Ivory Tower Meets The Campaign Stump

Once, many of the issues we talk about on this blog were discussed mostly among Rust Belt labor unions or in street demonstrations. But tough questions are increasingly being asked in a variety of places, from the ivory tower to the campaign stump... and in both instances, the focus is on a change in the rules of globalization, rather than perpetuating the stale debate about whether "yes" or whether "no" on globalization. Witness Harvard's Dani Rodrik's new paper, articulating what he says is now the "new orthodoxy" on trade:

We can talk of a new conventional wisdom that has begun to emerge within multilateral institutions and among Northern academics. This new orthodoxy emphasizes that reaping the benefits of trade and financial globalization requires better domestic institutions, essentially improved safety nets in rich countries and improved governance in the poor countries.

Rodrik goes on to push this new orthodoxy further, articulating what he calls his "policy space" approach, allowing countries to negotiate around opting-in and opting-out more easily of international rules and schemes as their development and domestic needs merit. Citing the controversy around NAFTA's investor-state mechanism and the WTO's challenge of Europe's precautionary approach in consumer affairs, Rodrik poses the following challenge to the orthodoxy:

Globalization is a hot button issue in the advanced countries not just because it hits some people in their pocket book; it is controversial because it raises difficult questions about whether its outcomes are “right” or “fair.” That is why addressing the globalization backlash purely through compensation and income transfers is likely to fall short. Globalization also needs new rules that are more consistent with prevailing conceptions of procedural fairness.

And this focus on a change of rules hit the political arena today, with a major policy speech by former Sen. John Edwards (D-N.C.).  See here. Among the important points, that thus far are only being articulated by Edwards among the top candidates:

  • For years now, Washington has been passing trade deal after trade deal that works great for multinational corporations, but not for working Americans. For example, NAFTA and the WTO provide unique rights for foreign companies whose profits are allegedly hurt by environmental and health regulations. These foreign companies have used them to demand compensation for laws against toxins, mad cow disease, and gambling - they have even sued the Canadian postal service for being a monopoly. Domestic companies would get laughed out of court if they tried this, but foreign investors can assert these special rights in secretive panels that operate outside our system of laws.
  • The trade policies of President Bush have devastated towns and communities all across America. But let's be clear about something - this isn't just his doing. For far too long, presidents from both parties have entered into trade agreements, agreements like NAFTA, promising that they would create millions of new jobs and enrich communities. Instead, too many of these agreements have cost us jobs and devastated many of our towns.

  • NAFTA was written by insiders in all three countries, and it served their interests - not the interests of regular workers. It included unprecedented rights for corporate investors, but no labor or environmental protections in its core text. And over the past 15 years, we have seen growing income inequality in the U.S., Mexico and Canada.

  • Today, our trade agreements are negotiated behind closed doors. The multinationals get their say, but when one goes to Congress it gets an up or down vote - no amendments are allowed. No wonder that corporations get unique protections, while workers don't benefit. That's wrong.

So, our movement has made real progress when things like Chapter 11, Fast Track and the precautionary principle are even being discussed by politicians and academics in the context of trade policy debates. And hopefully Edwards' raising of these issues will put pressure on the other candidates to follow suit. In the meantime, you can help turn the nice words into action by clicking here.

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Let the watering down begin - Korea, enviro deal

Just weeks after the legal text of the Deathstar Deal has been released, the Bush administration is already backing away from the minimal concessions it gave to some congressional Democrats in exchange for their consideration of pending FTAs. Here's from today's Inside U.S. Trade:

The United States last week accepted two changes to South Korea’s obligations under a bilateral free trade agreement signed on June 30... Specifically, the U.S. ... signed a second side letter that environmentalists say appears to decrease the likelihood that the U.S. would bring an environmental dispute settlement case against Korea...

Private-sector sources speculated that this environment letter was sought by Korea as a way to ensure that the U.S. will not seek dispute settlement against it for not enforcing the MEAs to which it is party...

