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EPI chimes in on Buy America

Over at the Economic Policy Institute, Rob Scott says,

Multinational companies such as General Electric and Caterpillar, and their allies in the Chamber of Commerce, are attacking “Buy American” provisions included in the economic recovery bill passed by the House on January 28th. They claim that these provisions will provoke a “trade war” with foreign governments, but foreign governments have long histories of supporting their own domestic companies. These companies are self-interested, simply wanting unlimited access to imports, many of which are illegally subsidized and unfairly traded... Companies like Caterpillar, which will benefit from billions of dollars of infrastructure spending in the stimulus package, want unfettered access to cheap steel from countries like China, which poured more than $15 billion into energy subsidies into that sector in 2007 alone. Chinese steel imports more than doubled between January and November, while U.S. steel production fell nearly 40%.

Click through to the full post for a nifty chart and more.

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Caterpillar worms its way into "Buy America" debate

Lane Corporations are attacking the "Buy America" provisions of the new stimulus package as "protectionism," as if investing U.S. taxpayer money in the domestic market is an abomination of the first order. Todd wrote about this yesterday; it's worth noting now that companies like Caterpillar, who are arguing strenuously against these provisions, have moved much production overseas.

What's more, the arguments being made are specious: the Buy America piece of the stimulus package simply extends existing law, rather than being some kind of brand-new nefarious protectionist scheme. The original Buy America Act was part of the 1982 Surface Transportation Assistance Act, and requires that U.S. steel and iron be used for federal and state transportation infrastructure projects. Notably, this is exempt from coverage under various trade-agreement procurement rules - although this certainly does not mean that said procurement rules are not still seriously problematic (PDF).

We have just released a lengthy memo for reporters and other interested parties on this issue. Many gory details contained therein, including the legal difference between "Buy America" and "Buy American" (yes, they are two different policies).

(Photo: Bill Lane of Caterpillar, back in his CAFTA Fat Cat days.)

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WaPo sez do not big up yourself

I just subscribed to the Washington Post, after a dozen years in D.C., as part of my new year's resolution to "go native." So, I mostly read the Metro section.

But today I was unfortunate enough to look at the editorial page today, which I have resisted looking at ever since I worked on Latin America policy at CEPR. Here's the gross, in an editorial entitled "Obama Can't 'Buy American'":

"Buy American" sounds patriotic, but paying more than necessary for steel diverts resources that could create jobs in other industries. Worse, it raises the prospect of retaliation against American exporters by U.S. trading partners. The director-general of the European steel industry trade association already has threatened to take the United States before the World Trade Organization if the steel provision passes. (Notably, European stimulus programs do not bar U.S. steel or other products -- yet.) "Buy American" would violate the Nov. 15 G-20 joint declaration, which committed the United States to "refrain from raising new barriers to investment or trade in goods and services" until November 2009.

We pointed out the problems with this declaration back at the time of the G-20 meeting. Obama's going to have to crush that statement and forge a new path.

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Menendez sez no bailout for foreign firms

The Detroit Free Press is reporting that some in Congress are eager to avoid having the bailout open the U.S. taxpayer up to limitless liability for the travails of multinational corporations.

Chrysler LLC should be forced to pay back its $4-billion loan from the U.S. Treasury should Fiat S.p.A. take control of the automaker, a U.S. senator told President Barack Obama today.

In a letter, U.S. Sen. Robert Menendez, D-N.J., said he did not want “American taxpayers paying to prop up the foreign auto industry.” Under the terms of the deal announced Tuesday, Fiat will take a 35% stake in Chrysler, and has the right to increase its stake to 55% if the two companies work well together...

“I am asking you to address the potentiality of foreign control and require the immediate payback of the loans already dispersed should such a scenario present itself,” Menendez said. “I am sure you would agree that the responsible action is to ensure that American taxpayers are not financing foreign automakers.”

