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VT Legislator Reacts to Interference on E-waste Bill

Ewaste_2 On July 3rd, we posted that two state bills in Maryland had seen interference from the People's Republic of China (PRC) before they had the opportunity to come to a vote, cited as "barriers to trade" in conflict with the U.S. commitments under the World Trade Organization (WTO). Since then, we have been updated on the developments of a similar case in Vermont and wanted to share.

State Senator Ginny Lyons (D-Chittenden County) recently issued a statement on August 12th responding to the correspondence she received from the PRC regarding her bill on electronic waste. This letter from the Chinese Government also referenced U.S. commitments under the WTO as reason for asking Lyons to "cancel" or "revise" her bill. To which Sen. Lyons responds:

"The People's Republic of China questions the authority of the Vermont legislature to enact legislation to protect human life and the environment. This attempted interference by the People's Republic of China in the democratic process in Vermont is alarming and threatens basic principles of our system of government. Common sense solutions to health issues at the state and local level should not be subject to international pressure."

She stresses that, "This is part of a disturbing trend toward undermining states's rights. It's simply not OK for other governments to feel that they have a right to intervene in our state legislative process in this way. It wouldn't matter whether the bill addressed by the Chinese government was about health care, workers' benefits, land use permitting, or in this case, electronic waste recycling, the underlying principle is the same: respect for democratic decision-making. And so, we have to let folks in Washington DC and in Beijing know that this is an unacceptable intrusion."

This statement follows the unanimous passage of Sen. Lyons' resolution on this issue by the National Conference of State Legislatures (NCSL) Labor and Economic Development Committee at their annual meeting in July. The resolution asks that, at minimum, USTR issue a statement to NCSL "affirming that states’ abilities to pass laws and regulations protecting human health and the environment should not be abridged, and that USTR will aggressively defend states’ regulatory powers as a matter of U.S. federalism."

The Forum on Democracy and Trade released a preliminary analysis of the allegations by the People's Republic of China claiming that Sen. Lyons' bill is inconsistent with the WTO Agreement on Technical Barriers to Trade (TBT). The analysis finds the following:

"The TBT Agreement, which states that "Members should ensure that technical regulations are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade." Under this strict "necessity test," trade values arguably trump other public policy values unless there is no conceivable alternative policy that is less burdensome on trade."

And states in conclusion:

"As illustrated by this event, other countries could and are beginning to use the trade system to apply pressure to state legislatures and to impact the state legislative process. Since trade promotion authority has expired, states see an opportunity to evaluate the process for providing input on trade issues and to improve federal-state communication. A new system for improving communication between states, USTR, and Congress should be a strong priority for the next Congress and President to ensure that our democratic system of government is protected."

We wholeheartedly agree with the Forum's conclusion and hope that state legislators will act on this opportunity to improve their role in the process. (If you are a state legislator and would like to get involved in a working group devoted to these issues, please email: sedelman@citizen.org.)

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Making a story where there isn't one

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

Philip Elliott of the AP writes an unusual story the headline of which is "NAFTA Bashing off the Democrats' Agenda" and the lede of which is: "The once-decried free trade deals of the primaries have been all but abandoned as political boogeymen."

Yet the story goes on to say that both Obama and Clinton campaigned and won primaries based on their NAFTA criticism, and all of the people cited argue that trade is and was a potent political issue.

So what's the evidence for the proposition in the lede and headline?

During the Democrats' nominating convention here this week, nary a mention arose about the North American Free Trade Agreement or its peers... Part of the reason Obama has gone silent on NAFTA is because it riles up some unions and staunch Democrats, but not independent and swing voters. NAFTA is an easy target because some voters blame such trade deals for lost jobs, but its details don't work well in 30-second soundbites.

This last sentence might have been the lede: I think I would advise anyone running for office not to talk about investor-state mechanisms in their nomination speech too, much as I am fascinated by the topic.

