Transitions at Eyes on Trade

Today is my 632nd and final blog post on Eyes and Trade. It has been a pleasure interacting with you over the last 5.5 years.

Tomorrow is my final day at Public Citizen. I’ve been named a Gates Scholar and I’ll be off to the University of Cambridge to continue my research agenda. You can keep tabs on me at my personal blog: ToddNTucker.com.

Eyes on Trade will continue, under the able editorial oversight of Ben Beachy - Public Citizen’s new research director on trade issues. You’ve already seen him blogging here, and you’re in great hands!

When I came to Public Citizen in October 2004, I had an interest in foreign policy and institutional economics (how politics shape economic outcomes and vice versa). I was eager to work with a terrific group of activists, and to learn about Congress and trade issues.

So, what have I learned?

Following Last Week’s Damaging Revelations About the Trans-Pacific Partnership (TPP), the Obama Administration Expands Controversial Trade Deal

Following Last Week’s Damaging Revelations About the Trans-Pacific Partnership (TPP), the Obama Administration Expands Controversial Trade Deal 

 WASHINGTON D.C. – That the Obama administration would invite an additional country to join the Trans-Pacific Partnership (TPP) after last week’s leak of secret negotiating documents revealing the proposed pact’s threats is outrageous, Public Citizen said today.

 Last week, after three years of closed-door negotiations, the text of the TPP Investment Chapter leaked, revealing that the Obama administration had agreed to submit the U.S. to the jurisdiction of foreign tribunals where foreign corporations would be empowered to challenge U.S. laws and demand unlimited compensation from the U.S. Treasury.

 The revelation was met with criticism from the political left and right.  However, the U.S. Trade Representative (USTR) refused to comment on the leaked chapter. Increasingly, members of Congress are raising concerns about the pact, including Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee’s Subcommittee on International Trade, Customs, and Global Competitiveness, who has been denied access even to the U.S. proposals to the TPP negotiations.

 Following the growing criticism of the administration’s lack of transparency and the newly revealed substance of the TPP, instead of the administration reconsidering the many TPP provisions that would vastly expand corporate rights and privileges, the administration’s response was to add yet another country into TPP talks: Mexico. Meanwhile, reports out of New Zealand indicate that China also is pursuing entry into this so-called trade deal.

 “The TPP model is fundamentally flawed: It’s hard to imagine who in this country would support it if they knew that it banned ‘Buy American’ procurements, limited Internet freedom a la SOPA (the controversial Stop Online Piracy Act) or created a two-track judicial system privileging corporations with a new ticket to raid our tax dollars,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Adding more countries just expands the potential threats of corporate attacks that the TPP poses to people here and now also poses to Mexicans.”

 “Via closed-door negotiations, U.S. officials are rewriting swaths of U.S. law that have nothing to do with trade, and in a move that will infuriate left and right alike, have agreed to submit the U.S. government to the jurisdiction of foreign tribunals that can order unlimited payments of our tax dollars to foreign corporations that don’t want to comply with the same laws our domestic firms do,” Wallach said. “U.S. trade officials are secretly limiting Internet freedoms, restricting financial regulation, extending medicine patents and giving corporations a whole host of other powers.”

 Opposition to the TPP is growing. Last month, 69 members of Congress sent a letter to President Barack Obama in response to revelations that TPP actually bans “Buy American” procurement rules.                                                       

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

Controversial Trade Pact Text Leaked, Shows U.S. Trade Officials Have Agreed to Terms That Undermine Obama Domestic Agenda

PUBLIC CITIZEN PRESS RELEASE

After Two Years of Closed-Door Negotiations, Trans-Pacific Partnership Text Replicates Alarming Bush Trade Pact Terms That Obama Opposed as Candidate, and Worse

WASHINGTON, D.C.– A leak today of one of the most controversial chapters of the Trans-Pacific Partnership (TPP) reveals that extreme provisions have been agreed to by U.S. officials, providing a stark warning about the dangers of “trade” negotiations occurring under conditions of extreme secrecy without press, public or policymaker oversight, Public Citizen said.

 “The outrageous stuff in this leaked text may well be why U.S. trade officials have been so extremely secretive about these past two years of TPP negotiations,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “Via closed-door negotiations, U.S. officials are rewriting swaths of U.S. law that have nothing to do with trade and in a move that will infuriate left and right alike have agreed to submit the U.S. government to the jurisdiction of foreign tribunals that can order unlimited payments of our tax dollars to foreign corporations that don’t want to comply with the same laws our domestic firms do.”  

