China Trade Deficit Toll: 2.4 Million Jobs

Robert Scott of the Economic Policy Institute (EPI) just came out with a terrific new study on the job losses that the U.S. economy has suffered because of the sky-high deficit with China.  It estimates that the rise in the deficit with China since it entered the WTO (2001) has displaced 2.4 million jobs.  

Between December 2007 (when the recession began) and February 2010, the U.S. economy lost 8.4 million jobs.  This means that if our deficit with China reverted back to its level in 2001 instead of being at its current level, the U.S. economy could generate about one-fourth of the jobs that it lost during the Great Recession.

What’s great about this study is that it estimates job losses in each congressional district.  Previous studies from EPI looked at deficit-induced job losses only down to the state level. With this study, Scott uses a different dataset that surveys millions of people per year, so there are enough respondents in each congressional district to get job loss estimates. Check out where your district ranks in job losses here (and here for an alphabetical listing).

Fortunately, there is a lot of movement in Congress to get China to allow its currency to appreciate against the U.S. dollar. Last Monday, 130 members of Congress, led by Representative Mike Michaud, sent a letter to Treasury Secretary Tim Geithner and Commerce Secretary Gary Locke urging them to officially designate China as a currency manipulator in its April 15th report.  Yesterday, the House Ways and Means Committee held a hearing on China’s currency policy, its impact on the U.S. economy, and steps that the U.S. could take to press China to revalue it currency.  Most economists believe that China’s currency is undervalued by about 40 percent, making imports from China artificially cheap for the U.S. and U.S. goods more expensive in China.

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Lori Wallach's Op-Ed in Today's Edition of The Hill

 

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Obama’s trade policy opportunity

By Lori Wallach

Contrary to the clamor from the U.S. Chamber of Commerce and newspaper editorials, the Obama trade agenda is not stalled - it is in formation.

This week, negotiations started on President Barack Obama’s first potential trade agreement - the Trans-Pacific Partnership. Will the administration transform the TPP process that Bush initiated in 2008, so as to translate Obama’s campaign trade reform commitments into a new approach that that works for more people and thus rebuild bipartisan consensus for trade expansion? Or, will the administration revert to the Bush-Clinton-Bush trade pact model, and intensify the associated economic and political damage?

Creating a new policy is necessary in this era of globalization, if Americans are to enjoy the economic security of good jobs and an end of the crisis-inducing financial casino, a clean environment, and safe food and products.

Indeed, creating a new trade policy will determine the success of much of the Obama administration’s domestic agenda given that today’s agreements extend far beyond tariffs and quotas to set parameters for numerous non-trade polices. Trade-pact investment and procurement rules will affect whether the billions being invested in the Green Economy will translate into American jobs. Trade-pact service sector rules define the policy space available to re-regulate finance and reform health insurance. Trade-pact rules implicate efforts to combat climate chaos.

The large agribusiness firms and job-offshoring multinationals who claim Obama’s trade agenda is stuck were the few beneficiaries of the 1990s pacts like the North American Free Trade Agreement and World Trade Organization. They oppose establishment of an Obama trade policy. They seek continuation of the status quo, starting with adoption of Bush’s leftover NAFTA-style pacts with Colombia, Korea and Panama. To revive this failed model - most recently rebuffed when a majority of House Democrats opposed Bush’s Peru agreement that mirrors the remaining three - would be a grievous policy and political mistake.

The goods news is that a diverse bloc in Congress has built consensus around a new approach designed to achieve trade expansion that can deliver U.S. job creation, consumer safety and environmental protection. A majority of House Democrats, including 12 full committee and 56 subcommittee chairs, have sponsored the Trade Reform, Accountability, Development and Employment (TRADE) Act, as have 23 Blue Dogs, 19 New Democrats and 30 Congressional Black Caucus members. The bipartisan legislation sponsored by Rep. Mike Michaud (D-Maine) and Sen. Sherrod Brown (D-Ohio) translates Obama’s trade reform commitments into a new trade-pact model - building on the initial reforms Democratic trade committee leaders extracted from Bush in 2007.

The TRADE Act’s provisions on what future pacts should and should not include provide a roadmap for trade expansion at a time when the damage wrought by the NAFTA-WTO model has transformed trade politics. In the past two elections, 72 congressional candidates that campaigned against the trade status quo and for a new approach replaced those who voted for NAFTA, CAFTA, and China’s WTO entry. GOP and Democratic 2008 candidates ran over 140 campaign ads on trade, as did the Democratic House and Senate national campaign committees. This reflects the strong public demand for a new American trade policy.

Not surprisingly, polling shows bipartisan opposition to the old trade regime across diverse demographics. Since NAFTA and WTO went into effect, the U.S. lost net 5 million manufacturing jobs (one out of four in that sector) while American median wages remained stagnant despite productivity gains as corporations used the pacts’ investor protections to relocate and arbitrage their labor costs absent a floor of labor standards. Various environmental and health laws were attacked before trade tribunals. Unsafe food and product imports swelled. The trade deficit exploded from $102 billion to a height of $807 billion, with dire consequences for global economic stability. Quite simply, the old model has not worked for most Americans - nor for most in other nations, as is highlighted by the Doha Round WTO expansion deadlock.

For the Obama administration to succeed, it must not only update the trade-pact model, but also remedy our China trade disaster and update the 2001 Doha Round agenda. Treasury’s April 15 decision on China’s currency manipulation will be critical in determining the success of Obama’s goal of creating 2 million net new jobs from expanded exports. We would suffer net job losses and an enormous trade deficit were imports - to which China is the largest single contributor - to follow their current trend.

Time is overdue to dispense with the claim that critics of the past model are anti-trade. The question is trade under what terms. The bipartisan consensus that marked decades of U.S. trade votes was shattered with the 1990s advent of the NAFTA trade agreement model. Replacing the failed 1990s trade-pact experiments with the new American trade policy Obama promised and Americans expect is the way forward.

Wallach is director of Public Citizen’s Global Trade Watch.

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Is There an Outbreak of Amnesia at USTR?

During the presidential campaign, Obama made it clear that he intended to renegotiate NAFTA to include enforceable environmental and labor rights provisions in the main text of the agreement.  The USTR’s 2010 Trade Policy Agenda, released yesterday, entirely lacked any plans to fulfill this crucial campaign promise.

When President Obama was campaigning for office, the only “r” verb he used on NAFTA was “renegotiate,” coupled with a friendly “opt out.” In contrast, USTR's report uses the verbs “review” and “recalibrate,” but then only to refer to actions they promised to take but still haven't taken. On NAFTA’s severe environmental and labor shortcomings, the report only stated that NAFTA’s central oversight body, comprised of officials from each country’s trade negotiating body, would “strengthen its relationship” with the North American Commission for Environmental Cooperation and the North American Commission for Labor Cooperation, which are bodies established under NAFTA whose role is mostly limited to releasing reports about the labor and environmental effects of NAFTA. They have no enforcement capabilities, which Obama heavily criticized.

It’s not like Obama whispered his position on NAFTA to labor unions and environmentalists in private meetings.  He was loud and clear about his plan to renegotiate NAFTA, proclaiming it several times in the televised presidential debates.  In a January 2008 debate, he said that “it is absolutely true that NAFTA was a mistake.” Obama reminded us that his position on NAFTA has been consistent during a February 2008 debate:

MR. RUSSERT: Senator Obama, you did in 2004 talk to farmers and suggest that NAFTA had been helpful. The Associated Press today ran a story about NAFTA, saying that you have been consistently ambivalent towards the issue. Simple question: Will you, as president, say to Canada and Mexico, "This has not worked for us; we are out"? 

SEN. OBAMA: I will make sure that we renegotiate, in the same way that Senator Clinton talked about. And I think actually Senator Clinton's answer on this one is right. I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced. And that is not what has been happening so far.

That is something that I have been consistent about. I have to say, Tim, with respect to my position on this, when I ran for the United States Senate, the Chicago Tribune, which was adamantly pro-NAFTA, noted that, in their endorsement of me, they were endorsing me despite my strong opposition to NAFTA.