The para is also off on its politics: independents and swing voters are MORE trade-skeptical than Democrats, as this Pew poll from May shows:

In general, Republicans express more positive views than do Democrats about the impact of free trade agreements on the United States. Still, as many Republicans see free trade agreements as a bad thing as a good thing (43% vs. 42%). Democrats, by 50% to 34%, say free trade agreements are bad for the United States. A narrow majority of independents (52%) views free trade agreements as bad for the country.

Solid majorities of Democrats (64%), independents (64%) and Republicans (55%) say that free trade agreements lead to job losses - rather than create jobs - in the United States. There also is fairly broad agreement that free trade agreements lower, rather than raise the wages of American workers. Democrats, by nearly four-to-one (57% to 15%) say that free trade agreements slow the economy down rather than make it grow; this also is the prevailing view among independents (50% vs. 18%).

Continue reading "Making a story where there isn't one" »

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Palin: An Unknown on Trade

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

News reports are indicating that John McCain is tapping Gov. Sarah Palin (R-Alaska) for his running mate. As we reported back in 2006, Palin has not articulated views on trade issues, although Tony Knowles, her Democratic opponent in the 2006 gubernatorial race, had campaigned on a fair trade platform.

Elsewhere in Alaska land, Anchorage mayor Mark Begich is challening incumbent Sen. Ted Stevens. Begich has been critical of all of the trade deals negotiated by the Bush administration, while Stevens - with the notable exceptions of  opposing NAFTA, the WTO and the Chile FTA - has voted against fair trade 80% of the time (16/20 votes) since 1974.

Update at 5 pm: While Chris Hayes reports that Palin might have had a Buchanan-ite past, there seems to be little evidence that she is a trade skeptic. In fact, a U.S. Chamber of Commerce piece has her saying,

Alaskans have been first-rate at international trade for decades. I applaud the hard-working Alaskans who help our economy at home, and other economies around the world, through trade.

Not that I would hazard a guess as to what this general statement means, but still...

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No NAFTA Change Possible? Think Again. 299 Times.

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

Whenever the prospect of renegotiating NAFTA is brought up - whether in the context of the Trade Act now moving through Congress, or in regards to Barack Obama's campaign pledges - the counterargument is that the pact simply can't be renegotiated. The argument seems to be that the U.S.-Canada relationship is so fragile that it can't be touched or both countries will slink back into isolationism like it's 1799.

The reality? Since 1794, the U.S. and Canada have negotiated 299 agreements and treaties. That means our relationship with Canada has formally changed on average about 1.397 times every single year.


After the category of defense treaties, the trade category is what we've renegotiated most frequently with Canada. Other types of treaties, such as those related to highways or aviation, don't come anywhere close.

Taking just trade agreements alone, we've had at least 44 since 1935, meaning that on average our trade relationship with Canada has changed more than every two years. Since the 1988 U.S.-Canada pact was signed, we've had 28 trade agreements with Canada, including several changes to NAFTA. That's an average of 1.4 changes a year to our trade relationship alone over 20 years. The only difference from fair traders' demands for NAFTA renegotiation is that those changes were mostly in a pro-corporate direction. (Click here to download our spreadsheet of all these agreements, which is a major undercount, since they exclude almost any treaty or agreement no longer in effect.)

In sum, enough with the excuses. The basic NAFTA model - at nearly 15 years old - is long due for an overhaul.

(Thanks to our amazing and now departed interns Rebecca Riddell, Isaac Raisner and Amy Bruno for their help on compiling this list from USTR and State Department sources.)

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Biden on Trade

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

Toronto's Globe and Mail highlights the trade positions of Barack Obama’s new running mate, Sen. Joe Biden:

Brace yourself for a barrage of tough rhetoric on trade from Joe Biden, Democrat Senator Barack Obama's vice-presidential pick.

The U.S. senator from Delaware has vowed to overhaul the North American free-trade agreement and take Prime Minister Stephen Harper "to the mat."

A self-described "fair trader," Mr. Biden voted against recent trade pacts between the U.S. and other countries. He's also pushed for strict enforcement of U.S. and international trade laws.

And like most Democrats, he wants new and explicit protections for workers and the environment built into all future trade deals.

While running for President, Sen. Biden recognized the strong public opposition to our current NAFTA/WTO trade model. Biden announced his opposition to the Peru Free Trade Agreement last fall.