Although the TPP has been branded a “trade” agreement, the leaked text of the pact’s Investment Chapter shows that the TPP would:

• limit how U.S. federal and state officials could regulate foreign firms operating within U.S.  boundaries, with requirements to provide them greater rights than domestic firms;
• extend the incentives for U.S. firms to offshore investment and jobs to lower-wage countries;
• establish a two-track legal system that gives foreign firms new rights to skirt U.S. courts and laws, directly sue the U.S. government before foreign tribunals and demand compensation for financial, health, environmental, land use and other laws they claim undermine their TPP privileges; and
• allow foreign firms to demand compensation for the costs of complying with U.S. financial or environmental regulations that apply equally to domestic and foreign firms. 

While 600 official U.S. corporate advisors have access to TPP texts and have a special role in advising U.S. negotiators, for the public, press and policymakers, this leak provides the first access to one of the prospective TPP’s most controversial chapters. In May, U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee’s Subcommittee on International Trade, Customs and Global Competitiveness – the committee with jurisdiction over the TPP – filed legislation to open the process after he and his staff were denied access to even the U.S. proposals for the TPP negotiations. 

Last month, U.S. Trade Representative Ron Kirk defended the unprecedented secrecy of TPP negotiations by noting that when the draft of a major regional trade pact was released previously, it became impossible to finish the deal as then proposed. 

“The top U.S. trade official effectively has said that the administration must keep TPP secret because otherwise it won’t be able to shove this deal past the public and Congress,” said Wallach. “The airing of this one TPP chapter, which greatly favors foreign corporations over domestic businesses and the public interest and exposes us to significant financial liabilities, shows that the whole draft text must be released immediately so it can be reviewed and debated. Absent that, these negotiations must be ended now.” 

The TPP is the first trade pact the Obama administration is negotiating. Today’s leak further complicates the administration’s goal of completing TPP negotiations this fall. Already the TPP timeline was generating political headaches for the Obama re-election campaign, as repeated U.S polling shows that majorities of Democrats, Independents and GOP oppose more NAFTA-style trade deals. 

The TPP may well be the last trade agreement that the U.S. negotiates. This is because TPP, if completed, would have a new feature relative to past U.S. trade pacts: It would remain open for any other country to join later. Last month, USTR Kirk said that he "would love nothing more" than to have China join TPP.

The TPP offered an opportunity to develop a new model of trade agreement that could deliver the benefits of expanded trade without unduly undermining signatory nations’ domestic public interest policies or establishing special privileges for foreign corporations. President Barack Obama and countless members of Congress campaigned on fixing these investment rules to better protect the public interest. But Public Citizen’s analysis of this text shows that the U.S. positions do not reflect any of the changes that candidate Obama pledged when he recognized the threats posed by the NAFTA-style investment provisions in trade agreements. 

The leak also reveals that:

• Australia has refused to submit to the jurisdiction of the “investor-state” private corporate enforcement foreign tribunal system;
• U.S. negotiators are alone in seeking to expand this extra-judicial enforcement system to allow the use of foreign tribunals to enforce contracts that foreign investors may have with a government for government procurement or to operate utilities contracts and even related to concessions for natural resources on federal lands;
• Other countries are proposing safeguards for financial regulation and limits to the corporate tribunals that the U.S. has not supported.

 Public Citizen’s analysis of the leaked text and guided tour through its provisions can be found here.

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BREAKING: For an analysis of these developments by Zach Carter of The Huffington Post, click here.

Obama’s ‘Regulatory Cooperation’ Executive Order Is a Smokescreen for Deregulation

Note: Today, the Obama administration announced an executive order on the need for international harmonization of regulations. Below, please find reactions from two Public Citizen experts.

Statement of Amit Narang, Regulatory Policy Advocate, Public Citizen’s Congress Watch Division:

With this executive order, the administration once again has decided that appeasing big business is more important than vigorously defending the importance of public protections to our country. The public and small businesses believe, as demonstrated in pollafter poll, that strong regulatory standards are essential and can be achieved while growing our economy. The administration should stop catering to big business and should move quickly to finalize the numerous workplace safety, food safety, consumer product safety and environmental protections that have been under review at the Office of Management and Budget for months, and in some cases, years.

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

Unfortunately, international “regulatory cooperation” largely has been a smokescreen for deregulation, which typically involves trade pact rules setting ceilings on consumer, environmental, financial, health and other public interest standards that no country is permitted to exceed.

Deregulators have been trying for years to use the claim of maximizing trade flows as a reason to gut sensible public interest regulations and impose lowest common denominator standards internationally on food safety, environmental protection and financial regulation.

Whether you call it harmonization, deregulation or international regulatory coherence, this controversial agenda of using “trade” pacts to set a ceiling on health, safety, financial and environmental standards stalled out in the WTO Doha Round of trade talks, and now is being resisted in the Trans-Pacific Partnership (TPP) trade deal. This recent executive order appears to be the latest effort to introduce by stealth what has been rightly rejected elsewhere.