In the Democratic candidates’ debate in August 2007, Obama had a sense of urgency in his voice when he discussed his position on NAFTA:

Continue reading "Is There an Outbreak of Amnesia at USTR?" »

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USTR’s 2010 Trade Policy Agenda: The Good, The Bad, and the Bizarre

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

Relative to last year’s March 1 report, the 2010 Trade Policy Agenda released today by the Office of the U.S. Trade Representative (USTR) excludes some troubling elements, such as the call for rapid action on the leftover Bush trade pact with Panama, the demand that climate policy conform to trade rules and the reference to renewed presidential trade authority. But at the same time, the report unfortunately fails to deliver the new fair trade agenda that President Barack Obama promised during the campaign and that is needed for our country’s economic recovery.

It also continues to mimic the misrepresentations that the Bush administration borrowed from the U.S. Chamber of Commerce with respect to only considering the role of exports on U.S job creation, as if the U.S. did not have a massive job-killing trade deficit. An example is the hilarious statement about 10 million U.S. jobs being supported by exports in 2008 – a year we had a $696 billion deficit – without any reference to the net U.S. jobs effect of the flood of imports underlying that deficit. The report also fails to mention that 5 million net U.S manufacturing jobs – one out of every four – have been lost since the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA) went into effect, or the downward pressure our current trade policies are putting on wages across the economy.

Continue reading "USTR’s 2010 Trade Policy Agenda: The Good, The Bad, and the Bizarre" »

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5,500 is Just the Beginning

Last Friday's rally and protest at the soon-to-close Whirlpool plant in Evansville, Indiana drew a massive crowd. Organizers said 5,500 protesters joined the day's actions against the corporate greediness of Whirlpool's - which just received $19 million in federal stimulus money for job creation! Protesters demanded Whirlpool reverse its plan to shift good 1,100 jobs to Mexico - a move facilitated by unfair trade deal-in-chief: NAFTA.

The AFL-CIO has already produced a short video of highlights from the actions:

And this is only the beginning. Imagine how workers in Evansville would react if the President tried to pass yet another NAFTA-type trade deal - like one with South Korea where the U.S. auto industry takes on it on the chin. Now imagine what happens if they tried to pass one with tax haven Panama or unionist murder capitol Colombia!

Clearly, U.S. workers, facing some of the hardest economic times in memory, won't stand idly by while their families' futures are washed down the drain by corporate greed and bad trade policy. That's why they're mobilizing behind the TRADE Act - the comprehensive trade reform bill - and pressuring to hold President Obama accountable to his campaign promises.

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Fighting To Save Jobs in Evansville

Any minute now, the huge rally to save 1,100 good, family-supporting union manufacturing  jobs will begin. Brother Richard Trumka, president of the national AFL-CIO, will headline the event, along with other local labor and elected officials.

IUE CWA - Whirlpool
Trumka has and Oped in today's Evansville Courier & Press that shows the stakes:

After more than 50 years, Whirlpool is turning its back on Evansville — shipping hundreds of good local jobs to Mexico despite the company's healthy profits and millions of taxpayer dollars in federal economic stimulus money.

We need jobs. And we can't stop in Evansville.

We have to take the fight to every company that wants to cut out on America's workers, to the big banks that ruined our economy and to elected officials who refuse to stand up for working families.

When companies such as Whirlpool choose cheaper labor and lax environmental standards over America's workers, consumers and communities, we're going to let them know we won't stand for it.

There's a lot at stake, both nationally and here in Evansville.

Brother Trumka is right indeed. It's a national policy problem that requires a national policy solution. The fight is not just going on in Evansville, but in towns like Newton, Iowa and Galesburg, Illinois, and all throughout the country where good manufacturing jobs being are lost to lower wage countries like Mexico. Thanks to unfair policies like NAFTA, that's where the Whirlpool jobs will go thanks.

That's why we need to pass forward-looking reforms like the TRADE Act that allow for a sane manufacturing policy that creates good jobs right here in the U.S.

For more on the local buildup to today's rally, check out:

~ WFIE's coverage of the Whirlpool Corporation's threat letter to displaced workers who plan to participate in today's action, and ongoing protest preparations, or

~ The local Fox affiliate's continuing coverage of how the threat letter steeling the union's resolve, or

~ The Evansville Courier & Press Editorial expressing some limited solidarity with displaced workers marching against the 'recommendation' of their unfaithful boss:

Cobern [local Whirlpool manager] said in his letter that the decision to close the Evansville plant is final and will not be reconsidered....

In the meantime, allow these workers the freedom to express their frustration and disappointment at seeing their employer pack up for the trip to Mexico.

It has to hurt.

Hurt must barely begin to describe it. But here's hoping that pain will give way to anger at the unfair trade policies and corporate greed at the root of the problem/ Then that anger can transform into organizing to build another world in which the needs of normal hard-working women and men of the world come first!

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Whirlpool: Taking Tax Dollars, Taking Jobs

It can barely get greedier than this: We're in tough economic times, so Whirlpool receives $19 million in taxpayer funds to create jobs. Then it turns around and announces it will shutter its Evansville, Indiana refrigerator plant and displace the 1,100 workers there. Disgusting.
WHIRLPOOL_8_2009
And where, you might ask, will those jobs go? They'll follow so many other lost family-supporting jobs on the NAFTA train to Mexico.

But workers are hoping to make the planned Evansville closing a turning point in the battle for American manufacturing, and are fighting to keep the plant open. The president of the national AFL-CIO, Richard Trumka, is scheduled to speak tomorrow at a major rally to keep plant open. Many hundreds are expected to join the demonstrations from across the region and the country.

The union representing the Whirlpool workers, IUE-CWA Local 808, is fighting fiercely. Financial Secretary of Local 808, Barbara Reich, lays it bare on evening news of the local Fox affiliate:

We need to bring to the attention of the American public when a so-called - in my opinion - American company gets American tax dollars, $19 million American tax dollars to create jobs, then they should not be taking existing American jobs to Mexico or China... We need those jobs right here in this community.

Sister Reich is right. It's a long shot that the plant will stay open, but workers are rallying to a higher cause. Under the influence of unfair NAFTA/WTO-style trade policies, manufacturing job loss has hobbled the country's economic prospects. Working people in Evansville are fighting not just to keep the plant open, but also to change the policies of "taking these jobs to other countries."

That's why solutions like the TRADE Act that correct our failed trade policies, are a crucial element of this fight. Indiana Representatives Visclosky, Donnelly, and Carson have endorsed the comprehensive reform legislation, but 8th District Rep. Brad Ellsworth, who is expected to speak at the rally and whose hometown is Evansville, has yet to sign on. Hopefully he'll see the light and join the growing reform consensus.

Mobilization and protest are another critical element of the fight. So tomorrow - Friday, February 26th - working families will assemble in Evansville to say, enough!

Continue reading "Whirlpool: Taking Tax Dollars, Taking Jobs" »

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GOP Turnaround on Buy American: Genuine Concern or Opportunism?

Mike Elk over at Campaign for America’s Future points out that the leadership of the Republican Party has flip flopped over the limited “Buy American” provisions in the stimulus bill.  This debate is particularly salient now, since the U.S. just watered down the Buy American requirements when it comes to Canada. Mike Elk explains how Michael Steele has made a U-turn on Buy American:

GOP Chairman Michael Steele blasted the Obama administration in a fund-raising email earlier this week for allowing stimulus money designated for clean energy solutions to be spent on overseas companies. Which is interesting, because stimulus money going to overseas firms was the direct result of conservative opposition to attempts to keep that money in America.

Notwithstanding Republican leaders’ huffing and puffing about “protectionism” one day and offshoring the next, Buy American isn’t a partisan issue.  As Mike points out, 86 percent of Americans support the Buy American provisions of the stimulus legislation, including 79 percent of Republicans.  If the Republican Party’s position on Buy American has actually changed, then they should say it loud and clear.  As of now, though, it just seems that Steele is attacking the Obama administration simply for partisan gain.

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Justice Beyond Copenhagen

Last night DC was lucky enough to host an all-star panel of global justice activists in a panel discussion called "Evaluating Copenhagen: What it Means for Ecology, Economy, and Equity", convened by leading global justice organizations.

Among the panelists were longtime friends of ours at Global Trade Watch. They included leaders the Global Justice movement like Martin Khor from the South Centre, Maude Barlow from the Council of Canadians, Victor Menotti of the International Forum on Globalization, Chair of the UN Permanent Forum on Indigenous Issues Victoria Tauli-Corpuz, and Gopal Dayaneni from Movement Generation. I'll discuss some highlights below the video.

These experts and leaders left very little doubt that the fight to avert climate catastrophe is the fight for the direction of the global economy; that climate justice + trade justice = true global justice.

