“Like Gravity” Fast Track Trade Sinks Jobs and Wages

This is a reposting of a blog post written by Mary Bottari for the Center for Media and Democracy's PR Watch on January 21.

Rep. Dave Camp (R- MI) and Sen. Max Baucus (D-MT) have introduced "Fast Track" legislation in Congress. It's been 15 years since a U.S. president sought Fast Track authority, which strips Congress of its Constitutional authority to have a meaningful role in U.S. trade policy. If the Fast Track bill passes, the Trans-Pacific Partnership (TPP), a trade deal involving 11 Pacific Rim countries could be completed and signed before it is sent to Congress for a vote. Then the far-reaching trade deal will be railroaded through with no amendments and only 20 hours of debate.

The original Fast Track was cooked up by Nixon, served up again by Clinton to pass the NAFTA and WTO agreements, and stirred up again in 2000 to jam China free trade through Congress. That all worked out well, didn't it? The United States lost 5.7 million manufacturing jobs in the NAFTA/WTO era, and our trade deficit with China is now one of the largest in history.

Today, President Obama is seeking Fast Track to get the TPP and the 27-nation Transatlantic Trade and Investment Partnership (TTIP) through Congress. His road is a rocky one. His trade team could not convince a single Democrat to author the bill in the House, and with hundreds of groups across the political spectrum -- from progressive environmental and consumer groups to various Tea Party patriots -- lined up against it, it's possible Fast Track can be defeated.

"When Will We Start to Measure the Results?"

The long, controversial history of fast tracked trade agreements hardly came up in the first Senate hearing on the Baucus-Camp bill on January 16.

Chairman Baucus, the only Democrat to author the legislation in either house, rambled on about the fact that 95 percent of the world's consumers live outside the United States. According to Baucus, we need more trade deals to reach those consumers. But he forgot to mention that the United States is already part of the WTO trade pacts on goods and services encompassing some 159 member countries, so our products already have privileged access around the globe.

This line of argument was also supported by the ever-present Honeywell CEO David Cote, last seen pushing Social Security and Medicare cuts on behalf of the Business Roundtable and the "Fix the Debt" gang. Cote dubbed Fast Track "a key enabler for trade agreements," invoking the wrong kind of chuckle.

Larry Cohen, President of the Communication Workers of America, injected a refreshing dose of reality to the proceedings. Cutting through blather about "leveling the playing field," Cohen looked Baucus in the eye and demanded answers to a few pointed questions.

After 20 years of NAFTA, Cohen demanded, when are we going to start to actually measure the results? "No other nation has trade deficits like ours," said Cohen. Since 1993, the year before NAFTA, our trade deficit in goods was $132 billion or 1.9 percent of GDP. By 2012, our trade deficit ballooned to $741 billion or 4.6 percent of GDP, Cohen detailed in his written testimony.

When, asked Cohen, will we start to document the net effect of these trade deals on employment? "What has happened to our jobs, our communities, the North Philadelphia that I grew up in? The Cleveland that I can picture now? The devastation throughout those communities, no replacement for those jobs," said Cohen. The Economic Policy Institute estimates that between 1998 and 2012, the United States lost one third of its manufacturing base largely due to growing U.S. trade deficits.

When, asked Cohen, will we document the effect of trade on pay and standards of living? "I can tell you story after story where CEOs say to me -- it's gravity, we have to move the jobs or you have to cut the pay," says Cohen. When U.S. workers are put in competition with workers like those in Vietnam making 28 cents an hour, U.S. wages have no where to go but down. Cohen pointed out that average weekly take home pay for an American worker today is $637 compared to $731 40 years ago.

The Senators shifted uncomfortably in their seats, but had no answers for the CWA chief, who pushed to bring thousands of call center jobs back to the United States. Telecom firms, however, demanded that the salaries "be competitive" with those of overseas workers.

Congress Is Targeting the Wrong Deficit

Just days before, Senate Republicans shot down unemployment benefits for 1.3 million Americans, because, to the Republican caucus, nothing matters more than the United States federal account deficit.

But many economists say Washington has the calculus backwards -- they are targeting the wrong deficit. As Dean Baker and Jared Bernstein explain in the New York Times, Washington's obsession with lowering the budget deficit by slashing spending and supports for the economy will only lead to slower growth, whereas "reducing the trade deficit would have the opposite effect. Not only that, but by increasing growth and getting more people back to work in higher-than-average value-added jobs, a lower trade deficit would itself help to reduce the budget deficit." EPI projects that reducing the trade deficit could generate a "manufacturing-based recovery" for the United States.

The two trade agreements in the works right now, the TPP and the TTIP, will only add to our job-killing trade deficit.

Corporate Courts Facilitate Attacks on Consumer, Health, and Environmental Protections

Senator Sherrod Brown (D-OH) turned the conversation at the Fast Track hearing in a completely new direction by asking David Cote if he thought trade agreements should be used to attack consumer and environmental laws democratically enacted around the globe. Brown referenced the so-called "investor-state" provisions that have been included in U.S. trade agreements that allow corporations to directly sue governments for cash damages outside of domestic court systems and in friendly trade tribunals if they believe consumer, health, or environmental regulations harm their products.

Brown pointed to a new case in Australia, where U.S. firm Phillip Morris is suing Australia over a new plain packaging rule for cigarettes designed to reduce cigarette smoking among teens and other new users. Phillip Morris battled the rule in Australian courts and lost, so is taking it to a corporate-friendly trade tribunal. The rulings of these tribunals are binding, and there is no appeal.

Cote, who is no doubt perfectly aware of the perverse system and its history of successful attacks on a range of public interest laws (detailed by Public Citizen here), used the "I am not a lawyer" dodge.

The list of these investor attacks is growing. U.S. pharmaceutical firm Eli Lilly is attacking Canada's system for approving generic drugs under NAFTA, and a U.S. fracking firm is attacking Quebec's moratorium on fracking as a "trade barrier."

Wikileaks Takes on Trade

The range of public interest policies implicated in the trade agreements is enormous. TPP "includes chapters on patents, copyright, financial regulation, energy policy, procurement, food safety and more -- it would constrain the policies on these matters that Congress and state legislatures could maintain or establish," says Public Citizen.

As if that wasn't enough, the TPP's draft environment chapter, published by Wikileaks last week, would undermine protections for oceans, forests, and wildlife. "If the environment chapter is finalized as written in this leaked document, President Obama's environmental trade record would be worse that George W. Bush's," said Michael Brune, executive director of the Sierra Club.

This is Wikileaks' first foray into trade, but it makes consummate sense. Not only are the agreements being negotiated behind closed doors with classified input from 600 U.S. corporate advisors, but the issues on the table include internet freedom and access to medicines around the globe.

The draft intellectual property chapter obtained by Wikileaks "would trample over individual rights and free expression, as well as ride roughshod over the intellectual and creative commons," says Julian Assange. "If you read, write, publish, think, listen, dance, sing or invent; if you farm or consume food; if you're ill now or might one day be ill, the TPP has you in its crosshairs," he told Politico. The U.S. government's pro-PhRMA position "will severely restrict access to affordable medicines for millions of people," says Doctors Without Borders.

Another World Is Possible

The last time the United States used Fast Track to pass a trade agreement, it was with South Korea. Senator Baucus and crew trotted out all the same talking points about how our exports would boom. But it was our trade deficit that boomed, increasing by $5.5 billion or 46 percent since 2012.

With the U.S. recovery staggering and with the wide range of issues caught up in the trade negotiation, it is no wonder that a coalition of those opposing free trade agreements is growing more diverse and powerful every day.

Fast Track will not pass without a sustained effort by the President himself. Yet, when his top trade representative did not bother to show up at the Senate hearing last week, Obama left everyone wondering if he had the appetite for the fight or if another world was possible.

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U.S. Trade Representative Dodges Senate Fast Track Hearing

The US Trade Representative (USTR) declined an invitation to testify at the Senate Finance Committee opening hearing on the controversial “Fast Track” legislation – leaving an Ohio Republican, Sen. Rob Portman, in the position of representing the White House by reading from an Administration press release.

Several committee members said they were puzzled and disappointed that USTR Michael Froman passed on an opportunity to convince some skeptical lawmakers they need to establish Fast Track authority for President Barack Obama’s priority Trans-Pacific Partnership (TPP) agreement.

“I wish they were here,” said Portman, a member of the committee and a former US trade representative under President George W. Bush.  “It’s important.”

Sen. Orrin Hatch of Utah, the ranking Republican on the committee, said renewing Fast Track for Obama is "not an issue where the president can lead from behind."

The hearing was a crucial early test for Obama’s ability to obtain Fast Track authority and complete the Trans-Pacific Partnership, priorities on his second-term wish list.  But it comes in the shadow of the 20th anniversary of NAFTA – a sweeping free trade agreement that took effect Jan. 1, 1994, and which many experts cite as a factor in the widening gap between rich and poor in the United States.  

The Trans-Pacific Partnership is like NAFTA on steroids. And that is one reason for the noticeable divide between the president and members of his own party in Congress – many of whom have been openly skeptical of TPP and have already announced opposition to Fast Track. This week, a group of Democratic senators sent a letter to leader Reid opposing the Camp-Baucus bill. This follows on five Finance Committee members coming out against Fast Track last week and 160 House Democrats signaling opposition at the end of last year.

The rarely-used Nixon-era procedure would allow Obama to sign the TPP before Congress votes to approve it with a guarantee that the White House could write expansive legislation to implement the pact that would not subject to committee or floor amendment and get House and Senate votes on such legislation in 90 days with only 20 hours of debate allowed.  

Meanwhile, with not a single House Democrat sponsoring the Fast Track bill, the GOP House leadership has insisted that the White House present a list of 50 House Democratic votes for the bill before a vote will be scheduled. Some Republicans are urging the president to do some arm-twisting for a bill embraced by the Chamber of Commerce but rejected by labor unions and progressive groups, mindful of the damage NAFTA has done.

One of the few things economists agree on is that our current trade policy is a major contributing factor to growing U.S. income inequality. Obama is expected to dedicate much of his State of the Union address to plans for battling income inequality while he is also pushing for Congress to Fast Track the TPP, which would expand the NAFTA model to more nations.

A study published by the Peterson Institute for International Economics estimated that as much as 39 percent of the observed growth in U.S. wage inequality is attributable to trade trends. Since the January 1, 1994, implementation of NAFTA, the share of national income collected by the richest 10 percent has risen by 24 percent, while the top 1 percent’s share has shot up by 58 percent.

Communication Workers of America President Larry Cohen said the US was negotiating with countries that have no interest in fair wages for their workers. If TPP is approved, “American workers will compete against workers in Vietnam who are earning 75 cents an hour” and who are rioting for better wages, Cohen said.   If Americans complain, he said, the Vietnamese government has a simple answer, he added: “They say, ‘We’re a communist country.  We don’t need higher labor standards.’”

Senator Sherrod Brown raised concerns about the proposed TPP provisions that would allow foreign corporations to attack U.S. law before foreign tribunals to demand compensation from the U.S. Treasury for our laws that undermine their expected future profits. He discussed the challenge that Philip Morris brought before a trade agreement investor tribunal against the government of Australia for its policies protecting the public from the health problems of tobacco.

Witnesses supportive of Fast Track included David Cote, CEO of Honeywell, Inc., Jim Allen, president of the New York Apple Growers Association, andElena M. Stegemann, of NuStep, a small business that manufactures high-tech exercise machines. 

Uninvited participants included the protestors that Committee Chairman Senator Max Baucus threatened to remove unless they put down their signs. One accused Senator Baucus -- Obama’s nominee to be ambassador to China -- of being a “Benedict Arnold” who was ceding Congress’ constitutional trade authorities through Fast Track.  Other signs read, “Fast Track: Race to the Bottom,” “TPP: How Low Can Wages Go?”

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Thursday Senate Finance Committee Fast Track Trade Hearing to Be Contentious

Fast Tracking the Trans-Pacific Partnership Conflicts with the President’s Efforts to Counter Income Inequality, a Key Focus of the State of the Union Address

Note: At 10 a.m. Thursday, the Senate Finance Committee is holding a hearing on a bill (3830) to give the president Fast Track trade authority.

Thursday’s hearing on the long-delayed legislation to establish Fast Track authority for President Barack Obama’s priority Trans-Pacific Partnership (TPP) agreement could be a donnybrook, Public Citizen said today. Five Finance Committee Democrats announced opposition when it was introduced last Thursday.

“Democrats want to talk about job creation and tackling income inequality, which are also expected to be the main themes in President Obama’s State of the Union speech, but the 20-year record of NAFTA shows that deals like the Trans-Pacific Partnership would only contribute to income inequality as more middle-class jobs are lost,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

One of the only things that economists agree on regarding the North American Free Trade Agreement (NAFTA), which marked its 20th anniversary of being in effect on New Year’s Day, is that such trade pacts are a major contributing factor to growing U.S. income inequality. Obama is expected to dedicate much of his State of the Union address to plans for battling income inequality while he is also pushing for Congress to Fast Track the TPP, which would expand the NAFTA model to more nations.

This conflict is likely to be among the problems raised by committee Democrats with U.S. Sen. Max Baucus’ (D-Mont.) Fast Track bill. A study published by the Peterson Institute for International Economics estimated that as much as 39 percent of the observed growth in U.S. wage inequality is attributable to trade trends. Since the January 1, 1994, implementation of NAFTA, the share of national income collected by the richest 10 percent has risen by 24 percent, while the top 1 percent’s share has shot up by 58 percent.

“Many members of Congress are asking why we would agree to give up our authority to make sure the Trans-Pacific Partnership is not NAFTA on steroids, particularly when we’ve seen what NAFTA has done to American workers,” Wallach said.

Not a single House Democrat agreed to co-sponsor the Fast Track bill. The “Bipartisan Congressional Trade Priorities Act of 2014” had imminently departing Baucus (D-Mont.) as its only Democratic sponsor, along with U.S. Rep. Dave Camp (R-Mich.) and Sen. Orrin Hatch (R-Utah.)

But getting Fast Track for TPP is a top priority of President Obama. The legislation replicates the Fast Track mechanism found in the 2002 grant of Fast Track, which more than 150 House Democrats announced in a November 2013 letter that they would oppose, as did several dozen House GOP.

“The Trans-Pacific Partnership is a Trojan horse for a host of awful measures that have nothing to do with trade and would never get through Congress in the light of day. Only five of the draft trade pact’s 29 chapters are about international trade. This grab bag should not be pushed through Congress without a real debate over each of its impactful measures. The trade pact would threaten food safety, raise medicine prices and roll back Wall Street reforms. The Trans-Pacific Partnership would offshore millions of American jobs, ban Buy American policies and sneak in threats to Internet freedom,” Wallach said.

Democratic and GOP presidents have struggled to persuade Congress to delegate its constitutional trade authority via Fast Track. Fast Track has been in effect for only five years (2002-2007) of the 19 years since passage of NAFTA and the agreement that created the World Trade Organization (WTO).

“Democrats are saying, ‘No more Fast Track process that sidelines Congress from determining trade agreements’ contents,’ because today’s pacts like the Trans-Pacific Partnership  invade Congress’ domestic policymaking authority and set binding rules on food safety, medicine patents and pricing, copyright and Internet freedom, immigration and much more,” Wallach said.

While many focus on the number of jobs lost from NAFTA and similar pacts, the most significant effect has been a fundamental alternation in the composition of jobs available to the 63 percent of American workers without a college degree. The United States has lost millions of manufacturing jobs during the NAFTA era, even as overall unemployment has been largely stable (excluding the fallout of the Great Recession) as new low-paying service sector jobs have been created.

The qualityof jobs available, and the wages most U.S. workers can earn, have been severely degraded. According to the U.S. Bureau of Labor Statistics, two out of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them more than 20 percent. It is not only those who lost a job to NAFTA who face downward wage pressure: as increasing numbers of workers displaced from manufacturing jobs joined the glut of workers competing for non-offshorable, low-skill jobs in sectors such as hospitality and food service, real wages have also fallen in these growing sectors under NAFTA.

The shift in employment from high-paying manufacturing jobs to low-paying service jobs has contributed to overall wage stagnation. The average U.S. wage has grown less than one percent annually in real terms since NAFTA was enacted even as worker productivity has risen at more than three times that pace.

