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Take this job: amazing fair trade econ opening

The Center for Economic and Policy Research is one of the few good think-tanks in town, and I don't say that just because I met my wife while working there. Their stable of full-time and associated economists and policy analysts are that rare mixture of talent and political commitment that perform an outsize role in a country/world where Thomas Friedman is seen as an expert on globalization. While they are sober and non-partisan, they are also about the only progressive public intellectuals that don't seem to rejoice in kicking advocates in the face just to sell books or make a name for themselves. Not that I have any experience with that or anything. ;)

Anyway, CEPR's hiring an international economist, and if you're a PhD economist and you like this blog, you should strongly consider applying.

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Real World of Fair Trade

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

Some of you may recall that Rep. Ed Towns (D-N.Y.) was one of the CAFTA 15, in reference to the 15 Dems who betrayed their party's base and supported the NAFTA expansion to Central America back in 2005. 71m4jxmyhdl_sl500_aa280_gif Towns attracted several progressive challengers in the 2006 elections, and skated by with under 50% of the vote in a three-way primary that included Charles Barron and Kevin Powell from MTV's Real World's first season.

Well, Powell is back, and going after Towns again. And apparently, he has the support of Chris Rock, Dave Chappelle, and a bunch of other incredible Brooklyn residents. We'll stay tuned to see what happens.

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Obama's folks talking to fair traders

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

According to today's Inside U.S. Trade,

Members of the House Trade Working Group, which opposes the U.S.-Colombia free trade agreement and other trade deals negotiated by the Bush administration, late last week told a representative of the Democratic presidential candidate Sen. Barack Obama (D-IL) that his campaign would gain political support if it endorsed a new trade policy...

Members argued in a June 19 meeting with Obama campaign adviser Jason Furman that a more forceful rejection of Bush administration trade deals would help to connect with working class voters in crucial swing states such as Ohio, Pennsylvania and Michigan...

The members in the meeting also talked with Furman about the TRADE Act [...] Furman said the campaign is still reviewing the legislation...

In other news, some of you may remember when Obama went all Bill Cosby on poor black parents last week. But Obama seems to be embracing a bit more structural critique, joining Sens. Jim Webb (D-Va.), Hillary Clinton (D-N.Y.) and Bernie Sanders (I-Vt.) in co-sponsoring a bill on paid parental leave for federal workers. The bill, which passed the House last week, is a real victory for economic justice. Go Congress!

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First WTO post-Y2K Climate Challenge?

Our recent report looked at the WTO preemption issues surrounding green and climate policies, noting that:

Cap-and-trade programs could be challenged under existing WTO rules. Indeed, this is far from a hypothetical problem: in January 2008, the Bush administration pressured the European Union to drop the import provisions of its cap-and-trade program. According to Inside U.S. Trade,

“Backing U.S. opposition to the proposal is the possibility it could retaliate under the WTO
…Under existing jurisprudence on the General Agreement on Tariffs and Trade (GATT),
tariffs imposed based on the means of production constitute WTO violations. Therefore, the EU proposal, which like tariffs also would have increased the price of imports, could in the end constitute a WTO violation because it was directed to products that used large amounts of carbon in their production.”

In response, the European Commission’s new package of carbon control policy package “did not contain a proposal opposed by the U.S. to require European importers of carbon-intensive products to buy carbon allocations in the EU’s cap-and-trade system.” Instead, the new plan shelves the import aspects of the plan “in favor of a study to be completed in 2011,” thereby postponing vital international policy innovation in that area for at least several more years.

According to today's NYT, it looks like the first major post-Y-2k climate policy challenge at the WTO is just around the corner.

The European Union reached a landmark agreement Thursday to cap emissions from aircraft, raising the stakes in an increasingly ferocious battle with the United States over how to regulate global greenhouse gases.

In the first requirement of its kind, all airlines arriving or leaving from airports in the European Union would be required to buy pollution credits beginning in 2012, joining other industrial polluters that trade in the European emissions market. That includes non-European carriers like American Airlines and Singapore Airlines.

Including airlines in the system is the boldest move yet by Europe to stamp its environmental policies on the rest of the world...

American officials warned that the requirements probably would be illegal under the convention governing international civil aviation.

“The mandatory application of the European Emissions Trading System to U.S. airlines and airlines of other non-European countries is, we think, both contrary to international law and ultimately unworkable,” said Robert Gianfranceschi, a spokesman at the United States Mission to the European Union in Brussels...

The transport association spokesman, Mr. Concil, said the costs to the airline industry of buying permits to comply with European emissions regulations would be more than $4 billion. Imposing new, costly rules on airlines was “incredible” at a time when the industry is expected to lose more than $6.1 billion this year, he said.

As the article notes, it's possible that this pact could come up under non-WTO agreements. But it's huge money. We'll be staying tuned.