If, as panelists noted, the climate negotiations will eventually lead to the rewriting of the global economy then global institutions like the WTO and other unfair institutions of trade and development will have to change dramatically. For decades, social movements have resisted the globalization agenda of the international corporate elite. With the threat of climate change, the world has been forced to pursue fundamental economic transformation. That transformation presents tremendous opportunity, and so comprises the silver lining on the dark, looming clouds of possible climate catastrophe.

Problem is that too few of us in the global north are connecting the dots between the struggles of the global justice movement with the current fight for a fair climate deal.

Continue reading "Justice Beyond Copenhagen" »

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GDP Growth Figures Smaller than they Appear

The release of the 2009 trade flow data last Wednesday revealed that the trade deficit jumped significantly more than expected in December 2009.  The seasonally adjusted December deficit amounted to $40.2 billion; most experts expected a trade deficit of $35.8 billion. This deficit figure is for trade in goods and services combined - see the chart below for the trade deficit for goods alone.
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This will mean that the robust fourth quarter annualized 5.7 percent GDP growth estimates released at the end of January - based on projected December trade flows - will likely need to be revised in light of the new trade deficit numbers, in addition to revisions due to other factors. (Recall that trade flows are an important part of the calculation of GDP - the dollar value of exports is added to GDP, but the value of imports is subtracted.)

According to the AFP

Most analysts predicted the December trade gap would reduce the gross domestic product (GDP) growth estimate for the fourth quarter, which is due for revision later this month.

The economy grew at a robust 5.7 percent annual pace in the final quarter, accelerating from 2.2 percent growth in the prior quarter after four quarters of contraction amid the worst recession in decades, officially begun in December 2007.

"It is true that the wider deficit will shave a couple of tenths off GDP growth, but it is hard to describe the trade figures as bad news, since they show a continuing robust rebound in world trade," said Nigel Gault, chief US economist at IHS Global Insight.

"Over the second half of 2009, US goods export volumes rose 15.5 percent, while goods import volumes rose 17.7 percent," he said.
Its worth pointing out that the claim of the economist at HIS Global Insight that it is hard to describe the trade figures as bad news, since they show a continuing robust rebound in world trade, refers to the indication, given the trade data, that global demand for goods is rising and hence the global economic recovery is underway. A larger U.S. trade deficit is not good news for the U.S. economy, though, since it represents jobs that could have been created if our trade deficit was lower.

AP notes that "the export gains are expected to be outpaced by an even larger rebound in imports" in the coming months.

The first revision of the fourth quarter GDP estimate is due on February 26.

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Things USTR Should Give Up For Lent

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Now that Fat Tuesday is over, we've thought of ten things USTR should give up for Lent to avoid unnecessary policy failure and political disaster, if not eternal damnation:

  1. Going to the first Obama-era Trans-Pacific Partnership (TPP) talks (March 15-19) to represent the "U.S. position" without having consulted with the congressional Democrats and Democratic base groups who expect USTR to deliver on Pres. Obama's campaign commitment to create a new U.S. trade agreement model.
  2. Allocating limited USTR resources to trade negotiations that hold few prospects for expanding exports or creating jobs. (Um, for instance like the TPP - given the U.S. already has trade pacts that zero out tariffs with the four prospective TPP partners - Australia, Singapore, Chile and Peru - that comprise over 85% of the combined GNP of countries involved in TPP talks.)
  3. Continuing to ignore the growing China trade disaster. (Even as the 2009 annual trade data showed that the global economic crisis had suppressed overall trade flows, China's share of the U.S. trade deficit increased.)
  4. Disregarding the TRADE Act, given it represents the majority view among House Democrats about what TPP and other trade negotiations should and should not include.
  5. Only discussing exports, not imports - and the related Bush-era talking points. (Giving this up would be aided by disconnecting the direct hotline between the offices of USTR Ron Kirk and Chamber of Commerce President Tom Donohue.)
  6. The Doha Round - after all these years, it's pretty clear that the agenda forced in 2001 ain't cutting it. Time for a new agenda for multilateral trade expansion.
  7. The hangover Bush FTAs with Colombia, Panama and Korea. (What Democrats have forgotten the 1994 congressional midterm wipeout lesson about what happens when a new Democratic president pushes a NAFTA-related trade agreement inherited from a Bush?)
  8. Prioritizing WTO compliance over necessary climate solutions.
  9. Obsession with killing food safety rules in other countries. (Has Michelle Obama read the 2009 National Trade Estimates report?)
  10. Empty rhetoric on transparency and accountability (in favor of actually doing the comprehensive, inclusive trade policy review promised in early 2009.)

And, just as giving up most of the things that people give up for the 40 days of Lent is actually a good idea for the rest of the year too, we think these should stick.

Have a good Ash Wednesday!

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Minnesota: New Front in Fight for Public Interest, Eh?!

Minnesota is moving to encourage renewable energy by slapping a tariff on coal energy produced in North Dakota, and challenging the global economic order in the process.Carbon-tax

And so opens another front in a much larger battle for the legal and policy space to enact common sense public interest regulations and curb the corporate profit crusade. It's a fight that's vital to the creation of a economic model that averts climate catastrophe and provides dignified living for workers.

Penalizing unsustainable or unethical products, or supporting sustainable and ethical ones, is seen by public interest groups across the globe as a key tool for improving labor conditions and environmental standards. But free-market fundamentalists have long insisted that 'similar' products, in this case electricity, must be treated 'similarly'.

Disgracefully, substantial differences in the ways a product is made are purposefully erased for policy-makers so corporations can hunt for cheaper inputs and thus higher profits. A toy made by a toxic-pollution dumping factory vs. a clean factory? Same. Clothes made with slave labor vs. union labor? Same. Energy generated in a way that fuels climate change vs. renewable energy? Its all the same under corporate free-market logic.

But the corporate types have been winning. They've gotten their faulty logic inscribed in our global trade pacts like NAFTA and the WTO, which provide harsh penalties for transgressions. In so doing they've been able to use the bogeyman of trade sanctions to stifle innovative, quality of life-improving policy tools.

Continue reading "Minnesota: New Front in Fight for Public Interest, Eh?!" »

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On His Way Out, Corzine Dismisses Public Call for New Direction on American Trade Policy, Vetoes Reform Bill

New Jersey Governor Rejects Bill Passed by State Legislature That Would Safeguard State's Regulatory Authority From Trade Agreements

CorzineNew Jersey Gov. Jon Corzine on Monday vetoed cutting-edge legislation that would have safeguarded job-creation programs, Buy America/Buy New Jersey procurement preferences and renewable source energy policies from being undermined by trade agreements. The Jobs, Trade and Democracy Act required a vote by the state Legislature before the state could be bound by federal government officials to conform state policies to the non-trade regulatory constraints imposed through certain trade agreements. The bill was designed to ensure that the practice and principles of American democracy, from federalism to checks and balances, are safeguarded in this era of globalization, Public Citizen said.

The New Jersey bill Corzine vetoed dovetails with the federal Trade Reform Accountability Development and Employment (TRADE) Act, which provides for improved state-federal consultation on trade agreement matters. That bipartisan legislation has 133 co-sponsors in the U.S. House of Representatives, including New Jersey congressional Reps. Robert Andrews, Rush Holt, Frank Pallone, Donald Payne, Steve Rothman and Chris Smith.

"Its hard to understand why Gov. Corzine would oppose the efforts of people in New Jersey as well as state and local officials nationwide who are demanding new accountability over federal trade negotiators so they do not negotiate away states abilities to create jobs using smart procurement policies and regulate health, energy and other services," said Lori Wallach, director of Public Citizens Global Trade Watch division. "How New Jersey chooses to spend its taxpayers dollars to pursue local economic development or design policies to make health care affordable should be decided by New Jersey citizens through their democratically elected Legislature with approval by their governor - not imposed top-down by foreign trade pacts."

The legislation (S. 1802), which passed the New Jersey General Assembly in May (61-13-3) and the state Senate in December (32-6), would have required state legislative approval of federal government requests in order for New Jersey to be bound to conform its policies to the non-tariff provisions of future trade agreements, including these agreements service sector, procurement and investment rules. Todays trade agreements have drastically expanded scopes, which include the imposition of new constraints on non-trade policies over which state and local governments traditionally have had jurisdiction, such as those affecting environmental protection, financial service regulation, land use and economic development, access to affordable healthcare and medicines, and more. State and local officials have increasingly become aware that todays trade agreements are invading the non-trade policy space reserved for state officials through an insidious sort of international pre-emption. Five other states - Hawaii, Maine, Maryland, Minnesota and Rhode Island - have recently enacted legislation similar to that which Corzine vetoed.