Twenty years of evidence of NAFTA’s contribution to U.S. income inequality makes fast tracking a massive TPP NAFTA expansion a hard sell among Democrats, Public Citizen said. Passing Fast Track in the first half of 2014 before lawmakers’ attention turns to midterm elections would require a full court press by Obama in addition to the massive corporate campaign that is already gearing up. How Obama handles Fast Track in his State of the Union address will be one sign of whether such a White House campaign is forthcoming. 

What happens at the Finance Committee hearing could be a preview of the coming battle.

Meanwhile, proponents of the Camp-Baucus Fast Track bill are trying to highlight the bill’s inclusion of some new negotiating objectives for trade pacts that were not included in the 2002 Fast Track. But the underlying Fast Track process included in the bill ensures that these objectives are entirely unenforceable. Whether or not the president obtains the listed negotiating objectives, the Camp-Baucus bill would empower the president to sign a trade pact before Congress votes on it, with a guarantee that the executive branch could write legislation to implement the pact and alter wide swaths of existing U.S. law, obtaining both House and Senate votes within 90 days. That legislation would not be subject to markup and amendment in committee, all amendments would be forbidden during floor votes and a maximum of 20 hours of debate would be permitted in the House and Senate.

Democratic and GOP presidents alike have historically ignored negotiating objectives included in Fast Track. The 1988 Fast Track used for NAFTA and the pact that established the WTO included a negotiating objective on labor standards, but neither pact included such terms. The 2002 Fast Track listed as a priority the establishment of mechanisms to counter currency manipulation, but none of the pacts established under that authority included such terms.

Congress’ willingness to support Fast Track has also declined markedly because “trade” agreements have increasingly invaded Congress’ domestic policymaking prerogatives. The TPP includes chapters on patents, copyright, financial regulation, energy policy, procurement, food safety and more – it would constrain the policies on these matters that Congress and state legislatures could maintain or establish. Fast Track is outdated 1970s technology being applied to 21st century pacts.

Prior to Fast Track and starting with Franklin Roosevelt’s presidency, Congress gave Tariff Proclamation Authority (TPA) to presidents. But it covered only tariffs, not the broad subject matter included under Fast Track. The mechanism allowed the executive branch to implement reciprocal tariff cuts only within bounds set by Congress. Notably, this “TPA” was entirely different than Fast Track, which is sometimes called Trade Promotion Authority (TPA), as it pertained only to tariffs. (Public Citizen's 2013 book, “The Rise and Fall of Fast Track Trade Authority,” provides an in-depth history of Fast Track and U.S. trade authority.)

Due to Fast Track’s controversy, President George W. Bush spent two years and extraordinary political capital to obtain the 2002-2007 Fast Track grant, which passed a Republican-controlled House by one vote and expired in 2007. A two-year effort by President Bill Clinton to obtain Fast Track trade authority during his second term in office was voted down on the House floor in 1998 when 171 Democrats were joined by 71 GOP who bucked then-Speaker Newt Gingrich.

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Camp-Baucus Bill Would Revive Controversial 2002 Fast Track Mechanism

The Camp-Baucus Fast Track bill released yesterday replicates the procedures included in the 2002 grant of Fast Track that expired in 2007:

  • The president would be empowered to unilaterally select trade negotiating partners and commence negotiations. Like the 2002 Fast Track, in the Camp-Baucus bill this authority is conditioned only on pro forma consultations and 90 calendar days’ notice being given to Congress before negotiations begin. The Camp-Baucus bill provides no mechanism for Congress to veto a president’s decision to enter into negotiations on a trade pact that would be subject to expedited floor procedures, nor any role in selecting with which countries such pacts are initiated. (Sec. 5(a))
  • The president would be empowered to unilaterally control the contents of an agreement. As with the 2002 Fast Track, congressional negotiating objectives in the Camp-Baucus bill are not enforceable. Whether or not U.S. negotiators obtain the listed negotiating objectives, the Camp-Baucus bill would empower the president to sign a trade pact before Congress votes on it, with a guarantee that the executive branch could write legislation to implement the pact and obtain House and Senate votes within 90 days, with all amendments forbidden and a maximum of 20 hours of debate permitted. (Sec. 3(b)(3))
  • The president would be authorized to sign and enter into an agreement subject to expedited consideration conditioned only on pro forma consultations and providing Congress 90 calendar days’ notice prior to doing so. (Sec. 6(a)(1)) The executive branch alone would determine when negotiations are “complete.” The congressional “consultation” mechanisms in the Camp-Baucus bill do not provide Congress with any authority or mechanism to formally dispute whether negotiations have indeed met Congress’ goals and thus are complete, much less any means for Congress to certify that its objectives were met before an agreement may be signed.
  • The president would be authorized to write expansive implementing legislation and submit it for consideration. (Sec. 6(a)(1)(C)) As with the 2002 Fast Track, such legislation would not be subject to congressional committee markup and amendment. The 2002 Fast Track states that this legislation can include any changes to U.S. law that the president deems “necessary or appropriate to implement such trade agreement or agreements.” (19 USC 3803(b)(3)(B)(ii)) Inclusion of the term “appropriate” in this section of past Fast Track authorities has been controversial, because it provides enormous discretion for the executive branch to include changes to existing U.S. law that Congress may or may not deem necessary to implement an agreement. Indeed, inclusion of the term “appropriate” has enabled Democratic and GOP administrations alike to insert extraneous changes to U.S. law into legislation that skirts committee mark up and is not subject to floor amendment. Rather than remove the term “appropriate,” the Camp-Baucus bill merely adds the superfluous modifier “strictly” in front of the same “necessary or appropriate” language found in the 2002 Fast Track. (Sec. 3(b)(3(B)ii)) As with the 2002 Fast Track, there is no point of order or other mechanism to challenge inclusion of overreaching provisions in the implementing bill.
  • Like the 2002 Fast Track, the Camp-Baucus bill would require the House to vote on such legislation within 60 session days, with the Senate having an additional 30 days to vote thereafter. (Sec. 3(b)(3))
  • Like the 2002 Fast Track, the Camp-Baucus bill would forbid all amendments and permit only 20 hours of debate on such legislation in the House and Senate. Voting, including in the Senate, would be by simple majority. (Sec. 3(b)(3))
  • The Camp-Baucus bill replicates the 2002 Fast Track with respect to limitations that could be placed on the application of the Fast Track process to a specific trade agreement. While the factsheet on the bill released by the Finance Committee suggests that it includes a “strong, comprehensive” disapproval process, in fact it replicates the 2002 Fast Track’s limited grounds for which a resolution to disapprove Fast Track can be offered. The Camp-Baucus bill also replicates the 2002 Fast Track’s procedures for consideration of such a resolution, which curtail the prospect that such a resolution would ever receive a vote. To obtain floor action, a resolution would have to be approved by the Ways and Means and Finance committees, and then the House and Senate would have to both pass the resolution within a 60-day period. (Sec. 6(b))

The Camp-Baucus bill includes several negotiating objectives not found in the 2002 Fast Track. However, the Fast Track process that this legislation would reestablish ensures that these objectives are entirely unenforceable: 

  • In addition, some of the Camp-Baucus bill negotiating objectives advertised as “new” are in fact referenced in the 2002 Fast Track. For example, the 2002 Fast Track included currency measures: “seek to establish consultative mechanisms among parties to trade agreements to examine the trade consequences of significant and unanticipated currency movements and to scrutinize whether a foreign government engaged in a pattern of manipulating its currency to promote a competitive advantage in international trade.” (19 USC 3802(c)(12)) The so-called “new” text in the Camp-Baucus bill is: “The principal negotiating objective of the United States with respect to currency practices is that parties to a trade agreement with the United States avoid manipulating exchange rates in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other parties to the agreement, such as through cooperative mechanisms, enforceable rules, reporting, monitoring, transparency, or other means, as appropriate.” (Sec. 2(b)(11))

What is touted as “enhanced coordination with Congress” is actually the mere renaming of the Congressional Oversight Group from the 2002 Fast Track as “Congressional Advisory Groups on Negotiations,” while provisions ostensibly improving transparency merely formalize past practice:

  • The 2002 Fast Track established a Congressional Oversight Group (COG) comprised of members of Congress appointed by congressional leaders who were to obtain special briefings from the U.S. Trade Representative’s (USTR) office on the status of negotiations and to attend negotiations on an advisory basis. The Camp-Baucus bill renames the COG – delineating a “House Advisory Group on Negotiations” and a “Senate Advisory Group on Negotiations” and describing joint activities of the two – but includes the same appointment process and limited role for  congressional trade advisory groups as found in the 2002 Fast Track. (Sec. 4(c))
  • The Camp-Baucus bill instructs USTR to write guidelines for its consultations with Congress, the public and private sector advisory groups. In effect, this provision merely requires USTR to put into writing how it will (or will not) relate to these interested parties. (e.g. Sec. 4(a)(3) and Sec. 4(d)(1))
  • The Camp-Baucus bill simply formalizes the past practices of USTR by requiring that any member of Congress be provided access to trade agreement documents. For instance, during NAFTA negotiations, members of Congress had open access to the full draft NAFTA texts with a new version placed into a secure reading room in the U.S. Capitol after each round of negotiations. In the summer of 2013, the Obama administration finally responded to growing pressure by members of Congress for access to draft TPP texts by bringing requested specific chapters to members’ offices for review when a member asked for such access. Rather than specifying that USTR must resume the practice of providing standing access for members of Congress to full draft trade agreement texts, the Camp-Baucus bill leaves to the discretion of USTR how it will provide text access to members of Congress if a member requests access. (Sec. 4(a)(1)(B))
  • The Camp-Baucus bill also replicates the problematic language of the 2002 Fast Track that limits access to confidential trade agreement proposals and draft texts for congressional staff with the necessary security clearances to only committee staff, excluding personal staff with clearances. (Sec. 4(a)(3)(B)(ii))

The Camp-Baucus bill faces long odds for approval in the 113th Congress:

  • With a large bloc of House Democrats and Republicans already having announced opposition to the old Fast Track process at the heart of Camp-Baucus bill, the prospects are limited for the Obama administration to secure passage in the first half of 2014 before lawmakers’ attention turns to midterm elections.
    • A letter sent to President Obama in November by 151 Democrats opposed Fast Track authority and called for the creation of a new mechanism for trade agreement negotiations and approval.
    • Twenty-seven Republicans have also announced their opposition to Fast Track in two letters to Obama.
    • Most Democratic Ways and Means Committee members joined an additional letter in November noting that the old Fast Track process enjoys little support.
  • Even after repeated delays in introduction, the Camp-Baucus Fast Track bill failed to gain a House Democratic cosponsor. Ways and Means Ranking Member Sandy Levin (D-Mich.) has announced that he does not support the Camp-Baucus bill. Levin’s demands for changes to the 2002 Fast Track procedure to enhance Congress’ role in determining the contents of trade pacts were rebuffed by Ways and Means Committee Chair Dave Camp (R-Mich.), Finance Committee Chair Max Baucus (D-Mont.) and Finance Committee Ranking Member Orrin Hatch (R-Utah).
  • The Camp-Baucus Fast Track grandfathers in the Trans-Pacific Partnership (TPP) and U.S.-EU Trans-Atlantic Free Trade Agreement (TAFTA) negotiations. (Sec. 7) Fast Track for the TPP and TAFTA is especially controversial because these pacts would include chapters on patents, copyright, financial regulation, energy policy, procurement, food safety and more, constraining the policies that Congress and state legislatures could maintain or establish on these sensitive non-trade matters. Fast Track was designed in the 1970s when trade negotiations were narrowly focused on cutting tariffs and quotas, not the sweeping range of non-trade policies implicated by today’s pacts.

Fast Track is an anomaly. It has only been in effect for five of the past 19 years:

  • Both Democratic and GOP presidents have struggled to convince Congress to delegate its constitutional trade authority via the Nixon-era Fast Track scheme. Fast Track has been in effect for only five years (2002-2007) of the 19 years since passage of NAFTA and the agreement that created the WTO.
  • A two-year effort by President Bill Clinton to obtain Fast Track trade authority during his second term in office was voted down on the House floor in 1998 when 171 Democrats were joined by 71 GOP members who bucked then-Speaker Newt Gingrich. Clinton did not have Fast Track for six of his eight years in office, but still implemented more than 130 trade agreements.
  • President George W. Bush spent two years and extraordinary political capital to obtain the 2002-2007 Fast Track grant, which passed a Republican-controlled House by one vote, and expired in 2007. 
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Legislation to Provide Fast Track Trade Authority for President Obama Finally Introduced, But Can It Pass?

Considerable House Opposition on Day One, Tight Calendar in Election Year

Legislation introduced today by U.S. Sen. Max Baucus (D-Mont.) and U.S. Rep. Dave Camp (R-Mich.), which would revive the controversial Fast Track trade authority, faces long odds for approval in the 113th Congress, Public Citizen said today. The legislation replicates the Fast Track mechanism found in the 2002 grant of Fast Track; however, the new legislation alters some previous negotiating objectives.

Both Democratic and GOP presidents have struggled to persuade Congress to delegate its constitutional trade authority via the Nixon-era Fast Track scheme. Fast Track has been in effect for only five years (2002-2007) of the 18 years since passage of the North American Free Trade Agreement (NAFTA) and the agreement that created the World Trade Organization (WTO).

With a large bloc of House Democrats and Republicans already having announced opposition to the old Fast Track process at the heart of Camp-Baucus bill, the prospects are limited for the Obama administration to secure passage in the first half of 2014 before lawmakers’ attention turns to midterm elections. The first session of the 113th Congress was consumed with negotiations among Ways and Means and Finance Committee leaders that could not produce a consensus bill. Ways and Means Ranking Member Sandy Levin (D-Mich.) has announced that he wants changes to the old process to enhance Congress’ role.

The legislation includes several negotiation objectives not found in the 2002 Fast Track; however, the underlying Fast Track process included in the bill ensures that these objectives are entirely unenforceable. Whether or not the president obtains the listed negotiating objectives, the bill would empower the president to sign a trade pact before Congress votes on it with a guarantee that the executive branch can write legislation to implement the pact and alter wide swaths of existing U.S. law and obtain both House and Senate votes within 90 days. That legislation is not subject to markup and amendment in committee, all amendments are forbidden during floor votes and a maximum of 20 hours of debate is permitted in the House and Senate.

“Congress’ willingness to support Fast Track has declined markedly because ‘trade’ agreements have increasingly invaded Congress’ domestic policymaking prerogatives,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “On top of that, Democratic and GOP presidents alike have consistently ignored the negotiating objectives included in Fast Track, but the way the process is structured, Congress has given away its authority to do anything about it.”

The Trans-Pacific Partnership, for which President Barack Obama seeks Fast Track authority, includes chapters on patents, copyright, financial regulation, energy policy, procurement, food safety and more that would constrain the policies on these matters that Congress and state legislatures can maintain or establish.

President George W. Bush spent two years and extraordinary political capital to obtain the 2002-2007 Fast Track grant, which passed a Republican-controlled House by one vote and expired in 2007.

A two-year effort by President Bill Clinton to obtain Fast Track trade authority during his second term in office was voted down on the House floor in 1998 when 171 Democrats were joined by 71 GOP who bucked then-Speaker Newt Gingrich. Clinton did not have Fast Track for six of his eight years in office, but still implemented more than 130 trade agreements, including granting Most Favored Nation status to China, which led to China’s WTO access.

“Fast Track is outdated 1970s technology being applied to 21st century realities, which is causing serious damage,” said Wallach. “It’s rare these days that across the aisle, Congress agrees on anything, so it’s notable that a large bipartisan bloc insists on maintaining the exclusive constitutional authority over trade that the Founding Fathers wisely granted to Congress.”

Fast Track allowed a president to determine the contents of trade pacts, sign them before Congress votes and write expansive implementing legislation that is not subject to congressional committee amendment – all with a guarantee that Congress would vote on a completed agreement and the legislation within 90 days, with no floor amendments and limited debate.

A letter sent to Obama in November by 151 Democrats called for creation of a new mechanism for trade agreement negotiations and approval: “Congress, not the Executive Branch, must determine when an agreement meets the objectives Congress sets in the exercise of its Article I-8 exclusive constitutional authority to set the terms of trade,” the letter said. “For instance, an agreement that does not specifically meet congressional negotiating objectives must not receive preferential consideration in Congress.”