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Sirota: The Growing Power of the Fair Trade Uprising

David Sirota gives a shout-out to the ever-expanding U.S. fair trade movement, saying it "may continue to be ignored by the media (and, frankly, much of the blogosphere), but it represents one of the most encouraging transpartisan developments of the last few years."

Over the last few years, polls show the public has moved to something of a consensus position on trade: full-on opposition to NAFTA-style pacts. That's for good reason as this Associated Press report shows. Tearing down tariffs and protections without regard for the consequences is not only a dangerous departure from the policies that built America's economy, but also a deliberate way to force American and foreign workers into a wage-cutting, environment-destroying, union-busting race to the bottom.

...Meanwhile... trade fundamentalists like Tom Friedman and Fareed Zakaria flaunt their supposed environmentalism and humanitarianism by publicly worrying about issues like global warming and the erosion of human rights in the developing world - even though the domino effect they cheer on creates pressure on governments to reduce their pollution controls and human rights in order to retain foreign investment.

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Antigua/gambling case drags on

It's been a little while since we updated on this topic, but there's a good reason for that... there hasn't been any news. The latest on the Antigua-gambling case at the WTO is more no-news news:

Antigua and the United States are not giving up on reaching a compromise in their Internet gaming dispute, announcing that they would push back the deadline for reaching a settlement yet again and leave room open for the possibility of another extension. They will continue talks until July 11.

If you've forgotten, where the case stands now is that the WTO has authorized Antigua to impose sanctions of up to $21 million against the United States, Exhibit A of WTO rules favoring corporations over domestic policy-making space.  Here's a look at the case as it has evolved - a history in Eyes On Trade posts:

Earlier prehistory can be found at our website.

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Poll roundup: Americans want to renegotiate NAFTA

A new Rasmussen Reports telephone poll indicates that over half - 56 percent - of Americans think NAFTA should be renegotiated. The juicy bits include:

A new Rasmussen Reports national telephone survey taken Monday night finds that 56% of voters support renegotiation while 39% say U.S. free trade agreements in general have directly impacted their families. Of that latter group, 73% say the impact has been a bad one, as opposed to 14% who say it was beneficial.

Only 16% of respondents favor NAFTA - a pact which came into being in 1994 and lowers nearly all trade barriers between the U.S., Canada and Mexico -- as is, with 28% undecided... Perhaps most importantly, 71% say negotiation of trade agreements is important to them in terms of how they will vote. Only 20% say it is not important.

(We've been talking about that last point for a while now...)

This comes a few weeks after a Pew Research Center poll showing that 48 percent of Americans, including 42 percent of Republicans and 52 percent of Independents, believe "free trade agreements—like NAFTA, and the policies of the World Trade Organization" have been "a bad thing" for the United States, while only 35 percent said they have been a good thing. This is a dramatic reversal from a 2004 poll in which Americans believed that these trade agreements have been a good thing, by a 47-34 margin.

The same Pew poll also shows that 61 percent of Americans believe free trade costs U.S. jobs, and 56 percent believe it lowers wages. Only 9 percent believe free trade creates U.S. jobs, and only 8 percent believe it raises wages – results which are consistent across party affiliation lines.

And, just for fun, if you care to take at face value the ABC News/Facebook poll (to be clear... I wouldn't), 79 percent of Americans think the U.S. should renegotiate NAFTA or withdraw from it entirely.

A few more polling tidbits after the jump...

Continue reading "Poll roundup: Americans want to renegotiate NAFTA" »

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Will the real Bill Richardson please stand up?

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

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

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

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

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

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

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Obama campaign fights back on Fortune interview

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

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

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

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Trade on the Trail: Into the General

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

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

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

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

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

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

Obama is also courting labor backing today:

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

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

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

Naomi Klein writes:

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

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

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

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

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

And Dick Cheney weighs in:

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

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

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

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

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

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

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A Fair Trader Headed for Maine House of Representatives

111507househopeful Elsie Flemings, a former Global Trade Watch staffer who played a leading role in the Oman FTA and CAFTA accountability fights, won the Democratic primary last week in Maine's District 35, beating opponent Gary Friedman with over 60% of the vote.

Although only 25, Flemings has already taken on corporate interests in Maine and fought for local economies. In 2007, she helped push the passage of the Informed Growth Act, which requires cities to conduct a full economic impact analysis study before allowing “big-box” stores (retail stores over 75,000 square feet) to break ground.

Flemings will face Republican nominee Rick Savage in the fall.

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Tearing down trees in anger

A new Pew poll out shows that Americans are dead last among 24 nations in their support of the very concept of trade, with only 15 percent saying "trade is very good for the economy". The Pew poll confirms what is already clear from anyone who watched the swing state primaries: you can't expect to get elected in 2008 by advocating more of the same failed NAFTA-WTO agenda.

