And this week's Trade on the Trail
No slippage here, keep walking

Musing on strategic pauses and the non-slippery slopes...

We heard a lot over the last year from a lot of clever Washingtonians about how if we just stopped "squawking" about the NAFTA expansion to Peru and gave Dems a pass to vote for this one, then we would avoid the "much scarier and totally different" NAFTA expansions to big, huge, giant, monstruous countries like Colombia and South Korea.

As the argument seemed to go, "principle?! who needs principles, especially when your policy stance is so easy to understand! First, spend 25% more on labor monitoring, but lower your auto tariffs by a formula equal to the logarithim of the increased labor spending, and then multiply that by the number fewer of murdered workers in non-tradable sectors over the number of increased cut flower imports. Then, while covering your eyes with a Made in China American flag blindfold, throw a dart on a spinning Made in Mexico globe, and the small country 36 degrees due west is the country where it is OK to have a NAFTA-style trade agreement."

Huh? What? As we argued previously, "what determines the effects of a trade agreement is not mainly the economic size of the country involved but instead the scope of the extraordinary corporate rights established under the agreement - rights that undermine U.S. domestic and foreign policy goals." josh Holland and David Sirota argue something similar here. Peru and Panama may not be huge, but they're big enough for a lot of corporations to think it was very important to extend NAFTA to them. I guess you don't need too much space to set up Halliburton Peru and then use the FTA's corporate rights to undermine Peruvian and U.S. laws. Or whatev' you want to do.

And if matters of principle don't get your blood racing and hips shaking, then the political argument alone should be compelling. Let's say that 20% of members of Congress are firmly with fair traders on principle, while 30% are firmly against. (As it turns out, these are the percentages of House members that vote fair trade at least 80% and 0% of the time, respectively). That leaves about 218 members - of 50% of the House - that are picking and choosing their positions on fair trade depending on the bill, and are looking to outside pressure groups to define where the lines in the sand are. Elected officials don't necessarily have a long memory, but long enough to know that a model for one country should be just as good/bad for any other country. Or let's just say, I would love to be in on the lobby meeting where someone tries to convince a member otherwise. Like Twister, expect with tainted Peruvian ceviche and Colombian murderers on the red and blue dots.

In any case, the so-called Peru-passage-for-Korea-opposition deal that clever Washingtonians were so confident about appears to be fraying apart, as America's Ways and Means chairman announces from the SquawkBox. Check out this video at about 5:54 minutes in, or read this transcript and reporting from the Bureau of National Affairs:

Rep. Charles B. Rangel (D-N.Y.) said Nov. 16 he is optimistic that Congress will consider the pending U.S. free trade agreements with Colombia, Panama, and South Korea next year but cautioned that it is still not a sure bet. Rangel, who chairs the House Ways and Means Committee, said that problems remain with all three agreements that will need to be resolved.

He said that the agreement with Colombia would not be approved if it were brought before Congress for a vote today, calling the situation in the country "pretty heavy in terms of the violence against a whole lot of teachers and labor leaders." "We just don't have the votes," Rangel said.

With respect to Panama, Rangel said that the fate of the pending FTA with that Central American nation may be in the hands of the State Department, following the election this fall as president of the National Assembly of a Panamanian legislator under indictment in the United States for the murder of an American soldier. Rangel called the legislator--Pedro Miguel Gonazalez-Pinzon--"a big elephant in the living how we handle that may be up to the State Department."...

Rangel, speaking in an interview on CNBC's "Squawk Box," said that, with respect to the FTA with South Korea, it is "being negotiated by the Executive Branch [which] is trying to get some relief for our beef exports."

But in the end, he said, he is optimistic that Congress will take up all three agreements next year, which some observers, however, have argued may be impossible because it will a presidential election year. "I'm optimistic [that] next year we'll take a look at all of these things," Rangel said, "and maybe the situation might change."

This makes sense. After all, once you've forced tons of members of the caucus to vote for a flawed trade deal with one country, why would anyone think twice about voting for the exact same trade deal with another country? I'm not necessarily a member of the USTR fan club, but I think the fine team over there could probably bring some pressure to bear to reshuffle some Panamanian officials, Colombian statistical methods on assassinations, and Korean tariffs.  Maybe that would be enough of a template for a new trade policy for some observers, but I don't think that such little tweaks are what really make the difference when we're facing a massive bleeding of high-paying jobs ever further up the skill and income ladder.

D4507fn1 And that brings me to my last and final musing of the day, on the argument for a "strategic pause" on trade. Jeff Faux from EPI has been raising this notion for a long time, and it must be a pretty powerful idea because presidential candidates are feeling the need to echo it, and from what I've read and heard, the Corporate Powers That Be within Dem circles are very scared of it.

It's a good start, but I think there are several reasons why it's an incomplete strategy. First of all, it's very clear that a strategic pause is not the same as taking a position of principle on NAFTA expansion. I'm definitely not calling Jeff unprincipled, but I am saying that people that don't necessarily agree with Jeff and/or me on the principles of fair trade can also be FOR a pause in bilateral trade negotiations.

Second, the thing about a pause or "time out" is that as soon as someone is elected into office, only they get to decide when it's "time out" or "time in." There is no objective standard on principle of what should or shouldn't be in a trade deal, or commitment to specific timing, that is all enforceable in the court of public opinion, let alone a real court.

Moreover, most legislators LIKE TO LEGISLATE, as this interaction between Larry Mishel from EPI and Chairman Rangel from earlier this year made clear: 

RANGEL: The last witness on this panel is Dr. Lawrence Mishel, who is the president of the Economic Policy Institute. I thank you for coming and bringing a different view to the serious question of globalization...   

LARRY: Let me also be the skunk at the party, I am sorry to say, to talk about the real costs of globalization and what is really happening out there to people's jobs and wages... We think we need a new approach to globalization. I think the first and foremost starts with what we call a strategic pause. No more trade agreements. Let's get things right in the United States before we press further down this road...  

RANGEL: Thank you. I am new at this job, and I am 76 years old. So, all this business about pausing and stopping and waiting and--if you were my lawyer, I would ask, can you put this on fast forward? I don't think too many people would see you as the skunk at a picnic. You are just a--we wish you weren't there. I think that the panel is saying in some form what you have said.  So, we can't wait. If we don't give trade promotion authority, we have got to have a good reason for not giving it.

So between the people who will not commit to oppose NAFTA-modeled trade agreements on principle, the people who endorse a "time out" but on their own terms, and the people that don't even want a time out and instead want a "fast forward", it's not clear what the strategic pause (if pursued as a stand alone strategy, which I know EPI is not but others may be) gets you, besides just temporarily upsetting the powers that be, which okay, I admit gives me some grins too.

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