"That the Obama administration did not agree at the G-20 summit to push the same NAFTA-style Korea free trade agreement that former President George W. Bush signed in 2007 is understandable. It’s projected to increase the U.S. trade deficit, is wildly unpopular in both countries, and replicates the most threatening NAFTA provisions that promote offshoring and financial deregulation. And, its chapter on labor rights bans references to the International Labor Organization Conventions that establish, well, the internationally recognized labor rights. The real question is why the Obama administration would have been willing to sign off on the Bush agreement in Seoul if only the Koreans had agreed to some more market access for U.S. cars and cows. And why they might go for a deal based on those narrow fixes when talks resume tomorrow near Washington..."
Today on MSNBC's Morning Joe, Donald Trump launched into a tirade about the Korea FTA, unprompted.
Trump went on to say, “I think that fair trade is a much better word than ‘free trade.’ I listen to these people saying, ‘Oh, that’s going to hurt free trade.’ What’s ‘free trade’ when a country has imbalances of hundreds and hundreds of billions of dollars…?”
Today's edition of Inside U.S. Trade (subscription only) reports that the Prime Minister of New Zealand, one of the negotiating parties of the Trans-Pacific Partnership (TPP), stated that a NAFTA-style investor-state lawsuit provision will likely be excluded from the TPP:
In a Nov. 15 press conference, New Zealand Prime Minister John Key said it was a "far-fetched" idea that a Trans-Pacific Partnership (TPP) agreement would contain an investor-state dispute settlement mechanism, according to a video of that New Zealand press conference posted on the prime minister's website.
The Prime Minister's statements add greater momentum to the effort to exclude investor-state enforcement provisions from the TPP. Another TPP negotiating partner - Australia - today breathes easier because its "free trade" agreement with the United States excluded investor-state enforcement.
Dozens of multinational corporations have used the investor-state mechanism of NAFTA to attack environmental and public interest laws in the United States, Canada, and Mexico. Right now, El Salvador is trying to fight off two multi-million dollar suits brought by gold mining corporations that target crucial mining environmental laws. It's no wonder that the Prime Minister of New Zealand doesn't want to subject his country to the same types of foreign investor challenges.
On Monday, the World Bank's International Centre for Settlement of Investment Disputes (ICSID) heard the latest in yet another CAFTA-investment mining case against El Salvador. This time, Milwaukee-based Commerce Group Corporation is trying to squeeze at least $100 million out of El Salvador's taxpayers. The mining firm brought the case after its environmental permits for its gold mining and milling operations in Northeastern El Salvador were revoked after the company failed its environmental audit. At stake is whether investors will be able to undermine El Salvador's environmental policies using the controversial investor rights of the Central American Free Trade Agreement.
The backdrop for this case is rising concerns in El Salvador about the impact of mining. Leaders of El Salvador’s major political parties, the Catholic Church and a large civil society network have increasingly expressed concerns about mining companies’ operations over past years. At the same time, intimidation and threats against civic groups raising concerns about mining issues have escalated. In the past year and a half, three prominent anti-mining activists were murdered.
Check out Public Citizen's backgrounder on the Commerce Group case for more details.
Before my trip to Seoul this week, the reasons for the American public's opposition to the NAFTA-style trade model were fairly clear to me. After all, it's a big ask for the American public to support more of the same job-killing brand of trade agreement in the midst of an economic crisis even after President Obama campaigned on promises of reform.
However, for all of the accusations of self-interested protectionism lobbed at Americans who are critical of this model, one would think that Koreans were clamoring for the completion of the Korea-US FTA.
Much to the contrary - this week unionists, farmers, peasants, and students filled the streets of Seoul daily and nightly to their outrage/dispair with the agreement. From marches, to candle light vigils, to actions outside of the parliament, Koreans made it clear that the current agreement is unacceptable, as are the proposed solely commercial modifications.