Hat-tip to Simon Lester. Foreign banks have already been involved in some of the same shenanigans as it relates to the financial sector bailout, and the backdrop is of course the WTO's General Agreement on Trade in Services (GATS, and all its financial service tack-ons). Here's how legal scholar Apostolos Gkoutzinis describes this agreement:

The General Agreement on Trade in Services, the most significant product of the Uruguay Round of trade negotiations, is the most far-reaching in coverage of the international legal instruments that regulate the terms of trade in services among nations. The 1997 Financial Services Agreement and the specific national commitments on financial services operate against the legal and institutional framework established by the GATS. The agreement on trade in services reached in the Uruguay Round is perhaps the most important single development in the multilateral trading system since the GATT itself came into effect in 1948.

Here's a subtle way that so-called "trade" rules work as a constraint on public-sector activism and industrial policy: if every time you open up the piggy bank you have to open it up to thousands of corporations, you're going to be less likely to open it up at all. Such far-reaching non-discrimination rules are like advice from a demon psychologist: prioritize all objectives and all players all  at once. That kind of objective function would seem to lead to an equilibrium  away from selecting subsidization strategically and towards doing nothing at all.

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In which I find myself sorta agreeing with Phil Gramm

Former Sen. Phil Gramm (R-Texas) was one of the loudest ideologues for deregulation and status-quo trade policies. But in some old testimony I was reviewing on the Jordan FTA, Gramm made a real stink about labor and environmental conditions in Fast Track, on sovereignty grounds. I post the full floor statement, not necessarily because I agree with his conclusions, but more to show the startling lack of awareness of how many domestic laws were changed or challenged as a result of Fast Tracked agreements ALREADY.

Continue reading "In which I find myself sorta agreeing with Phil Gramm" »

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New database on tariff suspensions

The Sunlight Foundation has premiered a new database on which members of Congress have sponsored which tariff suspensions. As Sunlight's Bill Allison notes:

House Members proposed more than 800 bills that would provide tax relief–in the form of tariff suspensions–for about 120 companies and organizations during the 110th Congress. The U.S. International Trade Commission, which analyzes the bills, suggests that all told, those bills–if enacted–will cost the Treasury $1.1 billion in 2009...

Tariff bills range from measures that would open the door to low cost footwear from China (affecting about 60 percent of the shoes sold in the United States, according to the International Trade Commission) to measures that will save a Connecticut textile firm the princely sum of $5.40 a year on imported “camel hair, not processed in any manner beyond the degreased or carbonized condition.”

While it’s easy to get lost in the details, a few points about tariff suspensions are worth mentioning: like earmarks, they generally benefit one company or organization; the House instituted new rules to provide more transparency in the tariff suspension process (these greatly facilitated my making of the database); transparency assumes that the press or public actually looks at what’s being made transparent; and, finally, because none of these bills is likely to pass before the current Congress turns out the lights, many of them will probably be reintroduced at some point in the 111th Congress, and we’ll keep tracking them.

I've crunched some of the numbers from this immensely useful tool, and here are the top 12 cosponsors of tariff suspensions from the last Congress, sorted by dollars of (potential) foregone tax revenue during the fiscal years of the session.

Howard Coble (R-NC)     $14,264,192
Earl Blumenauer (D-OR)     $10,267,000
Dan Burton (R-IN)     $9,888,065
Ellen Tauscher (D-CA)     $7,565,637
Kenny Hulshof (R-MO)     $7,432,957
Joe Courtney (D-CT)     $4,524,505
Emanuel Cleaver (D-MO)     $3,940,430
Bobby Scott (D-VA)     $3,509,225
Steve Israel (D-NY)     $3,216,250
Michael Castle (R-DE)     $2,618,000
Mike Ferguson (R-NJ)     $2,210,456
Ray LaHood (R-IL)     $2,142,211

In other news, a former U.S. trade official who helped negotiate China's WTO accession has now come out publicly that this was a bad idea. The Economic Policy Institute is hosting Bob Cassidy next Tuesday morning here in DC. Be sure to come on out!

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Saskia Sassen on monarchism; me on good books

Saskia Sassen has a fascinating piece on how the current era of globalization has increased executive power at the expense of Congress and democratic deliberation more generally. What will this mean for Obama?

