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Rethinking Trade - Season 1 Episode 17: Democrats on Trade

Rethinking Trade - Season 1 Episode 16: Online Retail Giants Sneak Attack by Trade Pact

Online retail giants like Amazon have been quietly stuffing trade agreements with terms that handcuff governments from protecting consumers or breaking up the online behemoths. What these corporations and their government co-conspirators call “digital trade” rules are in fact designed to forbid governments from protecting our privacy, holding the online giants accountable for dangerous or fake products they sell us, and empowering us to control our personal data. 

“Digital trade” rules being pushed in U.S. trade deals give some of the world’s largest corporations further control over our personal data and the online-retail market.

Transcribed by Garrett O’Brien

Ryan:

Welcome back to Rethinking Trade, where we don’t just talk about trade policy, we fight to change it. I’m Ryan, and I’m joined once again by our in-house trade expert Lori Wallach.

Lori, it’s not a secret to anyone that the 2016 presidential debate, and now the 2020 one, have made the trade issue politically confusing. Now, you’ve long been part of the movement for alternative trade rules that limit corporate power, protect workers, consumers, and the planet but your adversaries have often been Democratic presidents like Bill Clinton and Barack Obama who presided over significant negotiations of some really bad trade deals. People like Donald Trump have preyed upon this fact and painted themselves as the alternative to the Democrat’s bad trade deals. At the same time, it’s often been Democrats in the House and Senate who’ve been the champions of the alternative trade rules people like you have advocated for — not to mention that all of these bad trade deals were also supported by most of the Republican party. Let’s talk a bit about the Democratic party’s complicated relationship with trade policy. Where do we start?

Lori: 

The story about trade politics is not so much partisan as it is one’s philosophy about the economy and who ought to be prioritized. And there has been a broad dichotomy historically between the presidential wing of the Democratic party, which has quite systematically sided with corporate elites, versus the Congressional wing, which has quite systematically sided with working people. 

So you have a dynamic where Democratic and Republican presidents alike have pushed the same corporate rigged trade agreements, trade policies, trade model, that see the rules of the global economy as an extension of privileges and powers for big companies, including a lot of things that are flat out protectionist. Starting with NAFTA, US trade agreements had literally rent-seeking monopoly protections, anti-free trade for Big Pharma. Why would you put a monopoly patent in a free trade agreement? Because it was for the corporations. And presidents of the Republican and Democratic variety sided with that, but the Congressional situation has been quite different. 

Congressionally, the Democrats have led the opposition to these corporate rigged agreements and have promoted alternatives, whereas the Republicans in Congress have followed their presidential wings and have overwhelmingly supported agreements like NAFTA, the WTO, China’s entry into the WTO. So, if you look historically you’ve got this battle that is Democratic presidents pushing, along with Republican presidents pushing, the same kind of trade agreements for decades. You have Republicans in Congress voting for them overwhelmingly and you have Democrats in Congress voting overwhelmingly against them to the point where with a bunch of these agreements you literally have, you know, five Democrats, fifteen Democrats, when there are hundreds of Democrats in congress and it is always the vast majority of Republicans in Congress voting for, but it might be a Democratic or Republican president pushing the same-old-same-old and that split has led to a lot of political confusion when then Donald Trump comes on the scene, which by the way could have been Bernie Sanders on the scene or could have been Senator Warren on the scene as a president. It had to do with basically breaking that bipartisan presidential consensus in favor of the same-old-same-old.

Unfortunately, the way Trump did it was not to push the progressive alternatives that Democrats in Congress, and unions, and consumer groups like ours, and environmental groups, have been pushing. He did break the old consensus but not necessarily in favor of people or the planet, it was a much more nationalist, corporatist view but a different take.

Ryan:

One of the things Trump did was he really utilized NAFTA, the North American Free Trade Agreement, in 2016 as an example of the “Democrats’ bad trade deals” and while it was signed by Bill Clinton it was introduced by Republican president George HW Bush wasn’t it? And didn’t a lot of Congressional Democrats oppose NAFTA at first?