Still, I am amazed that the very idea of trade is so problematic. In general, people tend to be in support of the notion of international exchange; our complaint has always been that pollsters don't ask specific enough questions, like, "Would you support an act of Congress that would reduce barriers to trade with a poor country that would push U.S. wages downwards?"

So the Pew poll is very clunky, not asking about specific trade policies or impacts, but rather about views of trade in general. If they asked more sophisticated questions, we would have likely seen more demonstration of the global rejection of this agenda as well, which are obvious from the protests in Korea against U.S. beef to the Irish public's rejection of a corporate-friendly EU treaty.

And some of our friends weigh in for a piece on the Pew poll by National Journal's Winter Casey:

"You have to remember that since 2002 wages have not moved in the United States despite six years of economic growth," said Mark Weisbrot, co-director of the Center for Economic and Policy Research. "Our leaders have forced most Americans into very harsh competition through international trade, but they have protected the upper-income groups from the same competition. Therefore, international trade has played a significant role in redistributing income from the lower and middle classes to the rich. A lot of people can see that, even though the pundits and the Beltway bloviators try to deny it."

Paul Krugman and Dani Rodrik are weighing in on a recent line of argumentation about "trade = lower prices." In Dani's words:

Advocates of globalization love to argue that free trade lowers prices, and the argument seems sensible enough. Think of all the cheap goods from China that we can buy at Wal-Mart.  But anyone who understands comparative advantage knows that free trade affects relative prices, not the price level (the latter being the province of macro and monetary factors).  When a country opens up to trade (or liberalizes its trade), it is the relative price of imports that comes down; by necessity, the relative prices of its exports must go up!  Consumers are better off to the extent that their consumption basket is weighted towards importables, but we cannot always rely on this to be the case.

And thanks to David Sirota for addressing taking down the crock that Roger Lowenstein spewed over the weekend. I was so angry yesterday that this kind of garbage gets any play from serious newspapers that I had to rip down half the trees in my yard. Hey, anger is a gift, right?

I could make a much better case for so-called "free trade" agreements than Lazy Roger here, because he (and by extension his editors) are so blinded by their own privilege that they fail to take seriously any weaknesses in their pamphleteeing hoo-haa. They do not help their corporate or ideological masters by recycling 30 year old Chamber of Commerce fact sheets. At least we know where the re-educated editors from Pravda were sent.

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Who Likes to Rock the FDI Party? Kevin G Likes To Rock the...

We've written about our bud Kevin Gallagher of the Global Development and Environment Institute many times before. After an amazing book out last year with Lyuba Zarsky, he has another one out on foreign direct investment and sustainable development that's getting the book event treatment over at the Carnegie Institute this Thursday in DC. If you're around, it'll be the best FDI party around. Details after the jump...

Continue reading "Who Likes to Rock the FDI Party? Kevin G Likes To Rock the..." »

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Internationalist? Only if Detroit and Big Cattle Say So

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

With polls and protests casting the a shadow over the U.S. image in the world, how do you win hearts and minds in other countries? Is it by forcing them to dismantle consumer protections? Is it be forcing them to dismantle an industrial system which offered its workers much greater security than our downsized and offshored auto workers? Americans don't want what is left of the Progressive and New Deal and 1970s eras dismantled, and it appears that other countries don't either.

Emphasizing shared class and consumer interests would be a great way to unite the interests of Koreans and Americans, and overcome some of the animosity that Koreans feel towards the U.S. government. The Obama campaign is not helping its internationalist street cred by making the sole focus of its criticism of the Korea FTA that Korea has standards that are too high. Instead, they should be supporting higher U.S. food and product standards so that our producers can gain global credibility without having to resort to deregulatory shenanigans. In fact, take it a step further and commit to working with the Koreans at the WTO to ensure that country's retain full policy space to enact food and product standards without risking trade sanctions.

Don't get me wrong: I understand the domestic political advantage you can gain by beating up on other countries and making it seem like you're sticking up for the national interest. But you can also gain a similar advantage by critiquing corporations in the name of consumer and worker interests. And using big stick trade "diplomacy" for the benefit of special interests does not do many favors to our long term diplomatic interests.

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NoNoNoNoNo: Ireland rejects corporate globalization

Irish voters have just rejected an attempt to force corporate globalization down their throat via the EU Lisbon Treaty. According to the Times Online:

Ireland - the only member state to hold a referendum on the matter - chose to reject it decisively by 53.4 per cent to 46.6 per cent....

Opponents rallied support for the No campaign around claims including that the treaty threatens sensitive Irish policies like the ban on abortion, low corporation tax and military neutrality...