Further, “A new trade agreement negotiation and approval process that restores a robust role for Congress is essential to achieving U.S. trade agreements that can secure prosperity for the greatest number of Americans, while preserving the vital tenets of American democracy in the era of globalization,” the letter stated. “Twentieth Century ‘Fast Track’ is simply not appropriate for 21st Century agreements and must be replaced.”

Background:

Opposition to Fast Track authority in Congress has increased significantly since the time of NAFTA and the WTO.

Under President George H.W. Bush in 1991, Fast Track authority passed a Democratic-led House by a 27-vote margin. Clinton had Fast Track authority for only two of his eight years in office, and in 1998, the Democratic-led House emphatically rejected his request, with 71 GOP representatives joining 171 in the majority to vote “no.” Bush managed to obtain Fast Track authority by only one vote in the House after two years of effort, and Congress rebuffed Bush’s request for an extension when that delegation expired in 2007.

In 2008, during his presidential campaign, Obama promised to replace Fast Track with a more inclusive process. History seemed with him: A new system of trade authority delegation has been created every few decades since 1890.

But since capturing a second term in the White House, Obama has ramped up his demand that Congress once again cede its constitutional trade authority via Fast Track.Prior to Fast Track and starting with Franklin Roosevelt’s presidency, Congress gave Tariff Proclamation Authority (TPA) to presidents. But it covered only tariffs, not the broad subject matter included under Fast Track. The mechanism allowed the executive branch to implement reciprocal tariff cuts only within bounds set by Congress. (Notably, this “TPA” was entirely different than Fast Track, which is sometimes called Trade Promotion Authority (TPA), as it pertained only to tariffs.)

Before that, trade agreements were often approved as treaties by the Senate, with both chambers later also required to pass implementing legislation. Public Citizen’s 2013 book, “The Rise and Fall of Fast Track Trade Authority,” provides an in-depth history of U.S. trade authority.

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Get Ready for the 2014 Trade Tsunami

Hard work, smart planning and perseverance made 2013 a year of inspiring fair-trade activism. 

Vibrant grassroots activism and dogged D.C. advocacy resulted in a new level of public and congressional concern about the perils of Fast Track and the Trans-Pacific Partnership (TPP). In November, three of every four Democrats – and a remarkable number of Republicans – publicly stated their opposition to Fast Track trade authority. The extreme procedure is seen as critical by TPP’s corporate boosters because it could railroad the TPP through Congress despite growing concerns about many aspects of the pact.

And, thanks to civil society pressure in Asia and Latin America, the other TPP country governments did not give in to all of the U.S. corporate-inspired demands for medicine monopolies, financial deregulation and expanded corporate investor tribunals in the TPP. As a result, the Obama administration failed to wrap up TPP negotiations in Singapore this month, missing yet another do-or-die, self-imposed deadline for the deal. 

This sets the stage for the most important U.S. political and policy fights on globalization and “trade” in decades, beginning in a few short weeks. The stakes couldn’t be higher.

In the first months of 2014, Congress will decide whether it will maintain its constitutional authority over trade or succumb to White House and corporate demands to give away its power to save us from more damaging “trade” deals.

This week, the Obama administration announced that top priorities for 2014 will be to sign the massive, dangerous TPP it has been negotiating for four years and extract Fast Track trade authority from Congress. The extreme Nixon-era Fast Track procedure would allow the TPP and a Trans-Atlantic Free Trade Agreement (TAFTA) to be signed before Congress approves them with a guarantee that they can be railroaded through Congress with limited debate and no amendments. (TAFTA would empower the European corporations with 24,000 subsidiaries operating here to drag the U.S. government before foreign tribunals to demand taxpayer compensation for U.S. laws they claim undermine their expected future profits.)

Cue the rattling chains: in 2014 we must banish the ghosts of NAFTA, which haunt us still. 

Twenty years ago on New Years’ Day, the North American Free Trade Agreement (NAFTA) went into effect. The World Trade Organization (WTO) opened shop a year later. Unlike past trade pacts, which dealt mainly with cutting tariffs, these agreements included investment rules that incentivized the “offshoring” of American jobs, ushering in a new era of growing U.S. trade deficits. These pacts also granted corporations new powers that raised medicine prices and limited food safety and financial regulation.

Yet despite NAFTA’s devastating track record and the U.S. loss of five million manufacturing jobs since its advent, the White House has decided to double-down on a failed economic experiment. In the TPP and TAFTA, Obama has taken the NAFTA model, injected it with steroids, and invited scores more countries to sign on.

Although there are powerful, deep-pocketed, international forces that will use everything at their disposal to get the trade deals passed, there is hope – and opportunity – for those of us who want to defeat them. 

The fiery international debates over NAFTA and WTO gave birth to a new fair trade movement in our country.  The devastating outcomes triggered by the trade pacts unified ordinary Americans against them. Polls show a majority of Americans – Republicans, Democrats and independents –think these sorts of pacts are bad not only for themselves and their families but for the nation.

And, the harsh lessons of NAFTA were learned worldwide. This certainly contributed to the other TPP countries’ concerns about the NAFTA-on-steroids proposals in the TPP.

But we face a race against time. Will growing public opposition to the TPP in Asian and Latin American countries overcome what President Obama heartbreakingly announced this week will be his new personal effort to seal the deal in the first months of 2014?

Continue reading "Get Ready for the 2014 Trade Tsunami" »

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Falling Exports under Korea FTA Likely to Bolster Fast Track Opposition

This week's government release of trade data highlights a stunning decline in U.S. exports to Korea, a rise in imports, and a ballooning of the U.S. trade deficit under the Korea Free Trade Agreement (FTA).  With such sorry results emerging from the Korea deal, it's little wonder that 178 Democrats and Republicans this week rejected Obama's bid to Fast Track through Congress another FTA -- the sweeping Trans-Pacific Partnership (TPP).  

U.S. goods exports to Korea fell 8 percent and imports from Korea grew 8 percent under the first 18 months of the Korea deal, relative to the 18 months before the deal took effect. The shift provoked an incredible 56 percent growth in the U.S. trade deficit with Korea in the FTA’s first year and a half.

The Korea FTA’s abysmal record for U.S. jobs has been consistent: in 18 out of the 18 months since the deal took effect, U.S. exports to Korea have fallen below the average level seen in the year before the deal.  And in every single one of the 18 months since the FTA, the U.S. deficit with Korea has exceeded the average monthly deficit before the deal took effect (see graphs below). These losses amount to tens of thousands of lost U.S. jobs.

The disappointing data from the Korea FTA, a template for the TPP, is poised to generate even more congressional opposition to Obama’s request for Fast Track’s extraordinary authority to railroad the TPP through Congress on an expedited timeline with limited debate and no amendments.

Korea Exports Nov 2

Korea Deficit Nov 2

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151 House Democrats, Bloc of GOP Announce Opposition to ‘Fast Track’ Trade Authority

Mounting Concerns About Possible Trans-Pacific Partnership Unite Members Across Party Lines Against Abdicating Congressional Authority Over Trade 

A letter sent today to President Barack Obama opposing Fast Track authority, signed by 151 House Democrats, signals the end of a controversial Nixon-era procedure used to railroad contentious trade pacts through Congress. Obama has asked Congress to delegate to him its constitutional trade authority via Fast Track for the Trans-Pacific Partnership (TPP) and other pacts.

The signers of the letter show the breadth and depth of Democratic House opposition to Fast Track. Signers include:

  • 18 of 21 full committee ranking members and 72 subcommittee ranking members;
  • Leadership members including Assistant Democratic Leader Jim Clyburn; Democratic Congressional Campaign Committee Chair Steve Israel; Steering and Policy Committee Co-Chairs Rosa DeLauro and Rob Andrews; and 35 of 48 Democratic Steering and Policy Committee members;
  • 19 of the short list of Democrats who voted for the 2011 U.S.-Korea Free Trade Agreement;
  • 26 of the 51 members of the New Democrat Coalition, and 8 of the 14 members of the Blue Dog Coalition; and
  • 36 of 42 House members of the Congressional Black Caucus, and 13 of 19 House members of the Congressional Hispanic Caucus

On Tuesday, 25 House Republicans members announced their opposition to Fast Track, and most Democratic Ways and Means Committee members joined a letter noting that the old Fast Track process enjoys little support. Even prominent supporters of past trade agreements who did not sign these letters recently have voiced their opposition to Fast Track.

“These letters make clear that Fast Track is history,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “When Nixon cooked up this scheme 40 years ago, trade pacts covered only tariffs. Now, deals like the TPP could rewrite wide swaths of U.S. policy, currently under the control of Congress, from food safety and financial regulation to Buy American procurement to energy policy.”

Fast Track delegated to the executive branch authorities the Constitution explicitly gives Congress. Fast Track let the executive branch unilaterally select trade partners, set agreements’ terms and sign them before Congress even voted. Then the executive branch could write implementing legislation, skirting committee review and amendment. This legislation could be directly submitted for votes, with congressional leaders’ control of House and Senate floor schedules overridden. Votes could be forced within 60 days in the House and an additional 30 days in the Senate. Normal voting rules were waived, with all amendments banned and only 20 hours of debate. Unlike all past trade authorities, which covered only tariffs, Fast Track allowed the executive branch to “diplomatically legislate,” using trade agreements to set policy on non-trade matters.

“Polls show that opposition to more-of-the same trade deals is one of the few issues that uniteAmericans across party lines,” said Wallach. “It’s not really surprising that there is bipartisan congressional opposition to Fast Track.” 

Fast Track has been used only 16 times, although hundreds of U.S. trade agreements have been implemented since the mid-1970s. These have included the most controversial pacts such as the North American Free Trade Agreement (NAFTA) and the agreement that created the World Trade Organization (WTO). The U.S. has a large and growing trade deficit with countries involved in past U.S. fast-tracked Free Trade Agreements (FTAs). U.S. export growth is 38 percent higher with countries with which we do not have FTAs relative to those with which we have FTAs.

Also fueling congressional opposition to Fast Track is the abysmal outcome of the Obama administration’s only major trade pact to date, the U.S.-Korea FTA, which is the template for the TPP.  In contrast to Obama’s promises that the Korea deal would boost exports, in the agreement’s first year, U.S. exports to Korea fell 10 percent, imports from Korea rose and the U.S. trade deficit with Korea exploded by 37 percent. This equates to a net loss of approximately 40,000 U.S. jobs.

Opposition to Fast Track has been growing in Congress since the time of NAFTA and the WTO. The 1991 Fast Track grant passed in the House by a 27-vote margin. President Bill Clinton never was able to obtain Fast Track again after that grant expired. Clinton had Fast Track authority for only two of his eight years in office, and in 1998, the House explicitly rejected his request, with 171 Democratic and 71 GOP opposing Fast Track. President George W. Bush then spent two years and enormous political capital to pass Fast Track in 2002 by two votes. That delegation of Fast Track expired in 2007, and Congress rebuffed Bush’s request for an extension.

In 2008, candidate Obama promised to replace Fast Track with a more inclusive process. Historically, a new system of trade authority delegation has been created every few decades since 1890. But in recent months, Obama has ramped up his demand that Congress once again cede its constitutional trade authority via Fast Track.

“Fast Track is outdated 1970s technology being applied to 21st century realities, which is causing serious damage,” said Wallach. “It enables agreements that offshore U.S. jobs and expose our consumer and environmental laws to attack and rollback.”

Already a decade ago, one of Congress’ most ardent free traders, the late U.S. Rep. Robert Matsui (D-Calif.), who led the Democratic House effort to pass NAFTA, described why Fast Track was unacceptable:

“Trade is no longer primarily about tariffs and quotas. It’s about changing domestic laws. The constitutional authority to make law is at the heart of our role as a Congress and of our sovereignty as a nation. When international trade negotiators sit down to hammer out agreements, they are talking about harmonizing ‘non-tariff barriers to trade’ that may include everything from antitrust laws to food safety. I believe the President and the USTR should be able to negotiate trade deals as efficiently as possible … But that does not mean that Congress must concede to the Executive Branch its constitutional authority over foreign commerce and domestic law without adequate assurances that Congress will be an active participant in the process. Congress should be a partner, not a mere spectator or occasional consultant to the process. … Think about what may be bargained away at the negotiating table: our own domestic environmental protections ... food safety laws ... competition policies. That’s the air we breathe, the food our children eat, and the way Americans do business… The nature of trade has changed, and Fast Track authority must change with it. I ardently believe in the principles of free trade. But I will not put my constitutional authority over domestic law and my responsibility to my own constituents on a fast track to the executive branch.” (Rep. Robert Matsui (D-Calif.), Congressional Record, 147, 12/6/01, at H9025.

Prior to Fast Track and starting with Franklin Roosevelt’s presidency, Congress gave Tariff Proclamation Authority to presidents. But it covered only tariffs, not the broad subject matter included under Fast Track. The mechanism allowed the executive branch to implement reciprocal tariff cuts only within bounds set by Congress. Prior to that, trade agreements were often approved as treaties by the Senate, with both chambers later also required to pass implementing legislation. Public Citizen’s 2013 book, “The Rise and Fall of Fast Track Trade Authority, provides an in-depth history of U.S. trade authority.  

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Fast Track: New Report Proves Difficulty of Defending the Indefensible

When most people hear about a political maneuver that empowered corporate-advised executive branch negotiators to skirt Congress and rewrite policies that affect our daily lives, they don’t say, “Well, that sounds like something worth defending.”  But that improbable response is exactly the position being taken by corporate defendants of Fast Track who have announced a desperate push to revive the undemocratic maneuver by the end of this year. 

Fast Track was a Nixon-crafted ploy, used to railroad through Congress unpopular “trade” deals that have empowered foreign corporations to attack domestic health and environmental policies, enabled pharmaceutical firms to raise medicine prices, and equipped banks with a tool to roll back financial regulation.  Under the U.S. Constitution, Congress is supposed to write the laws and set trade policy.  For 200 years, these key checks and balances helped ensure that no one branch of government had too much power.  But that changed with Fast Track. 

Fast Track delegated away Congress’ constitutional authority over trade pacts, empowering the executive branch to negotiate and sign an agreement before Congress approved the contents.  Then it allowed the executive branch to write legislation that could not be amended and to force a limited-debate vote on the sealed deal within 90 days.

As unpopular deals like the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) were rammed through Congress under Fast Track, mounting opposition to the maneuver grew strong enough to force Fast Track’s corporate proponents to attempt a rebranding (cynically redubbed as “Trade Promotion Authority”). 

It didn’t work.  Fast Track remained polemical and Congress finally allowed it to die in 2007. 

Now Fast Track’s corporate proponents are trying hard to revive it, because they’d like to shove another unpopular “free trade” agreement (FTA) through Congress.  Administration officials have admitted that Fast Track’s democracy-defying procedure will be essential to usher into law the controversial Trans-Pacific Partnership (TPP) – a sweeping U.S. pact under negotiation with 11 Pacific Rim countries that would impose new rules on daily realities ranging from access to medicines and food safety to Internet freedom and Wall Street reform

One of the most recent attempts to revive Fast Track is a report put out by the Third Way think tank – a glossy 10-pager that undertakes the unenviable task of defending Fast Track.  To do so, the think tank employs a series of claims that are as indefensible as Fast Track itself.  Here’s a sampling.

Claim: We must revive Fast Track to push through Congress the controversial TPP because the deal will boost U.S. exports (even to non-TPP countries). 

Reality:

  • The report hopes for big export gains…to non-TPP countries. The report touts a potential export growth of $600 billion to “Asia-Pacific markets” if the U.S. were to recapture its historical export share in the region.  Great.  But not relevant to the TPP.  The $600 billion projection is based on a hypothetical rise in exports to 12 countries.  Seven of them are not in the TPP.  Two more are in the TPP but already have FTAs with the United States.  That leaves three countries for which the TPP could even plausibly have a bearing on the question of how to increase exports (a question that, per the last point, deserves the answer: “not through another FTA”).  Yet, the report is content to use this hypothesized export growth “opportunity” that is 75% patently irrelevant to the TPP as the reason why the TPP should be railroaded through Congress.  
  • The TPP is not really about trade.  Only five of the TPP’s 29 proposed chapters actually pertain to traditional trade matters.  The rest would set new rules affecting everything from food safety and financial markets to medicine prices and Internet freedom.  The reason for wide-ranging public and congressional opposition to the TPP is because people don’t want more expensive healthcare, unsafe food, a rollback of Wall Street reform, corporate attacks on environmental safeguards, etc.  While there is no observed correlation between enacting an FTA and seeing exports rise, there is a correlation between enacting one and seeing public interest safeguards fall.  