Koreans expressed anger about various aspects of the agreement - the potentially crippling effects on Korean farming and the 30% self-employed 'mom and pop' establishments; new rights KORUS gives to about 1,000 U.S. corporations to challenge Korean subfederal and federal laws in private tribunals; opening the floodgates to U.S.-style financial deregulation. Americans and Koreans actually share a sizeable amount of common ground in their criticisms of the current KORUS FTA.
The Korean public's outrage about the KORUS FTA is unlikely to cool down anytime soon. The question is whether or not President Obama will seize this opportunity to follow through on his campaign promises to reform the Bush trade model and deliver a trade agreement that both Americans and Koreans can support.
Before many election results were even in, the Chamber of Commerce was gleeful at the high-profile election losses of key fair traders, including several that had co-sponsored the TRADE Act.
But, as we've come to expect from the Chamber, they don't ask the right research question: relative to what?
In our report from last week "Election 2010: The Best Defense Was a Fair Trade Offense," we don't cherry-pick a few anecdotes like the Chamber, but instead look at the full universe of over 182 competitive and open-seat races. We profile the trade positions of over 360 candidates in these races. We then looked at how different groups fared as a whole.
Our finding is pretty conclusive: on the whole, Democrats who ran on fair trade were more likely to survive the GOP tidal wave than those that did not run on fair trade. This is true even controlling for the competitiveness of the race.
In fact, despite losing 24 TRADE Act cosponsors to defeat at the polls (on top of the 7 cosponsors that retired), those cosponsors that survived will now make up an even greater share of the Democratic Caucus in the next Congress (56% in 2010 vs. 60% in 2011).
Meanwhile, the share of the Democratic Caucus that is against fair trade has shrunk to negligible proportions. For instance, of the 11 anti-fair trade Dems in the New Democrat Trade Task Force, only 7 will be returning to the new Congress. (This takes their share of the Democratic Caucus from an already low 4.2% to a tiny 3.7%.) Or look at the 23 anti-fair trade Dems that signed a letter to President Obama in support of Bush's pending trade deals. Only 16 will return, which means their percentage of the Caucus went from 9% to 8%.
But this is only one side of the story. As we've been showing all week, Tea Party voters and candidates are also highly skeptical of unfair trade policy. This year, Republicans were willing to take a page from (what had been until recently) the Dems' hymnal and attack job offshoring. So, of the 24 TRADE Act sponsors that went down in defeat last Tuesday, 15 of them faced GOP opponents who ALSO campaigned on fair trade.
In a year when 205 Democratic and Republican candidates ran against the status quo of job offshoring and unfair trade, it’s unbelievable that President Obama would consider reviving a job-killing, NAFTA- style trade deal with Korea negotiated by George W. Bush in 2007. But that’s exactly what seems to be happening.
Sign our petition to President Obama’s chief political strategist, David Axelrod, that it’s political suicide to flip-flop on his campaign commitments to reform our broken job-killing trade policy.
We're already pushing over 2000 signatures. Sign the petition today, before it’s too late!
Be sure to spread the word to your friends, family and fellow activists. Our voices can send a powerful and loud message.
Check out this op-ed by Todd Tucker in today's San Francisco Chronicle.
"Obama administration officials are in Seoul this week for talks that could well determine the president's re-election prospects. Last week, the president said that he would give the 'maximum effort' to resolve problems with the U.S.-South Korea trade deal inked by President Bush. The next few days will show whether the president intends to adopt the controversial deal as his own, or push for significant reforms that could gain broad support..."
Read the entire piece here.
A new Pew poll released today found that antipathy towards “free trade” agreements and the WTO is particularly intense among Republicans and Tea Party supporters. This finding reinforces the results of previous polls that popular concern for the direction of our trade policy is spreading far beyond just Democrats.
Republicans in the survey were more almost twice as likely to believe that “free trade agreements” (FTAs) like NAFTA and the policies of the WTO harm rather than help the United States (by a 54 to 28 percent margin). This opposition is more intense than that of the public overall, more of whom still believe the U.S. is hurt by such unfair trade deals (by a 44 to 35 percent margin).