Biden also echoed Sen. Obama's comments on the need for a strong response to the importation of unsafe toys in an October 30, 2007 Democratic debate at Drexel University: "If I were president, I'd shut down any imports from China, period, in terms of their toys -- flat shut it down. Imagine if this was Morocco selling us these toys, we would have shut it down a year ago."

More statements from Sen. Biden on trade and globalization are available here.

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Corporate America Wins with Trade!

This is quite the impressive jam by the Oregon Fair Trade Campaign (ORFTC)...

They do a great job of cutting straight to the heart of the the Consumer Electronics Association's silly-ness. US exports grow faster on average with countries when we have no NAFTA-style trade pact. The Colombia FTA can do nothing but wreak more havoc on the US economy and job market. We've already lost more than 3 million good manufacturing jobs since NAFTA, with the electronics industry itself having dealt its fair share of pink-slips. Now they go around highlighting the few jobs their members have not yet sent overseas as a reason to keep paving the way for them by passing unfair trade deals! Do they really expect a "thank you" from the American worker?

The truth is that the Fat Cat CEOs who stand to gain from FTAs would simply love another round of trade deals to make sure they can ship out the rest of the jobs wherever they please, whenever they please. As long as they can escape progressive, pro-worker regulation that ensures shared prosperity and sustainability, they'll be supporting any and every trade deal, no matter how horrendous the abuses of the regimes themselves or the abuses of their paramilitary allies.

Hats off to the Oregon Fair Trade Campaign for this one. World-class spoofing, indeed! My favorite is the part where they slam the bus as being too "low-brow" a mode of transport. Kudos.

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The Missing Link

Thanks to the work of labor, fair trade and immigration activists, the dots of “coincidence” between the enactment of NAFTA and the huge spike in immigration from Mexico to the United States since then are getting connected.

At the Labor Council for Latin American Advancement's (LCLAA) 17th National Convention earlier this month in Orlando, delegates approved no fewer than four - that's right four! - resolutions calling for fair trade. Most of these directly highlight the causal relationship between the economic and social upheaval caused by NAFTA-style trade pacts and increased immigration. NAFTA and similar pacts have displaced millions by devastating small farmers’ livelihoods and wiping out small businesses.

Mexican government data shows that 1.7 million campesinos have been displaced by NAFTA. The Mexican small business group El Barzon reported that 20,000 small business were wiped out in just the first seven years of NAFTA. Meanwhile, the majority of the 700,000 jobs ‘created’ in the first years of NAFTA (with the relocation of U.S. auto, electronics and other manufacturing plants) have since moved on to China.

Yup, the multinational corporations had no interest in paying Mexico’s $7 per day non-living wages when they could get $1-$2 per day in China – plus a government in cahoots to ensure there will never be any independent unions to help workers fight to better their circumstances.

With the lack of opportunity for workers or small farmers or small business amid the utter failure of NAFTA to bring “development” to Mexico, it’s not rocket science to realize that many of the Mexico’s NAFTA casualties would have little choice but to migrate.

LCLAA's been saying they told us so for some time (See pg. 38) and we've been more than pleased to do our part in spreading their wisdom far and wide.

Delegates also showcased their commitment to fixing the current NAFTA-WTO mess by choosing to endorse Sen. Brown and Rep. Michaud's TRADE Act. They also reiterated their steadfast opposition to the US-Colombia NAFTA expansion, denouncing the dismal conditions on the ground in the union murder capital of the world, and calling for new, fair, rules for the global economy.

Members of Congress Rep. Alcee Hastings (FL-23) and Rep. Luis Gutierrez (IL-04) were on hand throughout the week, discussing the importance of the Latino vote this election cycle.  One of the central themes of the convention was Su Voto Es Su Voz – Your Vote Is Your Voice and the importance of registering to vote.