Continue reading "Fast Track: New Report Proves Difficulty of Defending the Indefensible" »

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As President’s Export Council Meets, No Chance to Meet Obama’s Export Doubling Goal; Exports Fall Under Free Trade Agreements

Obama’s Quest for Fast Track Authority and for Support for Trans-Pacific Partnership Pact Undermined by FTA Outcomes; U.S. Exports Have Declined in Each of 16 Months Since Korea FTA Implementation

As President Barack Obama’s Export Council convenes today to discuss his request for Fast Track authority and the status of the increasingly controversial Trans-Pacific Partnership (TPP), recent government data show it will be virtually impossible to meet Obama’s stated goal of doubling exports by the end of 2014. The same data shows that in 16 out of 16 months since the Korea “free trade” agreement (FTA) took effect last year, U.S. goods exports to Korea have fallen below the average export level in the year before the deal. At last year’s sluggish overall two percent U.S. export growth rate, the United States will not achieve Obama’s export-doubling goal until 2032, 18 years behind schedule.

The actual dismal outcomes of the current free trade agreement model are having a significant impact in Congress, where skepticism is growing about both Obama’s request for the rarely used Fast Track trade authority and the TPP.

“Given the dismal data on U.S. export growth, it would be very revealing if the Export Council just calls for more of the same policies and procedures that have gotten us these bad results,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “But whatever the Export Council says, many members of Congress are well aware that the Korea pact has been a loser and that this Trans-Pacific deal would just expand that model to more countries, which seems to be fueling opposition to the president’s request that Congress delegate its constitutional authority over trade to him via the Fast Track process.”

The overall U.S. export record under FTAs has not been helping Obama make his case for Fast Track or the TPP. Growth of U.S. exports to countries that are not FTA partners has actually exceeded U.S. export growth to countries that are FTA partners by 38 percent over the past decade.

The export record of the Korea FTA is even worse. In the first year of the deal, U.S. exports to Korea fell 10 percent (a $4.2 billion decrease), imports from Korea rose 2 percent (a $1.3 billion increase), and the U.S. trade deficit with Korea swelled 37 percent (a $5.5 billion increase), compared to the prior year. Approximately 40,000 net U.S. jobs were lost under the deal’s first year, according to an economic study.

“If the president is serious about growing exports, he would do well to ditch these NAFTA-style so-called ‘trade’ pacts that export U.S. investment dollars and American jobs and look for a new model,” said Wallach. “As long as the administration keeps pushing more of the same instead of acknowledging the damaging record of the past trade deals, of course members of Congress must maintain their constitutional authority over trade so they can make sure we do not end up with yet another damaging pact.” 

Click here for a PDF of this release.

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A Fast Track to Greater Inequality?

President Obama is thankfully talking again about the yawning inequality in the U.S.  In an interview with the New York Times late last month, he said that the ever-widening gap in income is "not a future that we should accept." Unfortunately, it's the future that his trade negotiators are promoting. 

While Obama denounces inequality, the Obama administration is rushing to conclude talks on the Trans-Pacific Partnership (TPP), a sweeping commercial pact with 11 Pacific Rim countries that implicates everything from the cost of our medicines to the safety of our food. The TPP also threatens to further widen the gap between rich and poor, as emphasized by economist Nancy Folbre in a New York Times piece this week, by perpetuating the inequality-spurring history of unfair trade deals spelled out below.

Obama recently implied that unfair trade "sends a lot of jobs overseas." When the jobs being offshored are primarily those of workers in the middle and lower income brackets, as has been true under the last couple decades of TPP-like deals, middle-class wages stagnate as upper-class incomes climb. The result: increased income inequality.  

But Obama seems to miss this connection.  Just last week, in his economic speech in Chattanooga, Tennessee, he praised the Korea Free Trade Agreement (under which exports have been falling) and vowed to get authority from Congress to sign more such deals.  Obama's top trade official, Michael Froman, has confirmed that Obama would like to Fast Track deals like the TPP through Congress. Fast Track was an extreme and rarely-used maneuver that empowered executive branch negotiators, advised by large corporations, to ram through unfair trade deals like the TPP by unilaterally negotiating and signing the deals before sending them to Congress for an expedited, no-amendments, limited-debate vote. Apparently, Obama would like more of the same.

Stopping Fast Track would go far toward stopping the TPP.  And halting the TPP would go far toward halting the upward march of income inequality.  Unfair trade deals have been a steady drumbeat in that march:   

As unfair trade deals have been Fast Tracked into law, U.S. income inequality has jumped to levels not seen since the robber baron era. Today, the richest 10 percent of the U.S. is taking nearly half of the economic pie, while the top 1 percent is taking one fifth. Wealthy individuals’ share of national income was stable for the first several decades after World War II. But that share has shot up 45 percent for the richest 10 percent and 117 percent for the richest 1 percent since the passage of Fast Track in 1974, a time period characterized by a series of unfair trade deals. The income share of the richest 10 percent escalated particularly abruptly after the 1994 enactment of the North American Free Trade Agreement (NAFTA). See the graph below. 

The median family has been losing about as much to trade-induced inequality as to taxes. Longstanding economic theory predicts that trade will increase income inequality in developed countries. In the 1990s, the pro-NAFTA Peterson Institute for International Economics (PIIE) sought to quantify the effect of trade policy on U.S. income inequality, and found that nearly 40 percent of the increase in inequality was attributable to U.S. trade policy. When the Economic Policy Institute (EPI) updated the PIIE figures, it found that the median U.S. family lost about $2,300 per year (in today’s dollars) from the burden of rising inequality due to trade. The wage losses from trade each year for the median family are on par with the median household’s income tax burden. EPI projects that, if current trade policies and trends continue, all wage gains made since 1979 by workers without a four-year college degree (65 percent of the U.S. workforce) could be erased.

Changes in technology or education levels do not fully account for U.S. wage pressures. Some have argued that advances in computer technology explain why less technologically-literate U.S. workers have been left behind, asserting that more education – rather than a different trade policy – is how to end income inequality. While more education and skills are desirable for many reasons, these goals alone will not solve the problems of growing inequality. First, as documented in a Federal Reserve Bank paper, inequality started rising as systematic U.S. trade deficits emerged, in the early Fast Track period, far before most workers reported using computers on the job. Second, college-educated workers have also seen their wage growth stagnate, even in technologically sophisticated fields like engineering. Thus, rectifying unfair trade policy, not only better educating U.S. workers, will be an essential part of tackling rising income inequality.

Trade and Inequality

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Obama Hints at Unfair Trade as a Cause of Stagnant Wages

In his economic speech at Knox College yesterday, President Obama acknowledged the role of unfair trade in stagnant wages and growing inequality:

In the period after World War II, a growing middle class was the engine of our prosperity...But over time that engine began to stall, and a lot of folks here saw it...Global competition sends a lot of jobs overseas. It became harder for unions to fight for the middle class...And so what happened was that the link between higher productivity and people's wages and salaries was broken...So the income of the top 1 percent nearly quadrupled from 1979 to 2007, but the typical family's incomes barely budged.

That's all true.  Despite a doubling of U.S. workers' productivity, real median wages hover at 1979 levels.  What does unfair trade have to do with this?  We spell it all out in our synopsis of the economic impacts of the offshoring-prone "free trade" era, enabled by the undemocratic power grab known as Fast Track, which is ironically now supported by Obama's own administration. Here are some critical excerpts: 

Trade agreement investor privileges promote offshoring of production from the United States to low-wage nations. In the past, trade competition came from imports of products made by foreign companies operating in their home countries. But today’s “trade” agreements contain various investor privileges that reduce many of the risks and costs previously associated with relocating production from developed countries to low-wage developing countries. Thus, many imports now entering the United States come from companies originally located in the United States and other wealthy countries that have moved production to low-wage countries. For instance, over half of China’s exports are now produced by foreign enterprises, not Chinese firms.  American workers effectively are now competing in a globalized labor market where some poor nations’ workers earn less than 25 cents per hour.  

The bargaining power of American workers has been eroded by threats of offshoring. In the past, American workers represented by unions were able to bargain for their fair share of economic gains generated by productivity increases.  But the investor protections in today’s trade agreements, by facilitating the offshoring of production, alter the power dynamic between workers and their employers. For instance, a study for the North American Commission on Labor Cooperation – the body established in the NAFTA labor side agreement – showed that after passage of NAFTA, as many as 62 percent of U.S. union drives faced employer threats to relocate abroad, and the factory shut-down rate following successful union certifications tripled.

About 7 million American manufacturing jobs – over 1 out of 3 – were lost during the Fast Track era. The U.S. manufacturing sector has long been a source of innovation, productivity, growth and good jobs.  By 2012, the United States had less than 12 million manufacturing jobs left – about 6.6 million fewer than in 1974 before Fast Track was first established,  with less than nine percent of the American workforce in manufacturing for the first time in modern history.  

Displaced manufacturing workers have been forced to take lower-paid service jobs. Trade policy affects the quality of jobs available, not the aggregate quantity. And the job quality (i.e. wage level) available has been degraded by the mass erosion of manufacturing. According to the Bureau of Labor Statistics, two out of every five displaced manufacturing workers who were rehired in 2012 experienced a wage reduction of greater than 20 percent. Most took a pay cut in lower-paid service jobs (the graph below indicates how lower-paid service jobs have replaced higher-paid manufacturing jobs).

Trade policy holds back wages even of jobs that can’t be offshored. When workers in manufacturing are displaced and seek new jobs, they add to the supply of U.S. workers available for non-offshorable, non-professional jobs in construction, health care, hospitality and more. The Bureau of Labor Statistics has projected that some of the U.S. economy’s fastest job growth in the coming decades will occur in such low-skill occupations. But as increasing numbers of American workers, displaced from better-paying jobs by current trade policies, have joined the glut of workers competing for these non-offshorable jobs, real wages have remained stagnant in these growing sectors.  

And that, in a nutshell, is how Pres. Obama got from "Global competition sends a lot of jobs overseas" to "the typical family's incomes barely budged." Unfair trade deals, built for offshoring, reduced workers' bargaining power, forced displaced manufacturing workers to take big pay cuts, and contributed to the overall glut of workers competing for lower-wage jobs. Now if only his trade negotiators would spot the unfair trade link and stop pushing more offshoring-prone "free trade" deals.  

Manufacturing

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The Obama Administration Wants to Sell You a Used Trade Policy

The Office of the U.S. Trade Representative (USTR) just released the 2012 annual trade report and 2013 trade agenda of the President.  It reads a bit like a used car salesman trying to do his best with a lemon.  The report/car’s well-polished sheen looks pretty… until you take a peek under the hood. 

Take the first sentence: “Trade is helping to drive the success of President Obama’s strategy to grow the U.S. economy and support jobs for more Americans.”  Almost makes you forget that last year’s non-oil trade deficit rose to a five-year high, implying the loss of millions of jobs, doesn’t it?  How about the second sentence: “The Obama Administration’s trade policy helps U.S. exporters gain access to billions of customers beyond our borders to support economic growth in the United States and in markets worldwide.”  That’s an interesting way to frame a year whose sluggish two percent export growth rate put us 18 years behind schedule in achieving Obama’s export-doubling goal.  The report continues on with its pitch, trying its darndest to pretty up what amounts to a year of ugly trade policy impacts for workers and consumers, and what appears to be more of the same planned for the 2013 trade agenda. 

Before you buy this “certified pre-owned” trade policy, let us help interpret some of the report's glossy claims:

Fast Track

The report’s first page features these two sentences: “To facilitate the conclusion, approval, and implementation of market-opening negotiating efforts, we will also work with Congress on Trade Promotion Authority. Such authority will guide current and future negotiations, and will thus support a jobs-focused trade agenda moving forward.”  Those lines have prompted a frenzy of press speculation that the Obama administration could ask Congress for Fast Track, the controversial tool that presidents from Nixon to Bush II have used to seize Congress' constitutional prerogative to set trade policy.  Fast Track has been newly euphemized as "Trade Promotion Authority." (It's not a "clunker," it's a "mechanic's dream.")  Much of the press hubbub has been over whether or not Congress would or should revive the "politically contentious" Fast Track authority for Obama. But that's not the right question. We should be asking: what kind of trade negotiating system should replace Fast Track?  It's time for a modern, democratic trade negotiating process to replace an autocratic Fast Track system that predates disco. 

It's interesting that the administration decided to devote two lone sentences to Fast Track in a 382-page report. Why not be more forthright in heralding a new push for Fast Track?  Because when asking for something unpopular, it makes sense to whisper.  And Fast Track is vastly unpopular.  Before being allowed to die in 2007, Fast Track was a Nixon-conceived attempt to sidestep checks, balances and other pesky features of a democratic republic by taking from Congress its Constitution-granted prerogative to determine trade policy. In one fell swoop, Fast Track 1) delegated away Congress’ authority to choose trade partners and set the substantive rules for “trade” pacts that have deep ramifications for broad swaths of non-trade domestic policy, 2) permitted the executive branch to sign and enter into FTAs before Congress voted on them, 3) forced a congressional vote on FTAs, and 4) suspended amendments and truncated debate when that vote occurred.  It was under this legislative luge run that we got NAFTA, CAFTA, the Korea FTA, etc.  Fast Track's extreme approach has created many an opponent (right, left, and center), spurring politically costly battles for past presidents that have attempted to wrest the unpopular authority from Congress.  

If Fast Track carries such political liability, why is the Obama administration pursuing it?  Well, according to today's report, it's to “facilitate” the passage of FTAs like the TPP (see below).  But if the TPP is such a “high-standard” agreement, what’s the harm in letting Congress get a good look at it, rather than handcuffing their involvement with Fast Track?  Doing so would save Obama the political grief of a Fast Track fight.  Or maybe there’s something even more objectionable about the TPP itself that requires Fast Track’s unparalleled sequestration of congressional power to get the deal enacted?  

Again, the choice is not Fast Track or no Fast Track.  It's Fast Track or a sensible model of trade policymaking for a modern democracy.  A new model of delegated authority would respect Congress' responsibility to play the lead role in determining the outcome of “trade” deals that intend to rewrite policies regarding financial regulation, immigration, climate and energy policy, healthcare, food safety, etc.  

Trans-Pacific Partnership

USTR reiterates throughout the report its standard definition of the Trans-Pacific Partnership (TPP) as “a high-standard regional trade agreement that will link the United States to dynamic economies throughout the rapidly growing Asia-Pacific region.” (italics added)  The primary problem with this pitch is that we’re already quite linked with these economies -- as in, 90 percent linked.  The United States already has trade deals with six of the seven largest TPP negotiating economies, which constitute 90 percent of the combined GDP of the negotiating bloc.  The TPP “dynamic economies” with which we don’t already have liberalized trade include Vietnam, where annual income per person is $1,374, and Brunei, which has a population smaller than Huntsville, Alabama.  As we’ve said time and again, this deal is not primarily about trade. 

What is it about?  It's about banning Buy American policies that support U.S. jobs; discreetly enacting provisions of the congressionally-defeated, Internet-freedom-threatening Stop Online Piracy Act; restricting safety standards for imported food; empowering foreign investors to directly challenge governments’ public health and environmental policies while demanding taxpayer compensation for “expected future profits;” counteracting efforts to reregulate Wall Street; giving pharmaceutical corporations better tools to undermine drug cost containment policies; and more.  USTR appears to have omitted such details in today's report.   

Under a section entitled “Inclusion of stakeholders at Trans-Pacific Partnership negotiations,” USTR boasts that “Stakeholder engagements and briefings provided an opportunity for the public to interact with negotiators from all of the participating countries and provide presentations on various trade issues, including public health, textiles, investment, labor and the environment.”  We have indeed given such presentations…while TPP negotiators were simultaneously scheduled to be on the other side of the negotiating venue.  It’s hard to engage trade negotiators who are supposed to be in two places at once.  We do appreciate the attempt at engagement, but would appreciate a more concerted effort

After patting its back for being “open” and having “unprecedented direct engagement with stakeholders,” USTR includes this: “At the same time, the Administration will vigorously defend and work to preserve the integrity of confidential negotiations, because they present the greatest opportunity to achieve agreements that fulfill U.S. trade negotiation objectives.”  Here USTR is trying to explain the equivalent of a used car's missing motor: an unbending commitment to not release the TPP negotiating text.  While claiming “unprecedented” engagement with stakeholders, USTR’s decision to keep the TPP negotiating text secret from the public, the press, and even congressional offices is “unprecedented” among 21st-Century trade deals of this scope.  The World Trade Organization (WTO), hardly a paragon of transparency, posts key texts online for public review. In addition, when the last major regional “trade” agreement (the Free Trade Area of the Americas) was at the same stage as the TPP is now, the text was formally released by the U.S. and other negotiating governments (in 2001). It’s hard to claim genuine engagement with stakeholders when those stakeholders cannot see the thing in which they hold such a stake. 