Republicans who agree with the Tea Party (think of those who had more enthusiasm to show up at the election booth last week) viewed FTAs even more unfavorably: 63 percent of them thought that FTAs and the WTO were bad for the United States, in contrast to only 24 percent who have a favorable view.
More independents also believe that these trade deals have hurt rather than helped the U.S.
If the Obama administration thought that it would be easy to pass a Korea FTA through a Republican Congress, these new poll numbers prove that it is mistaken. The Republican and Tea Party voters who elected the new Republican majority in the House are deeply opposed to more NAFTA-style FTAs, and the new members of Congress will find it dangerous to cast votes on FTAs against their constituencies.
The poll also found that 55 percent of Americans think that FTAs have lead to job loss, while only 8 percent think that they have created jobs. This gap is even wider among Republicans and Independents. President Obama has said that his number one priority is job creation. If he is trying to convince Americans that he has his priorities straight, the last thing he should do is pass another NAFTA-style FTA, since most Americans believe that these FTAs are job killers.
What Obama must do is follow through on his presidential campaign commitments and reform the Korea FTA, including deep changes to the labor rights, investor-state enforcement, and financial services regulation provisions of the FTA. If his administration thinks it can make some cosmetic changes and get it approved by Congress, it is in for a rude awakening.
President Obama set a deadline to announce the fate of the George W. Bush-negotiated Korea Free Trade Agreement that Congress has been unwilling to approve: the Seoul G-20 summit, which begins on Thursday. At issue is whether the Obama administration will remove the investment rules, which promote offshoring of jobs, and the financial deregulation requirements, while fixing the pact's unbalanced commercial terms.
Bush's Korea FTA text, which closely replicates NAFTA and CAFTA, contains key provisions that directly conflict with President Obama's campaign commitments to overhaul America's trade policy to create jobs, guarantee workers' rights, protect the environment and ensure financial stability. This document juxtaposes Obama's campaign statements on trade with what's actually in the text of the Korea FTA.
We review five studies that have attempted to predict the economic effects of the Korea FTA, with particular attention paid to an often-cited study conducted by the U.S. International Trade Commission (USITC). The implementation of the Korea FTA as negotiated by Bush will lead to an increase in the U.S. trade deficit in goods, which will likely cause layoffs here at home. Major changes to the Korea FTA must be made if its harmful effects are to be mitigated.
At the U.S. Chamber of Commerce and other entities seeking more-of-the-same trade pacts, there is excitement at the prospect that the administration will do exactly what its fierce political enemies wish: take ownership of another Bush NAFTA-style trade pact that would simultaneously favor their offshoring agenda, while putting Obama’s re-election in peril. This document provides a brief analysis of the political situation for Obama.
Anytime you force an ad-man to compress a difficult policy problem into a 30-second soundbyte, you're going to lose some complexity.
I watched about 800 political ads for the 2010 cycle, and most of the China-related ads I that I saw were not bashing Chinese people - they're bashing unfair trade deals and policies, voted on in Washington, that had the effect of offshoring jobs to other countries. In other words, the reason things aren't made in America is because of policies that were. You can see the full pantheon of ads and analysis in our new report here.)
For what it's worth, candidates of color (including a number of South Indian Americans and Asian Americans) in both parties have launched some of the strongest attacks on job offshoring this election cycle.
This includes Rep. David Wu (D-Ore.) in Portland, who bears the distinction not only of being an Asian-American campaigning for fair trade, but also a Democrat showing that you can campaign and win on fair trade in the Pacific Northwest, where the (incorrect) conventional wisdom is that this message doesn't play.
Democrats and Indian-Americans Manan Trivedi in Pennsylvania and Raj Goyle in Kansas also posted credible showings in GOP-leaning districts. Both campaigned extensively on fair trade themes. As an NPR column argued:
The trick for these candidates is to never let voters forget you are running to represent Sacramento, or Wichita - not Bangalore.
Raj Goyle does this by campaigning very hard on fighting outsourcing of Kansas jobs. Ami Bera agrees, "we have to keep those jobs here because we have over 12 percent unemployment."