The development of a global corporate economy has further strengthened the executive branch and weakened the legislative. This process started long before the second Bush administration and cuts across political parties. It began in the 1980s, when the current globalization phase took off, and has continued since...

A question appropriate for this week In fact, economic globalization has had its own autonomous effect in sharpening executive power and in weakening the legislature. This is separate from questions of national security and abuses of executive privilege. It will take more to stop this consolidation of power than having an administration that does not abuse its executive power and that would eliminate the Patriot Act, though this would certainly make a difference...

A new president genuinely willing to respect the balance of power and willing to cancel the Patriot Act will still be in a structural position of growing power in today’s liberal state. A hollowed-out Congress confined to domestic matters weakens the political capacity of citizens to demand accountability from an increasingly powerful and globally oriented executive. Today, the liberal state produces its own democratic deficit.

There is an ironic possibility in all of this. Can a president intent on fighting for a better and more just democracy actually use that expanded executive power to do this?

Also, for those of you interested in some good book recommendations, check out my essay on David Rothkopf, Ha-Joon Chang and Mark Engler's latest over at the Dissent website. The conclusion seems appropriate for this week of change:

THIS OCTOBER, the International Monetary Fund (IMF) and World Bank meetings came to Washington, and, as they do every year, an impassioned bunch of activists mounted protests, decrying the neoliberal agenda that has deregulated markets, pitted worker against worker, and devastated local communities and the environment.

The difference this time around was that, in the wake of the most significant financial meltdown of our times, the bankers were echoing the protestors’ calls for re-regulation. Indeed, as the number of people protesting the global institutions has shrunk since September 11, 2001, the mainstream acceptance of their basic critiques has swelled...

As economic conditions worsen, there will be a bevy of rich individuals and governments attempting to claim the reform mantle as their own. The WTO, IMF, and World Bank are already attempting to reposition themselves as the ideal brokers for solutions to the climate, finance, and food-price crises—despite their role in creating or exacerbating them. Decades of political marginalization have left too many progressives too timid to lay out their alternative visions in a meaningful policy form. If they fail to do so now, the current “told you so” moment will be sweet but short.
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Sirota on sociopaths and neocolonialists

It was only a matter of time. Anyone who did antisweatshop work in the 1990s knows that there is a mighty resevoir of pro-sweatshop sentiment lurking just beneath the edifice of the anti-Bush Democratic Party. Back when we could all make fun of Bush's word slop, it was pretty easy to forget that these sociopaths exist, and that they walk amongst us. David Sirota dishes the dirt:

Nicholas Kristof's latest New York Times column makes the case that corporate colonialism and human exploitation aren't just not bad, but actually a great virtue that will save the developing world - and that those working to stop such colonialism and exploitation are the root cause of global poverty. I kid you not:

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don't exploit enough...

I'm glad that many Americans are repulsed by the idea of importing products made by barely paid, barely legal workers in dangerous factories. Yet sweatshops are only a symptom of poverty, not a cause, and banning them closes off one route out of poverty...

When I defend sweatshops, people always ask me: But would you want to work in a sweatshop? No, of course not. But I would want even less to pull a rickshaw. In the hierarchy of jobs in poor countries, sweltering at a sewing machine isn't the bottom.

This is quite literally the argument of a sociopath - and the problem is that sociopathy is so prevalent in discussions about trade and globalization that we barely even notice it anymore.

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One pill makes you larger, and one pill makes you small

There is a worrying new front of concern for fair traders: the almost complete offshoring of our nation's medicine supply. Here's the latest from the NYT:

Experts and lawmakers are growing more and more concerned that the nation is far too reliant on medicine from abroad, and they are calling for a law that would require that certain drugs be made or stockpiled in the United States.

“The lack of regulation around outsourcing is a blind spot that leaves room for supply disruptions, counterfeit medicines, even bioterrorism,” said Senator Sherrod Brown, Democrat of Ohio, who has held hearings on the issue.

Decades ago, most pills consumed in the United States were made here. But like other manufacturing operations, drug plants have been moving to Asia because labor, construction, regulatory and environmental costs are lower there.