Announcement of Flawed 2012 Model BIT Shows Agenda Motivating Obama TPP Talks

The Obama administration released the 2012 Model Bilateral Investment Treaty this morning. Here's our response:

Announcement of Flawed Investment Rules Show Agenda Motivating Obama Trade Talks

Statement of Lori Wallach, Public Citizen

Instead of the reforms promised by  candidate Obama, the Obama administration’s ‘new’ Model Bilateral Investment Treaty released today is the same in all major respects as the deeply flawed ‘old’ Model Bilateral Investment Treaty (BIT) and the investment chapters of U.S. free trade agreements.
 
Like the old U.S. investment model, the new text will allow companies to challenge public interest regulations outside of domestic court systems  before  tribunals of three private sector trade attorneys operating under minimal to no conflict of interest rules. These arbitrators can order governments to pay corporations unlimited taxpayer-funded compensation for having to comply with policies that affect their future expected profits, and with which domestic investors have to comply.
 
By revealing a fundamentally unchanged BIT (after pushing three Bush trade deals in 2011 based on the same flawed model), the administration is exposing the anti-public interest agenda motivating the nine-nation Trans-Pacific Partnership trade talks. In those negotiations, countries like Australia (who have been attacked in BITs by Philip Morris over their plain packaging tobacco policies) have criticized the U.S. model of investment rules.
 
At a time when multinationals like Chevron are using BITs to evade justice and get out of environmental remediation obligations, it is unthinkable that an Obama administration – post BP oil spill, post Wall Street crash – would privilege the rich at the expense of the 99 percent.

For those wishing to see a track changes version of the little that changed in the 2012 Model BIT relative to the 2004 Model BIT, along with some commentary of the shortcomings of both, click here.

U.S. Abandons Final Pretense of Transparency or Inclusion of Consumer, Health, Environmental, Labor Perspective in Trans-Pacific Partnership (TPP) Talks

WASHINGTON D.C. – U.S. trade officials have quietly cut stakeholder presentations from the next set of Trans-Pacific Partnership (TPP) agreement negotiations, eliminating the last pretense that the process of the talks is transparent and inclusive and sending a message that only the views of the 600 official corporate trade advisors provided special access to the talks will be reflected in the final deal, Public Citizen said today. At previous TPP negotiating rounds, a day was set aside for civil society groups and others with concerns about the TPP to make presentations to negotiators.

“The message is clear: From now on, not only will the talks remain behind closed doors, but all pretense of consideration of consumer safety, health, environmental or labor concerns has been thrown out in favor of ensuring that the damning record of past U.S. trade pacts use of the same terms being pushed by the U.S. for TPP are not brought into the discussion,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

“The stakeholder presentations were the last vestige of transparency in these TPP talks,” Wallach said. “Many negotiators from other countries have told me that the stakeholder process was very valuable because it provided detailed information on the problems caused by past U.S. trade agreements (and on how they have actually worked) that was not generally available and certainly not being shared by U.S. negotiators, who generally have promoted positions promoted by industry interests.”

                Indeed, the U.S. Chamber of Commerce recently noted on its website that it had “led the business community’s advocacy for U.S. negotiators to include strong disciplines in the TPP trade agreement on intellectual property and path-breaking new rules on regulatory coherence, due process in antitrust enforcement and state-owned enterprises. In these and other areas, U.S. negotiators have proposed negotiating text that hews close to the chamber’s recommendations.”

Public Citizen earlier this month joined with other public interest groups from the nine TPP countries to demand that the draft TPP text be released. Negotiating texts for past deals have been released, such as for the Free Trade Area of the Americas in 2001. Currently, more than 600 official corporate trade advisors have access – to which the press and public are denied. Indeed, TPP countries signed an agreement in 2010 to not release negotiating texts until four years after a deal is completed or negotiations abandoned.

To date, U.S. Trade Representative (USTR) Ron Kirk has refused to release any draft TPP text, despite repeated calls from civil society groups for more than a year. U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee’s Subcommittee on Trade, has led congressional efforts to make the process more transparent. Wyden told Oregon Live, “When international accords, like ACTA, are conceived and constructed under a cloak of secrecy, it is hard to argue that they represent the broad interests of the general public.”

“USTR’s response to the request by civil society groups and Sen. Wyden to see draft texts of a massive agreement that will rewrite wide swaths of U.S. non-trade law has been to slam the door shut, instead of opening up the process and making it more transparent,” said Wallach.

The fallout from the U.S. decision already has begun. In response, New Zealand civil society groups have called on their government to “pull the plug” and walk away from the TPP talks. The TPP negotiations cover issues ranging from banning Buy America policies, to curbing Internet freedom, to providing offshoring incentives and special rights for corporations to attack U.S. laws in foreign tribunals.