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Trade battles on the big screen at national conventions

If the presumptive presidential contenders and their advisors have still not figured out - ahem - the political costs of surrendering to so-called "free trade" policies of the NAFTA/WTO variety against the interest of, well, almost everybody, they might be surprised to find some people getting a little riled up about the issue at convention time: delegates to both the Democratic National Convention (August 25-28 in Denver) and the Republican National Convention (September 1-4 in St Paul) will be treated to a "sneak peak" viewing of the latest Hollywood indie extravaganza...

Stuart Townsend's Battle in Seattle won't open for another month for the rest of us (September 19th and 26th in select cities across the country), but thanks to the folks behind the Impact Film Festival, convention delegates will get an inspiring (and timely) look-in on a rocking film set in Seattle during the WTO protests.

With a star-studded cast (Charlize Theron, Woody Harrelson, Andre-3000, Ray Liotta, Michelle Rodriguez and more), everyone will want to see the story of the 5-day uprising that forced the collapse of the WTO's 1999 Seattle ministerial. The film is sort of like Crash, following the lives of twelve characters during those historic days. Woody plays a cop – no kidding. So does Tatum Channing. Andre Henderson and Michelle Rodriquez are protestors. One of the most powerful "people's" moments in recent U.S. history never looked so beautiful.

Maybe a trip down that particular 'memory lane', to the days when more than 50,000 union members (voters!), environmentalists (also voters!), students (read: youth voters!) and more converged in Seattle to speak truth to power in the face of the world's biggest corporations - and their Washington DC pundits - will keep the politicians just a little more honest when they talk about the looming trade issues of our time?

For the rest of us, now is the time to start booking those advance tickets for the Battle in Seattle showings closer to home. The film will be opening:

  • September 19:   New York, San Francisco and Seattle (of course!)
  • September 26:   Atlanta, Boston, Chicago, Detroit, Los Angeles, Minneapolis, Sacramento and Washington, DC.                        

Groups of 25 or more receive discount tickets. To find a theater near you call 866-758-1258 or visit www.battleinseattlemovie.com/labor

To organize an event around the film's release, contact Michael Crawford at 202-546-4996 or mcrawford@citizen.org

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Morales rising: Evo win margin jumps 15% on record of stopping NAFTA-WTO expansion; reasserting control over natural resources

Bolivia’s President Evo Morales was returned to office last week following a controversial ‘recall referendum’ pushed by rightwing political opponents with a landslide victory of 68%.  Morales, the first indigenous president of Bolivia, won by 53% when initially elected in late 2005. The recall vote increased the majority of Morales and his Movement Towards Socialism (MAS) party by nearly 15%.

Morales’ landslide victory exposed the marginality of a vocal bloc of right-wing separatists in the country’s gas and oil-rich regions. Their goal – to get things back to pre-Morales days when a small elite controlled the revenues from the country’s massive energy resources and farm land. And they are desperate to derail Morales' planned constitutional and social reforms, including regaining control of the country’s oil and gas resources and land redistribution for one of the world’s erstwhile poorest nations.

The right wing had two related strategies: breaking the oil-producing lowland regions away from the rest of the country and taking the national oil revenues with and um...throwing Morales out of office. The first avenue is unconstitutional (although that has not stopped them from repeatedly trying) but now they’ve just gotten whomped on Plan B to un-elect Morales.

Media reports of the past week have largely focused on predictions that the defeated right wing would continue to attack Morales despite the massive vote of public confidence, since four key separatist opponents of Morales were also, as expected (and detailed in a report by WOLA here), returned to their regional posts. The significance of Morales’ rising support levels have largely been swept under the carpet: When Morales was elected in late 2005, his 53 victory was by far the largest in the country’s history, making him the first Bolivian leader able to claim an absolute majority. Two years later, his support has grown by a further 15%.

Such numbers suggest widespread support among Bolivia’s indigenous majority and beyond for the approach Morales has adopted to redistribute wealth and resources (as detailed in a recent report by CEPR)

Morales’ campaign for social and economic justice extends beyond Bolivia when the country participates in international negotiations. For instance, when the WTO recently held an invitation-only mini-ministerial for a select 30 countries, Morales’ issued a powerful statement. He said what many excluded developing country leaders were thinking about the attempt to steamroller through a Doha Round WTO expansion most poor countries oppose:

“The WTO negotiations have turned into a fight by developed countries to open markets in developing countries to favor their big companies…The poorest countries will be the main losers. The economic projections of a potential WTO agreement, carried out even by the World Bank, indicate that the cumulative costs of the loss in employment, the restrictions to national policymaking and the loss in tariff revenues will be greater than the “gains” from the “Development Round”.