Lori: 

So, the politics in NAFTA is the perfect example of why this is so jumbled and hard to understand. The concept of NAFTA came from Ronald Reagan. It and the negotiation of the WTO, the so-called GATT Uruguay Round, were Reagan's ideas of how effectively to get around an overwhelming Democratic majority in Congress that was systematically blocking his privatization and deregulation of the service sector and that was blocking the extension of patent giveaways for Big Pharma. The idea was to use this sort of Trojan Horse work-around of the Trade Agreements. So, the history of NAFTA is that Reagan came up with the idea and in fact Reagan initially started the precursor, the US-CAN negations. Then George Bush the first picks up the NAFTA negotiations, he doesn’t just introduce it, he signs it, it’s his deal. It was signed before he was out of office. He negotiated that deal and he signed it. But because of the dynamic I described where the Democratic presidential wings have often been indistinguishable from the Republicans on trade, then Bill Clinton picks up the old NAFTA as a sort of political maneuver and creates some meaningless unenforceable side agreements in the environment and labor and pushes the exact thing that Bush has signed, that Reagan has envisioned, through Congress. But the political dynamic was bloody because while almost every Republican in Congress voted for the NAFTA, the majority of Democrats fought their own Democratic president and voted against. And there was a block, I would say a larger block overtime, of 100 Democrats who voted with Clinton, their president, a lot of goodies were given away, but 160 Democrats voted against. What’s super interesting is that in short order by the time there’s a push for NAFTA extensions to other countries in Latin America, in 1998, and people had seen the effects of three years of NAFTA, the vote had totally shifted. 171 Democrats voted against, only 29 Democrats voted for their own democratic President Bill Clinton having the trade authority called Fast Track to extend NAFTA throughout the Americas because in those three years not only had everything that Democrats in Congress who voted against, and the opposition was led by the Democratic house leadership, Gephardt, the number one Democrat, Bonior, the number two Democrat in the House, they led the fight against NAFTA, against their own president, from the Capital, from the leadership offices of the Congressional Democrats, not only had everything they had warned but an enormous number of worse things had happened. So, by the time the lived experience had caught up to the warnings of the Democratic Congressional leadership to their rank in file members, Congress denied Bill Clinton having trade authority for the rest of his term because there weren’t enough Democrats to go along with the overwhelming number of Republicans who passed it even by a narrow margin. So, from that point on President Clinton never had trade authority again.

Ryan: 

So, another big thing that happened I guess before that under the Clinton presidency and this is as NAFTA had begun taking its devastating effect on US factory workers and Mexican farmers and so many others, there was also the World Trade Organization. And the WTO is widely seen as a Clinton baby because he was president when it was signed, and he was also president when China was brought into it back in the year 2000. Maybe talk a little about how congressional Democrats reacted to these developments at the time.

Lori:

The NAFTA fight helped the Democrats lose the House. The midterm elections 1994 had an enormous fall-off in turnout for union households and working people who just basically saw a Democratic president passing this agreement they knew was going to devastate them and in short order had started to lead to mass outsourcing in Wisconsin, in Michigan, and other states. Democratic base voters basically stayed home in 94 and the Democrats lost the House because of the NAFTA fight and the dynamic of that politics had such damage that on the Congressional wing, as well as the outcomes of these agreements, the opposition tightened up but Clinton continued to push the same bad framework, and the WTO is a perfect example of that as well as China’s entry into it and that would be the 2000 PNTR, Permanent Normal Trade Relations vote, but also in 1999 the US was the leader in trying to push a huge expansion for the WTO to include more corporate rights and powers and to basically impose more non-trade dictates against people on the planet into the WTO and the Democrats in Congress were out there in the front of these marches in Seattle in 1999 during the protest. I have a wonderful picture up in my office of David Bonior, then the number two Democrat, and three or four committee chairs, Maxine Waters and George Miller, all marching arm-in-arm with protesters in Seattle against the Democratic president’s attempt to expand the WTO, but again Clinton’s role really taints the politics because people think of Democrats — Clinton — they don’t realize the Democrats in Congress were leading the fights against these very proposals. Nancy Pelosi as a member of Congress, not yet the Speaker, led the Congressional fight in the house against China PNTR. It was run out of her congressional office to whip the votes to try and get a no vote. And that is another example where more Democrats were induced by Clinton to support it, 73, where 150 voted against, so double were against, but an overwhelming number of the Republicans voted for it. And that was kind of the turning point. Because after that China PNTR vote in 2000, after more cases against important US public interest laws were being ruled against at the WTO, as more and more job outsourcing started under NAFTA and then once China was in the WTO in 2001, 2002, mass outsourcing to China which now had guaranteed access to the US at the very favorable US very low tariff rates established in the WTO, Democratic opposition in Congress really started to consolidate against the model. 