Continue reading "On His Way Out, Corzine Dismisses Public Call for New Direction on American Trade Policy, Vetoes Reform Bill" »

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Trade Theory Textbook Goes in the Trash

Peter Morici, Chief Economist at the U.S. International Trade Commission from 1993 to 1995 (those dark days of NAFTA implementation), has a new op-ed out today, entitled “Why Free Trade is Failing America”. A lot has changed since his tenure at the USITC. He's now a professor at the University of Maryland and he recognizes that the assumptions underpinning arguments for trade liberalization sometimes never hold true:

No economic policy could better serve Americans than genuine free trade but open trade policies are failing Americans.

Free trade is a compelling idea. Let each nation do more of what it does best, and specialization will raise productivity and incomes.

Americans are not sharing in those benefits because President Barack Obama, like President George W. Bush, permits China and others to cheat on the rules, unchallenged, to the detriment of the U.S. interests he was elected to champion…

Unfortunately, U.S. imports exceed exports by another $400 billion, and workers released from making those products go into non-trade-competing industries, such as retailing, in which productivity is at least 50% lower. This slashes gross domestic product by about $200 billion, overwhelming the gains from trade, and requires workers displaced by imports to accept lower wages.

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The Return of the NAFTA Election Cycle?

(Disclaimer: Public Citizen has no preference among the candidates.)

As we throw out the old calendar and enter an election year, Democratic and Republican party leaders are busy figuring out their electoral strategies.  Various Democratic strategists, for their part, are running through the familiar arguments about appealing to independent voters versus rallying the base.  Arguing for a rally-the-base approach, Democratic strategist Steve Rosenthal reminds us that voters punished the members of Congress who pushed though a bad trade pact one fateful election cycle:

In 1994, the year Republicans swept to power in the House and Senate, union members were demoralized and stayed home because the Clinton administration had fought vigorously to pass NAFTA and backed down on health care reform.

Economist Paul Krugman also argues this NAFTA point while discussing the Republican strategy: “The idea that NAFTA was a big plus for Clinton, coming from Rahm Emanuel of all people, is just too bone-headed for words.”

Fortunately for everyone involved, the choice between fair trade and NAFTA-style agreements is not a choice among appealing to liberal, conservative, or moderate voters.  Polls have demonstrated that voters of all stripes are fed up with the NAFTA model, particularly in swing states.  Fair trade candidates elected in 2008 now have the seats in Congress to prove it, which makes clear that support of the NAFTA model is a losing strategy, while supporting the TRADE Act might be a way to win.

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Trade Preferences Suspended in the Name of Democracy

The Obama administration deserves applause for suspending the African Growth and Opportunity Act (AGOA) trade preferences of Niger, Guinea, and Madagascar last week.  Under the AGOA legislation, the President has the power to deny AGOA preferences to a country that has not “established, or is making continual progress toward establishing….the rule of law, political pluralism, and the right to due process, a fair trial, and equal protection under the law.”  The Obama administration suspended the trade preferences of Niger, Guinea, and Madagascar because they have all experienced undemocratic transfers of power recently.

It’s too bad the standard trade agreement model doesn’t contain these types of democracy-preserving provisions, as Hondurans found out when their democratically elected President was ousted in a coup this June. 

Given that 70% of Honduran exports go to the United States, the threat of trade sanctions would have been a powerful bargaining chip as the U.S. tried to reverse the coup. Our reckless trade policy came back to bite us, however. In an August press call, the State Department explained the source of our powerlessness:

REPORTER: Yeah. I just wanted you to elaborate why [suspending trade preferences] is not a possibility.

SENIOR STATE DEPARTMENT OFFICIAL ONE: We have an agreement called the CAFTA agreement [i.e. the Central American Free Trade Agreement], and apparently provisions in that make it impossible – very difficult, if not impossible, for us to do that, so we can’t – it looks like we cannot go down that route.

Our trade policy should be promoting democratic governance instead of handcuffing our ability to discourage coups and dictatorships.  Signing CAFTA-style trade agreements is a surefire way to diminish our capacity to conduct effective foreign policy.

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TRADE Act at the Top!

2009 has been a great year for fair traders. We've seen an upgraded fair trade Congress take office, staved off the leftover Bush deals to expand NAFTA to South Korea, Panama, and Colombia, AND made major headway on flagship reform legislation, the TRADE Act.YIR_09_Thumbnail1

As if it weren't enough to have 133 Cosponsors in the House and 7 in the Senate, the Drum Major Institute - a progressive think tank - has named the TRADE Act one of the 10 Best Public Policies of the Year:

This year, Obama had the opportunity to make [his campaign platform's] vision of robust fair trade a reality with the Trade Reform, Accountability, Development and Employment (TRADE) Act. The bill, sponsored by Representative Mike Michaud, sets criteria for reevaluating NAFTA, the WTO, and other trade pacts in the light of urgent national concerns about food and product safety, environmental protection, labor standards, national security, and other issues impacted by trade...

...For setting forth a positive vision of globalization that favors the many, we ratify the TRADE Act as one of the best policies of 2009.

Thanks to the Drum Major Institute for recognizing the leadership and wisdom of the TRADE Act! It's exciting just to ponder what other accolades and milestones the TRADE Act might receive and rack up in 2010. We can't wait to see.

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Senate Hopefuls Take Note

(Disclaimer: Public Citizen has no preference among the candidates.)

The TRADE Act has just picked up another prominent endorser. Adding to the 132 House and 7 Senate Cosponsors, we now have leading Democratic Senate hopeful Alexi Giannoulias promising to cosponsor the Senate TRADE Act, recently re-introduced by Sen. Brown (D-OH), if elected.Giannoulias

As the Giannoulias campaign touted and the blog Chicagoist report, Giannoulias is running on a fair trade platform to fill the Senate seat vacated by President Obama - not unlike Obama himself.

Chicagoist reports on the fair trade developments:

As part of the announcement, Giannoulias pledged that he would co-sponsor the TRADE Act bill in the Senate. That bill would require the Government Accountability Office to review all existing trade agreements for their impact on jobs and the environment, and then requires the president to submit renegotiation plans to Congress to remedy the gaps the GAO identifies. The review required in the TRADE Act includes NAFTA and the WTO.

Its already looking like an interesting fair trade campaign cycle for 2010. EOT will keep you posted.

(Photo courtesy of Chicago Public Radio's Flickr feed)

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Hodes on TRADE Act: It's about JOBS!

First-thing this week, Rep. Paul Hodes (D-NH) helped lead the charge for a new, fair, sustainable global economy that works for working people everywhere.Paul_Hodes_official_110th_Congress_photo

Early Monday Hodes announced he had chosen to cosponsor the Trade Reform, Accountability, Development and Employment (TRADE) Act, joining 131 other colleagues in the House of Representatives and 7 in the Senate.

The Manchester Union-Leader reports that the Congressman met with workers directly affected by unfair trade policies and the loss of manufacturing employment:

With New Hampshire's manufacturing economy faltering, U.S. Rep. Paul Hodes announced yesterday he is co-sponsor of a bill in Congress to address the trade imbalance.

Meeting with out-of-state manufacturing workers and labor leaders at the Airport Diner in Manchester yesterday morning, Hodes (D-NH) said the TRADE Act will set tough new standards for trade agreements.

"It's a jobs bill," he said, "We need to recognize we are in a huge transition."

[CORRECTION - workers were real live Granite Staters, NOT out-of-state as reported].

The real human face of the manufacturing crisis was highlighted at the event. The Union-Leader goes on:Closed factory

Marlie Merrill was there to hear what the congressman had to say. Merrill, a machinist, is on furlough from Kingsbury Corporation in Keene, which used to have 1,200 manufacturing jobs and now has 90. He is a member of the United Auto Workers Local 2232.

He said his employers cannot get loans because they do not have contracts and they cannot get contracts without loans.

"It's a vicious cycle," Hodes said. "We need to take a new approach of rewarding those for creating jobs in America."

The TRADE Act sets tough new standards for trade agreements to make sure that they benefit American workers and businesses, Hodes said. The proposal also calls for a detailed review of every international trade agreement, and their impact on American workers and families.