(Bera ran in against Dan Lungren in California.)
In Hawaii, Democratic candidate Colleen Hanabusa criticized job offshoring in paid television ads, and was successful in her effort to unseat GOP incumbent Charles Djou, who ran the campaign's only television ad in favor of the Korea FTA. Both candidates are Asian American.
Democrat and Congressional Hispanic Caucus member Loretta Sanchez fought back a challenge from Vietnamese-American GOP candidate Van Tran in this heavily Latino and Asian district. She campaigned against unfair trade with Vietnam, and against other anti-worker trade deals.
In Louisiana, African-American candidate Cedric Richmond beat Vietnamese-American GOP incumbent Anh Cao. Richmond ran paid television ads against unfair trade deals, while Cao attacked unfair trade with Vietnam (even though he had supported the Bush-initiated Trans-Pacific Partnership while in office).
In Georgia, Democratic incumbent and African-American Sanford Bishop won re-election in his majority White-American, deep South district, and ran paid television ads attacking NAFTA and China trade policy. (Bishop has had complicated trade policy history - voting for the WTO and China's entry into it, while voting against NAFTA and cosponsoring the fair trade TRADE Act.) Meanwhile, his fellow Democratic incumbent Jim Marshall did not campaign on his fair trade record, and lost to Austin Scott, a Republican that emphasized Buy America themes. (Both Marshall and Scott are white.)
Ryan Frazier, an African-American GOP candidate in Colorado, criticized the fact that the stimulus bill was not used to buy only U.S.-made goods. Allen West, an African-American GOP candidate in Florida, criticized the job offshoring impact of cap-and-trade. Their Democratic opponents approached these candidates in different ways: Ed Perlmutter in Colorado ran anti-offshoring ads of his own and won, while Ron Klein in Florida was mum on trade and lost.
And Latino voters in California and Nevada strongly backed Democratic Senate incumbents Barbara Boxer and Harry Reid, who both campaigned against policies that send jobs to Mexico and other countries.
Finally, 75 percent of the Congressional Black Caucus, nearly half of the Congressional Hispanic Caucus, and Asian-American members like Reps. Mazie Hirono (D-Hawaii) and Judy Chu (D-Calif.) have endorsed the TRADE Act, which simultaneously pushes for good jobs here at home, while prioritizing stronger environmental justice, workers rights and democratic protections for our trading partners. Not to mention a fellow named Barack Obama, who also campaigned and won on these themes - winning not only communities of color but making serious inroads into the white working class.
In sum, elected officials don't seem to have much difficulty reconciling justice for communities of color at home and abroad with a strong working class message of standing up for job creation in the United States. They know as well as anyone what my colleagues John Schmitt and Nicole Woo (and other CEPR folks) have found: that the quality of manufacturing and other jobs here at home is a major reason that families from Asian-Pacific, African-American and Latino-American communities have ascended to the middle class.
Greenberg Quinlan Rosner, the polling company, has released the results of a poll they took this past week for Democracy Corps and Campaign for America's Future.
There are several interesting finds:
- While many pundits have suggested that Americans are primarily upset at the Democratic Party or President Obama, Americans feel even less "warm" about corporations. Among voters, only 29 percent fell warm towards corporations, while the comparable number is only 13 percent among non-voters. The numbers for big banks specifically were even worse in some regards: 12 percent among voters, and 16 percent among non-voters. These are lower warm ratings that have Obama, the Dems, the GOP, Sarah Palin, Newt Gingrich, the NRA, labor unions, and more. (Only "the state of the economy" garnered lower warm ratings, while "The Tea Party" fared poorly among non-voters.)
- Voters that voted for Democrats cited job offshoring as the most important issue facing the country, and said that the GOP candidate's support for job offshoring was the most important reason to not vote Republican.
