Bitter fallout, murders, dodges, rules, deals
The White House responds, and we respond to the response

Focusing in on the economics and foreign policy

I had a piece on the record of NAFTA in my hometown paper today, the Courier-Journal, which typically (and today was no exception) is a big supporter of NAFTA-style trade deals.

If NAFTA is so rotten, why does Congress keep passing similar deals? The few special interests benefiting from these pacts have armies of lobbyists, give millions in campaign contributions and are shameless scaremongers. Their latest line, for instance, is that expanding NAFTA will counter the influence of Venezuela. In reality, the damage done to most people in our trade partner countries by NAFTA-like policies has been a major factor in breeding anger against the U.S. and support for populism.

Thankfully, the 2006 elections ushered in a freshmen class full of fair traders. The new political reality was on display in last year's vote on a NAFTA expansion to Peru. Reps. John Yarmuth and Ben Chandler joined a majority of Democrats in opposing the deal, which was also opposed by American and Peruvian unions, church leaders and environmental groups. Yet Indiana's Baron Hill and Brad Ellsworth were among the minority of Democrats who caved to corporate pressure and voted for the NAFTA expansion. This is a bad record to have as Sen. Barack Obama and Sen. Hillary Clinton tour Indiana bashing NAFTA and distancing themselves from their own mixed records on trade.

There are some other great pieces out there circulating now too. Kevin Gallagher has a great piece looking at the economic impact of the deal:

The U.S.-Colombia Free Trade deal is one of the most deeply flawed trade pacts in U.S. history. It will hardly make a dent in the U.S. economy, looks to make the Colombian economy worse off and accentuate a labor and environmental crisis in Colombia. The Democratic majority in Congress is right to oppose this agreement and call for a rethinking of U.S. trade policy.    

According to new estimates by the United Nations Economic Commission for Latin America, the net benefits of the agreement to the U.S. will be a miniscule 0.0000472 percent of GDP or a one-time increase in the level of each American's income by just over one penny. The agreement will actually will make Colombia worse off by up to $75 million or one tenth of one percent of its GDP; losses to Colombia's textiles, apparel, food and heavy manufacturing industries, as they face new competition from U.S. import, will outweigh the gains in Colombian petroleum, mining, and other export sectors, it concludes.

Adam Isacson has an interesting piece tackling the national security argument for the Colombia FTA:

Dealing a blow to small-scale producers in places like Cauca, Nariño, or Putumayo could damage the livelihoods of thousands of farmers who, as it is, are just getting by. It could add to the ranks of rural dwellers who see no other option but to plant coca. It could add to the population of young rural Colombians susceptible to recruitment by guerrillas or "emerging" paramilitary groups.

In the absence of a "Marshall Plan" for Colombia's countryside—which is not forthcoming—the FTA could deal an economic shock to zones that, while sparsely populated, are of central importance to the effort to combat armed groups and the drug trade. Rather than making the Andes safer, the FTA could trigger a more immediate national-security threat.

In other news, support for the free market system is dropping in the US and around the world, according to a new poll from PIPA. Finally, Policy Matters Ohio has a great report out calling for an industrial policy for "green" and "blue"-friendly lightbulbs.

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