Merrill said he knows of two fellow employees who have lost their jobs homes. [Correction mine].

He has been struggling to pay health care costs while out on furlough.

And further:

Gail Kinney of Canaan was at the roundtable and listened. She is a member of UAW Local 1981 and goes around the state helping those dealing with unemployment. While the watch word is "re-training," she said, "at this point the question is training for what? There is a sense of quiet desperation."

NH AFL-CIO President Mark McKenzie said in 35 years, he has seen a tremendous change.

In Manchester alone, he said you could walk both sides of the Merrimack River and see thousands working in shoe and sweater manufacturing. Now, those jobs -- which paid enough to keep people buying cars and houses -- are gone, altered by trade agreements such as NAFTA.

Its great to see Hodes getting out in front on the TRADE Act. Hodes is not just cosponsoring the bill, but hitting the streets, and connecting with affected residents and organize for a new model of the global economy that puts people over profit.

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Reflections on Seattle WTO Anniversary '09

I'm on my way back from Seattle, having just attended the actions and people's summit celebrating the ten year anniversary of the WTO shutdown in 1999. Ten years ago this week, the Millennium Round of WTO negotiations to further bind the worlds' democracies to profit-over-people corporate policies - nearly identical to the current Doha Round - was stopped in it tracks.WTO IR Action N30 09

So much has happened since teamsters and turtles alike took over the streets of Seattle, labor marched, and tree sitters blockaded the convention center. During the weekend at the People's Summit, put on by the Seattle +10 Organizing Committee, Community Alliance for Global Justice, and the Washington Fair Trade Campaign, folks traded fond recollections of creative protest and dancing in the streets, chemical weapons and near misses, thoughts on broken widows and built alliances. You couldn't help but wish you had been there.

But it's true that much has changed since Seattle '99. Here are some thoughts, rooted in the past, that occur to me as we all look forward to the 21st Century Movement or Global Justice:

1) Support for trade justice has grown tremendously since 1999. We're right to be proud that we've stopped further WTO expansion since 1999, nearly stopped the Central American Free Trade Agreement, and have kept at bay the most damaging Bush-negotiated FTA deals with Colombia, South Korea, and Panama. We got stuck with the Peru FTA - but many organizations fought back and made clear that passing even economically tiny trade deals now requires a massive political cost.

2) Despite these victories, the damages of the WTO/NAFTA model are ongoing throughout the world. We can't forget that in addition to economic meltdown and joblessness in the U.S., that the food and climate crisis are already devastating the Global South. Add to these most glaring manifestations of the WTO-ified global insanity the cultural upheaval of widespread immigration, violent displacements of whole peoples for mining, megaprojects and monoculture, and wars of occupation for resources, and we still only start to get an accurate picture of the tattered world of 2009.

3) Its past time to return to direct denunciation of corporate power. In yesterday's global justice movement, we unabashedly called out the corporate powers as illegitimate and retrograde. Our primary gripe with the WTO, IMF World Bank, and FTAA, whether you were a student sweatshop activist, a tree-sitter, a manufacturing worker or a school teacher, was that those institutions gave more power to corporations to fell the old-growth, outsource and offshore, build more sweatshops, loot the public coffers and privatize our public services. Rhetorically, we made no bones about these institutions being vehicles that serve the corporate elite at the expense of the rest of us. We said if corporations were the ones doing the globalizing, we'd collectively resist their agenda. And that we have, uniting under common banners against a common opponent, one named corporate power. If we don't return to this footing, we'll remain fragmented as a climate movement, development and international solidarity, immigration rights, and food sovereignty movements.

4) Copenhagen = Seattle? The more I hear this comparison, the less I am sure. And note that I say this as someone who's increasingly convinced that the need for climate justice is the top challenge facing the global economy. What separates Seattle '99 and Copenhagen '09 is a clear understanding by social movements that corporate influence is rotting the process to the core. In Seattle, activists were clear that the WTO's development agenda was a trojan horse for corporate profits. Expanding corporate power was the aim of the talks, and the reason we shut it down.

Continue reading "Reflections on Seattle WTO Anniversary '09" »

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Bringing home the Battle in Seattle

Recently, we told you about our WTO Turnaround campaign – an effort urging President Obama to turn around the WTO’s failed policies. Starting this week as part of that campaign, in retirement communities and universities, at birthday parties and union halls, activists across the country will be holding special WTO Turnaround House Parties to celebrate the 10th anniversary of the Seattle protests where 50,000 activists took to the streets of Seattle and shut down the WTO. Battle_in_seattle_movie


The House Parties include showing a bonus special edition DVD of the feature film Battle in Seattle with exciting Seattle protest footage and a short new documentary we helped the Steelworkers produce about the protests and ongoing efforts to turnaround the WTO.


If you think you can pull together 10 or more of your friends and family, coworkers, church group, or classmates for a house party or screening, let us know and we’ll send you the DVD. We’ll also get you an activist tool kit with postcards to the president so that your friends and neighbors can remind President Obama about his trade reform commitments and the incredible citizen victory that happened in Seattle 10 years ago. We think that anyone, from the students, family farmers, unionists, and tree-sitters who rallied in Seattle in ’99 to all of those who wished they were there, won’t want to miss this DVD.  Click here for more info.

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Loving the Miami Heat!

No, not that Miami Heat! I'm referring to the Miami Florida heat rising up about Rep. Kendrick Meek (D-Fla.) who pulled his cosponsorship of two bills important to Public Citizen - the Single-Payer Health Care for All bill (HR 646), and the TRADE Act (HR 3012).Temp Rising!

Meek waited until he'd wrapped up key labor endorsements, and until his main primary opponent dropped out, then signed off both bills.

Peter Cohn reports for Congress Daily (Oct 30th; subscription only):

On Oct. 21, he withdrew his support from the bill, sparking a conflagration his office is still trying to put out. Meek had a conference call the following day with around 40 Florida labor officials to thank them for their support; instead, the labor officials erupted with anger over his move, according to people on the call.

He spent the afternoon calling them individually, and Meek's office attempted some more damage control Wednesday, sending an e-mail to critics explaining his actions. The explanation does not appear to have had its desired effect.

Labor leaders are furious that Meek would pull such a move. Cohn's report goes on:

"I believe if he doesn't go back as a co-sponsor on that trade bill, he might have some problems, based on the scuttlebutt I've heard," said Pat Emmert, president of the Palm Beach-Treasure Coast chapter of the Florida AFL-CIO.
 
Emmert said the International Machinists and Aerospace Workers union in particular was angry with Meek's move. In fact, while Meek has racked up endorsements and campaign contributions from unions, the Machinists are not one of them, according to FEC records and a list of endorsements on his campaign Web site. The Machinists' PAC donated $5,000 to his 2008 House campaign.
 
Frank Ortis, president of the Florida Machinists, said "all of our jobs are going south" because of trade pacts, and that a once million-strong union is down to 372,000 members.

It remains to be seen whether Meek's siding with corporate interests over his base will be an obvious trend in his campaign. If so you, you can bet it'll be a disappointing November for Florida Democrats.

(Disclaimer: Public Citizen has no preference among candidates.)

Photo used under Creative Commons License, courtesy of user Miki

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Sen. Bunning Gets Lit Over Canadian Anti-Smoking Law

According to Inside U.S. Trade, Sen. Jim Bunning (R-Ky.) has placed a hold on the nomination of Miriam Saprio to the post of Deputy U.S. Trade Representative, due to concerns about …Canadian legislation to prevent tobacco marketing to kids?

Bunning has apparently halted the nomination proceedings to focus the Obama administration on the Canadian anti-smoking legislation, which some U.S. tobacco interests fear will block exports to Canada. The law is known as the Cracking Down on Tobacco Marketing Aimed at Youth Act, and was passed in the Canadian Senate in October. It has already been criticized as a so-called trade barrier, and has been placed on the WTO's Technical Barriers to Trade committee meeting agenda for this week. A U.S. source said that Brazil will likely speak in opposition to the law, but USTR has yet to decide if it will take a position.