- Polling respondents were read four distinct narratives of campaign messages that generic candidates ran on in 2010, and were asked whether that campaign narrative would make them more likely or less likely to vote for the candidate. The first reminded voters' of the Republican Party's role in creating the conditions behind the recession, the second criticized GOP support for job offshoring, the third focused on GOP support for "free trade agreements" and how America should instead give benefits to companies that create jobs in the country, the fourth was a (control?) message about how Obama promised change but instead Democrats wrecked the economy. The third message did the best among voters, and the second message did the best among non-voters - both obviously dealing with fair trade themes.
- Regardless of how or whether they voted, poll respondents were asked to respond to whether they agreed about with a set of statements about the state of the country. The first related to concerns about the size of the national debt, the second to Wall Street rather than Main Street being bailed out, the third about lack of bipartisanship, the fourth on corporate influence in election finance, the fifth on inequality and CEO bonuses, and the sixth and final message focused on job offshoring and the need to "make things in America." Eighty-nine percent of voters agreed with the sixth message on fair trade - more than any other narrative. Among non-voters, eighty-five percent agreed with the sixth message - second only to the third narrative about bipartisanship. Moreover, the percentage gap between those that agreed vs. disagreed with the fair trade message was the widest of all the narratives, i.e. it "won" by the largest margin.
- Poll respondents were asked whether they favored a series of two hypothetical policies that the next Congress could take up: upgrading our national infrastructure, or launching a five year fair trade plan that attacks job offshoring. The second plan fared significantly more favorably among both voters and non-voters, and there was also a larger (positive) gap between those that favored versus disapproved of the latter proposal.
So far so good. But then, poll respondents were asked a bizarre trade-related question: would they favor a hypothetical Democratic or hypothetical Republican proposal on trade that were characterized as follows:
On trade and exports, the Democratic leaders say we need to double our exports over the next five years, that requires ending subsidies to corporations that send jobs abroad, passing trade agreements to open markets, enforcing an even playing field for US companies, and working globally to limit trade imbalances.
On trade and exports, the Republican leaders say we need to increase our exports, and that requires passing more trade agreements, getting government out of the way. American workers can compete and win with any workers across the world.
When given these binary alternatives, more voting respondents favored the GOP proposal, while more non-voting respondents favored the Dem proposal.
But note that both hypothetical positions describe "passing trade agreements", and sound a lot alike in other ways. The Dem position in particular sounds a lot like Obama in today's New York Times, where he talks about moving forward with a U.S.-Korea trade deal as part of a job- and stability-creating recipe.
As we've written, this argument is wrong on the merits. Our past NAFTA-style agreements have been associated with slower U.S. export and job growth, and the U.S. government's own numbers show that the Korea deal will be a net negative for our goods exports, i.e. manufacturing jobs. For these reasons alone, it's hard to understand how this jumped onto Obama's to-do list, much less to the top.
But the latest Greenberg poll shows that it's also wrong on the politics. The only way for Dems to squander the significant advantage that robust fair trade advocacy brings for them is to start sounding too much like Republicans, blur the line between the parties, and insist on "passing more trade agreements."
Greenberg and CAF anticipated our argument, and tested an alternative set of messages:
On trade and exports, the Democratic leaders say, It's time to challenge countries like China that are taking our jobs, end subsidies to corporations that send jobs abroad, stop passing NAFTA-like trade deals until we have a national strategy for making things in America and exporting goods, not jobs.
On trade and exports, the Republican leaders say we need to increase our exports, and that requires passing more trade agreements, getting government out of the way. American workers can compete and win with any workers across the world.
Unsurprisingly, Dems regain the upper hand when their position is described as blocking more NAFTA-like deals and aggresively creating jobs. A significantly higher percentage of voters and non-voters alike say that they "strongly support" the first statement, while support for the Republican position drops among both voters and non-voters. And, as the crosstabs on page 57-58 of this graph show, it helps Dems out especially with swing voters, independents, and their own base - all of whom are relatively more turned off by the blurry message.
This confirms what we showed earlier this week in our 182-race analysis: the best defense is a good fair trade offense.
(Disclosure: Public Citizen has no preference among the candidates for office.)