Libertas, a group run by the businessman Declan Ganley and the Sinn Fein party, led by Gerry Adams, were among the most prominent 'no' campaigners.

Mr Ganley said today: "The Irish people should never have been taken for granted. In their enormous wisdom they have taken on board the treaty, looked at the arguments and, it seems that we have returned the same result again that our fellow Europeans in France and the Netherlands have already sent to the unelected Brussels elite."

That's in reference to the French and Dutch votes against a previous incarnation of the treaty. You can visit the "No" campaign's website here, which goes over the arguments about how the Lisbon treaty would limit workers rights and public interest policies. The Guardian reports that:

Adding saliva to injury, an MP has just been spat at by triumphant anti-EU campaigners singing Eurodance group 2 Unlimited's 1992 hit No Limits (a 'song' that repeats the word "No" 72 times, just to make the point). The political elite are not popular in Ireland.

Just for kicks, here's the song:

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NAFTA Peru Expansion Didn't Solve Peruvian Forestry Problems, I

The results are pouring in: when Congress voted to pass last year's NAFTA expansion to Peru, they effectively gave up leverage over a government determined to rip apart the Amazon and its biological occupants.

The FTA negotiations began in 2004. At that time, there was exploration contracts with multinational extraction companies for eight oil blocks. Then, in 2006, as negotiations were wrapping up, that number jumped again; slowed down while Congress was considering the FTA in 2007; and now has jumped up by another eight, bringing to total to 40 blocks. Another 14 are slated to be signed by 2009. According to ENS:

"Oil and gas blocks now blanket nearly 75 percent of the Peruvian Amazon," said Dr. Matt Finer, staff ecologist at Save America's Forests in Washington, DC, who is now in Peru. "That is over 123 million acres of megadiverse rainforest, roughly the size of California and Maine combined."...

"Hydrocarbon blocks now overlap 20 protected areas," said Cesar Gamboa, president of the Peruvian nongovernmental organization Derecho, Ambiente y Recursos Naturales.

"Thirteen of these protected areas preceded creation of the oil blocks and the overlap is illegal due to the lack of compatibility studies required in the Protected Areas Law," Gamboa said...

An analysis by Save America's Forests indicates that 58 of the 64 blocks overlay titled indigenous lands and 15 overlap the territories of indigenous peoples in voluntary isolation.

Then, Peruvian President Alan Garcia unilaterally modified the institutional structure that slowed down destruction of the rainforest, only months after Congress approved the trade deal. According to IPS:

Legislative decree 1,015, approved by García on May 20, makes it possible for indigenous communities in the country’s highland and jungle regions to authorise the sale or lease of communal land to private investors with the votes of just 50 percent plus one of the members of the community assemblies.

The new law modifies legislation on private investment that required the consent of two-thirds of the qualified members of the village assembly to sell or lease land.

Now the votes of only a simple majority in village assemblies, who no longer must be duly qualified members, are needed...

The entry of private investment has come hand in hand with the formal land titling and break-up of communal property, and many indigenous peasants in the coastal regions have been forced to pawn their land titles to obtain loans, given the lack of state support for improving the productivity of their farms, said [one activist]...

Some warn that the decree opens the door to manipulation of communal assemblies.

"The common practice of many companies has been to foment the creation of communal organisations parallel to the official ones, and to co-opt some of the local leaders, which has enabled them, in many cases, to destroy the social fabric and impose their own decisions," said lawyer Javier Jahncke with the non-governmental Ecumenical Foundation for Development and Peace (FEDEPAZ).

Indeed, the action by the nominally socialist Garcia has brought together the left, the right, and indigenous groups in Peru to oppose the presidential power grab, and the multinational land grab. We'll look at more of this story today and next week.

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Shahnge you can't ask for

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

The reactions to the reactions to the Obama campaign's economic appointment of Rubin acolyte Jason Furman show the distance we have yet to go in achieving an Uprising politics in this country. Brad DeLong is furious that the LA Times misrepresents Furman's views on Social Security (he fought against privatization). Paul Krugman thinks the concerns are "silly", and writes

Maybe I’m wrong, but my sense is that Jason Furman has become a proxy target for some Obama supporters who, now that the Great Satanness has been defeated, are suddenly starting to have the queasy feeling that their hero might be a bit of a …. centrist. I’m tempted to say I told you so; in fact, I guess I just did. But that’s all in the past now.

Anyway, lay off Jason Furman, a good guy who will do his best to defeat a candidate who gets his economic advice from Phil Gramm.

Ezra Klein writes:

What I can't figure out about the furor of Barack Obama's decision to name Jason Furman his economic policy director is where have these people been? This is like getting pissed at Project Runway because it's a show about clothes... if unions wanted an economic lefty, they should've endorsed John Edwards in the primary, or at least demanded that Obama staff up with trusted labor types in order to gain their support back when he was in a close primary race.