The lived experience of the wreckage both the attacks, and domestic, environment, consumer laws, and also the job loss, and from that point on there was nothing like the big chunks of votes for China PNTR, which, you know, 73 Democrats was a minority but it was not an insignificant number, same thing as the NAFTA minority of the party voted for it but not an insignificant number. From that point on it was super lopsided. So, for instance, when the fast track came up in 2002 and now George Bush the second was president, 190 Democrats voted against it, 21 voted for it. Or with CAFTA, 190 Democrats voted against it, 15 voted for CAFTA. And that shift has basically followed through to the current day where with a Democratic president in 2015, 160 Democrats voted against Fast Track for TPP for their own president and 28 only were willing, for their own president’s key priority of the entire congressional session, to vote for it. But, unfortunately, because Clinton is the guy who is seen as pushing WTO expansion in Seattle, Clinton was the guy who pushed the NAFTA through congress, the WTO through congress, China into the WTO, and then President Obama pushed TPP, it’s super confusing for a lot people who aren’t paying attention to the nitty gritty of the congressional votes. So someone like Trump can exploit that and make it seem like Democrats writ large are for these policies when in fact every single time a president has been derailed from doing more harm: Clinton when he lost his trade authority thanks to Democrats in 1998, Bush when he was not able to get new trade authority after his 2002 authority ran out, Obama when TPP was stopped, that’s all Democrats in congress saving all of our bacon. 

Ryan:

And that’s another thing Trump took a lot of credit for: stopping the TPP. Whereas you’re describing, it was actually dead on arrival when he took office.

Lori:

Yeah, you know, it’s a myth that he stopped TPP. To the extent that he had a role, it was burying the molding corpse that had been left out in the sun rotting dead for a year. So, the 2015 fight on Fast Track where originally, thanks to the Democrats in Congress, Obama lost that vote, he went back and made a deal with the Republicans in Congress threw out a trade assistance program for workers who lose jobs to pay off the Republicans to get them to switch and for more Republicans to vote for it narrowly passed the trade authority that was then used to close the TPP deal. But the TPP deal gets closed and throughout all of 2016, it’s sitting there unable to get within 60 votes of passage in the House of Representatives which is a honking deal because typically, if a trade agreement is stuck, it’s stuck by 10, 15, 20 votes and then the president basically buys those votes by promising a bridge here, or a package there, or a congressional special this-and-that from the president and this was such a wide margin because there was almost no democratic support. 

Even the 28 Democrats who voted for trade authority two years before were not willing to say that they would vote for the TPP. So the agreement sat there for an entire year, couldn’t get through congress and the horrific mistake, I think, of the Obama administration was instead of sending cabinet officials around to campaign for Hillary Clinton in 2016, they were sending cabinet officials all across the country to those very swing states: Wisconsin, Michigan, to try to put pressure on Democrats to support the TPP for a lame-duck vote after the 2016 election. They were so obsessed with TPP. In my home state in Wisconsin, I am convinced, having the Ag Secretary and others running up and down those Mississippi, Minnesota, border state counties pushing TPP was part of how for the first time ever those districts went for Trump. Because people there lost tens of thousands of jobs to NAFTA, WTO, China and so we saw basically even the effort in the lame-duck session after Trump has won, Democratic disaster, the Obama administration is still trying to pass TPP and at that point the Democrats in congress just, you know, were smearing furious and doubled down in their no votes, Trump came in to an agreement that couldn’t get through congress and then officially gave notice it wouldn’t be approved. That’s what he did. We didn’t actually withdraw; we gave notice that we would not be sending notice of approval and the other countries moved on without us.

Ryan: 

Yeah, so that’s a pretty horrific story about the TPP’s role in the 2016 campaign. Do you think anything has changed today?

Lori: 

I think that is the big question. So, Trump is going to try to say that he fixed things — the data show he hasn’t. He campaigned on stopping outsourcing and getting rid of the deficit. His own labor department has certified 300,000 jobs as lost due to trade under the Trump administration and his trade deficit is bigger than when he took office and it remains to be seen if the Democrats at the presidential level and their campaign leaders have learned the sad lesson. Clearly, they see the downside of touting the corporate rigged status quo but whether they’re going to promote the kind of alternatives that we support, I think that remains to be seen, I think that could be important for how this election ends.

Ryan:

Rethinking trade is produced by Public Citizen’s Global Trade Watch. I would encourage you to visit Rethinktrade.org as well as tradewatch.org to educate yourself and find out how you can get involved in work we are doing in the fight for fairer and more equitable trade policies.

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