The critical ingredients for most antibiotics are now made almost exclusively in China and India. The same is true for dozens of other crucial medicines, including the popular allergy medicine prednisone; metformin, for diabetes; and amlodipine, for high blood pressure.

Of the 1,154 pharmaceutical plants mentioned in generic drug applications to the Food and Drug Administration in 2007, only 13 percent were in the United States. Forty-three percent were in China, and 39 percent were in India.
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Latest Peru FTA Developments Confirm Opponents' Fears

Bush is on an orgy of FTA implementation, putting into effect NAFTA-style deals with Oman, Costa Rica and now Peru in its last days in office. Here's what we had to say about the latest Bush Peru mess:

President Bush's announcement that the Peru Free Trade Agreement (FTA) will be implemented despite Peru's refusal to conform its laws to the pact's labor rights requirements and its gutting of forestland protections after the pact's U.S. passage, is the sort of outcome we worried about when we opposed the deal in 2007.

The Bush administration and Democratic congressional leaders negotiated improvements to the FTA's labor and environmental standards, but the fact that the pact is going into effect after Peru gutted its forestry law and has refused to bring its labor laws up to International Labor Organization standards shows more improvements are needed to the labor and environmental provisions of the U.S. trade agreement model.

The Peru FTA, which included enhanced labor and environmental standards but also extended some of the most damaging provisions of the North American Free Trade Agreement (NAFTA), including extreme foreign investor protections, was opposed by a majority of House Democrats.

Given the problems we have seen with the Peru FTA model upon which the Panama FTA is based, plus Panama's money-laundering and tax evasion issues that were highlighted in legislation co-sponsored by President-elect Obama during the last Congress, Bush's announcement today will only fuel opposition to the sidelined Panama FTA. In addition, since the Peru FTA vote, 28 House members who campaigned against NAFTA and its expansion were elected to replace those who had voted for the Peru FTA.

Earlier this week, House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Ways and Means Trade Subcommittee Chair Sandy Levin (D-Mich.) wrote to Bush asking that he not implement the FTA because Peru has not "implemented its obligation (under Article 17.2.1 of the FTA) to adopt and maintain in its statutes, regulations and practices the fundamental right of workers to freely associate and collectively bargain."

The environmental rollback that has received the most attention since the U.S. Congress passed the FTA was the approval by Peru's Congress of a law that removed protections for as much as 60 percent of Peruvian lands now defined as forest, such as recently deforested areas and plantations.

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Colombia a Model For Democracy... Bush/Cheney Style

Outrage over Bush giving the Presidential Medal of Freedom to paramilitary-linked Colombian President Alvaro Uribe is spreading, and for good reason. When your country's leader awards its highest civilian honor to a man linked to the murder of unionists and human rights activists and presides over the worst human rights abuses and deepening humanitarian disaster in the hemisphere, outrage is beyond appropriate, it's required.

MSNBC asked Lori on their 1600 Pennsylvania Ave show last night to examine the audacity of this hypocritical doublespeak.

Despite his clear record, as Bush hung Uribe's medal, Uribe was said to be "dedicated to the prosperity of Colombia's people and democratic values" (!) What's more, it was said that "under Uribe, Colombia has become a model for countries seeking reconciliation and a society based on respect for human dignity" (!)

Continue reading "Colombia a Model For Democracy... Bush/Cheney Style" »

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Fair-Trade Champions Moving On Up

The latest addition to the House Ways and Means Committee is none other than beloved Rep. Linda Sanchez (D-Calif.), the former Teamster and co-founder of the House Trade Working Group. She voted the fair-trade position 100% of the time, including on WTO withdrawal, Fast Track cancellation, and NAFTA expansion to Chile, Singapore, Australia, Morocco, Central America, Bahrain, Oman and Peru.

Other fair traders elevated to Ways & Means include Reps. Danny Davis (D-Ill.), Brian Higgins (D-N.Y.) and John Yarmuth (D-Ky.), who have virtually identical records to Sanchez for the period that each has been in office.

And let's not forget Obama's labor secretary nominee, Rep. Hilda Solis (D-Calif.), who also has been a consistent fair trade champion.