So criticism would have been okay back in the primary, when Democratic voters had choices. Now they have no choices, and so you can't ask for shahnge. Dean Baker hit the nail on the head:

Senator Obama's election can make an enormous difference in the political environment and the direction the country takes. But progressives must keep the pressure on. Senator Obama is an enormously talented political figure, but he alone is not going to bring about change. It takes a movement.

It's important to remember that Obama campaigned on a fair trade platform that helped him win key swing and early primary states like Iowa and Wisconsin. And now key stakeholders - with massive get-out-the-vote operations - are urging him not to change course now. According to today's NYT:

“For years we’ve expressed strong concerns about corporate influence on the Democratic Party,” John J. Sweeney, president of the AFL-CIO, said Wednesday in a statement implicitly critical of the symbolism of the appointment, no matter Mr. Furman’s economic skills...

Of particular concern to labor is the Hamilton approach to trade. While labor wants restrictions that would preserve jobs, the Rubin camp wants free trade that might cost jobs but would be offset by a broader safety net channeling more income support and job training to the job losers...

In his statement criticizing Mr. Furman’s appointment, Mr. Sweeney said, “The fact that our country’s economic policies have become so dominated by the Wall Street agenda — and that it is causing working families real pain — is a top issue we will be raising with Senator Obama.”


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Shah-nge you can believe in, part II

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

Reactions to yesterday's Obama policy team announcement kept pouring in. From ABC News:

"When people see someone like Barack Obama promise change and then see that same person make their first move the hiring of a Wall Street economic team, that’s what sows disengagement and cynicism in the public,” said David Sirota, a one-time backer of former Sen. John Edwards, D-N.C., who is the author of “The Uprising: An Unauthorized Tour of the Populist Revolt Scaring Wall Street and Washington."

From the LAT:

"We are very much taken aback that Furman has been put at the head of this team," said Marco Trbovich, a senior aide to United Steelworkers President Leo W. Gerard, whose support is considered crucial to Obama's success in heavily unionized areas of Pennsylvania, Ohio, Minnesota and other battleground states.

Trbovich worked with Furman during Kerry's presidential campaign, in which Furman was also an economic advisor.

"He is a very bright fellow, but he is an unalloyed cheerleader for the trade policies that have been very destructive to manufacturing jobs in this country," Trbovich said. "There are very serious concerns" about his appointment.

Perhaps the most enraging part of the record, according to Trbovich and others, were comments attributed to Furman on Wal-Mart.

In a paper presented in Washington, he suggested that there were some economic benefits from the company's low prices and other policies at a time when major labor unions had launched an anti-Wal-Mart campaign.

Furman worked most recently as a budget expert at the Brookings Institution in Washington heading the Hamilton Project, an economic policy research group. It was founded by Rubin, who now chairs the executive committee of Citigroup Inc.

Lori Wallach, a lawyer and leading opponent of free-trade policies, said the appointment was jarring from a policy and a political perspective.

"Furman seems like a liability, given his anti-worker writings and statements about Wal-Mart, fair trade and other middle-class issues," said Wallach, director of Public Citizen's global trade watch division.

And Obama's folks are planning some fundraising in China, according to the WP.

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This is what (beef) democracy looks like

It's no secret that America's food and beef safety system is highly problematic and inferior to that of many Asian and European nations. So it shouldn't be any surprise that our agribusiness companies - already responsible for the destruction of the Mexican peasantry via NAFTA - have their sights set on another "barrier to trade": strong consumer regulations.

In fact, that's precisely the target of the latest NAFTA-style trade deal with Korea, and the government there very nearly caved to U.S. pressure to allow U.S. beef into the country's famously high quality domestic beef market. The Korean people put the smackdown on that proposal, as the NYT reports (with their beautiful photo as well):

President Lee Myung-bak pledged a "new beginning" on Wednesday as he contemplated reorganizing his unpopular government, which has been shaken by the biggest anti-government demonstrations in two decades.

The demonstrations against Mr. Lee started six weeks ago when students began protesting11koreainline1190 his government’s decision in April to resume imports of American beef despite widespread fears of mad cow disease. They grew into a broader backlash against Mr. Lee’s leadership style and his policies on everything from North Korea to education reform programs.

Speaking to a group of businessmen at his office, Mr. Lee gave his first comment on the massive rally against his four-month-old government that brought at least 100,000 people into the streets of Seoul on Tuesday and prompted his entire cabinet to offer to resign.

The beef protests have dealt a sharp blow to Mr. Lee, who was elected in December championing a new “pragmatic” approach to ties with Washington...