Trans-Atlantic FTA

The report reiterates President Obama’s State of the Union surprise: that the United States intends to not just negotiate a NAFTA-style pact spanning the Pacific (the TPP), but also one spanning the Atlantic. In brief discussion of the Trans-Atlantic FTA (TAFTA), the report says, “Such a partnership would include ambitious reciprocal market opening in goods, services, and investment, and would offer additional opportunities for modernizing trade rules and identifying new means of reducing the non-tariff barriers that now constitute the most significant obstacle to increased transatlantic trade.”  But this deal, even more than most, is not about trade.  Says who?  USTR itself.  U.S. Trade Representative Ron Kirk, in a briefing on the deal said that the administration has resisted including the word “trade” in the name of the deal “because it is so much broader than trade.” 

With tariff levels already quite low between Europe and the United States, this FTA appears to be primarily about those “non-tariff barriers” standing in the way of “regulatory coherence.”  What might such opaque terms mean?  In the past, they have been code for a lowest-common-denominator approach to reducing all those safety, environmental, health, financial stability and other domestic regulations that corporations have not been able to roll back via domestic pressure.  “Trade” deals provide a handy forum in which to write binding rules that contravene such regulations.  What regulations in particular might be on the hoped-for chopping block?  European firms have already taken aim at U.S. financial regulations, while U.S. corporations have long been annoyed by Europe’s tougher policies against unsafe food, GMOs, and carbon emissions.  Big agribusiness, oil and gas, chemical, and financial firms on both sides of the Atlantic may be hoping to undermine such policies in a new TAFTA, to the detriment of, well, just about everyone else. 

Exports and Jobs

The report informs the reader that “Data from 2012 showed that every $1 billion in U.S. goods exports supported an estimated nearly 5,400 American jobs...”  Good to know.  What about an additional $1 billion in imports?  As per usual, USTR trumpets the gains of exports without looking at the other side of the trade equation.  In the same way that exports are associated with job opportunities, imports are associated with lost job opportunities when they outstrip exports, as dramatically occurred last year.  The non-oil U.S. deficit in goods rose six percent in 2012 to $628 billion, the largest non-oil U.S. trade deficit in the last five years.  According to the Obama administration’s own math, that degree of negative net exports implies the loss of 3.4 million jobs.  That data from 2012 didn’t make it into the report. 

Readers of Eyes on Trade know that U.S. exports to Korea under the Korea FTA have been faring particularly poorly: they fell 10 percent in 2012 after the deal took effect (compared to the same months for 2011).  How did USTR deal with this inconvenient truth in its annual report?  It didn’t.  With respect to the three FTAs implemented in 2012, the report states “…in 2013 we will work with Korea, Colombia, and Panama to ensure that the bilateral trade agreements that went into effect last year continue to operate smoothly…”  A ten percent fall in exports for a deal that was sold under the unrelenting promise of “More Exports. More Jobs?”  Real smooth.  It seems that these are not the things one mentions in an annual report when one’s accompanying agenda for the next year includes more of the same FTAs (e.g. TPP), sold under the same “More exports. More jobs” pitch.   

Buy American and Green Procurement Policies

Wonder why our exports and job growth has been so sub-par recently?  USTR thinks it has found the answer—that scourge of our economic woes called “localization.”  Here’s what the report has to say on the topic: “We are also actively combating “localization barriers to trade” – i.e., measures designed to protect, favor, or stimulate domestic industries, service providers, and/or intellectual property (IP) at the expense of goods, services, or IP from other countries…Localization barriers to trade that present significant market access obstacles and block or inhibit U.S. exports in many key markets and industries include: requiring goods to be produced locally; providing preferences for the purchase of domestically manufactured or produced goods and services; and requiring firms to transfer technology in order to trade in a foreign market…Building on progress made in 2012, the localization taskforce will coordinate an Administration-wide, all-hands-on-deck approach to tackle this growing challenge in bilateral, regional, and multilateral forums…” 

Before the USTR dedicates the few hands it has on deck to scour the globe for pernicious localization policies, it might want to check out a few of our own.  Namely, Buy American.  This program, widely-supported among Republicans, Democrats and independents, provides a textbook example of USTR’s definition of a “localization barrier.” Buy American explicitly “provides preferences for the purchase of domestically manufactured or produced goods,” by requiring that U.S. tax dollars be spent on domestic firms when the U.S. government purchases construction equipment, vehicles, office supplies, etc.  Did USTR have in mind the elimination of this job-supporting program? Their trade agenda would certainly indicate so –- the TPP and other FTAs ban the Buy American treatment for any foreign firms operating in new FTA partner countries. 

“Localization” also implicates Buy Local and other green procurement policies that governments are increasingly using to transition to a greener economy.  Ontario, for example, has employed a renewable energy program that requires energy generators to source solar cells and wind turbines from local businesses so as to cultivate a robust supply of green goods, services, and jobs.  The program has earned acclaim for its early success in generating 4,600 megawatts of renewable energy and 20,000 green jobs.  But one group hasn’t had much acclaim to offer: the WTO.  In a ruling at the end of last year, the WTO decided that the successful program’s local requirements violate WTO rules.  Today's report confirms indications that USTR now also intends to take on such climate-stabilizing “barriers to trade." Last month, the United States initiated a WTO case against India, attacking buy-local components of its solar energy policy.  A refurbished trade agenda that undermines an urgently-needed clean-energy agenda?  Sounds like a lemon. 

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Sherrod Brown Tosses the Panama FTA

Well, not quite. But, man, that FTA text does look pretty heavy, and like it could put a hurtin' on some of the senators in the room that are against fair trade.

But here's a floor speech from fair trade champion Sen. Sherrod Brown (D-Ohio) on the night the Senate voted on the Panama, Korea and Colombia trade deals. It's about 30 minutes, and a very eloquent description of why these trade deals are no longer primarily about "trade," but about how we regulate our domestic economy. Brown's TRADE Act would go a long way to getting "trade" policy right.

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Obama Shifts Away From Jobs Message to Promote Bush-Signed Trade Pacts Projected by Official Government Studies to Increase Trade Deficit

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

It is bizarre that President Barack Obama has switched from his long-awaited focus on jobs to spending effort passing three George W. Bush-signed, NAFTA-style trade deals that official government studies show will increase our trade deficit even as polls show most Americans oppose NAFTA-style trade pacts and recognize that they kill American jobs.

The only way these deals will pass is if congressional GOP lawmakers expose themselves to the foreseeable election attack ads and provide President Obama almost all of the votes; most congressional Democrats will oppose these deals, which are loved by the U.S. Chamber of Commerce and despised by the Democratic base groups.

Apparently, the Obama team has a way to win re-election that does not involve Ohio or other industrial swing states. We saw with NAFTA in 1993 the dire political consequences of a Democratic president blurring distinctions between the parties on this third-rail issue of trade and jobs. And unlike NAFTA, this time, even official government studies show that these pacts will increase our trade deficit.

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Trade-ifact Part Deux

It's time for the second installment of Trade-ifact: Keeping the Media Honest about Trade Deals. Since our last installment, FTA proponents in the administration and Congress have worked to move along the negotiations for curtailing Trade Adjustment Assistance (TAA), all while maintaining a straight face when claiming that these trade pacts will create jobs. Late yesterday, White House Chief of Staff Bill Daley said that they would submit the FTAs for Congressional approval within days, so next week expect the FTA debate to turn white-hot (and a wave of questionable claims to reach tidal wave heights).

Doug Palmer (Reuters)

US showdown looming on Korea trade without deal soon (7/10/2011)

Palmer writes, "A year ago, Obama moved to resolve Democratic concerns with the deals." Democratic concerns with the three FTAs remain unresolved. Despite small tweaks to the auto provisions in the Korea FTA, imports of Korean autos are still projected to slam U.S. autoworkers. Plus, nothing was done to address the Korea FTA's prohibitions on certain vital financial sector regulations. Murders of labor union leaders in Colombia continue, and many Democrats are vowing to oppose the Colombia FTA as a result. Finally, Panama's status as a tax haven will remain unchanged if the Panama FTA is approved. The FTA's investor-state provisions would even allow the Panamanian government and corporations to challenge U.S. policies targeting tax havens. Overall, there has been no fundamental change to the NAFTA trade model that Obama promised while he was a presidential candidate.

Palmer claims that Fast Track trade negotiating authority "has long been considered vital for securing trade deals with U.S. trading partners worried that without it their agreements could be picked apart by Congress."  As noted in our book on the history of Fast Track, scores of trade agreements have passed Congress without Fast Track protection, including 130 trade and investment agreements under the Clinton administration alone (Clinton lacked Fast Track authority from 1995 to the end of his second term). In 2000, former Clinton U.S. Trade Representative went as far as to say, "if you look at our record on trade since 1995, I don't think the lack of Fast Track impeded our ability to achieve our major trade goals."

Obama said ready to move on South Korea trade bill (7/14/2011)

Palmer says that Obama demands an "extension" of TAA be approved along with the three FTAs. The Obama administration's proposal on TAA is actually to narrow eligibility and cut benefits. As Inside U.S. Trade reports, under the new TAA plan workers displaced by trade could receive a maximum of 130 weeks of income support while undergoing retraining, while currently workers can receive up to 153 weeks of income support. It also would restrict income support eligibility for workers who are not in retraining programs, cutting the types of waivers for income support from six to three. Chairman of the House Ways and Means Committee, Republican Rep. Dave Camp, said of the deal, "The final result is a program that has been cut not only from 2009 levels, but also below 2002 levels in several key areas." The "2009 levels" are the elements of the TAA program that expired earlier this year, while the 2002 levels are the elements that are currently in effect. The cuts are a burden on displaced workers when they can least afford it.

Vicki Needham (The Hill)

Republicans split on trade tactics (7/13/2011)

Continue reading "Trade-ifact Part Deux" »

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Liveblogging dueling congressional hearings on 3 NAFTA deals

President Obama has decided to introduce NAFTA-style deals with Panama, Colombia and Korea to Congress, bowing to pressure from corporations and Republicans.

Recognizing that the deals would cost jobs, the administration also agreed with House Republicans to cut (but partially renew) trade adjustment assistance (TAA) for workers displaced by trade.

Republicans, after getting what they want, are now threatening to block or muddle the push on the FTAs, because TAA was not cut enough, or out of concerns that pairing TAA with the FTAs backs up the notion that trade deals cost jobs. Well, yes.

The three deals will be considered under Fast Track trade promotion authority, which means that normal congressional procedures and debate are suspended. As we state in our book on the topic:

Core Aspects of Fast Track Trade-Authority Delegation

  • Allowed the executive branch to select countries for, set the substance of, negotiate and then sign trade agreements – all before Congress had a vote on the matter.
  • Required the executive branch to notify Congress 90 calendar days before signing and entering into an agreement.127
  • Empowered the executive branch to write lengthy implementing legislation for each pact on its own, without committee mark ups. That is to say, the process circumvented normal congressional processes. These executive-authored bills altered wide swaths of U.S. law to conform domestic policy to each agreement's requirements, and formally adopted the agreement texts as U.S. law. As a concession to congressional decorum, the executive branch agreed to participate in "non" or "mock" hearings and markups of the legislation by the trade committees. However, this is a practice, not a requirement.

Today, we will attempting to live-blog the simultaneous mock markups in the Senate Finance and House Ways & Means Committees. I'll be focusing on the latter. [My comments will be in brackets; unless noted by quotes, all notes are paraphrased from actual statements.]

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Chairman Dave Camp (R-Mich.): We obtained significant reductions in TAA. But the agreement was on substance, not process.

[See statement here. Camp has a key misrepresentation in his opening statement:

"The three trade agreements are a sure-fire way to create American jobs by growing U.S. exports of goods and services – and they do not require one dime of new government spending.  The independent U.S. International Trade Commission estimates that the three pending trade agreements together would increase U.S. exports by at least $13 billion.  These agreements will create and support jobs here in the United States – 250,000 jobs, using the President’s own measure."

This is a serious misrepresentation. In fact, consistent use of this methodology here would show a job loss from the trade deals, not a job gain.

And it's misleading to suggest that these deals don't cost money. In fact, as the Congressional Budget Office estimates have shown, the U.S. government will lose billions in tariff revenue from implementing the deals.

Korea FTA itself: $7,355 million over 2011-2021

Colombia FTA itself: $1,400 million over 2011-2021

Panama FTA itself: $6 million over 2011-2021]

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Ranking Member Sander Levin (D-Mich.): Urging a "no" vote on mock markup of the 3 FTAs if his amendment to include TAA is not included. Is asking for a certification to be required that Colombia has met its action plan requirements before the agreement enters into force. Urging a no vote if this amendment to require certification fails.

[This Action Plan fails to accomplish the most important labor rights objective: requiring an end to unionist killings on the ground. It also falls far short of the extensive benchmarks laid out by Democratic labor rights leaders.]

Continue reading "Liveblogging dueling congressional hearings on 3 NAFTA deals" »

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Scott Walker's NAFTA trade package

President Obama came under fire from progressives earlier this year who felt he did not do enough to support the working families in Wisconsin and throughout the Midwest who have been fighting to preserve their collective bargaining rights from attacks by anti-worker governors like Scott Walker.

Now, the administration has gone a step further and is touting Scott Walker's support for a package of three NAFTA-style trade deals that are projected to offshore American jobs. The letter also calls for reinstatement of Fast Track, the undemocratic mechanism invented by Richard Nixon to ram trade deals through Congress that expired in 2007 and that Obama campaigned against as a candidate.

Most governors did not sign onto this latest NAFTA push. But  Scott+Walker+Presidents+Obama+Travels+Wisconsin+D0lRNSKUp6Jl major anti-union Republican governors including Walker and Indiana's Mitch Daniels are on the letter. (See whether your governor signed on or not after the jump.)

It's one thing to backtrack on the fair-trade campaign commitments you made to your political base, adopt Bush's trade policies as your own, and refuse to go out of your way to fully support your political base in state level politics. It's quite another to actively partner with governors that want to destroy your political base on an agenda the American people despise.

Click here to take action and urge your member of Congress to vote down Scott Walker's NAFTA trade package.

See the full list of signatories after the jump.

Continue reading "Scott Walker's NAFTA trade package" »

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Senate Supermajorities, Filibusters and Worker Rights

Labor activist Thomas Geoghegan recently had a piece in the New York Times that rightly decries how current filibuster practices are imposing supermajority requirements on non-treaty legislation like health care reform.

Ironically, treaties have now been effectively stripped of their supermajority requirements. The Constitution empowers Congress to regulate foreign commerce, and requires that treaties be approved by a Senate supermajority. According to the Federalist Paper 75, this was to ensure popular legitimacy of international instruments that would operate as domestic laws. Yet, the controversial 2005 Central America Free Trade Agreement - which the founders would likely have considered a treaty - passed by only two House votes. The process on this and similar deals was rushed through Congress via the Fast Track mechanism (itself receiving only one vote in the House in 2001), which limits debate and gives expansive powers to the executive to design and sign trade agreements.

Public policy will continue to face a legitimacy crisis if pro-worker legislation is perpetually blocked, while anti-worker trade deals skate through Congress.

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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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Unifying the Dems across Caucuses

With Congress in recess this week, we're finally able to take a step back and analyze just how significant last week's TRADE Act roll out was.

What's most impressive is just how diverse the list of TRADE Act cosponsors are. We put together a handy list of cosponsors, and we're all jazzed when we see the 17 members of the Blue Dog Caucus together with 14 members of the New Democrat Caucus and 19 Congressional Black Caucus members. I'd be really interested in seeing a list of bills cosponsored by both Barbara Lee (D-CA) AND Leonard Boswell (D-IA).