Unfortunately, Baucus' Senate Finance Committee went the other way, adding arch anti-fair traders Sens. Tom Carper (D-Del.) and Bill Nelson (D-Fla.) to the makeup. Additionally, Sen. Bob Menendez (D-N.J.) - who has voted the fair-trade position on 9/18 votes - was added to the committee.

Read Sanchez and Solis' floor statements on the NAFTA expansion to Peru after the jump.

Continue reading "Fair-Trade Champions Moving On Up " »

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Denuncia de la Medalla en Español (Translation on Bush/Uribe Medal)

Los compas del blog Peruanista han traducido la declaración de Lori sobre la Medalla que Bush regaló a Uribe. Super agradecido, Carlos! (Our friends at the blog Peruanista took it upon themselves to translate Lori's statement into Spanish. Much appreciated, Carlos!)

(Datos de la foto son de la primavera de 2007 - Stats in photo from spring 2007)

Concesión hecha por Bush de la Medalla de la Libertad al presidente colombiano Uribe es un ultraje

Publicado el 13 de enero de 2009 en Eyes on Trade


La premiación que ha hecho [George W.] Bush de la Medalla de la Libertad al presidente colombiano [Álvaro] Uribe es un ultraje considerando los vínculos de su gobierno con paramilitares de extrema derecha y los ataques en aumento contra los sindicalistas, los afro colombianos y pueblos indígenas en Colombia.

Declaración de Lori Wallach, directora de Global Trade Watch, de Public Citizen:

La concesión hecha por el presidente Bush de la Medalla de la Libertad a el presidente colombiano, Álvaro Uribe, es indignante y ofensiva, en vista de las horribles violaciones de los derechos humanos hechos por la administración Uribe de comprobados por los miles de lideres sindicales, afro colombianos e indígenas que han sido asesinados, atacados o desplazados, y dadas las profundas conexiones de ese gobierno con asesinos paramilitares de derecha.

Continue reading "Denuncia de la Medalla en Español (Translation on Bush/Uribe Medal)" »

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Bush Grant of Medal of Freedom to Colombian President Uribe Is an Outrage

Bush Grant of Medal of Freedom to Colombian President Uribe Is an Outrage Given his Government’s Links with Right-Wing Paramilitaries and the Growing Attacks on Colombian Unionists, Afro-Colombian and Indigenous People.

Statement of Lori Wallach, Director of Public Citizen's Global Trade Watch Division:


President Bush’s award of the Medal of Freedom to Colombian President Alvaro Uribe is outrageous and offensive given the Uribe administration’s horrific human rights abuses documented by the thousands of assassinated, attacked or displaced union, Afro-Colombian and indigenous leaders and given the administration’s deep links to murderous right-wing paramilitaries.

How could Bush award our nation’s highest civilian honor to the leader of a country with worldwide pariah status for its systematic crushing of the most basic human rights?

More than 460 unionists have been murdered in Colombia since Uribe took office in August 2002, including 43 in 2008 alone (an increase from 2007), even as Colombia faced scrutiny related to a trade agreement Bush negotiated with Uribe. Colombia has the world’s highest assassination rate for unionists.

In addition, the Uribe administration has worked consistently to undermine Afro-Colombians’ hard-won civil rights and territorial control. Systematic violence against Afro-Colombians and assassinations of their leaders continue unabated.

Continue reading "Bush Grant of Medal of Freedom to Colombian President Uribe Is an Outrage" »

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Bhagwati: WTO Constrains Pro-Local Response to Crisis

Just a few thoughts on Jagdish Bhagwati's recent FT column on Obama, the bailout, and the WTO:

  1. Whatever one thinks of Bhagwati's economics, one can't help but be repulsed by his political philosophy. Tariffs or auto bailouts may or may not be a bad idea, but isn't it the rightful place of democratically elected representatives and administrators to determine their value without undue interference from unelected bodies like the WTO?
  2. Ditto for his ecology. Bhagwati writes, "Under a 1995 WTO agreement, export subsidies and “local content” requirements are prohibited as directly damaging to trade and all other subsidies that are specific to companies or industries are open to complaint; and this applies even when they are claimed to be environmentally friendly." We've been raising the green jobs vs. WTO issue for some time. It's nice that Bhagwati agrees with the analysis, although disturbing that he doesn't see WTO rules that forbid a pro-local bias (read: green) in policy as desirable.
  3. Bhagwati also agrees with us on the desirability of NAFTA-style FTAs, saying such a vote "is not a vote for multilateralism but just the opposite." Curiously, he somehow thinks that labor unions are friendlier to FTAs than to the WTO, which has been the opposite of my experience and I'm sure of every trade lobbyist on Capitol Hill. Here's Bhagwati's explanation:
  • "To understand this paradox, consider that labour union lobbies and their political friends have decided that the ideal defence against competition from the poor countries is to raise their cost of production by forcing their standards up, claiming that competition with countries with lower standards is “unfair”. “Free but fair trade” becomes an exercise in insidious protectionism that few recognise as such. This cynical tactic can work only when the US is engaged in negotiating FTAs, typically with weak countries. It does not work for the multilateral system where powerful, democratic countries such as India and Brazil reject such trade-unrelated demands. So, the “fair trade” lobbies, which Mr Obama continues to embrace, gravitate towards FTAs rather than the WTO. The Democrats’ opposition to occasional FTAs – including the latest one with Colombia – reflects, then, a recurring attempt at imposing yet more draconian demands on small countries rather than a preference for the multilateral trading system."

Wait, is he talking about Democrats, labor unions, or which political actor? The reason labor is opposed to Colombia FTA is not because Uribe won't submit to their demands, but because Uribe's government has been implicated in assasinations of union members. Additionally, they oppose the NAFTA model, and don't believe that any FTA with Colombia is acceptable.

Bhagwati is right that more and more legislatures and citizens groups around the world are rejecting the insertion of non-trade issues into trade negotiations. But labor rights are not the target of this rejection in 2008: it is rather the WTO prohibitions on anti-recession measures that Bhagwati (perversely) celebrates.

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FTAs Penalize U.S. Exports to the Tune of Five Auto Bailouts

Longtime readers will recall that we challenged the U.S. Chamber of Commerce to a data duel back in the fall. We scored two points to their one, and we promised we'd be back with even more nerdliness.

Now, the Dark Side has challenged us to a final duel, courtesy of a new report touting CAFTA. It arrives just in time for the January 1 implementation of CAFTA for Costa Rica, where nearly half of the voters rejected the pact in an unprecedented referendum, and the other half were scared to within an inch of  their life by false Bush administration threats.

This time has arrived, fearless nomads, for the fair-trade force to strike back. The Chamber's main argument is that U.S. exports have increased under CAFTA. This is true, but of course it is also the normal course of affairs. Barring unusual circumstances, U.S. exports increase with foreign income growth.

The real question is: growth relative to what?

It is meaningless to highlight U.S. export growth rates in the very recent past, given the changes in thFunny_license_plate_2 e value of the dollar, which has made U.S. exports more competitive than they've been for decades. Currency changes, not the presence of FTAs, explain recent export growth.

In fact, to the extent that presence of an FTA has had an effect on U.S. exports, it seems to have been in a penalizing direction.

We've only got a short time horizon for meaningful comparisons. CAFTA was only implemented for the Dominican Republic in March 2007, so there isn't a single full year to year comparison available for the pact. (El Salvador implemented March 2006, Honduras and Nicaragua in April 2006, and Guatemala in July 2006). So it only makes sense to compare the 2006-08, or better still, the 2007-08 period. And even that's a stretch.

Here are the facts:

  1. Over the 2006-08 period, inflation-adjusted annual average export growth to the 14 FTA countries was 10.9% 6%, while the comparable figure for non-FTA countries was over twice that at 14.4%. Looking at just the CAFTA 5 countries (i.e. without Costa Rica), the comparable figure is 12.7% - still lower than that to non-FTA countries.
  2. Over the even more appropriate 2007-08 period, the figure is 7.1% for FTA countries, 10.5% for the CAFTA 5, and 14% for the non-FTA countries.
  3. Even if you look at the 2005-08 period, non-FTA countries still beat CAFTA countries in terms of average annual export growth.