The protests Tuesday took place on the 21st anniversary of the huge pro-democracy demonstrations that helped end authoritarian rule. Overhead, balloons carried banners that said "Judgment day for Lee Myung-bak" and "Renegotiate the beef deal." One widely distributed leaflet said, "Mad cow drives our people mad!"

The agriculture minister, Chung Won-chun, visited the protest site to offer an apology in a speech, but protesters quickly surrounded him, chanting "Traitor!" and he was forced to leave.

Can you imagine this kind of outpouring in the U.S., and over food policy of all things! We don't get that kind of crowd for an anti-war march! Would we get that kinda crowd for health care?!

The insidious thing about NAFTA-style deals is that, not only do they open the borders to (in this case) unwanted products, but they also limit the ability of the government to regulate food properly. And if the government were to try to regulate, these deals give agribusiness firms the right to sue the government for taxpayer compensation, thus chilling better policy the next time. This actually happened when a group of Canadian cattlemen sued the U.S. when our government closed the border to beef trade when Canada had an instance of mad cow.

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Shah-nge you can believe in

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

Bloomberg is reporting that the Obama campaign has named Jason Furman of Robert Rubin's Hamilton Project as a paid advisor, joining University of Chicago economist Austan Goolsbee. Unpaid advisors include mainstreamers Larry Summers and Alan Blinder, and heterodoxers Jared Bernstein from EPI and James Galbraith from UT-Austin.

I'll comment on this line-up in more detail in the future, but it's worth noting that Goolsbee has been willing to question how so many non-trade issues got wrapped up in trade policy, Summers has increasingly been talking up inequality problems, and Blinder of course has been virtually ejected from the mainstream for deigning to mention that service jobs are being increasingly offshored. And while Chris Hayes is despairing at some of these names that are blasting in from the past, he reports that Furman promises to read up on Sen. Sherrod Brown and Rep. Mike Michaud's TRADE Act, unveiled last week.

Okay, and for absolutely no reason other than I love comedian Bob Odenkirk, I include the HBO's Mr. Show video below. About one minute in, Odenkirk's snot-nosed, donut-ordering nincompoop tells the clerk to "Keep the change" (pronounced "shah-nge"). I have been annoying my wife and friends for weeks by saying "Shah-nge you can believe in" anytime we discuss the presidential race. It is not a reflection of my political views but of my emotional immaturity that I post this:

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Privatization as a cure for preemption?

Today's paper reports that the Senate is privatizing its dining room to get around budget losses, and now countries may be privatizing other entities to get around WTO rules. According to Inside U.S. Trade:

The European Union, in recently released comments on a Food and Drug Administration (FDA) inquiry on how third parties can be used to increase food safety, has said that if the FDA recognizes and relies on certifications that firms live up to private-sector standards, it could violate the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) in the World Trade Organization (WTO).

The EU in undated comments explained that though compliance with voluntary standards may lead to compliance with legal federal requirements, private-sector standards often go beyond what is required by federal governments. For instance, some private-sector standards ban the use of certain legally approved pesticides.

Private sector standards, the EU said, are frequently aimed “at ensuring compliance with legal requirements, but in many cases the provisions go beyond what is legally prescribed to cover issues of labor and social rights, production methods or environmental protection and sustainability."

And some developing countries are upset with the U.S. for its reliance on private, third party certifications across a variety of products, which they claim are difficult to keep current with. Public Citizen is generally skeptical of third party certifications, just as we're skeptical of most privatized regulation. But the EU's commentary shows that this issue cuts many ways: what if private sector standards are higher than the publicly enforced standards? What if countries start privatizing regulation in an attempt to get through a loophole in onerous WTO product standard rules? (That's partially what is at issue here: a disagreement about whether private standard setting agencies fall under WTO jurisdiction.)

And there's more from IUT. At ongoing government procurement negotiations at the WTO, countries are struggling how to address so-called “indicative criteria” that define whether government entities have been privatized:

Indicative criteria are an important issue because if government control or influence has been effectively eliminated over a particular entity, a GPA party that removes such an entity from its list of commitments generally owes no compensation. This became an issue when Japan attempted to de-list a railroad entity with the argument that it had been privatized, and the railroad’s status fell under dispute by GPA parties that lacked previously established criteria by which to judge Japan’s move.

Could a country that wanted to scale back its WTO procurement market access commitments do so by feigning some sort of mass privatization or partial privatization? Would progressives support privatization in that instance? Anyway, this is probably too much wonking out for a Monday morning, so I'll go back to my coffee.

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Book Recommendation: The Uprising

I was lucky enough to catch David Sirota's book tour when it swung through Washington, which he makes clear in his new book "The Uprising" is his least. favorite. town. ever. (Wow, I've never done that period thing before - makes me feel good to join a common blogger convention! Did I do it right?) He's been making the rounds, telling activists and whomever else would listen that, yes, Virginia, there is a politics outside of electoral politics.