And then you have members like freshman Rep. Tom Perriello (D-VA), who won his seat by 727 votes in a district President Obama lost by 2500 votes, connecting the dots between the current economic crisis and 16 years of the NAFTA trade model at the roll out press conference. What Perriello gets, and Democrats must to keep their majority, is that the politics of trade reform play especially well for Democrats in those red or purple districts that Democrats originally lost back in 1994. If I were knocking on doors for a candidate in Virginia, North Carolina or upstate New York, I'd be keeping the TRADE Act's call for a review and possible renegotiation of NAFTA high up on my clipboard.

Blue Virginia gives Rep. Tom Perriello a shout out for his leadership on the issue here.



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Videos from yesterday's TRADE Act presser

We've got statements from six members on video from yesterday's TRADE Act news conference. Here are the goods (all these links go to YouTube):

Also, check out this Reuters story on the Washington Post website, which says:

Trade deals with Panama, Colombia, and South Korea were negotiated by the Bush administration, but must be ratified by Congress before they can go into effect.

The House legislation "sets a clear standard for where House Democrats are on trade," said Bill Holland, a spokesman for Public Citizen, a consumer advocacy group that supports the bill.

"Those three (pending) agreements are built on the NAFTA model, and today's introduction of the Trade Act is a clear rejection of that model and a call for change," he said.

Finally, here are some letters of support for the TRADE Act from prominent organizations. A few samples: AFL-CIO; Change to Win; Sierra Club; Friends of the Earth (all PDF downloads).

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TRADE Act 2009: Double the Original Cosponsors, Double the Fun!

Web_DSC_6956

As Todd mentioned, the TRADE Act was reintroduced in the House of Representatives today by sponsor Rep. Mike Michaud (D-Maine). This year's version of the legislation is backed by 106 original cosponsors, including nine committee chairs and 45 subcommittee chairs. The cosponsors come from the full range of Democratic caucuses and from around the country. The full list of cosponsors is available here. The Trade Act - 2009 version - has double the number of original cosponsors as the Trade Act introduced last June, showing that support is rapidly growing for a fair-trade alternative to our current failed NAFTA-WTO model.

At today's press conference, although periodically interrupted by a series of floor votes, a number of members of Congress gave impassioned statements about the need for a new direction on trade. Chairwoman Louise Slaughter (D-N.Y.) and Reps. Michaud, Paul Tonko (D-N.Y.), Betty Sutton (D-Ohio), Tom Perriello (D-Va.), and Rosa DeLauro (D-Conn.) all spoke and took questions. We'll have video clips of some of these statements up by tomorrow.

In the meantime, after the jump, check out our full press release and some additional photos from today's press conference.

Continue reading "TRADE Act 2009: Double the Original Cosponsors, Double the Fun!" »

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Trade Act to be unveiled shortly

The 2009 Trade Reform, Accountability, Development and Employment Act, or TRADE Act, will be unveiled at 2 pm at an event on Capitol Hill.

The bill, sponsored by fair-trade champion Rep. Mike Michaud (D-Maine), has over 100 cosponsors, and represents a positive, forward-looking alternative to the failed NAFTA-WTO unfair trade model. Check out our post on last year's unveiling for a taste of things to come.

Stay tuned!

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Louise Slaughter, Presente!

The Conference Board of Canada just released a report that looks at the impact of the fair-trade sweep in the last two U.S. elections.

It takes the anti-democratic analytical perspective that things said during campaigns don't matter. So we have the inevitable comparison that only Nixon could "open" China, and only Obama could "save free trade," apparently because he campaigned against NAFTA-style policy.

While it's a well-worn trope that Democratic Party candidates lie to their base in the primaries to win their support, the important difference this time was the specificity of Obama's critique of NAFTA, some of which you can read about here. To be certain, we have no idea what his eventual policies will be, but we do know that this is not your father's Democratic primary in terms of the specificity of the commitments. It is a new day in regards to the trade-policy orientation of the president.

As for the congressional politics, the notion that the legislative branch will just roll over on its commitments seems incorrect as well. All you have to do is look at today's Roll Call story for evidence of Congress' collective backbone, and that they won't take the Panama FTA lying down:

“I’m getting really pis*ed off,” said House Rules Chairwoman Louise Slaughter (D), who represents a region of New York that has suffered under the North American Free Trade Agreement. “Obama’s got to get a he*l of a lot of stuff up through here, and to start out by bumming out about half of us doesn’t strike me as a wise move.”

Rep. Mike Michaud (D-Maine), co- chairman of the House Trade Working Group, singled out House Majority Leader Steny Hoyer (D-Md.) in his criticism of his party leaders’ desire to advance the Panama deal. The working group includes several prominent Members, including six committee chairmen and 17 subcommittee chairmen.

“As a Democratic leader, I don’t think it’s helpful to vulnerable Members to ask them to support a Bush-negotiated trade deal,” Michaud said. “As a Democratic leader, [Hoyer] should not be encouraging the White House to move forward on this.”...

During a meeting last month with representatives from the Office of the U.S. Trade Representative, Slaughter spoke on behalf of about 20 Members in voicing concerns with the Panama deal. The USTR attendees seemed “receptive,” she said, but have not contacted her since the meeting.

“I carried on awful,” Slaughter said of the hourlong meeting. “We’re not just going to take all of this stuff lying down anymore.”...

Rep. Marcy Kaptur (D-Ohio), one of the Members who attended the USTR meeting, said Slaughter repeatedly reminded USTR officials that she chairs the powerful Rules Committee.

“She made it very clear that she didn’t intend to move any of those bills,” Kaptur said. “I hope it gets someone’s attention over at the White House.”

The author of the report's obliviousness to a changed landscape within the Democratic Party shows through in the citation of the U.S.-Peru Free Trade Agreement, which the Conference Board notes passed, but doesn't mention that a majority of the majority Democrats opposed.

The Conference Board report is off in a number of other regards. First, it says that Obama will ask for Fast Track (i.e. Trade Promotion Authority). I have not seen that anywhere, and I don't think it is correct. He may ask for some form of delegated authority, but it is unlikely to be Fast Track. In fact, the quote that the Conference Board cites indicates that Obama is looking to change the form of delegated authority by establishing new checks and balances on the process. As the campaign commitments cited above note, Obama has said he will "replace Fast Track." (Our recent book - "The Rise and Fall of Fast Track Trade Authority" - offers a variety of alternative arrangements that could boost the legitimacy of trade deals.)

Finally, far too many Canadian sources are spreading misinformation about the Buy America/n provisions in the stimulus bill. As we've explained many times, the stimulus bill is ONLY an improvement for Canada. For the Buy America provisions related to federal grants to states for transit projects,  U.S. products have always been given a 25 percent price preference over products from Canada (and other trade-pact partner countries). For the Buy American provisions related to federal procurement, U.S. products (specifically iron, steel, and manufactured products for stimulus-funded projects) received a 6 percent preference, and now they receive a 25 percent preference. But... wait for it... so. does. Canada., and all of our other trade-pact partners. Pre-stimulus rules were more generous to Canada than Canada is to us under its WTO-NAFTA commitments, and the post-stimulus rules are more generous than the pre-stimulus rules.

So, friends to the north, don't hate, appreciate! (And don't worry, we know that our friends in labor and the environmental community are already far ahead of their government and elites on this question.)

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Video from Book Event

For those who missed yesterday's book launch of "The Rise and Fall of Fast Track Trade Authority", you can watch the video here, and check out pics on the New America Foundation website.

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New Book: How to Build a New U.S. Trade Consensus

We just released a book on "The Rise and Fall of Fast Track Trade Authority." It is available online at http://www.FastTrackHistory.org/ and at Amazon.Com if you prefer a Kindle download.

The formal launch will be today at the New America Foundation at 12:15 pm here in DC. If you are interested in attending or watching the event on a live stream, please go to the New America Foundation website. I believe you can even ask questions live and online.

Here's our press release:

New Book: How to Build a New U.S. Trade ConsensusCover3

‘The Rise and Fall of Fast Track Trade Authority’ Provides Unprecedented Historical Review of Trade Authority Since Nation’s Founding and a Path Forward

WASHINGTON, D.C. – A new book released today by Public Citizen examines the colorful 220-year U.S. history of how the president and Congress have grappled with negotiating and implementing trade agreements given the constitutional separation of powers requirements. “The Rise and Fall of Fast Track Trade Authority” by Todd Tucker and Lori Wallach concludes that Fast Track (the most recent mechanism Congress used to delegate its trade powers to the president) is a historical anomaly and counterproductive to the creation of good trade pacts.

“We wrote this book because when we did the research necessary to give ourselves a clear picture of Fast Track and the delegation systems before it, we found distorted, partial and inaccurate information in existing journalistic and scholarly work,” said Tucker, research director of Public Citizen’s Global Trade Watch division and a co-author of the book. “Much like the conventional wisdom on financial and trade deregulation, the prevailing narrative was that Fast Track was inevitable and necessary for the creation of trade agreements. We show that this is false and that, on the contrary, Americans have frequently changed the way that the executive and legislative branches have shared trade-policy powers.”

The book will be released today at an event at the New America Foundation in Washington, D.C. It will be available in a variety of easily readable formats accessible at FastTrackHistory.org. The research and publication of this material was made possible by a grant from the Alfred P. Sloan Foundation.

The book explores how the process of designing U.S. trade agreements has changed from 1789 to the present, examining five different regimes of trade-policy formation, the most recent culminating with the expiration of Fast Track during President George W. Bush’s second term.

Under the U.S. Constitution, Congress is responsible for crafting trade policy. Yet, over the past few decades, presidents have increasingly grabbed that power through Fast Track, which allows the executive branch to pick negotiating partners, determine trade pacts’ contents and even sign the deals – all before Congress gets a vote.

The book also notes that the trade agreements facilitated by Fast Track delve deeply into non-tariff, non-trade areas of policy such as investment, procurement and intellectual property. The book provides an unprecedented documentation of the arguments that motivated both opponents and proponents of the expansion of executive power over trade agreements. It is the result of a three-year scholarly investigation into hundreds of primary and secondary sources, many referenced in the book for the first time.

The book notes that growing numbers of voters and policymakers – including President Barack Obama and U.S. Trade Representative Ron Kirk – have opposed Fast Track and called for a more democratic process for creating a national globalization strategy.

“We look forward to a future new mechanism that can reduce political tension about trade policy and secure prosperity for the greatest number of Americans, while preserving the vital tenets of American democracy in the era of globalization,” said Wallach, director of Public Citizen’s Global Trade Watch division and a co-author of the new book. “Now is the time to have the debate about a new trade model, and this new book provides an essential starting point.”

###

Public Citizen is a national, nonprofit public interest organization based in Washington, D.C. For more information, please visit www.citizen.org.


Advance Praise for “The Rise and Fall of Fast Track Trade Authority”:

U.S. Sen. Sherrod Brown, Democrat of Ohio and congressional trade-policy leader
“If you wonder why trade policy over the past several years has reflected such narrow interests, look no further than the imbalanced trade policymaking process that is Fast Track. There is no other legislative mechanism with such extraordinary powers. Read this informed and engaging account of Fast Track’s history and take action.”

U.S. Rep. Mike Michaud, Democrat of Maine and co-founder of House Trade Working Group
“Most people now in Congress weren’t elected when President Nixon designed Fast Track to grab Congress’ exclusive constitutional authority over U.S. trade policy. President Obama discussed the need to replace Fast Track with a process that ensures a greater role for Congress. This book provides the lessons of 233 years of American trade authority history to inform Congress’ efforts to create just such a new trade negotiating mechanism.”

Alfred E. Eckes, eminent research professor in Contemporary History at Ohio University, author of “Opening America’s Market: U.S. Foreign Trade Policy Since 1776,” and former Reagan-appointed chairman and commissioner, U.S. International Trade Commission
“Candidates for federal office should be required to read and address the critical issues raised in this stimulating book. Wallach and Tucker make a persuasive case that the fast-track trade negotiating process produces agreements weighted to the interests of corporate giants and harmful to democratic governance and public safety. Their argument that a more democratic trade policy process is both possible and desirable merits the attention of public officials and thoughtful citizens everywhere.”

About the authors:
Lori Wallach is the director and founder of Public Citizen’s Global Trade Watch division and co-author of “Whose Trade Organization? A Comprehensive Guide to the WTO,” published by The New Press in 2004. One of the most widely cited trade and globalization policy experts, Wallach has testified before Congress, federal agencies and foreign legislatures. She graduated from Wellesley College and Harvard Law School.

Todd Tucker is research director of Public Citizen's Global Trade Watch (GTW) division. He is author of dozens of reports on the WTO, NAFTA, and various other consumer and economic issues. A graduate of George Washington University, he received his masters in development economics from Cambridge University.

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Join Us Thursday for a Live Discussion of a Mind-Blowing, Life-Changing Book

Friends, Readers, and all a yinz.

It's been years in the making, and it's finally arrived: the release of our new book this Thursday! Here areCover3 the details:

What: Book Release Event for "The Rise and Fall of Fast Track Trade Authority,"
Who: Authors Lori Wallach and Todd Tucker will speak; moderated by Barry Lynn, Senior Fellow at New America Foundation.
When: Thursday, May 7, 2009, 12:15 pm.
Where: New America Foundation, 1899 L Street, NW, 4th Floor, Washington, DC 20036
Why: Because you want to know about a much-needed new direction for trade policy
How: All's you got to do is RSVP right here.

More about the book:

The Rise and Fall of Fast Track Trade Authority is the first complete history of U.S. trade authority's evolution since the nation's founding. It shows how the balance of power between Congress and the executive branch has shifted regarding trade authority over the years.

Authors Tucker and Wallach explore how this perennial constitutional issue has been shaped over time by people you've heard about - like Hamilton, Nixon, and George W. Bush - and lots of people you probably haven't heard about. Unsurprisingly, Fast Track comes out as an historical anomaly. But some other lessons are less expected and can help shape a new trade authority mechanism that can replace Fast Track in the future.

The central message? Like our trade policy itself, Fast Track was not a random inevitability: things can be and have been done differently, and moving forward we must learn from the past. The book includes a new trade pact negotiating and approval process  to replace Fast Track that is more appropriate for today's expansive, complex international commercial agreements.

Praise for The Rise and Fall of Fast Track Trade Authority

"If you wonder why trade policy over the past several years has reflected such narrow interests, look no further than the imbalanced trade policymaking process that is Fast Track. There is no other legislative mechanism with such extraordinary powers. Read this informed and engaging account of Fast Track's history and take action." - Senator Sherrod Brown, Democrat of Ohio and congressional trade-policy leader

"Most people now in Congress weren't elected when President Nixon designed Fast Track to grab Congress' exclusive constitutional authority over U.S. trade policy. President Obama discussed the need to replace Fast Track with a process that ensures a greater role for Congress. This book provides the lessons of 233 years of American trade authority history to inform Congress's efforts to create just such a new trade negotiating mechanism." -Representative Mike Michaud, Democrat of Maine and Co-chair of House Trade Working Group

HOPE TO SEE YOU THERE!

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Fast Track = dope

Just came across a pretty funny intervention in the original Fast Track fight from 1973-74, when Rep.Dope Charles Dent (D-Pa.) said,

"This is one bill that no one wants to hear anything about, because they might hear something that is in opposition to their views. The trade bill is just like someone who starts taking dope. People who take dope know it is wrong, they know it is unhealthy, they know that in the end it will kill them, but they keep on taking it."


Dent was referring to the Trade Act of 1974, which established the first grant of Fast Track authority, where Congress delegates its constitutional authority to set the terms of trade agreements to the executive. Most Democrats voted against the original Nixon proposal in December 1973. The Senate made some changes to the bill in 1974, but no printed copies were furnished to the members of the House, who were told by Ways & Means Committee members that the bill was dramatically improved. Most members simply trusted their colleagues to be telling the truth, a blind faith that was eroded by every single trade vote since.

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In which I find myself sorta agreeing with Phil Gramm

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

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

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Becerra Roundup

Obama's courting of Rep. Xavier Becerra (D-Calif.) for USTR continues. Here's a news round up.

Here's Mark Landler from the NYT:

If President-elect Barack Obama appoints Representative Xavier Becerra, Democrat of California, as his chief trade negotiator, it would punch several political tickets at once for Mr. Obama.

Mr. Becerra, who has emerged as the leading candidate to become United States trade representative in the Obama administration, is known as a defender of workers’ rights and as a skeptic of trade agreements. That would please union backers of Mr. Obama, who spoke in the campaign about reopening the North American Free Trade Agreement...