After seven years, the WTO round is anchored in the past and out of date with the most important phenomena we are currently living: the food crisis, the energy crisis, climate change and the elimination of cultural diversity. The world is being led to believe that an agreement is needed to resolve the global agenda and this agreement does not correspond to that reality. Its bases are not appropriate to resist this new global agenda,” Morales said in a statement

ahead of the talks.

It is just this sort of clarity and principled defense of the interests of his country’s majority poor population that makes the right wing in Bolivia – and in the United States – obsessed with attacking Morales. With Morales and his social change projects facing continued challenges from corporate interests - both domestic and foreign - as well-argued in this CounterPunch essay, the struggle is far from over.

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The Punditocracy: Speaking for the Wretched of the Earth

For those of us who get dizzy listening to the circular logic of the paragons of Punditocracy (especially of the capital P variety), Roger Bybee's (Fairness and Accuracy in Reporting) excellent historical round-up of Fareed Zakaria's noxious views on trade and globalization issues offers a welcome breath of cold, clean facts  after some pretty serious doses of post-Doha death vertigo from the 'powers that be'...

Fareed Zakaria, now the highly influential editor of Newsweek International, author of The Post-American World, and host of Fareed Zakaria GPS, constructed a landmark of unintended irony when he regally pronounced that “the downtrodden beg to differ” with protesters of corporate globalization (Foreign Affairs, 12/13/99).

Those who demonstrated against the World Trade Organization at the famous “battle of Seattle” in 1999, he asserted, were displaying the hubris of the “rich and privileged,” who were delivering “a familiar plea for the downtrodden of the world” by challenging the WTO’s promotion of sweatshops and environmental degradation in the impoverished Third World.

In other words, Zakaria denounced the arrogance of those who presume to advocate for the world’s poor—while appointing himself, the son of a prominent Indian attorney and politician, as the poor’s spokesperson. “There’s just one problem: The downtrodden beg to differ,” Zakaria declared.

In his eyes, the Third World’s poor eagerly welcome Western investment on any terms as a vast improvement over their current misery. Microscopic wages, long hours and heartless management in sweatshops, along with befouled air and water, might seem horrific to wealthy Westerners, but are gratefully welcomed by the desperate people of nations like Mexico, China and India. “In fact, if the demonstrators’ demands were met, the effect would be to crush the hopes of much poorer Third World workers,” he declared (12/13/99)...

On globalization, Zakaria zealously denounces opponents of corporate-determined trade agreements as seeking to impose utopian rules for the global economy that are widely rejected, especially by the most wretched of the earth....

Zakaria’s “anti-democratic” and “minority” accusations invert reality in...critical ways....

A recent multinational Chicago Council/ WorldPublicOpinion.org poll (released 4/25/07) found majorities in most poor nations insisting that globalization be accompanied by global standards to prevent a “race to the bottom.”

“Strong majorities in developing nations around the world support requiring signatories of trade agreements to meet minimum labor and environmental standards,” the survey concluded, citing data from China, India, Thailand, the Philippines, Argentina and Mexico. “Nine in 10 Americans also support such protections for workers and the environment.”

Elites in Third World nations, in contrast, staunchly opposed such standards, the study noted:

The leaders of less developed nations have generally opposed including language mandating minimum standards for working conditions and environmental protections in trade deals, arguing that such rules are protectionist and would undermine their ability to compete in major markets such as Europe and the United States.

“It has often been assumed that when leaders of developing countries argue against including labor or environmental standards in trade agreements, they represent the wishes of their people,” added Steven Kull, director of WorldPublic Opinion.org. “However, it appears that these publics would like to see the international community put pressure on their governments to raise their standards.”