In the wake of the release of our brand new report “Election 2010: The Best Defense Was A Fair Trade Offense,” a lot of folks have asked for more details about how the fair trade electoral advantage played out within certain subgroups of the House Democrats.
Table 1 below shows the win-loss ratios of House Democratic candidates by fair trade position, and sorted by the competitiveness of their races as determined by the Cook Political Report on November 1, 2010.
There are two things to note: first is the sheer breadth of candidates that campaigned on trade in every competitiveness category. Second, for every competitiveness category where Democrats won any seats, fair traders were more likely to win than campaigned against fair trade or that stated no position on fair trade.
Let’s look a little closer at the data. First of all, given the GOP tidal wave that hit Democrats, it is to be expected that Democrats took fewer seats in the Toss-Up category than in the Lean and Likely Democratic categories, in both percent and numerical terms. (And they captured none of the Lean or Likely Republican seats in which they were competing.)
But looking at just the 50 Toss-Up seats in play, a fair trade-oriented candidate was more likely to win their race than a candidate that ran against fair trade or took no position. The same goes if we look at only the Leaning or Likely Democratic seats.
An equally interesting exercise is to look at the shifts and trends within the Democratic Party’s caucus groups most likely to be in a competitive race this year: the Blue Dogs and the New Democrats.
It’s a little known fact that, even though both groups have some members that are very vocally against fair trade, half of the 51 Blue Dogs and a third of the 70 New Democrats are signed onto the TRADE Act, a bill that envisions a fundamentally fairer way of expanding trade and exports.
Still, the New Democrat Trade Task Force is the key group within the House Democratic Caucus pushing status quo trade policies. At least three lost their re-election bids: Reps. Suzanne Kosmas (Fla.), Harry Mitchell (Ariz.) and Bob Etheridge (N.C.); two retired: Artur Davis (Ala.), who lost his primary for the gubernatorial bid, and Vic Snyder (Ark.); and two are in races that have not yet been called: Melissa Bean (Ill.) and Rick Larsen (Wash.). Ironically, Kosmas, Etheridge and Larsen – along with fellow task member Ron Kind (Wisc.) – ran paid ads attacking job offshoring. Adam Smith (Wash.) also of the task force, did not focus on his advocacy of unfair trade, but instead on his work on trade adjustment assistance.
Some voters were not convinced by these battlefield conversions: Etheridge’s successful GOP opponent Renee Elmers attacked his vote for permanent normal trade relations with China, while Kosmas’ GOP opponent Sandy Adams criticized the flow of stimulus dollars overseas.
Table 2 gives a breakdown for just the incumbent New Democrat and Blue Dog candidates. As can be seen, many more chose to run on fair trade than did not. Indeed, savvy fair traders within the New Democrat Caucus such as Rep. David Wu (D-Ore.) campaigned and won on opposition to offshoring. Wu went further and called for trade policy that would require that our trading partners observe democratic and human rights norms – positions that helped Wu bridge both blue collar and social liberal voters within his Portland area district and fight back his toughest electoral challenge in years.
Indeed, those endangered Blue Dogs and New Democrats that campaigned on fair trade were more likely to survive than those that did not.
To read more about the fair trade campaign positions that New Democrats, Blue Dogs and others took in this year’s races, be sure to check out our new report here. We’ll be updating it on a rolling basis as the remaining dozen races are called.
Our 2010 election report is out!
Get all the details of how trade factored into the campaigns here.
The GOP tsunami obliterated many candidate-specific features of the midterm contests, but trade, job offshoring and/or government purchases of foreign-made goods were a stunningly persistent national focus of midterm election campaigns, with 205 candidates campaigning on these issues. A record number of 75 Republicans adopted some fair trade messaging as well, 43 of whom won their races. More than sixty races became "fair trade offs," where both the Democrat and Republican ran on fair trade themes. Only 37 candidates campaigned in favor of more North American Free Trade Agreement (NAFTA)-style trade agreements - about half of these candidates lost.
There were also a record 220+ campaign ads on trade.
Read the press release, view the full report, and watch all the ads here.