“You can only assume that the TPP would not survive the light of day, and that is why the U.S. public is being denied access to details and now civil society groups are being sidelined,” Wallach said. “The Obama administration declares itself the most transparent administration ever, and President Barack Obama campaigned on transparency in government. It’s time he put those words into action.” The next round of TPP talks will take place May 8-18 at the InterContinental Dallas hotel in Addison, Texas.                                                               

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Cancer prevention three months too soon

Welcome to Week Two following the WTO’s cancerous decision to rule against the U.S. measures to reduce teen smoking. As Rep. Henry Waxman (D-Calif.) said:

I am deeply disappointed in the WTO’s decision in the clove cigarette case, which has serious public health implications for United States efforts to reduce youth smoking.

The Family Smoking Prevention and Tobacco Control Act gave the FDA broad authority to protect the public’s health. It also directed immediate action to reduce youth tobacco use, including a ban on clove and candied-flavored cigarettes. Importantly, the law made no distinction in where a cigarette is manufactured because a cigarette -- no matter where it is made -- is addictive and deadly. I believe the WTO’s interpretation is wrong on the merits and wrong in its interference with our efforts to protect the American public from tobacco’s devastating effects.

I am committed to working with the Administration to advance our shared goal of ending the tobacco epidemic among our young people and ensuring that the U.S. ban on clove and candied-flavored cigarettes remains in place.

This is an encouraging sign that legislators may be heeding the call of thousands of Americans who have taken action under the Consumer Pledge urging principled non-compliance with the ruling.

We went over the main part of the decision – rendered by the Appellate Body’s three-person panel of Peter Van den Bossche (Belgium), Ricardo Ramirez-Hernandez (Mexico) and Shotaro Oshima (Japan) – in last week’s post. As we noted, this is the first time that the WTO has found a violation of the Agreement on Technical Barriers to Trade (TBT) Article 2.1.

But there was one major aspect of the ruling that we didn’t get to discuss: the finding that the U.S. violated TBT rules by having the sweet tobacco ban (enacted in July 2009) go into place on September 2009 rather than December 2009. In other words, the WTO found that the U.S. began fighting cancer three months too soon.

USTR May Trade Away Internet Freedom, But We Won't Know Until It's Too Late

At Wednesday's Senate Finance Committee hearing on the Obama administration's 2012 trade agenda, Senator Ron Wyden grilled U.S. Trade Representative Ron Kirk about the intense secrecy surrounting the Trans-Pacific Partnership (TPP) negotiations. Since the TPP is set to include provisions similar to the Stop Online Piracy Act (SOPA) and the Anti-Counterfeiting Trade Agreement (ACTA) decried by internet freedom advocates, Americans deserve information about such a controversial policy. Sen. Wyden notes that the TPP negotiations are not a matter of national security, but are a matter of policy of broad public concern:

I’m not asking for everything to be published, and certainly, I respect your judgment with respect to, you know, issues that affect national security and classified matters.  But, issues that pertain to freedom and innovation on the net are policy questions, and the American people want the chance to participate.

The hearing heats up at minute 7:02:



Ron Kirk replies with the tired line that trade agreements could not be negotiated without this kind of secrecy, but provides no arguments or evidence to support this assertion. This claim is false on its face. The public is now provided access to negotiating documents of the WTO, arguable the most important venue for trade negotiations. There is no reason why the public should not have access to the same information for the TPP negotiations.

Not only is the text secret during the negotiations, but all TPP countries signed a secret agreement to calssify the negotiating texts for at least four years after the TPP goes into effect. After taking heat for this secret agreement that keeps everything secret, New Zealand was forced to release the text of the secrecy pact. Though neither the public nor members of Congress are permitted to view the negotiating texts, over 600 representatives from corporations have access to the texts, allowing them to steer the negotiations in their favor.

Job-Killing Trade Deals Pass Congress Amidst Record Democratic Opposition

Obama and Tea Party Flip Flop on Fair Trade Campaign Commitments

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

With nine percent unemployment and Americans desperate for job creation, it is unconscionable that President Obama and House Republicans would push through a trio of NAFTA-style job-killing trade agreements that even the government’s own studies show will increase the U.S. trade deficit.

This represents a complete flip-flop for President Obama, who won crucial swing states by pledging to overhaul our flawed trade policies. So it is no surprise that a sizeable majority of Democrats in Congress voted against these agreements, against Obama and for American jobs.

Today a larger share of House Democrats voted against a Democratic president on trade than ever before. It took Bill Clinton nearly eight years of NAFTA job losses, sell outs and scandals to have nearly two-thirds of the House Democrats vote against him on trade.

Given the strong Democratic opposition, ultimately it was the Tea Party GOP freshmen who passed these job-killing deals despite their campaign commitments at home to stand up for Main Street businesses, against more job offshoring and for Buy American requirements. The three pacts explicitly ban Buy America procurement policies. The Korea FTA is projected to increase the trade deficit, with seven U.S. industrial sectors hardest hit and job losses of 159,000 in its first seven years.