2003968309244839153_fs Documenting these small p politics is what "The Uprising" is all about. While David's last book, "Hostile Takeover" was more of a wonk-policy piece, this latest book leaves the theory and the legislation to one side and tackles what motivates people to get involved and stay involved in movements that fundamentally challenge the status quo. He dissects the failure of the anti-war movement to end the war, the spectacular organizing that our friends at WashTech are doing with tech workers in Seattle, as well as the fusion electoral efforts of our other friends in the Working Families Party in NY state.

David doesn't shy away from something that hasn't been talked about so much since the days of NAFTA and the Seattle WTO protests, which is the possibility that both right and left groups have a common interest in an uprising against entrenched and unaccountable elites. Towards this end, he hangs around with Lou Dobbs and the Minutemen (not at the same time) on the border to see what makes them tick, and what about current politics pushed them into more insurrectionary modes of political action.

To the extent that the book has a thesis, it's that uprisings are a natural and necessary response to an era when the center of empire is unresponsive to popular demands and ceaselessly attempting to coopt all dissent into channels palatable to the powerful. As the Rolling Stones asked in "Street Fighting Man", "what else can a poor boy do but sing for a rock and roll band?..."

David's answer: take that righteous anger you feel at being shut out, and ensure that it moves in a progressive, movement-building direction. (tangent: is the RNC trying to say that BHO is a street fighter?? Look at the resume section.)

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Who's saying what about the TRADE Act


The TRADE Act calls for a strategic pause on trade agreements and a long overdue comprehensive review of U.S. trade policy.  This bill also outlines a new U.S. trade strategy-one that puts a priority on the interests of working class Americans, farmers, the environment, and domestic manufacturers, not just multinational corporations.

The AFL-CIO is proud to support the TRADE Act.  It is past time to restructure U.S. trade policy to work for working families - here at home and around the world.

Change to Win:

"This legislation will finally bring an end to the disastrous trade deals that have sent millions of jobs overseas and lowered safety standards. It will set new rules for global trade that create good American jobs, improve working conditions everywhere, and make sure that the benefits of trade are shared with workers, not just corporate CEOs.

"The TRADE Act lays the foundation for creating fair trade agreements that will help working families achieve the American Dream in the 21st century economy."

National Farmers Union:

"Current trade agreements have consistently failed to live up to their promised benefits, encouraging a race to see who can produce the cheapest food and fiber regardless of production standards," NFU President Tom Buis said. "The TRADE Act defines a plan for a fair trade policy that will allow American agriculture to compete on a level playing field."

Friends of the Earth:

Friends of the Earth supports well-crafted trade policies that protect the environment and workers, enhance public health and safety, foster strong democratic institutions and improve the quality of life worldwide. Unfortunately, our world's precious natural resources face serious threats from the current free trade model. Past trade pacts, based upon the failed NAFTA/CAFTA model have not worked, and actually encourage industry to relocate in pursuit of the least stringent environmental and social standards. Trade agreements should support, rather than undermine, environmental protection. The TRADE Act encourages responsible behavior, providing a blueprint for a far better and more balanced way to conduct international trade.

Much more after the jump...

Continue reading "Who's saying what about the TRADE Act" »

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Today's TRADE Act Presser

Although a tornado watch in DC today pushed it indoors, it didn't make a press event announcing the Brown/Michaud TRADE Act any less successful, with supporters of a new progressive trade agenda making an impressive showing. You can see our statement on the TRADE Act here or below in Todd's post, and we have more materials about this new framework on our website here (with more coming in the near future). There have already been a few stories in the media:

Here are a few photos from the event:

More will be up at our Flickr account soon.

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Major trade bill dropped today: our statement

Here's our press release:

Public Citizen Supports Landmark Trade Expansion Legislation

TRADE Act Addresses American Public’s Demand for Change During Presidential Campaign With a New Way Forward on Trade, Globalization

WASHINGTON, D.C. -  Following a presidential primary season highlighting broad public concern about current trade policies, the Trade Reform, Accountability, Development and Employment (TRADE) Act introduced today by Sen. Sherrod Brown (D-Ohio) and Rep. Mike Michaud (D-Maine) reveals a way forward to a new trade and globalization agenda that could benefit more Americans, said Public Citizen. The bill is supported by a broad array of labor, consumer, environmental, family farm and faith groups and more than 50 House and Senate original cosponsors.

“The TRADE Act is exciting because it describes concretely new trade and globalization policies that many Americans would support and shifts the debate toward future consensus about what we are for, rather than focusing on opposition to the current model,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division.

