deals

In the bustle of the last week we didn't get a chance to point out a statement issued by the U.S. Gender and Trade Network (USGTN) to Congress voicing rejection of the fast track process and concern about the May 10 trade "deal." But despite our delayed reaction, it is worth noting. The Gender and Trade Network, members of which include the Center of Concern, International Labor Rights Fund, and the American Friends Service Committee, among others, was joined on this letter by fourteen additional groups including the National Organization for Women (NOW), who took the opportunity to highlight the price that women and those they support are paying for our current, misguided policies.

The current trade framework provided in TPA and realized in the proposed agreements with Panama and Peru will continue a trade agenda that assaults women’s economic, social and political rights, supporting unequal structures of power, loss of livelihoods, deterioration in public health and shrinking policy space.

We, and our allies, seek a trade policy that puts social well-being and human rights at the center. Trade is not an end in itself, but a vehicle for social and economic development. Trade agreements in service of development foster sustainable livelihoods and decent work for all members of society, social cohesion and authentic democratic processes that enable all people to be social, political and economic subjects of their own lives and the life of their societies.

Threatening public health, increasing unemployment and worker exploitation, limiting access to essential services, and destroying local farm economies are just some of the grievances addressed in this gendered account of the shortcomings of our current model. Each of these recurring problems is an atrocity in and of itself. Together, they represent a system which is in danger of reversing myriad landmark achievements that have reinforced both women's rights and human rights the world over.

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Just for fun...

It's a congressional recess week, so all the action right now is in the districts. For you people in DC, here's an entertaining way to pass a few minutes: "The Fellowship of the Ring of Free Trade." (Of course, like any YouTube video, half the entertainment is in the comments.)

(There's also a "sequel" here, not available on YouTube presumably for copyright reasons...)

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New Direction?

The weekend announcement by Pelosi, Hoyer, Rangel and Levin that "Our legislative priorities do not include the renewal of fast track authority" and that they will oppose NAFTA expansion to Colombia and South Korea is very welcome, and Colombian workers and Korean farmers - and the U.S. Middle Class - can rest easier as a result. The AFL-CIO's statement and Steelworker statement reflect that excitement.

But as Rep. Mike Michaud (D-Maine) points out after the jump, there are still "serious concerns" with the Peru and Panama deals that these Democrats pledged to support. As humanitarian relief groups and Latino groups have pointed out, these deals still have agriculture provisions that will give incentives to narcotrafficking and immigration. As retirement security groups in the US and Peru have pointed out, the Peru deal still has provisions that would benefit Citibank and lock in failed social security privatization. As environmental groups have pointed out, the NAFTA model's harmful investor rights provisions are still in place. And even business groups say the "new" labor provisions are unenforceable. And much much more.

Democrats have been in this quandary before. They supported a basically NAFTA model trade pact with Jordan - with some improved labor rights provision on paper - that has led to an explosion in Jordanian sweatshops. And many Democrats supported Bush's NAFTA expansion to Bahrain on the basis of policy promises that have already been broken. And note this from Inside U.S. Trade from last December, after many Democrats helped pass the Bahrain FTA:

Bahrain’s government issued an edict last month that explicitly bans strikes and demonstrations in several sectors of its economy, including areas considered vital to security such as civil defense and ports as well as in the oil and gas sector, educational firms and bakeries. Labor groups sources said the edict appears to violate provisions in the U.S.-Bahrain FTA that prohibit weakening labor laws to spur increased trade or investment...

Support for the NAFTA model helped cost Democrats Congress in 1994 and helped cost Republicans Congress in 2006. How's the voting public to understand Democratic support for selective NAFTA expansion? It says all the wrong things at a time when the public is demanding a total change of course.

Continue reading "New Direction?" »

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The iPod supply chain, or why a China focus is insufficient

As we've noted before, there are plenty of problems with China trade. Some in the debate however choose to focus only on "their [currency] prices," as opposed to "our [currency] prices," or on China as opposed to the unfair WTO-style rules of the game.

Hal Varian's recent NYT column on the i-Pod's tangled supply chain pointed out a fact that should make it clear that we cannot eliminate the U.S. trade deficit or solve manufacturing problems just by cracking down on China:

Even though Chinese workers contribute only about 1 percent of the value of the iPod, the export of a finished iPod to the United States directly contributes about $150 to our bilateral trade deficit with the Chinese.

This is because all the parts come from elsewhere in Asia, and only the final assembly is done in China. Granted, the super low Chinese wages account for part of the reason why such a low percentage of the end value "comes" from China - with higher wages, we should see a higher Chinese share (assuming Apple did not just simply seek out a lower cost locale, which of course they would.)

So, we could eliminate the Chinese trade deficit, only to have U.S. manufacturing still face the crippling effects of an overvalued dollar, and the trade deficit simply shift to other parts of Asia. Rather than playing whack-a-mole around the globe, couldn't we just get to the root causes of the problem (i.e. the flawed rules of the game; absence of forward-looking U.S. policy)?

Thanks to the folks at IELP for pointing this out.

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Wisconsin Senate Calls for New Era in Trade Policy

As Fast Track expires this week, the Wisconsin State Senate passed a resolution calling for a replacement of the outdated mechanism with a new process that includes state consultation. This resolution becomes the thirteenth such that has passed, echoing the widespread desire for change in our failed trade policy from state officials and the rest of the country.

In a press release from State Senator Hansen's office, Sen. Hansen calls on Congress to listen to the peoples' demands:

"The 2006 elections turned on issues of importance to working people. Foremost among these issues was trade. The workers and farmers of this state and nation can't stand for these corporate trade deals any longer and they've made their opinions clear."

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Fast Track officially comes off the rails


Midnight has passed, and you know what that means: bye-bye Fast Track. Here are some more photos from an event last week hosted by Sen. Sherrod Brown (D-Ohio) celebrating Fast Track's passing and heralding new directions for U.S. trade policy (see the full photo set here). After the break, see some statements from various groups about the expiration, and what they think should come next.

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Continue reading "Fast Track officially comes off the rails" »

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