Sen. Harry Reid (D-Nev.) has criticized Bunning’s move, saying the Obama administration “cannot dictate how the Canadian legislature does its job, any more than the Canadian Parliament can dictate how we do ours.” If Reid likes this, he should check out the recent USTR 2009 National Trade Estimate Report on Foreign Trade Barriers, which criticizes Canada and a number of American allies for their domestic safety and health laws.
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The Stuff Nightmares Are Made of…

Just in time for Halloween, we’ve found a truly scary article about unprecedented NAFTA expansion: Erik Heinrich of CNN predicts that the upcoming conclusion of a “free trade” agreement between the European Union and Canada will likely begin a push for a NAFTA-EU trade zone, which would encompass nearly a billion people and would account for more than half of the world’s total GDP.

The president of Canadian Manufacturers & Exporters, the country’s largest trade and industry association, has said “the largest benefits will come from economic integration,” referring to increased foreign direct investment and access to government procurement, the very provisions of NAFTA fair traders have flagged as some of the most damaging aspects of the agreement and others based on the NAFTA model.

According to Steven Schrage of the Center for Strategic and International Studies (CSIS), (who opines that “it makes sense to integrate NAFTA with the EU,”) the Bush administration had a NAFTA-EU deal on its radar, but failed to make progress: “The ball is in the Obama administration’s court.” CNN does concede that a NAFTA-EU trade deal would likely be met with stiff opposition in the United States.

What an interesting way to sell this deal to the Obama administration: “The Bush administration thought this was a great idea!” I am comforted that Obama has expressed that he is fully aware of what he calls “NAFTA’s shortcomings” and has made a variety of trade promises that suggest he has no interest in continuing the Bush administration’s failed trade initiatives. As for Congress, the desire for a new trade agenda is illustrated by support for the Trade Reform, Accountability, Development and Employment (TRADE) Act, which currently enjoys support from 123 Democrats and two Republicans in the House of Representatives, including 10 committee chairs, 52 subcommittee chairs, and wide swaths of the Democratic Blue Dog Coalition, Congressional Black Caucus, Congressional Hispanic Caucus, and the New Democrat Coalition.

It still freaks me out, though.
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How NOT to Seek Higher Office

It's really hitting the fan for Congressman Kendrick Meek, the likely Democratic contender for the 2010 Florida Senate seat. Meek recently withdrew his cosponsorship from two key pieces of legislation for progressives: the Single Payer Health Care bill (HR 676), and the TRADE Act (HR 3012).KMeek

Congress Daily (Oct 23rd, 2009 - subscription only) reports on the fury Meek's flip-flop has unleashed on himself:

Labor unions are furious with Rep. Kendrick Meek, D-Fla., for his decision this week to withdraw his name from a bill rapidly gaining support among House Democrats to renegotiate or scrap several major trade agreements.

One labor source called it "spineless," and people familiar with the matter said some unions were threatening to withdraw support for Meek's 2010 Senate bid. "It's very disappointing, especially considering he's got a pretty good labor record," said Lisa Kinard, director of federal legislation and regulation for the Teamsters Union.

The Hill additionally notes Meek's "abrupt" and conspicuously-timed reversal on the two measures:

The Florida AFL-CIO endorsed Meek for the Senate at an Oct. 7 meeting, which Meek touted in a press release on Wednesday, the same day he changed his sponsorship.

Thea Lee, a lobbyist for the AFL-CIO, said her organization supports Michaud’s legislation and that Meek’s decision to drop his sponsorship would be a subject of discussions.

Congress Daily notes another conspicuous fact:

The fracas was a step backward for Meek after good news arrived late last week, when Rep. Corinne Brown, D-Fla., announced she would not challenge Meek for the nomination.

Congressman Meek's statement on the floor offered not so much as an attempt at an excuse as to why he would changes his mind, but his spokespeople sound an awful lot like the Chamber of Commerce misleading talking points against the TRADE Act.

Working people in Florida will have to watch Meek closely to see whether his actions side with them and for reform of our unsustainable job-wrecking economic model, or with the Chamber of Commerce business as usual.

(Disclosure: Global Trade Watch has no preference among candidates for elected office.)

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Offshoring airline safety

Last week, NPR ran a three-part story on U.S. airlines sending airplane maintenance work - formerly a high-paying, unionized domestic profession - offshore, particularly to Central America and Asia. The lead story, To Cut Costs, Airlines Send Repairs Abroad, summarizes much of the relevant information, but the entire three parts are worth a read. Also note that this is not the first time that this issue has made headlines in recent years. At issue here are both the offshoring of quality jobs and the problems with regulating safety under today's trade model. Some of the money quotes from the first NPR story regarding the latter:
"The FAA does not require airlines to report exactly where they send their aircraft for which kinds of repairs. So, FAA inspectors are not sure which of the roughly 700 foreign repair shops they should inspect... The FAA's inspectors didn't even show up at some foreign repair stations to monitor their work for as long as three to five years."
The second story in the series details some of the questionable practices at one Salvadoran repair operation, Aeroman:
...[Aeroman] mechanics say managers keep pressuring them to fix the planes faster. For instance, if there's rust on a metal beam, but it's just a little over tolerance, "the supervisor says, 'Oh, just leave it like that,'" the mechanic says, through an interpreter. "'There's no need to repair it.'" [...] Another mechanic ticked off other problems at Aeroman. Some employees don't store glues at the required temperatures, he says. That means the glues could fail — which potentially means that parts of the airplane could fall apart... And this mechanic says some workers can't even read the airlines' repair manuals. The manuals are written in English, but some mechanics at Aeroman can't read English — including him.
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Walking the Line

ImHungryStopNAFTAUp here in the Global Trade Watch field loft, we love a good picket line. This one, however, brings a special joy to our heart. Autoworkers from the UAW's Local 174 based in Romulus, Michigan made a trek down to Brownsville, TX to protest our broken NAFTA-style trade policies. 

The Brownsville Herald Reports that the picketers denounced the greed that drives NAFTA-style globalization:

"We are losing our jobs on this side, and (American corporations) are paying workers low wages on the other," Local 174 UAW President John Zimmick said at the protest, wiping a sweaty brow. "Why can’t they pay workers what they are worth?

Its heartening to see these unionists take a 28 hour drive to stand in solidarity with their brothers and sister autoworkers, regardless of nationality. These UAW leaders and activists demanded better for auto employees in both the U.S. and in Mexico. The Herald continues:

This was the second demonstration staged by the group, which took to marching in front of the Hidalgo-Reynosa International Bridge Monday afternoon. At that time, workers also gathered at a street corner on the Mexican side of the bridge to protest what they said were unfair layoffs at a TRW Automotive maquiladora in Reynosa. TRW Automotive is a supplier for Ford Motor Co. and Chrysler.

"We want trade, but we want it to be just," said Martha Ojeda, executive director of the Coalition for Justice in the Maquiladoras, adding that the 600 TRW Automotive workers dismissed from their jobs did not receive severance pay or unemployment benefits as they would in the United States.

Couldn't have said it better ourselves. We need FAIR trade, just trade, like envisioned in the TRADE Act to rebuild our economy. That's why the TRADE Act is supported by nearly half the House Democrats and two Republican Representatives as well.

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Check Out Rep. Levin's Guide on the Chinese Tire Case

As the media continues to cover the Obama administration’s recent decision to impose tariffs on tire imports from China, Congressman Sandy Levin has released a very useful guide covering the primary issues and arguments involved in the dispute - it is especially helpful in terms of distinguishing fact from fiction in the case.

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Lobbyists React with Fury and Threats to Obama Administration Decision

A few weeks ago we reported that the Obama administration was considering taking an important step towards fulfilling the campaign promise of reducing the influence of special interests in Washington by removing registered lobbyists from influential advisory committees.

This decision has been confirmed by the official White House blog which states, “the President has made a commitment to close the revolving door that has in the past allowed lobbyists and others to move to and from full-time federal government service…the President made a commitment to the American people to reduce the influence of lobbyists in Washington out of a belief that lobbyists have too often in the past achieved disproportionate impact on government decision makers at the expense of broader voices from the public at large. If we are going to change the way business is done in Washington, we need to make sure we are not simply continuing the practices of the past.” According to a senior White House official, the panels have been excessively dominated by lobbyists: “It is one of the ways special interests have historically shaped policy to the detriment of the public interest.”

Lobbyists have reacted with “absolute fury” to the decision, and some are brashly threatening to circumvent the policy in order to retain their influence on advisory panels: Dave Wenhold, president of the American League of Lobbyists (ALL) stated, “If lobbyists want to stay on boards, they will just deregister.” 