Members of Congress that voted for these job-killing agreements – backed by Wall Street and America’s most notorious job-offshoring corporations and harmful to American workers, small business and consumers – will face a reckoning as the damage of these pacts hits home. We promise to closely track and publicize every development.

Everyone is asking what the Obama administration could have been thinking to push the sorts of NAFTA-style trade deals that polls show majorities of Democrats, Independents and even GOP voters oppose as job killers, especially after the lesson of the 1993 NAFTA vote, when a Democratic president’s blurring of the distinctions between the parties on trade and jobs caused a disgruntled base to stay home. 

Every election cycle, more Democrats and GOP are campaigning against these sorts of NAFTA-style trade pacts. Given this and the high unemployment rate, it will be very rough for those officials who then betrayed folks at home and voted for these deals loved only by Wall Street and job-offshoring corporations.

Record of Congressional Democratic Opposition to Democratic Presidents on Trade Pacts

- 82.3% of House Democrats opposed the Colombia FTA (158 Democrats against, 31 for)

- 67.7% of House Democrats opposed the Korea FTA  (130 Democrats against, 59 for)

- 64.1% of House Democrats opposed the Panama FTA (123 Democrats against, 66 for)

- 60.6% of Democrats opposed NAFTA (1993)

- 35% opposed the WTO (1994)

- 65.56% opposed China PNTR (2000)

 

Record of Congressional Democratic Opposition to GOP Presidents on Trade Pacts

- 62.6% opposed the Chile FTA (2003)

- 62.14% opposed the Singapore FTA (2003)

- 41.3% opposed the Australia FTA (2004)

- 39.32% opposed the Morocco FTA (2004)

- 92.6% opposed the Central America Free Trade Agreement (2005)

- 40.4% opposed the Bahrain FTA (2005)

- 87.6% opposed the Oman FTA (2006)

- slightly more than half opposed the Peru FTA (2007)

Trade disaster: Congress votes tomorrow

A message from Lori Wallach, Director of Public Citizen's Global Trade Watch

You don't hear from me often. Over the past year, I have spend most of my time on Capitol Hill, meeting with members of Congress, educating them about our current flawed trade policy and how we can create a trade model that works.

I have been working to get a majority on Congress to say NO to the three devastating NAFTA-style trade deals signed by Pres. Bush that now Pres. Obama is trying to ram through Congress.

But today, I urgently need a favor from you. It will take about five minutes. Congress will vote on these job-killing, unsafe-import-flooding deals on Wednesday. I need you to pick up the phone and call 1-800-718-1008 right now to stop the three unfair trade deals with Korea, Colombia, and Panama.

Take 5 minutes to save jobs. Dial 1-800-718-1008 and tell your Representative to vote NO on all three flawed trade deals.

Here’s why:

• The Korea trade deal is the largest offshoring deal of its kind since NAFTA. If approved, the deal will displace 159,000 American jobs in the first seven years. Even the official U.S. government study on the Korea pact says that it would increase our trade deficit, and it hits the "jobs of the future” sectors hardest – solar, high speed trains, computers. [Learn more]
• We should have never even discussed a new trade deal with Colombia, the world capital for violence against workers. More unionists are assassinated every year than in the rest of the world combined. In 2010, 51 trade unionists were assassinated. Do you think we would consider a trade deal with a county where 51 CEOS were murdered? So far in 2011, another 22 have been killed, despite Colombia’s heralded new "Labor Action Plan.” [Learn more]
• The Panama agreement has many of the same problems as the other two deals -- undercutting the reregulation of the big banks and speculators who destroyed our economy and empowering foreign investors to attack U.S. health, safety, labor and environmental laws before foreign tribunals. But, Panama is also one of the world’s largest tax havens. There, rich U.S. individuals and over 400,000 corporations take advantage of the offshore financial center, many dodging paying the taxes our communities desperately need. This FTA would undercut our current tools to fight tax dodging and money laundering. [Learn more]

Stop the trade deals that replicate the failed policies of the past. Call your Representative today.

Behind the scenes and throughout the country, our team has done everything we can do to try and get through to the leaders in Congress to stop these trade agreements. But it looks like many of our leaders in Washington—both Democrats and Republicans—are siding with corporate lobbyists instead of learning from the experience of working Americans.

YOU know the reality of these trade deals better than corporate lobbyists—and Congress needs to listen to you.

Please call 1-800-718-1008 right now.

Speak out with millions of Americans against the job-killing trade deals that only reward fat cats, off-shore our jobs and undermine our environmental and financial stability safeguards.

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.]

Lori Wallach Profiled in The Hill

Check out this profile of Lori Wallach in The Hill today:

Agitator by Trade Unhappy with Obama

"Wallach, who was a year ahead of Obama at Harvard Law School, says the administration took up the mantle of George W. Bush by making only negligible changes to the trade deals that were hammered out while he was in office. 'He’s reviving Bush-era agreements and making those his own. It’s inexplicable,” Wallach said. … Win or lose, Wallach says she doesn’t subscribe to inertia, aiming to out-research, outsmart, outwork and out-organize her opponents — the majority of which are corporations. 'There’s a powerful set of special interests on the other side,' she said. 'The public is with us and our case is strong.'”