The legislation requires a review of existing trade pacts, including the North American Free Trade Agreement (NAFTA), the World Trade Organization (WTO) and other major pacts, and sets forth what must and must not be included in future trade pacts. It also provides for the renegotiation of existing trade agreements and describes the key elements of a new trade negotiating and approval mechanism to replace Fast Track that would enhance Congress’ role in the formative aspects of agreements and promote future deals that could enjoy broad support among the American public.

“Corporate interests have hijacked past trade pacts to get special protections - patent extensions that jack up drug prices, subsidies for offshoring production and more. The TRADE Act tips the scales back in balance with a trade agenda that also suits workers, the environment and everyday consumers,” said Wallach. “The special interests who pushed our current trade pacts claimed that opponents of NAFTA and WTO were anti-trade, which was never true .We invite them to show their commitment to trade expansion by supporting the TRADE Act, which will build a new American consensus in favor of trade.”

According to a May 2008 Pew Research Center poll, 48 percent of respondents believe free trade agreements are bad for the country, including 42 percent of Republicans and 52 percent of Independents. Only 35 percent of respondents consider them positive. A Wall Street Journal/NBC poll released in January 2008 found that 58 percent of Americans think “globalization has been bad … because it has subjected American companies and employees to unfair competition and cheap labor.”

These polls reflect many Americans’ negative experiences under our current trade model. Since 1975, when Fast Track was first enacted, the U.S. trade balance has shifted from a slight surplus to an unsustainable $709 billion deficit in 2007. A net 4.7 million manufacturing jobs have been lost, and while American worker productivity has doubled, American median wages are only 1 percent above 1970s levels. Since NAFTA and the WTO went into effect, an array of domestic public interest laws have been successfully attacked while imports of unsafe food and products have surged.

“Presidential primary candidates from both parties responded to the American public’s demand for trade policy change, and both leading Democratic candidates committed to renegotiating bad trade deals like NAFTA,” said Wallach. “This bill provides the specifics of what a broad array of labor, consumer, environmental, faith and family farm groups representing millions of Americans expect for a future trade agenda.”

The TRADE Act’s sponsors, Brown and Michaud, highlighted how the legislation offered specific positive trade policy solutions to the public’s concerns.

“The TRADE ACT will help Congress and the White House craft a trade agreement that benefits workers, business owners and our country. We want trade, and we want more of it,” said Brown. “The TRADE ACT is a critical first step on a new path for trade.”

Added Michaud, “The TRADE Act is a tremendous step forward in fixing our broken trade policies by setting out a new course on trade that will benefit businesses and workers in the U.S. This legislation outlines what a good trade agreement must and must not include. In this election year, with trade such a major focus of the debate, it’s important that the American people and the presidential candidates hear our message on trade. This legislation will help shape the debate on trade for years to come.”      


Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.

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Tom Frank advice for Obama: Drop Fareed, Pick up Jamie Galbraith

Thomas Frank has some advice for Obama in today's WSJ:

For Mr. Zakaria, the truly enlightened Americans, the ones who understand the coming order, are apparently Goldman Sachs, McKinsey & Company and assorted business chieftains. When Mr. Zakaria writes that Third World leaders "have heard Western CEOs explain where the future lies," he means it not as a sarcastic slap at those CEOs but as homage to their wisdom.

Average Americans, meanwhile, give Mr. Zakaria fits, what with their stubborn ignorance of foreign ways and their doubts about free trade. This attitude, in turn, has opened up "a growing gap between America's worldly business elite and cosmopolitan class, on the one hand, and the majority of the American people, on the other."

A warning here, senator. This is not an idea that will endear you to the people of Montana, or Ohio, or Pennsylvania. Were you to integrate it into your stump speech, you might even deliver the South Side of Chicago over to John McCain.

One more reason to be leery of all this market idolatry: It's wrong. Take the aspect of the "new era" that Mr. Zakaria most admires – "the free movement of capital," the international loans and investments he worships as "globalization's celestial mechanism for discipline." In point of fact, the rise of China and India – Mr. Zakaria's own paradigm cases – was possible only because those countries shunned global commercial credit markets in the 1970s, allowing them to avoid the interest-rate shock of the early '80s.

How do I know this? It's all explained in a far more worthwhile new book, "The Predator State," by James K. Galbraith. At your next photo-op, Mr. Obama, I hope to see you half way through it.

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Folks in Montana are what?

Labor11a There has been a series of news items over the last few months that suggest that the presidential candidates are softening their trade positions just because they don't have a No to NAFTA symbol tattooed on their forehead. Here is one example from a few days ago, but there have been others that we've written about.

Here's a quote from the recent article:

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

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

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

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

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

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

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

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Maine rocks fair trade

This is some great footage from the Maine Fair Trade Campaign's recent convention, with none other than our own Lori Wallach, making the case for a different trade model. Fair trade champion Rep. Mike Michaud (D-Maine) also riles up the crowd about 6 minutes in:

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