According to The Hill, an estimated 1,000 federal advisory committees were established under the Federal Advisory Committee Act, and many of them include registered lobbyists. The trade advisory system is made 28 advisory committees of about 700 individuals, approximately 30 percent of whom are registered lobbyists. For example, the textile and apparel advisory committee, which includes registered lobbyists from three industry apparel and textile trade groups, stands to lose a large percentage of its members due to the decision. For more on the trade advisory system, check out our book.

Calman Cohen, president of the Emergency Committee for American Trade and a lobbyists for IMB, Oracle, and eBay Inc, laments that the administration should “take account of all citizens, whether they are a lobbyist or not…”
Hmm…is Cohen suggesting that it’s time for a Lobbyists' Bill of Rights? 
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Trade a Flash Point Issue in Pennsylvania’s Democratic Primary

As Rep. Joe Sestak (D-Pa.) is set to challenge Sen. Arlen Specter (D-Pa.) for his U.S. Senate seat in the upcoming Democratic primary, trade policy has surfaced as a point of contention between the two candidates. Both have criticized the other as being supportive of unfair trade agreements and Specter agreed with the accusation that Sestak is “weak on trade.”

The candidates have a mixed vote record on trade. Specter voted for both NAFTA and the WTO, but has made occasional fair trade votes in recent years, by voting against China PNTR and CAFTA. On the Senate floor in 2005, Specter said of CAFTA,

“This trade agreement would adversely affect this job loss in the United States… many U.S. corporations would have to shut down their operations, export their jobs, and leave skilled workers jobless. This agreement would aggravate the problem. In addition to job loss, this agreement fails to enhance workers' rights…Ultimately, CAFTA would create downward pressure on wages because it would force our American workers to compete with Central American workers who are working for lower wages. This would allow foreign based companies to expand while leaving America more dependent on imports from abroad, which in turn would lessen the demand for domestic production and create even greater economic instability.”

Sestak for his part voted to deny fast-track treatment to the FTA with Colombia and has said that he plans to vote against the Korea and Colombia FTAs.

Yet, both candidates voted for the Peru FTA in 2007 and at this point, neither has cosponsored the TRADE Act – a key demand of fair traders.

The fact that the two candidates are analyzing each other’s trade policies and referring to specific trade agreements shows that political candidates are becoming more educated about trade policy and are using the issue as a platform for (re)election. In other words, trade continues to be a major election issue.
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CAFTA Signatory Honduras Falls Victim to a Coup

Recently ousted Honduran President Manuel Zelaya was in Washington, DC earlier this month and met with Secretary of State Hillary Clinton. Zelaya was roused from bed at gunpoint by the Honduran military, forced on a plane, and flown to Costa Rica in June. Since then, the de facto government has violated civil liberties left and right: The Huffington Post reports that Zelaya supporters have been killed, hundreds of people have been assaulted by armed forces, and over a thousand have been illegally detained. Meanwhile, press and media outlets have been shut down and journalists have been arrested and detained. 

Zelaya was criticized by Honduran elites for his progressive policies: During his tenure, Zelaya’s administration raised the minimum wage, gave out free school lunches, provided pensions for the elderly, distributed energy-saving light bulbs, decreased the price of public transportation, expanded scholarships for students, and passed legislation to protect the environment. He enjoys broad popular support, especially from unions, human rights groups, indigenous groups and peasant associations. 

The situation in Honduras has a number of important implications: Fair traders have long argued that NAFTA-style deals promote instability and now Honduras, a signatory to CAFTA, has suffered Central America’s first coup since the Cold War. CAFTA was approved in Honduras by local elites, the same interests who are threatened by Zelaya’s progressive policies. The instability in Honduras is an illustration of how NAFTA-style trade agreements can undermine democratic governance in member nations.
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OK, We Get It.

President Obama is meeting as we speak with Mexican President Calderon and Canadian Prime Minister Harper, us trade wonks aren't in denial that there's some pretty big issues on the front burner ahead of NAFTA. Drugs cartels and violence. Immigration. Economic meltdown. Anyone? Anyone?

Here's our full statement:

Ok, We Get NAFTA Renegotiation Isn't Obama's Top Priority (Amidst Economic Armageddon) but Americans Expect Him to Deliver on His Commitments to Fix Our Job-Killing Trade Policies...
 
President Obama's Guadalajara, Mexico, "Three Amigos" meeting Sunday with Mexican President Felipe Calderon and Canadian Prime Minster Stephen Harper can't but remind Americans of Obama's oft-repeated campaign commitment:  "One of the first things I'll do as president will be to call the Prime Minister of Canada and the President of Mexico and work with them to fix NAFTA."
 
The North American Free Trade Agreement (NAFTA) is not slated to be a major topic of conversation at the summit. But with U.S. unemployment nearing 10 percent, polls showing Americans' anger about NAFTA-style trade policies and Obama spending this week campaigning in battleground states on the impact of his economic policies, the president cannot forget, "It's the global economy, stupid."
 
Millions of Americans are still waiting for Obama to deliver on his campaign commitment: "NAFTA's shortcomings were evident when signed and we must now amend the agreement to fix them." Since the election, President Obama has reaffirmed his plan to renegotiate NAFTA - including in the face of Canadian Prime Minister Stephen Harper's pressure not to do so during Obama's February Canada trip.
 
That NAFTA - its expansion, not renegotiation - is not the main topic of this summit is noteworthy. The Three Amigos process was created for "deepening" NAFTA among its first three nations and pushing NAFTA expansion to 34 nations in the hemisphere through a now-dead Free Trade Area of the Americas (FTAA). Now instead of more NAFTA being discussed, the main trade talk will be about problems caused by NAFTA, among other trade irritants to be aired in bilateral sessions. (Mexico and Canada have trade challenged U.S. truck safety, dolphin protection, food labeling laws and more.)
 
Americans expect relief from the NAFTA trade model that has led to the loss of five million manufacturing jobs - one out of every three- since NAFTA. Last year, Obama committed to fix the core provisions of NAFTA that push down wages, cost U.S. jobs and lead to unsafe food imports. Instead of discussing tweaking the edges of NAFTA, he targeted: 
  • NAFTA's EXTREME FOREIGN INVESTOR PRIVILEGES THAT PROMOTE OFFSHORING  Obama answered "yes" to the question: "Will you commit to renegotiate NAFTA to eliminate its investor rules that allow private enforcement by foreign investors of these investor privileges in foreign tribunals and that give foreign investors greater rights than are provided by the U.S. Constitution as interpreted by our Supreme Court thus promoting offshoring?"  He also said: "While NAFTA gave broad rights to investors, it paid only lip service to the rights of labor and the importance of environmental protection. We should amend NAFTA to make clear that fair laws and regulations written to protect citizens in any of the three countries cannot be overridden simply at the request of foreign investors."
  • NAFTA's MISSING LABOR RIGHTS  "We'll add binding obligations to protect the right to collective bargaining and other core labor standards recognized by the International Labor Organization. And I will add enforceable measures to NAFTA, the World Trade Organization (WTO), CAFTA [Central America Free Trade Agreement] and other Free Trade Agreements (FTAs) currently in effect." "The rights of working people should be equal to those of commercial interests and their protections in trade agreements should be the same. Again, this was a fundamental failing in the NAFTA and CAFTA agreements." 
  • NAFTA'S PROCUREMENT POLICY MEDDLING   Obama answered "yes" to the question: "Do you support renegotiating trade agreements so they will allow us to use "Buy America" and "Buy Local" procurement policies?"

Continue reading "OK, We Get It." »

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What Would Cesar Chavez Do?

WWCCD? If someone was selling such a bracelet, I have to admit I'd jump at the chance and wear it with pride.Brother Cesar Mural

The photos from last week's Cesar Chavez Day celebrations are rolling in from across the country, and it occurs to me that Cesar Chavez' legacy contains inspiring lessons for fair traders to the point that a more than annual reminder would be in order.

The movement is growing to win recognition of a national Cesar Chavez Day, and fair traders especially should strive to follow the footsteps of this leader for labor rights, civil rights, and immigrant rights.

Imagine if Congress sought the advice of visionaries like Chavez as they ponder how to deal with Bush's leftover NAFTA-type deals with Panama, Colombia and South Korea? If they were to tirelessly advocate for marginalized farmworkers and farmers, as United Farmworkers (UFW) union co-founder Chavez did, they would certainly come to a fair-trade conclusion and demand reforms that put small farmers and workers first in devising trade policy.