Trade experts said the appointment of Mr. Becerra would suggest that Mr. Obama intended to make good on his campaign pledges to hold existing and new trade deals to tougher scrutiny.

Mr. Becerra, who entered Congress in 1992 and serves a district in Los Angeles, voted in favor of Nafta but now says he regrets it. In 2005, he helped lead the Democratic opposition to the Central American Free Trade Agreement, emerging as an impassioned voice for the rights of workers. The deal passed the House by two votes...

Some analysts suggested that choosing Mr. Becerra would be a gesture to Mr. Obama’s Democratic base after a series of economic appointments — Timothy F. Geithner as Treasury secretary and Lawrence H. Summers as a top White House adviser — that were viewed as sympathetic to business.

“We’re comfortable with it,” said Thea M. Lee, public policy director of the A.F.L.-C.I.O. “President-elect Obama has signaled that he wants trade policy to go in a different direction. The choice of Congressman Becerra indicates that he is going to hold trade policy to a high standard.”

And David Sirota over at Open Left:

Beccera hasn't accepted yet, but if he does, my initial reaction is that this is a solid choice. No, it's not perfect - Beccera voted for the landmark China PNTR deal in 2000 and for the Peru Free Trade Agreement. But perfect shouldn't be the enemy of the damn good.

Getting a U.S. Trade Representative who is on record against the NAFTA trade model and with votes against CAFTA and Oman is a huge change from both the Bush administration and the Clinton administration. And it's not just a good pick because it's a change from really bad Trade Representatives, the selection itself is good - and way, way, way better than what it could have been. The selection suggests Obama is serious about reforming our trade policies, and it should be applauded.

Here's John Nichols in the Nation:

Becerra has a long history of engagement with trade debates. That made it particularly significant when, in 2006, he announced that "it has become very obvious that our system for devising trade agreements, so very important to this country's functioning around the world, has not only broken, but it has broken completely."

Becerra is not a resolute fair-trader like Ohio Senator Sherrod Brown, Vermont Senator Bernie Sanders or Ohio Representative Marcy Kaptur. Like Obama, he's a mixed bag who will still need to be prodded by activists, especially as new debates about trade in services evolve. Becerra backed NAFTA as a House freshman, and has voted for several other trade deals. He has since acknowledged, however, that he was wrong to support schemes that may increase commerce but tend to concentrate "the benefits of that commerce in the hands of very few." That's encouraging. Even more encouraging is the fact that since his election to the House in 1992, Becerra has consistently opposed the "fast-track" model for negotiating trade agreements. When Congress grants fast-track authority to a president, it cedes to the trade representative most of its ability to shape policy, retaining only the right to accept or reject a final agreement. If Obama and Becerra simply develop a new approach to negotiating trade agreements, one that involves consultation with Congress, it will be much more likely that labor, consumer and human rights concerns will be addressed.

It is on those human rights issues that Becerra has been a particularly strong player in recent years. The Congressman delivered a national Spanish-language radio address last spring in which he defended the Democratic rejection of Bush's proposed Colombia free trade agreement on the grounds that, "Colombia still remains a dangerous place for those who advocate for worker rights. More than 2,500 labor leaders have been assassinated in Colombia since 1986. What would we say if labor leaders were being assassinated in our country every day, just for standing up for their rights as workers? That is what is happening in Colombia today." The message Becerra delivered was radically at odds with that of Republican and DLC free-traders. If he keeps delivering it as trade representative--along with other fair-trade themes he has articulated--Becerra could become the face of the change in trade policies that Obama promised, and that working people here and abroad can believe in.

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Stay Tuned... We're Moving Past The Fast Track

Regular readers of the blog will notice that our posting has dropped off a bit in recent weeks.

The reason? We've been busy with several long papers that we'll be releasing soon on Fast Track and what will replace it. One is a history paper of the various mechanisms that the United States has used over 219 years to deal with the executive-legislative branch co-responsibility for trade agreement negotiations and approval. It concludes that Fast Track is not inevitable, necessary, or even desirable to promote trade expansion. A second piece compares Fast Track's treatment of state and local officials to processes used by other federal democracies like Canada.

We think you'll enjoy 'em, and you'll be hearing more about them in the coming weeks.

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Behind the Fast Track Death

I am heading out of town for a week or so for Passover, but here's one last post before I go. Our friends from Human Rights Watch have an excellent post over at the Hill:

Congress is right to delay consideration of the US-Colombia Free Trade Agreement (FTA). What’s at stake here is a fundamental principle: that free trade should be premised on respect for human rights, especially the rights of the workers producing the goods to be traded.

Colombian workers cannot exercise their rights without fear of being killed. Just in the first three months of this year, 17 Colombian trade unionists have been assassinated—a substantial increase over the 10 killed in the same period last year.

Dan Wolfensberger writes in Roll Call:

Pelosi, however, is the first Speaker in the history of the 34-year-old statute to ask the Rules Committee (with House approval) to suspend the expedited timetable for consideration. The House handily endorsed her gambit Thursday, 224-195.

Just as it is unlikely that Congress will grant Bush his requested renewal of fast-track negotiating authority so late in his term, it is even more difficult to imagine a Democratic president even asking for it... It is also highly unlikely that the next Congress, which is likely to contain an even larger Democratic majority in both chambers, will grant whomever is president such authority. All this poses a new challenge to both branches of how to reconfigure our trade relations and processes over the next four to eight years...

The Politico gives the inside scoop on Fast Track death:

Democrats broke more than three decades of precedent by changing trade rules to suspend consideration of the deal. But they also displayed a procedural acumen that was less evident during their first, sometimes bumpy, year in power...

McGovern and other Democrats on the Rules Committee began discussing the possibility of stripping the time requirements from trade rules as early as January, members and aides said.

Those conversations were hypothetical, however, until the White House began to make noise about sending the Colombia agreement to Capitol Hill before Pelosi signed off on it. That prompted McGovern and Rules Committee Chairwoman Louise McIntosh Slaughter (D-N.Y.) to call for a meeting with the speaker.

Slaughter and McGovern oppose the trade deal for different reasons. The Massachusetts Democrat believes Colombia has not gone far enough to rectify its history of violence toward labor leaders.

Slaughter, meanwhile, opposes the measure because she believes it would deal another blow to her upstate New York district, which already suffers from the steady export of jobs.

Both opposed any maneuvering by Bush to force a vote, and both believed that stripping the time requirements was the best way to stop the president in his tracks.

And we got some feedback on a post from earlier this week on Fast Track, and just wanted to point out that Pelosi's action to cancel Fast Track virtually guarantees that the Senate will also not take action.

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Focusing in on the economics and foreign policy

I had a piece on the record of NAFTA in my hometown paper today, the Courier-Journal, which typically (and today was no exception) is a big supporter of NAFTA-style trade deals.

If NAFTA is so rotten, why does Congress keep passing similar deals? The few special interests benefiting from these pacts have armies of lobbyists, give millions in campaign contributions and are shameless scaremongers. Their latest line, for instance, is that expanding NAFTA will counter the influence of Venezuela. In reality, the damage done to most people in our trade partner countries by NAFTA-like policies has been a major factor in breeding anger against the U.S. and support for populism.

Thankfully, the 2006 elections ushered in a freshmen class full of fair traders. The new political reality was on display in last year's vote on a NAFTA expansion to Peru. Reps. John Yarmuth and Ben Chandler joined a majority of Democrats in opposing the deal, which was also opposed by American and Peruvian unions, church leaders and environmental groups. Yet Indiana's Baron Hill and Brad Ellsworth were among the minority of Democrats who caved to corporate pressure and voted for the NAFTA expansion. This is a bad record to have as Sen. Barack Obama and Sen. Hillary Clinton tour Indiana bashing NAFTA and distancing themselves from their own mixed records on trade.

There are some other great pieces out there circulating now too. Kevin Gallagher has a great piece looking at the economic impact of the deal:

The U.S.-Colombia Free Trade deal is one of the most deeply flawed trade pacts in U.S. history. It will hardly make a dent in the U.S. economy, looks to make the Colombian economy worse off and accentuate a labor and environmental crisis in Colombia. The Democratic majority in Congress is right to oppose this agreement and call for a rethinking of U.S. trade policy.    

According to new estimates by the United Nations Economic Commission for Latin America, the net benefits of the agreement to the U.S. will be a miniscule 0.0000472 percent of GDP or a one-time increase in the level of each American's income by just over one penny. The agreement will actually will make Colombia worse off by up to $75 million or one tenth of one percent of its GDP; losses to Colombia's textiles, apparel, food and heavy manufacturing industries, as they face new competition from U.S. import, will outweigh the gains in Colombian petroleum, mining, and other export sectors, it concludes.

Adam Isacson has an interesting piece tackling the national security argument for the Colombia FTA:

Dealing a blow to small-scale producers in places like Cauca, Nariño, or Putumayo could damage the livelihoods of thousands of farmers who, as it is, are just getting by. It could add to the ranks of rural dwellers who see no other option but to plant coca. It could add to the population of young rural Colombians susceptible to recruitment by guerrillas or "emerging" paramilitary groups.

In the absence of a "Marshall Plan" for Colombia's countryside—which is not forthcoming—the FTA could deal an economic shock to zones that, while sparsely populated, are of central importance to the effort to combat armed groups and the drug trade. Rather than making the Andes safer, the FTA could trigger a more immediate national-security threat.

In other news, support for the free market system is dropping in the US and around the world, according to a new poll from PIPA. Finally, Policy Matters Ohio has a great report out calling for an industrial policy for "green" and "blue"-friendly lightbulbs.

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Bitter fallout, murders, dodges, rules, deals

(Disclosure: Global Trade Watch has no preference among the candidates.)

Following Obama's "bitter" comment, most progressives are rallying to his defense: see Sirota here, Jane Smiley here, and Katrina vanden Heuvel here. A lot of progressives I know think that Obama was just channeling Thomas Frank. I dunno, I read the comment as throwing Frank in with the Kansans, and dismissing both. After all, trade criticism was listed right along religion as a seeming opiate of the masses. It seems, however, from yesterday's news cycle that Obama did not intend to send this message. Obama now says:

“Obviously, if I worded things in a way that made people offended, I deeply regret that,” Obama said in a phone interview with the Winston-Salem Journal. “But the underlying truth of what I said remains, which is simply that people who have seen their way of life upended because of economic distress are frustrated and rightfully so.”

On the right, Bill Kristol, no NAFTA opponent, writes in the NYT on the Obama bitter remark:

Obama ascribes their anti-trade sentiment to economic frustration — as if there are no respectable arguments against more free-trade agreements. This is particularly cynical, since he himself has been making those arguments, exploiting and fanning this sentiment that he decries. Aren’t we then entitled to assume Obama’s opposition to Nafta and the Colombian trade pact is merely cynical pandering to frustrated Americans?

But mostly, all was quiet on the trade angle of Obama's remarks from the corporatists, who love to use the Guns-God-Gays wedge issues while also pushing failed trade policies.

In other news, BoRev shows video showing Hillary unwilling to answer questions about her husband's ties to Colombia.

Simon Romero writes on the union killings in Colombia, showing that Citigroup employees are among the unionists targeted for murder just this year - which has seen an uptick of killings relative to 2007:

The case of Leonidas Gómez, Ms. Gómez’s brother, is one of several examples of union officials killed in recent weeks who were involved in organizing rare protest marches last month against paramilitaries. Government investigators here said they were investigating all the recent killings but had not yet identified those responsible.

Carlos Burbano was a vice president in the hospital workers’ union of the municipality of San Vicente del Caguán in southern Colombia who disappeared March 9. His body was found four days later in a garbage dump in an area considered paramilitary territory. Mr. Burbano, who had received threats before from paramilitaries, had been stabbed multiple times and burned with acid.

Like Mr. Burbano, Mr. Gómez, a member of the Bank Workers’ Union here in Bogotá, was an outspoken critic of the paramilitaries. He had also traveled throughout Colombia to speak against the trade deal, which he expected to raise salaries of senior Citigroup executives while eroding the benefits of employees, said Luis Humberto Ortiz, a fellow union official and Citigroup employee.

Mr. Gómez, last seen at a meeting with leftist politicians on the night of March 4, was found dead in his apartment on March 8, with stab wounds and his hands tied behind his back. Missing from his apartment were his laptop computer, U.S.B memory sticks and cash from his pockets, said his sister, Ms. Gómez.

Inside U.S. Trade on Friday had some interesting dissection of what Pelosi's Fast Track move last week means. Here is my paraphrasing of their reporting:

  1. Pelosi - confirmed by Rules Cmte and House vote - removed the Fast Track timeline, as well as the provision that it is highly privileged and cannot be debated. This safeguards against the scenario where Rangel passes it out of Ways and Means Committee but Pelosi remains opposed. It also safeguards against any member of Congress calling for a vote when they want. So leadership will be in control.
  2. The Colombia FTA is still not amendable, however, and the Senate rules remain the same: once the House sends it up, the FTA has up to 15 days in Finance Committee, and up to 15 additional days for a floor vote.
  3. However, if the Senate wants, it can vote under Fast Track rules today, but then would have to formally approve it again after the House sends it up. (This happened on CAFTA, when the Senate GOP leadership just wanted to get some momentum going by passing the pact before the House, and then taking a second vote later.)
  4. Because Bush has already dropped the Colombia FTA, it will have to be voted on this Congress, or it dies. Next year, if the president wanted to resubmit it, they could, but it wouldn't automatically receive Fast Track treatment. A new Fast Track vote would have to be taken if they wanted that to apply. Ed. comment: I'm betting we see Fast Track replaced by a different system, so I wouldn't expect any new Fast Track votes.

Finally, IUT cites an April 4 letter from Rice, Paulson and various cabinet secretaries to Pelosi saying that:

In seeking to identify an agreed path forward for the Colombia FTA, the Administration’s efforts have been guided by three objectives you identified in conversations with several of us that need to be met before the Colombia FTA would have the necessary support to pass the House of Representatives. They are: (1) a strong, bipartisan vote on legislation to implement our FTA with Peru; (2) a solid Trade Adjustment Assistance (TAA) reauthorization package; and (3) progress on labor violence and impunity in Colombia. As noted above, the first objective was satisfied by the strong bipartisan votes on the Peru FTA last year. [emphasis added]

That's the first time I've seen such clear preconditions on the record. Wonder if they're true?

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Making history

The FT summed up this week's happenings on Colombia and Fast Track fairly well:

The Democratic-led House voted 224 to 195 to stop the 90-day “fast track” time-table under which most significant US free trade deals have been ratified since the 1970s...

It was the first time in the 35-year history of the “fast-track” process that a president had sought to force lawmakers to vote on a free trade deal...

Even before this week, fast track has had a rocky history and has sometimes been suspended, for example during the latter years of the Clinton administration following the passage of the North American Free Trade Agreement.

David Sirota has a great column out this week that likens Bush's Colombia tactics to a moment from Colorado's labor history:

Ninety-four years ago on April 20, America made international news when a government-sanctioned paramilitary unit murdered Colorado union organizers at a Rockefeller-owned coal mine. The Ludlow Massacre was "a story of horror unparalleled in the history of industrial warfare," wrote The New York Times in 1914 — and the abomination was not just the violence, but the way political and corporate leaders colluded on their homicidal plans to protect profits.

Sanitized history teaches that our government has since changed. Quite the contrary, as the Bush administration this week moves to legitimize the methods of Ludlow through its Colombia Free Trade Agreement...

Colombian labor leaders have begged the White House to drop the deal, saying it will undermine their struggle for human rights by validating Uribe's thug-ocracy. Nonetheless, President Bush bolstered Uribe with a pact giving corporations incentives to leave America for the corpse-strewn pastures of Colombia — a union hater's paradise.

And there was this inspiring quote from the NYT's obituary of Abe Osheroff, one of last remaining veterans of the Abraham Lincoln Brigades. It seems appropriate as we move into the next phase of the fight, which is whether Dems will actually vote FOR the agreement now that they've canceled Fast Track. Ugh.

“If you need a victory, you aren’t a fighter,” he said in 2000, “you’re an opportunist.”

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Fast Track Death - live blogging

The House is doing an hour of debate on Fast Track for Colombia. I'll try to type the basic things that people are saying, and bracket any editorial remarks.