Read the entire profile here.

Photo Credit: Greg Nash / The Hill Newspaper

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  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.

Debunked FTA Export Claims Continue to Pop Up

In his announcement of the hearing on the Colombia FTA that occurred yesterday, Rep. Kevin Brady alleged that "Since 2000, U.S. exports to the 13 countries with which the United States has implemented trade agreements have grown almost twice as fast as our worldwide exports," but a fair accounting of the export record does not support this claim.

In our September report about the dismal record of U.S. exports to our FTA partners, Lies, Damn Lies, and Export Statistics, we debunked similar claims floated by the Chamber of Commerce and the U.S. Trade Representative. Apparently fair trade opponents think this claim is just too good to let facts get in the way, because it has surfaced again in Rep. Brady's statement.

It seems Rep. Brady is engaging in the same apples-to-oranges comparison trick that we highlighted in our September report (see page 18). If you take the unweighted average growth of exports to FTA partners and compare it to the weighted average growth of exports to the world over 2000-2010, you'll get an FTA growth rate almost twice as high as the growth rate of exports to the world.* Comparing weighted and unweighted averages makes FTAs seem great for U.S. exports, but it's a false comparison.

In fact, an apples-to-apples comparison of exports to FTA partners and non-FTA partners since 2000 shows just the opposite of Rep. Brady's claims: exports to FTA partners have grown at half the pace of exports to non-FTA partners. In inflation-adjusted and trade weighted terms, exports to FTA partners grew at an average annual rate of only 1.5 percent over 2000-2010 while exports to non-FTA partners grew at an average annual rate of 3.8 percent over the same period. The best way to compare the FTA and non-FTA export rates is to use a weighted measure since it weights exports by their value - and thus their importance to U.S. workers who produce the exported goods. However, as we demonstrated in our September report, it is also the case that if you slice it the other way - comparing the unweighted FTA rate against the unweighted non-FTA rate - exports to FTA partners still have grown at half the pace of exports to non-FTA partners. Thus, any way you slice it, exports to FTA partners have lagged behind exports to countries with which we do not have FTAs.

*Since Rep. Brady says "worldwide" exports, here exports to FTA partners are not subtracted out from exports to the world to get the non-FTA export growth rate. Also, Rep. Brady speaks of 13 U.S. FTA partners, but there are 17 FTA partners and all 17 were included in the calculations here. Finally, these numbers are not adjusted for inflation because the unweighted FTA export growth rate would actually be more than twice the weighted worldwide export growth rate if the data was adjusted for inflation, which would be inconsistent with Brady's claims.

Previewing Camp's Request for USITC Analysis of Korea FTA Supplemental



Earlier this year, Ways and Means Committee Chair Dave Camp requested that the U.S. International Trade Commission prepare a study covering changes to auto sector provisions in the Korea trade deal agreed upon during December 2010 supplemental negotiations. The USITC was slated to release this study to Camp yesterday. Now, Camp must decide if it will be made public. It will be critical to review both the USITC's findings and methodology. We urge Camp to make the study public, rather than release selective quotes from it.

What the USITC concludes will be very interesting. So, we've prepared a preview of the study. You can read it here.

Despite USTR Kirk’s Rhetoric, Obama Administration Trade Approach Is More of the Same

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

Ambassador Ron Kirk says that the administration wants to restore Americans’ long-lost faith in our trade policy and repeatedly promises to truly fix Bush’s leftover job-killing trade deals – but, at the same time, he’s before Congress pushing forward three of Bush’s NAFTA-style deals for approval.

Slightly altering auto tariff schedules in Bush’s NAFTA-style agreement certainly is not a faith-restoring trade policy overhaul. The Korea trade deal is still projected to increase the overall U.S. trade deficit and cost 159,000 U.S. jobs. The Korea deal requires the kind of financial deregulation that contributed to the economic crisis. The deal still contains Bush’s ban on reference to the International Labor Organization conventions when enforcing its weak labor standards. This agreement even allows South Korean goods to be given the benefits of the agreement even if such goods contain inputs or parts from North Korea, despite our sanctions on trade with that country. And it still has sovereignty-eroding, public-interest-policy-chilling rules that allow multinational corporations to sue governments in private, foreign tribunals for taxpayer money. 

The administration had a chance to fix the many glaring problems in Bush’s NAFTA-style Korea agreement, but it didn’t. Kirk is right that the majority of Americans oppose another one of these job-killing trade deals.