The campesino and farmers movements in all four countries (U.S. as well!) could expect solidarity from brother Cesar in their opposition to the hangover FTAs for this model's proven record of displacing rural people and forcing them to immigrate to where they are exploited as cheap labor. United Farmworkers co-founder Delores Huerta (equally praiseworthy for her vision in forging the UFW) has been an outspoken advocate of fair trade, advocating along with other Latin@ and labor leaders to fix our broken trade policies. This makes great company for groups like the Panamanian farmers and farm-workers organization ONAGRO, who state their opposition to the U.S.-Panama FTA in these terms.Delores

Groups like the UFW and countless local organizations like San Antonio's Cesar Chavez Legacy and Educational Fund are keeping on, marching to remember the works of brother Cesar, and to forward the struggle he left behind. Here's hoping that you marched or otherwise have had a chance to remember brother Cesar, and that you take some strength from it into the fight for fair-trade reform that lies ahead.

Note: The closest we can find to a WWCCD bracelet can be ordered online from the United Farmworkers.

(Photos Courtesy of Flickr user sandy richard under a Creative Common License, and from Cesar Chavez Legacy Foundation, respectively)

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Fair Trader Wins Salvadoran Presidency

Funes Count one more fair-trade government in Latin America. The Washington Post reports the winner is Mauricio Funes:

Funes, a dynamic speaker and political outsider who compares himself to President Obama and pledged to be an agent of change in the small Central American nation, was leading the polls late Sunday night with 51.2 percent of the vote and more than 90 percent of the ballots counted...

Funes's opponent, former National Police chief Rodrigo Ávila, who represented the Nationalist Republican Alliance (ARENA), was trailing with 48.7 percent of the vote. Ávila conceded defeat, telling supporters, "We will be a constructive opposition."

The Committee in Solidarity with the People of El Salvador (CISPES) is hopeful about the prospects for the country under the new government:

CISPES also wants to pass on a profound congratulations for the Salvadoran people, who today triumphed over fear and joined the countries of Latin America who are proving that indeed another world is not only possible, it is in formation!

Amen to that!

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Fair Traders Hang Tough in Salvadoran Elections

The Salvadoran fair-trade party FMLN (Frente Farabundo Marti de Liberacion Nacional) - vehement in its opposition to CAFTA - is leading the presidential race, but facing typical last-minute shenanigans from the right wing. And given the recent interventions by Republican congressmen - not unlike Bush administration's meddling in the CAFTA Referendum in Costa Rica - the FMLN is holding its breath.
FMLN Slate

A recent Washington Post piece reveals that while polls show the fair-trade FMLN candidate Mauricio Funes up by 18 points on the CAFTA-fans and privatizers' candidate Rodrigo Ávila of the ruling ARENA party, there's always a chance that something will give.

The February polls show Funes up 49 percent to Ávila 's 31 percent, but Aguilar [a commentator] cautioned that the race remains dynamic. Other polling shows the race to be a virtual dead heat.

That something might just be the not-so-veiled threats made by GOP congressmen yesterday, orchestrated to dominate the Salvadoran headlines the final moments of the campaign. As highlighted by CISPES, the Committee in Solidarity with the People of El Salvador (who also urges you to take action to make the clear U.S. neutral position):

Rep. Dan Burton (R-IN) stated, “Those monies that are coming from here to there I am confident will be cut, and I hope the people of El Salvador are aware of that because it will have a tremendous impact on individuals and their economy.” Indeed, these threats carry considerable weight for Salvadoran voters, as 25% of the Salvadoran population lives in the U.S., and 20% of the nation's economy consists of remittances from those family members.

This sort of meddling was full anticipated, which is why Rep. Raul Grijalva (D-Ariz.) coauthored a letter signed by 33 members of Congress to the State Department, calling for a preemptive declaration of U.S. neutrality in the Salvadoran elections. Now we clearly see why this was necessary.

You can see Grijalva's press conference here, or below on yesterday's Democracy Now:

The Post reports on Funes' own reaction to the scare tactics:

During his speech in Metapan, Funes promised that "we will end the economy of privilege for the few," a reference to the so-called 14 major families of the Salvadoran elite, who have dominated the country for generations. He urged the crowd not to believe ARENA's "propaganda." "They're desperate because they know they're going to lose," he said. "If you vote for me, light is at the end of this tunnel."

Eyes on Trade will be watching and will keep our readers posted.

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House Members to White House: We Got Your Back

A large bloc of House members sent President Obama a letter describing a trade reform agenda about which they are excited to work in cooperation with him. On issues ranging from renegotiating the North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA) and creating new import safety policies to remedying the failed U.S.-China trade relationship, the letter focuses largely on implementing Obama's campaign pledges to transform U.S. trade and globalization policies.House Seal

The letter, which was initiated by House Trade Working Group co-chair Mike Michaud (D-ME) was signed by a prominent group of members, including 6 Committee chairs and 17 Subcommittee chairs representing 24 states from Hawaii to Maine, from Georgia to Oregon, and stretching far beyond the Rust Belt. See the press release and letter here. One choice except of the letter to the President:

We heartily agree with your conclusion that trade policies “are not sustainable if they favor the few rather than the many.” Rebalancing our trade and globalization policies so that they create and retain good jobs in the United States, foster sustainable and equitable development worldwide, and provide government with the policy space necessary to solve pressing economic, climate, and other challenges is critical to prosperity and security at home and around the world.
 
This four-page letter was endorsed by key congressional leaders and members of diverse Democratic caucuses (Blue Dogs, New Democrats, Black Caucus, Hispanic Caucus, Progressive Caucus and more).

(Photo used under a Creative Commons license courtesy of Flickr user Stella's mom).
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Hearings Set for Obama's Trade Change Agent

(Note: Hearing has been postponed until Monday March 9, 2009, at 5:00 p.m.)

The Senate Finance Committee posted official notice that the hearing for President Obama's choice to head the Office of the United States Trade Representative (USTR) will being at 3pm on Thursday, March 5th.

Kirk on the trail

This will be fair trader' first in-depth look at former Dallas, TX Mayor and USTR nominee Ron Kirk's personal views on trade policy, and to hear how he plans to implement the litany of reforms committed to by President Obama on the campaign trail.

You can join in spirit what's sure to be an swinging hoppin' viewing party here at Global Trade Watch - either on cable, or by tuning in online at C-SPAN.org for all the fun.

I sure hope they're planning to devote some extra bandwidth to this programming. If just a small fraction of our friends who voted for fair trade last November decide to show up to the online auxiliary viewing part, it'll be quite the crowd!

(Photo courtesy of Flickr user Rob 1914)

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It's Because She's a Fair Trader - Not a Good Ol' Boy - Isn't It?

GOP Senators are blocking confirmation of President Obama's Labor Secretary pick and fair trader Rep. Hilda Solis (D-Calif.). Seems like they'd prefer someone with no family background of actually laboring and no history of support for people who perform labor for a living - you know, people like them.Solis 

They say its another tax issue that's been dug up about Solis' husband, but here's the San Francisco Chronicle on the what are likely the real GOP objections:

Republicans on the committee have challenged Solis over her support for the Employee Free Choice Act, which would make it easier for workers to unionize. They also suggested that her position as an unpaid board member for the pro-labor group American Rights at Work amounted to a lobbying role, which Solis denies.

We should also note that those same GOP Senators might not be too jazzed that Solis has an almost 100% fair-trade voting record representing her California constituents. Just a hunch.

But labor leaders like John Sweeney and Andy Stern are coming to Solis' defense. Sweeney, President of the AFL-CIO, reiterated his support for Solis yesterday:

Congresswoman Hilda Solis is eminently qualified for this post, and will be a vigorous advocate for the kinds of programs that our nation is working people need the most. She will fight to improve skills development and job creation programs, including development of "green collar" jobs. She will work to assure that workers get the pay they have earned and that they work in safe, healthy, and fair workplaces. She is ready to address the retirement security crisis and will work hard to protect every worker from job discrimination, regardless of race, sex, veteran status, or disability.

She understands that working men and women deserve the freedom to choose whether to form a union without employer interference.

Stern, President of the Service Employees International Union, put out a video calling this obstruction "unacceptable."

We'll be watching closely as hearings over this fair-trade cabinet member-to-be develop.

(Photo of Rep. Solis courtesy of Flickr user Barack Obama used under a Creative Commons License)

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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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