Rep. Slaughter (D-NY): Fast Track outsources our very basic legislative responsibility. We can alter this rule, and it won't affect the FTA or the Senate's actions in any way. We're on the edge of economic ruin, now is not the appropriate time to bring up a flawed agreement. Damage to workers and Afro Colombians too significant to warrant passage of this bill. It is our preregorative to suspend Fast Track if timing necessitates it. WE ARE REESTABLISHING THE HOUSE OF REP AS CO-EQUAL TO THE PRESIDENT

Rep. David Drier (R-Calif.): I've never seen Democrats align with Hugo Chavez and FARC. We are considering the Hugo Chavez RULE. Process is substance. He's reading the Fast Track rules as evidence that it's a Democratic process. Cites number of codels as upholding democratic principles. This is an unprecedented rule change. They are making up this nonsense as they go along. Venezuela threatens not only Colombia but very idea of democracy and free markets.

Rep. Charles Rangel (D-NY): I doubt that there's anyone who has the concern for Colombia. Not only with their political problems, but also their fight against drugs. Mr. President, you forgot to consult with the Ways and Means Committee. I don't remember the last time anyone has talked about the bill, instead they only want to talk about Chavez and Castro. Suggests some kind of a trade off for urban policing technology.

Rep. Diaz Balart (R-Fla.): This day will live in infamy.

Rep. Jim McGovern (D-Mass.): I'm open minded, but I'm not a cheap date.

Rep. Jim McCrery (R-La.): This bill turns off the timeline entirely.

Rep. Doc Hastings (R-Wash.) [- voted against the Peru FTA, but now is supporting an identical deal for Colombia - where unionists are murdered.]

SORRY. FLAKED. TOO MUCH INTOLERABLE RHETORIC ON BOTH SIDES.

Rep. Peter DeFazio (D-Ore.): So this is a rule from 1974. Guess what? we were the manufacturing collosus of the world. Until today, Congress never had a spine to stand up to the president before. Today is a new beginning.

Rep. Jerry Weller (R-Ill.): [Colombia is safer that Washington, DC. Pretty rich coming from a guy married to Guatemalan death squads.]

Rep. Rahm Emanuel (D-Ill.): Talking about globalization's squeeze on middle class Americans. If people don't win, they'll turn against trade per se.

Rep. Roy Blunt (R-Mo.): We didn't have FTAs before Fast Track.

Rep. Kevin Brady (R-Texas): [Calls us chickens.]

Rep. Tom Davis (R-Va.): They call it Fast Track so that we don't have to argue about process.

Measure to kill Fast Track passed: 224-195. On the Dem side, Melissa Bean (Ill.), Dan Boren (Okla.), Allen Boyd (Fla.), Jim Cooper (Tenn.), Bud Cramer (Ala.), Henry Cuellar (Texas), Baron Hill (Ind.), Nick Lampson (Texas), Tim Mahoney (Fla.), and Jim Matheson (Utah) crossed sides. On the GOP side, Bob Aderholt (R-Ala.), Virgil Goode (R-Va.), Robin Hayes (R-N.C.), Walter Jones (R-N.C.), Ron Paul (R-Texas), and Mike Rogers (R-Ala.) crossed party lines. John Tanner (D-Tenn.) voted present. Bob Andrews (D-N.J.), Tim Bishop (D-N.Y.), John Larson (D-Conn.), Bobby Rush (D-Ill.), and Albio Sires (D-N.J.) did not vote.

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Colombia-Congress-Fast Track: What happened, What we will do, and What you should think

Statement of Public Citizen's Global Trade Watch Director Lori Wallach on Decision to Remove Fast Track Treatment from Colombia Free Trade Agreement:

We applaud House Speaker Nancy Pelosi for reasserting congressional authority over trade by removing Fast Track treatment from the Colombia Free Trade Agreement (FTA).

Ftanoes Public Citizen will apply its full resources to ensure that the Colombia Free Trade Agreement is defeated by Congress.

The United States should never have negotiated a trade agreement with Colombia, a country with a shameful record of labor leader assassinations and systematic violence against Afro-Colombian communities whose current government has been linked to deadly right wing paramilitaries.

The Colombia FTA includes the most egregious provisions of NAFTA, including extraordinary foreign investor protections that promote offshoring of U.S. jobs and expose domestic health and environmental laws to attack in foreign tribunals; and agriculture rules that will devastate hundreds of thousands of subsistence farmers in Colombia, making them poorer and undermining U.S. security interests in the region. The deal also replicates NAFTA's  limits Buy America and green procurement policies and on imported food safety and inspection requirements.

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Breaking: Pelosi to kill Fast Track on FTA with union murder capital

As we reported yesterday, Bush is proving he is better at being Nixon that even Nixon was, showing what Nixon's Fast Track process is really capable of. (In other news, Nixon's trade representative, who helped cook up Fast Track, just died.)

According to Reuters, the House will be voting tomorrow on a proposal by Pelosi to kill Fast Track's application to the Colombia FTA. Fast Track, which expired last year, would have still otherwise applied to the Colombia FTA because it was notified to Congress before the deadline.

Back in January, we predicted that Pelosi might do something like this. And many state governments and civil society groups have spent the last two years (and more!) passing resolutions for replacing Fast Track with a more democratic process. That fight is still around the corner, but both Clinton and Obama have committed to a change of course on Fast Track and our trade policy.

We'll be coming out with some kind of statement shortly.

(Disclosure: Global Trade Watch has no preference among the candidates.)

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Pre-Super Tuesday reflections

(Disclosure: Global Trade Watch has no preference among the candidates.)

A lot of folks are offering their reflections the relative merits of the candidates (see here, here, here, and here.) I was able to share mine at San Francisco's NPR station a little earlier today.

As I see it, we should evaluate trade policy on three overlapping dimensions:

  1. Who is affected
  2. How is it made
  3. What are the "surprise" implications for non-trade policy

On the first front, I'm thinking of how our trade policy has resulted in (or not helped us avoid) a skyrocketing trade deficit, largely stagnant wages and farm prices, and the loss of millions of manufacturing jobs, hundreds of thousands of family farms, and an increasing number of service sector jobs. Nearly every candidate touches on this part of the issue - even Huckabee and Romney with their comments on manufacturing. (McCain has spoken about compensating losers through TAA.) With the exception of Ron Paul (who calls for scrapping the WTO, NAFTA, etc. directly), the whole field talks about the losses from trade policy for many people. They are largely silent on the trade-wage connections.

The second category relates to how we make trade policy. For four decades, our trade policy has been conceived under the undemocratic Fast Track mechanism, which takes away Congress' constitutional authority and responsibility to set our trade policy, and gives it to an executive branch that sets the terms and picks the partner countries and writes the deal, leaving Congress only an up or down vote. Obama has talked about replacing Fast Track, while Clinton has said she will hold off from asking for Fast Track until she reviews past agreements.

Finally, as we have long been arguing, trade policy these days is only marginally about trade. Much of the 600-page texts of the WTO and FTAs has to do with how we adopt policies domestically. Thus, a move to universal health care could be challenged as a limitation on market access for health insurance companies. Under our FTAs, investors can demand taxpayer money for public interest policies that limit their future expected profits. Obama has addressed investor-state, consumer protection, and domestic regulation. We haven't heard much from the other candidates on this dimension.

As we'll document in an upcoming report, both the Dem and GOP health care and climate change proposals could face WTO challenge. More specific responses to these and other questions can help voters can make an informed choice.

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Bush to circumvent Congress on Colombia FTA?

Just before the break, Inside U.S. Trade reported that the Bush administration is internally debating whether to submit the Colombia FTA to Congress without the consent of the Democratic leadership. Rep. Wally Herger (R-Calif.), who is a likely candidate to be the GOP's top rep on Ways and Means once Rep. Jim McCrery (R-La.) retires this year, said the prospect "is continually being debated at the White House.”

However, Herger added that submitting the FTA to Congress in such a manner is a “last option.” It is “obviously our first choice” to make the case for the FTA and generate adequate Democratic support for the agreement to have the leadership back the submission of the implementing bill, he said.

Under fast-track rules, Congress is obligated to consider fast-track trade bills in a fixed time frame once they are formally submitted, regardless of the leadership’s position on the bills. However, no administration has yet presented a fast-track trade bill without close consultation with the leadership.

Separately, Rep. Gregory Meeks (D-N.Y.), one of the "CAFTA 15" Dems who voted for the NAFTA expansion to Central America said he will try to get some labor groups to take a “neutral” position on the Colombia FTA. And...

[Rep. Sander] Levin said that if the Administration tries to send the final implementing legislation for the Colombia FTA to Congress without a green light from House Democratic leadership, it would be “very negative” and counterproductive.

Martin Vaughan in Congress Daily had more on this possibility.

lobbyists and administration officials have discussed the option of just sending the Colombia deal up and forcing Democrats to vote on it, if congressional leaders won't take it up willingly. But Democratic aides and opponents of the deal said House leaders might also hold a secret trump card, an "emergency brake" that could short-circuit the fast-track process.

In the event that the White House sent the agreement up, House Speaker Pelosi could write a rule that would make a vote on the agreement subject to the call of the chair. Even though the trade negotiating authority has tools to prevent an agreement from being bottled up in committee, the speaker could, through such a rule change, delay a House floor vote indefinitely. But Democratic aides downplayed that scenario, saying it is unlikely that the Bush administration would risk being repudiated on the Colombia deal by sending it up without the acceptance of Democratic congressional leaders.

If Pelosi wanted, she could face down Bush if he tried to pull this stunt. Normally Fast Track requires a House vote on final passage a maximum of 60 days after the president introduces implementing legislation, with the Senate having 30 additional days to vote. This feature of Fast Track thus forces final action at the latest 90 days after implementing legislation is dropped. However, the 2002 Trade Promotion Authority 2105(c) makes clear that this requirement, as well as Fast Track’s ban on amendments and 20-hour limit on debate,

"are enacted by the Congress—

(1) as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively, and as such are deemed a part of the rules of each House, respectively, and such procedures supersede other rules only to the extent that they are inconsistent with such other rules; and

(2) with the full recognition of the constitutional right of either House to change the rules (so far as relating to the procedures of that House) at any time, in the same manner, and to the same extent as any other rule of that House."

A Congressional Research Service memo makes this even clearer:

Although this [Fast Track] statute is permanent law, it has been enacted as an exercise of the rulemaking power of either House and can be changed by either House, with respect to its own procedure, at any time, in the same manner and to the same extent as any other rule of that House.

So, will Bush attempt to use Fast Track to slip the Colombia FTA past Congress? If he does, will the Dem leadership block the move by changing the rule on Fast Track? Or will the Dems fold their opposition on this NAFTA expansion before the show-down happens? Corporations are celebrating Democrats' caving in on Peru as creating momentum for Colombia FTA, after all. Stay tuned.

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No slippage here, keep walking

Corporate and political elites have been trying to expand the WTO unsuccessfully for over a decade. One of the main components of their plan is to subject the U.S. higher education sector to WTO coverage, something that would be very bad from the perspective of domestic policy innovation. See here for more. But in the wake of the Bush lovefest on the NAFTA expansion to Peru, it seems that there might be some more rumors of slippage on the slippery slopes, ranging from more Fast Track for Bush to actually considering expanding the WTO. From today's Congress Daily PM:

U.S. Trade Representative Schwab said "there is every reason to expect" that a Doha agreement on world trade can occur before President Bush leaves office, according to a transcript of remarks she made Monday in Singapore. She also said Democratic congressional leaders have indicated a willingness to move ahead on presidential trade negotiating authority if negotiators come up with a framework for a Doha deal...

A spokesman for Speaker Pelosi said Democrats would "want to see what agreement is negotiated," but did not rule out action on trade negotiating authority if the Doha deal is good enough to appease Democrats. A spokesman for Senate Finance Chairman Baucus said that if a Doha deal is negotiated, Baucus will confer with Schwab, House Ways and Means Chairman Rangel and others "to determine the appropriate next steps." the aide said.

No indication yet on how real any of this is, or if just bluster on all sides. We'll stay tuned...

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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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Wisconsin Senate Calls for New Era in Trade Policy

As Fast Track expires this week, the Wisconsin State Senate passed a resolution calling for a replacement of the outdated mechanism with a new process that includes state consultation. This resolution becomes the thirteenth such that has passed, echoing the widespread desire for change in our failed trade policy from state officials and the rest of the country.

In a press release from State Senator Hansen's office, Sen. Hansen calls on Congress to listen to the peoples' demands:

"The 2006 elections turned on issues of importance to working people. Foremost among these issues was trade. The workers and farmers of this state and nation can't stand for these corporate trade deals any longer and they've made their opinions clear."

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Fast Track officially comes off the rails

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Midnight has passed, and you know what that means: bye-bye Fast Track. Here are some more photos from an event last week hosted by Sen. Sherrod Brown (D-Ohio) celebrating Fast Track's passing and heralding new directions for U.S. trade policy (see the full photo set here). After the break, see some statements from various groups about the expiration, and what they think should come next.

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Continue reading "Fast Track officially comes off the rails" »

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Long Overdue, Fast Track Finally Passes into History

Millions of Those Harmed by Fast Track-Enabled “Trade” Deals Celebrate

OBITUARIES: Fast Track 1974-1995/2002-2007

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After a brief, damaging existence, Fast Track was pronounced dead on June 30, 2007.

The demise of Fast Track allowed the U.S. Founding Fathers to stop rolling in their graves over Fast Track's trampling of constitutional checks and balances. As well, victims of Fast Track-enabled trade agreements welcomed the news, given the anomalous procedure's record of damage despite having been locked up and out of commission for blocks of time since its inception.

In April 1973, America first saw the faint glimmer in Father Nixon's eye that was to become Fast Track when the Nixon administration - always eager to seize power from the legislative branch - dropped the initial Fast Track legislation. The young Fast Track - the product of a broken and abusive home - had an unusually long gestation period, taking over a year and a half to be unleashed by President Ford, who signed the first Fast Track bill into law. Fast Track teethed on federalism and checks and balances, shredding basic tenets of our democracy.

Continue reading "Long Overdue, Fast Track Finally Passes into History" »

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Bush administration using deal momentum to push Fast Track - for more than just Doha

The Bush administration appears to be considering making a concerted push for Fast Track - but for just more of the same NAFTA deals. Here's Martin Vaughan from Congress Daily with the scoop:

After a resounding failure last week to get the Doha round of global trade talks back on track, Trade Representative Schwab is arguing that whatever happens with Doha, the White House needs trade negotiating authority renewed to focus on smaller, bilateral deals.

"The United States has assuredly not given up on the Doha round," Schwab told reporters at a House event Tuesday. "Absent a breakthrough right now, it doesn't mean that trade promotion authority no longer is an objective . . . there are other ways of approaching it," she said.

"And the single most important thing to recall in terms of U.S. trade policy going forward," Schwab continued, "is when the Doha talks are in the doldrums, you're going to see us step up in the negotiation of bilateral and regional deals around the world."

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Pelosi's district calls on her to replace Fast Track

Last week, the San Francisco Board of Supervisors joined the dozen other state and local authorities around the country and unanimously passed a resolution (PDF) calling on Speaker Pelosi to replace Fast Track. The resolution also blasts the

"recent failure of the House leadership to consult other members of Congress, state and local policymakers, and key constituency groups before announcing the conclusion of negotiations with the Bush administration.."

Read the Green Party of California's Press Release on the resolution here.

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NEA says Fast Track must expire

The National Education Association (NEA) sent a letter to the Hill (PDF) this month urging Congress to let Fast Track go, citing key concerns about new U.S. General Agreement on Trade in Services (GATS) offers that would further commodify higher education. Some choice excerpts from the letter:

NEA strongly believes that education is a basic right... Subjecting higher education to WTO jurisdiction, which current proposals do, would place at risk a multitude of important higher education policies, such as subsidies, scholarships, and loans... We do not need WTO trade tribunals second-guessing U.S. lawmakers and regulators in closed trade tribunals.

Moreover,

To subject higher education to WTO jurisdiction without a thorough review by relevant policymakers within state and federal governments would be a serious error with devastating consequences. It is important to note that once signed, the binding terms of the GATS make it prohibitively difficult to "take back" sectors from WTO jurisdiction.

Case in point — the U.S. has decided to "take back" gambling from our WTO commitments, but Antigua is now demanding $3.4 billion in compensation for maintaining our gambling laws. Who's footing that bill?

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