These findings directly contradict Zakaria’s simplistic worldview that the free-trade agenda of America’s political and business elite reflects overwhelming public sentiment in both poorer nations and the U.S.

And, closer to home (and to the other salient topic of the day - the upcoming November polls - about which Zakaria is busy confusing the American electorate daily), Bybee reminds us of the ultimate price yet to be paid by those candidates who forget that the people actually know what's going on...

While elites across the globe support unregulated globalization, majorities in both the U.S. and poorer nations essentially seek to restructure globalization so that it benefits everyone—as signified by the flipping of 37 congressional seats in the 2006 mid-term elections from “free trade” advocates to supporters of “fair trade” (Global Trade Watch, 12/13/06)."

Gotta love it when the real elites try to carve their niches by claiming to speak for the poorest of the poor. Frantz Fanon must be spinning in his grave!

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Book Reco: The Predator State (and Sister Souljah moments?)

James K. Galbraith is an advisor to the Obama campaign, a University of Texas professor of economics, and son of famous JFK advisor John Galbraith. He has a new book out called "The Predator State," and it is well worth a read.

51yvzrqy1wl_ss500_ The primary goal of the book is not to talk politics, but to talk ideas. Like a lot of books over the last few years, "The Predator State" dissects the work of neo-liberals. Their packet of ideas, in Galbraith's reading, was to cut taxes, end inflation, and free the markets. While the original Reagan acolytes came to power on the appeal of ideas like "freedom", latter day Bushites have largely abandoned any serious commitment to them. Now, it is only so-called "liberals" who largely accept these ideas as the starting point for discussion.

Galbraith's criticisms of supply-side economics are many. How can we believe that markets are perfect, and also believe that there's insufficient savings? If we believe government should not intervene in markets, why is there such widespread support for the independence of the Federal Reserve, a government entity that sets prices? Why do we attribute many ideas to Adam Smith and David Ricardo that they never uttered? Are markets really that perfect if they reward failed capitalists at Enron and elsewhere? Small bore ideas from universal pre-K to job training receive targeted criticism: this is much too little for Galbraith, who wants liberals to - in the wake of Katrina and climate chaos - embrace his big ideas of economic planning.       

Continue reading "Book Reco: The Predator State (and Sister Souljah moments?)" »

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Kwa: "Doha Collapse Won't Mean Suffering for The Poor"

Comrade Aileen Kwa of the Third World Network has some great analysis over at IPS:

Will the poor suffer because of the way the Doha talks ended? The failure of the talks can in fact be regarded as a victory because key developing countries were able to stand by their principles and to defend the interests of the poor in their countries...

The world is in a very different place than when the World Trade Organisation (WTO) was formed in 1995. At that point the Washington Consensus advocating liberalisation and deregulation was still at an all-time high. It has fallen from its pedestal since.

Its failure can be seen in the fact that many African countries, despite implementing neoliberal structural adjustment policies to the letter, have de-industrialised in the last 20 years. The failure of the Doha talks is another blow to the crumbling consensus...

Binding a country’s trade policy and liberalising in accordance with a standard formula cannot accommodate this dynamism. In fact, liberalisation cannot be an end in itself. Countries should liberalise only when it is of benefit to them...

Countries should be allowed to explore a diversity of trade policies, in as far as they are not harmful to others outside.

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Chevron to USTR: help us kill more children


Chevron wants the United States to suspend trade preferences with Ecuador, because Ecuador decided to take exception to Chevron, you know, dumping billions of gallons (that is not a typo) of toxic waste in the Amazon rainforest, leading to cancer and deformities among indigenous peoples in the area.

Ecuador is demanding that Chevron pay between $8 and $16 billion to clean up the rainforest. Chevron's reponse? "We can't let little countries screw around with big companies like this—companies that have made big investments around the world." And then they went crying to USTR. This rather stunning quote from a Chevron lobbyist was written up in an excellent Newsweek article.

Democracy Now has more, including a discussion with the author of the above-linked Newsweek article, and through Just Foreign Policy, you can take action to urge USTR to reject Chevron's request.