Given the ugly battle that will ensue in Congress and with the American public over the Korea trade deal, we hope the administration will take a different approach with Colombia, Panama and the other countries with which it is now negotiating. With respect to Panama and Colombia, prior to any trade agreement being appropriate, Colombia’s deeply ingrained violence and Panama’s tax-haven status must be eliminated.

###

Lori Wallach on HuffPo: "Korea Trade Deal Is Lose-Lose"

Check out Lori Wallach's latest piece on The Huffington Post:

Korea Trade Deal Is Lose-Lose

"The Obama administration's effort to convince Congress to pass a NAFTA-style trade pact with South Korea on foreign relations and national security grounds took a beating last month when a large delegation of Korean opponents of the pact came to Washington. ... A majority of Koreans oppose the FTA, are offended that it requires South Korea to subject itself to the jurisdiction of foreign arbitral tribunals, and fear it will undermine the financial stability policies Korea has implemented following the recent and 1997 financial crises; this was the message from the South Korean officials to U.S. members of Congress. The FTA is also 'an unacceptable humiliation and an overly high price to pay for the Americans' role in providing national defense,' they said..."

Read the entire piece at The Huffington Post.

 

Liveblogging the Kirk Hearing on NAFTA Expansions

The Ways and Means Committee is having its second hearing on the NAFTA expansions to Korea, Panama and Colombia. The hearing is also looking at problematic attempts to expand the World Trade Organization's restrictions on domestic regulations, and the Trans-Pacific Free Trade Agreement (FTA). The U.S. Trade Representative, Ron Kirk, is testifying. I'll be live-blogging over at FiredogLake, and attempt to provide a real-time fact check. (If you want to watch the live feed, go here.)

Belief vs. Reality in West Lafayette Park

The Washington Post reported an interesting tidbit today:

"That's been a big piece of the business community's mantra for a long time: trade," said Daley, who was an adviser to President Bill Clinton on NAFTA and became Obama's chief of staff last month. "Just about every Republican I've engaged with in one way or the other at social events or calls, when I got the job . . . all of them that I've talked to, they all go right to Korea and the trade issue, because I think there's a belief that, you know, that can help the economy."

So, there you have it. Some businesses and some Republicans believe that the Korea FTA will help the economy, so the White House is making it a priority.

But, as we've documented, the projections show that the reality of the Korea FTA will be a net negative for the economy. And, as Roll Call reported yesterday, plenty of small business groups and Republicans are against the deal:

Opponents of free-trade deals say they can swing tea party backers to their side. Michael Ostrolenk, national director of StopUSKoreaNAFTA.org, said his center-right libertarian group favors free trade but opposes the South Korea deal because it would cost U.S. jobs and sovereignty.

In other words, there's a formula for uniting the country (as opposed to just west Lafayette Park residents) around trade expansion, but the Korea FTA ain't it.

Many Blue Dogs and New Dems Survived with Fair Trade

In the wake of the release of our brand new report “Election 2010: The Best Defense Was A Fair Trade Offense,” a lot of folks have asked for more details about how the fair trade electoral advantage played out within certain subgroups of the House Democrats.

Table 1 below shows the win-loss ratios of House Democratic candidates by fair trade position, and sorted by the competitiveness of their races as determined by the Cook Political Report on November 1, 2010.

There are two things to note: first is the sheer breadth of candidates that campaigned on trade in every competitiveness category. Second, for every competitiveness category where Democrats won any seats, fair traders were more likely to win than campaigned against fair trade or that stated no position on fair trade.

Let’s look a little closer at the data. First of all, given the GOP tidal wave that hit Democrats, it is to be expected that Democrats took fewer seats in the Toss-Up category than in the Lean and Likely Democratic categories, in both percent and numerical terms. (And they captured none of the Lean or Likely Republican seats in which they were competing.)

But looking at just the 50 Toss-Up seats in play, a fair trade-oriented candidate was more likely to win their race than a candidate that ran against fair trade or took no position. The same goes if we look at only the Leaning or Likely Democratic seats.

An equally interesting exercise is to look at the shifts and trends within the Democratic Party’s caucus groups most likely to be in a competitive race this year: the Blue Dogs and the New Democrats.

It’s a little known fact that, even though both groups have some members that are very vocally against fair trade, half of the 51 Blue Dogs and a third of the 70 New Democrats are signed onto the TRADE Act, a bill that envisions a fundamentally fairer way of expanding trade and exports.

Still, the New Democrat Trade Task Force is the key group within the House Democratic Caucus pushing status quo trade policies. At least three lost their re-election bids: Reps. Suzanne Kosmas (Fla.), Harry Mitchell (Ariz.) and Bob Etheridge (N.C.); two retired: Artur Davis (Ala.), who lost his primary for the gubernatorial bid, and Vic Snyder (Ark.); and two are in races that have not yet been called: Melissa Bean (Ill.) and Rick Larsen (Wash.). Ironically, Kosmas, Etheridge and Larsen – along with fellow task member Ron Kind (Wisc.) – ran paid ads attacking job offshoring. Adam Smith (Wash.) also of the task force, did not focus on his advocacy of unfair trade, but instead on his work on trade adjustment assistance.