These sources said Korea is likely in compliance with the MEAs already, but that the side letter could be a non-binding gesture by USTR designed to assure Korea that dispute settlement is unlikely in any case.

Environmental sources said the letter may be intended to give the U.S. government domestic political cover if it gets criticized for failure to launch an environmental dispute settlement case against Korea despite compliance problems.

Regular readers that a similar Bush administration side letter by none other than Bob Zoellick eviscerated the Jordan FTA's better-than-NAFTA labor standards. Is this latest Korea side deal a sign of more watering down to come? The pick-and-choose-on-NAFTA model members better hope not.

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Enviros: deal "not a sufficient template"

Sierra Club, Friends of the Earth, Defenders of Wildlife and Earthjustice on the deal:

it is not a sufficient template for trade agreements generally or for presidential trade negotiating authority. FTAs will still provide foreign corporations the right to directly attack public health and environmental measures, and will not fully protect environmental laws from other trade challenges.

They go on to note that it's pretty difficult to trust a deal with a president who "has established the worst environmental record in modern history."

UPDATE: Carl Pope of the Sierra Club, on his blog, reiterates enviros' analysis that "we are starting from such a bad baseline -- trade deals which are neither free nor fair -- that we have a long way to go, much further than Washington has agreed to this week."

Continue reading "Enviros: deal "not a sufficient template"" »

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Why is not killing dolphins so controversial?

The U.S. Court of Appeals of the Ninth Circuit recently issued a ruling on dolphin-safe tuna — an issue that has been cropping up in trade circles since 1990.

The background is this: under U.S. law, tuna labeled "dolphin-safe" cannot be caught with purse-seine nets, which can maim or drown dolphins. In the early 1990s under the pre-WTO General Agreement on Tariffs and Trade (GATT), Mexico and several other nations challenged this law, and though this challenge was settled outside of the system, a GATT panel found that "the US could not embargo imports of tuna products from Mexico simply because Mexican regulations on the way tuna was produced did not satisfy US regulations."

In response to Mexican threats of a WTO challenge against U.S. dolphin-safe labeling policies, which have been coming on and off since 1995, the Clinton administration weakened key provisions of the dolphin-safe law in the mid-1990s. Then, on New Years' Eve of 2002, the Bush administration's Department of Commerce issued a finding that weakened dolphin-safe labeling, in effect allowing the use of purse-seine nets still widespread in Mexico and other Latin American countries. As BNA reports (sorry, not linkable), this finding would "allow tuna-exporting nations such as Mexico to label their tuna as dolphin-safe even if caught by purse-seine nets that entrap and drown dolphins as long as no dolphins were observed to be killed or maimed."

After a long legal battle, two weeks ago the U.S. Ninth Circuit appeals court ruled against the Department of Commerce's finding, saying only Congress has the authority to change the law regarding dolphin-safe labeling. It seems doubtful Congress would do this, leaving open the question: will Mexico follow through with its threats and sue the U.S. under the WTO to force a change in our law? If so, there's sure to be outrage over the idea that an international body could overturn a domestic law not only passed democratically in Congress, but also validated by the courts after attempts to weaken it by both the Clinton and Bush administrations.

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New World Poll on International Trade

In a new poll by World Public Opinion, released in collaboration with The Chicago Council on Global Affairs that tracked attitudes of respondents in 18 countries and the Palestinian Territories, there is overwhelming support for environmental and labor standards in trade agreements.

This popular sentiment has been influential in transforming the trade debate from whether to include labor and environmental standards in trade pacts to how to include labor and environmental standards and this most recent poll proves it.

And as Bloomberg's Mark Drajem notes, (not linkable) "In the U.S., two-thirds of those polled said trade is harmful for workers' job security and 60 percent called it detrimental for job creation."

The specific questions in the poll are much more useful than standard polling questions, which really only test people's responses to corporate buzz words like "freedom" (as in free trade), rather than on the rules and effect of real world trade policy, which is anything but "free."

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