In other words, CAFTA amounted to a significant export penalty. If CAFTA exports had grown at the higher 14% rate of non-FTA countries, U.S. exports would have been $5 billion higher. If FTA country exports overall had done so, $77 billion would have been added to U.S. export accounts. In other words, FTAs accounted for a $77 billion export penalty in 2008.

To put this figure in perspective, this is over five times the sum demanded in the recent U.S. auto bailout. So, if the Chamber is serious about its analysis, it should be calling for a repeal of CAFTA, NAFTA and other FTAs to stimluate the economy. Or even better, let's have a permanent low dollar policy and acknowledge that FTAs aren't about export or job creation but are really about using the name of trade to lock in deregulation at home and abroad.

FTA Export Penalty  $                        77,413,993,339

  2007 (est based on 06-07 enhanced growth)
2008 (est) Growth Rate (Real, Ann Avg)
FTA 14   $   430,842,916,340  $                    461,578,111,658 7.1%
CAFTA 5  $   108,655,500,173  $                    120,048,435,155 10.5%
Non-FTA Countries  $   665,166,651,535  $                    758,559,096,629 14.0%
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One Third of CAFTA 30 Are Gone!

After the razor-thin margin for CAFTA passage back in 2005, we highlighted what we called the CAFTA 30, which was basically the CAFTA 15 Democrats that voted for the deal plus a few handfuls of Republicans who had committed (or who politically should have) to vote against.

Well, as of today, nearly a third of the CAFTA 30 are gone - ousted from office or otherwise replaced.

  • In 2006, Reps. Charles Taylor (R-N.C.), Richard Pombo (R-Calif.), Mike Fitzpatrick (R-Pa.) and Mark Foley (R-Fla.) were ousted by Heath Shuler (D-N.C.), Jerry McNerney (D-Calif.), Patrick Murphy (D-Pa.) and Tim Mahoney (D-Fla.) - who all called out the Reps' bad CAFTA positions. (Mahoney later sold out fair traders, but that's history, since he also lost his re-election.)
  • Now, in the 2008 races, there are four more casualties: Rep. Chris Cannon (R-Utah), Phil English (R-Pa.), Robin Hayes (R-N.C.) and Marilyn Musgrave (R-Colo.) -- all who were ousted by fair traders Jason Chaffetz (R-Utah), Kathy Dahlkemper (D-Pa.), Larry Kissell (D-N.C.) and Betsy Markey (D-Colo.). 
  • Additionally, Rep. William Jefferson (D-La.), one of the CAFTA 15, lost his 2008 election, and Rep. Jo Ann Davis (R-Va.) passed. And Sens. Norm Coleman (R-Minn.) and Elizabeth Dole (R-N.C.), whose bad CAFTA votes we also highlighted, lost their elections to fair traders Al Franken (D-Minn.) and Kay Hagan (D-N.C.).

This contradicts the claims of some corporate groups that voting for CAFTA was a not a political liability.

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Utah Legislators Call USTR's Bluff

Utah state legislators are fed up and sending a signal to the federal gGamblingovernment that states’ rights need to be respected in international trade negotiations.

The Salt Lake Tribune reports that this November, the Utah International Trade Commission drafted a resolution, Utah Joint House Resolution 1 "in hopes of persuading federal officials to favor domestic interests over international priorities." The resolution calls for “gambling to remain in the realm of states’ rights." Utah has a zero tolerance policy on gambling.                   

As you might remember, in 2005 Antigua challenged the United States over its restrictions on internet gambling at the WTO and won. To avoid changing gambling laws, the United States Trade Representative (USTR) claimed that they had unknowingly committed gambling services to the WTO General Agreement on Services (GATS) under “other recreational services” and at the urging of 29 attorney generals, including Utah Attorney General Mark Shurtleff, USTR took the bold step of withdrawing gambling from the WTO's GATS.

Since this withdrawal, the United States has been involved in endless negotiations (WTO rules require a country to satisfactorily compensate trading partners when withdrawing a commitment).