As usual, BoRev.net sums it up: "Cartoonishly Evil People Run the World!"

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Masses Protest Bush Korea Visit

According to the Associated Press:

Thousands of South Koreans gathered for a prayer service Tuesday to welcome U.S. President George W. Bush on a visit that also sparked revived street protests...

Obbz255_skbush_20080805034929 Some 18,300 police were on high alert with riot gear and bomb-sniffing dogs to maintain order across the South Korean capital during the American president's less-than-24-hour visit to the country, the National Police Agency said.

Mr. Bush held off on visiting Seoul earlier this year while protesters staged nightly candlelight vigils and clashing with riot police in anger over government plans to resume imports of American beef. The protests have since faded and meat shipments began. But Mr. Bush's visit rekindled the issue, sparking a rally in Seoul, with a crowd that police placed at about 1,500 marching to a downtown stream for a demonstration against the American president's visit. Police helicopters hovered overhead, as protesters held anti-Bush signs.

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Latest Bush Move on NAFTA Trucks

See our latest statement here.

Bush Administration Defies Congress, Extends Dangerous Cross-Border Truck Pilot Project for Two More Years

Statement of Lena Pons, Policy Analyst, Public Citizen

In announcing today that it would extend its cross-border trucking pilot project for two more years, the Bush administration continues to flout Congress at the expense of highway safety. This is the latest of many moves by the administration to give Mexico-domiciled carriers operating authority in the United States beyond a limited border zone despite lawmakers’ clear instructions to the contrary.

More at the link.

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Couldn't you have told me that 30 years ago?

Corporate lobbyists and ideologues have spent the past three decades in a frenzy trying to force countries to lower tariffs and deregulate their economies. Apparently, the brilliant economists involved in this exercise didn't realize that dangerously globalized supply chains require intensive usage of non-renewable energy sources. According to a front-page NYT story by Larry Rohter, which documents how Ikea and other companies are opening or reopening their U.S. manufacturing outfits:

Decisions like those suggest that what some economists call a neighborhood effect — putting factories closer to components suppliers and to consumers, to reduce transportation costs — could grow in importance if oil remains expensive. A barrel sold for $125 on Friday, compared with lows of $10 a decade ago.

“If prices stay at these levels, that could lead to some significant rearrangement of production, among sectors and countries,” said C. Fred Bergsten, author of “The United States and the World Economy” and director of the Peter G. Peterson Institute for International Economics, in Washington. “You could have a very significant shock to traditional consumption patterns and also some important growth effects.”

The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.

The study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade. “The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”

This is info that would have been useful before center-left political parties starting imploding over
their leaders' support for deregulatory policies against the interest of their constituents, not to mention the government waste on USTR salaries. Can we recall our Geneva delegation yet?

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No Gold Medal for U.S.-China Trade

Just in time for the Beijing Olympics, Rob Scott from the Economic Policy Institute put out a great paper that updates his numbers on how many jobs could have been supported with balanced China trade.

He figures that an additional 2.3 million jobs could have been supported, and he also looks at some of the wage effects of this trade imbalance: 

Because U.S. exports to China are much more commodity intensive (i.e., comprising products such as grains, steel scrap, and paper scrap) than Chinese imports (99% of which are manufactured products), average wages earned in jobs producing U.S. exports to China paid 4.4% less than the jobs displaced by imports from China. More than one-fourth of U.S. exports to China on a value basis were commodities.

His paper was released with the fine folks over at the Alliance for American Manufacturing.

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Gown joins town in resisting corporate glob

Greg Ip from the Wall Street Journal publishes an interesting finding:

In 1997, 58% of college graduates said globalization had been good for the U.S. while 30% said it had been bad, according to a poll conducted for the Wall Street Journal and NBC News. When the poll asked a similar question this past March, opinion had flipped: 47% of graduates thought globalization was bad and just 33% thought it was good. Respondents with high school educations started out negative on globalization and have become more so...

“The political impact is potentially quite important because it’s just not clear where support for engagement with the world economy is going to come from, if not from college-educated workers,” says Kenneth Scheve, a political scientist at Yale University who studies such attitudes.

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