Not only are Utah legislators out to make sure gambling laws are not compromised in ongoing negotiations, they also states to have a voice in the U.S. trade negotiation and approval process to make sure that other important state domestic regulations don’t get scrapped at the negotiation table.

Rep Sheryl Allen, R-Bountiful, the chief sponsor of the resolution, tells the Salt Lake Tribune:

Many see gambling as a moral issue. But I'm looking at it as a states' rights issue.…Talks for the next round [World Trade Organization negotiations in 2009] are in limbo. It's very important that states give input and get involved before agreements get signed by 153 countries.

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Al Franken gives us a final tally of 43 new fair traders!

Al_franken_senate Fair trader Al Franken (D) has just been certified as the winner of the long, drawn-out recount for the Minnesota Senate seat held by incumbent Norm Coleman (R). His victory brings us to seven new fair-trade senators and 43 new fair-trade members of Congress in total, assuming Coleman's likely legal challenges are unsuccessful, as is widely believed to be case.

As we describe in the candidate appendix (PDF) to our election report, Franken ran paid ads on offshoring, and, in a response to a Minnesota Fair Trade Campaign questionnaire, committed to oppose the WTO Doha Round and the Colombia, Panama and Korea FTAs, support the renegotiation of NAFTA and replacement of Fast Track, and oppose any trade agreements that include NAFTA-style investor rights. On his website, Franken had this to say on trade:

I favor a balanced approach to trade that recognizes the importance of opening up markets for our products but protects our farmers as well as our workers, our consumers, and our values. Frankly, the Bush-Coleman approach gives away too much for too little - CAFTA, for example, sold out Minnesota's entire sugar industry for access to six markets with the combined size of Columbus, Ohio. I will support fair trade agreements, but I won't sell out our farmers in a bad deal like CAFTA.

So to sum up, our final election findings look like this:

New Fair-Trade Congresspeople: 43, a net gain of 35

New Senate Fair Traders: 7, a net gain of 7
Senate races where fair traders beat anti-fair trader incumbents: 5
Senate races where fair traders took open seats vacated by retiring anti-fair traders: 2

New House Fair Traders: 36, a net gain of 28
House races where fair traders beat anti-fair trader incumbents: 13, net gain of 12
House races where fair traders took open seats: 20, net gain of 14
House special-election victors earlier in 2008 where fair trader replaced anti-fair trader: 3, net gain of 2

Races we monitored: 131+
Races where GOP ran on fair trade: 18+
Races where both GOP and Dem ran on fair trade: 14+
Paid ads on trade: 137+
House anti-fair traders that won higher office: 0
House fair traders that won higher office: 2

Check out our full election report (PDF) for much more.

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Getting the Goods, Delaying Bad Trade Deal, with Direct Action

DA gets goods1.thumbnail As you may recall from earlier posts, the opposition Democratic Party (DP) in South Korea is not timid about taking direct action in standing up, sitting down, or scaling, climbing and even enduring the occasional chemical spraying for its fair trade principles, and against the US-S. Korea FTA.

The Grand National Party (GNP, not the GOP) was looking to railroad through the unpopular NAFTA-style trade deal with the US, so DP legislators occupied the Parliament and blockaded entrances, paralyzing the government for over 10 days. Then the GNP unleashed the guards on the MP demonstrators, which according to Reuters, caused quite the scene:

Scores of South Korean security personnel and opposition MPs were injured on Saturday when guards broke up an opposition blockade outside the main floor of parliament. The opposition still occupies other key parliament facilities and has threatened to block voting on some measures it calls "evil".

And the continued protests are getting the goods:

The GNP had offered to delay votes on controversial measures, such as revamping media ownership laws and the U.S. trade deal, if it would help in the quick implementation of other reforms.

There is some great video of the scuffles, courtesy of the BBC.

In watching I can't help but be reminded that its the actions of our lawmakers that count, not just their words. South Korean fair traders are taking action in their own way, and all eyes are on the tomorrow's 111th Congress and the incoming Obama Administration to see that they act in their own way to fulfill their fair trade promise to the US electorate.

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