Some voters were not convinced by these battlefield conversions: Etheridge’s successful GOP opponent Renee Elmers attacked his vote for permanent normal trade relations with China, while Kosmas’ GOP opponent Sandy Adams criticized the flow of stimulus dollars overseas.

Table 2 gives a breakdown for just the incumbent New Democrat and Blue Dog candidates. As can be seen, many more chose to run on fair trade than did not. Indeed, savvy fair traders within the New Democrat Caucus such as Rep. David Wu (D-Ore.) campaigned and won on opposition to offshoring. Wu went further and called for trade policy that would require that our trading partners observe democratic and human rights norms – positions that helped Wu bridge both blue collar and social liberal voters within his Portland area district and fight back his toughest electoral challenge in years.

Indeed, those endangered Blue Dogs and New Democrats that campaigned on fair trade were more likely to survive than those that did not.

To read more about the fair trade campaign positions that New Democrats, Blue Dogs and others took in this year’s races, be sure to check out our new report here. We’ll be updating it on a rolling basis as the remaining dozen races are called.

The Political Genius of Sarah Palin: How One Facebook Post Sparked a Mass GOP Fair Trade Wave

There is some conventional wisdom that the GOP is more united than Democrats in favor of unfair trade deals. See for instance this ridiculous aside from the White House in the New York Times Magazine this weekend:

Rouse and Messina see areas for possible bipartisan agreement, like reauthorizing the nation’s education laws to include reform measures favored by centrists and conservatives, passing long-pending trade pacts and possibly even producing scaled-back energy legislation.

This is silly. Polls show that GOP and independent voters are at least as opposed to these deals as the Democratic base. (See here and here.) And, nowhere in the "everything and the kitchen sink" 48 page GOP "Pledge to America" unity document do they talk about trade or offshoring - showing that there is not a heckuva lot of GOP unity in support of unfair trade.

GOP candidates are responding to the public support for fairer trade. This cycle, we're seeing a much higher number of GOP running on fair trade than in the last two cycles, including pledging to renegotiate trade deals and end tax loopholes for companies that offshore jobs. Some are even attacking their Democratic incumbents' votes against fair trade (a vote for China PNTR, for instance).

But the message that I have seen probably 100 GOP candidates run on in this cycle is attacking the incumbent Democrat for voting for a stimulus bill with Buy America provisions criticized as weak.

Long-time readers will recall that we covered this issue in detail back in early 2009:

• In one corner, we had Sen. John McCain (R-Ariz.) - who campaigned against Buy America, and then lost a major Senate vote to remove Buy America requirements entirely from the stimulus bill.
• In another corner, we have President Barack Obama, who campaigned in favor of Buy America, but whose adminsitration pushed back on the stronger versions of the requirement.
• In another corner, we have the fair traders and economic justice types - who wanted to pass a stimulus bill, and one with strong Buy America provisions. The price imposed by the trade point people on the Hill and the administration was to ensure that countries we've signed trade deals with would be treated as if they were "American" for the purposes of the legislation.
• Finally, we have the American people: eighty six percent of Americans say that the stimulus should "require that government-funded infrastructure and construction projects use American-made materials and products to the greatest extent possible", including 79 percent of Republicans. The Buy America portion of the stimulus bill was by far more popular than the underlying bill itself.

Enter Sarah Palin. Despite never having clarified her views on trade policy on the VP campaign trail (or in her previous run for governor of Alaska), Palin raised eyebrows earlier this year when she attacked the stimulus bill for not requiring that all money be spent here in America. Palin wrote on her Facebook wall about the stimulus bill:

“We were promised it would provide “green jobs” for Americans, but 80% of the $2 billion they spent on alternative energy went to purchase wind turbines built in China!”

At the time, I figured that this was just an accidental or not fully thought-through Facebook post. Little did I know that Sarah Palin was an absolute genius whose Facebook post would spark a mass GOP fair trade wave: virtually every GOP candidate across the country is today campaigning on this loophole in the stimulus bill.

So, what would be the solution to this problem? Well, for starters, we'd have to revisit the procurement commitments in the World Trade Organization (WTO) and other unfair trade deals in order to get even close to 100% true Buy America rules in government spending.

Even many free traders feel very strongly that there are moral, environmental and economic reasons to ensure that our tax dollars are used to support local jobs and production. But, as we've long argued, the WTO closes off this key, sovereign policy space. (See our book "States' Rights and International Trade" for more.) Luckily,

• there are a number of both Democrats and GOP that are specifically campaigning on this fair trade sub-theme of reforming procurement rules;
• a majority of House Democrats have already signed up to legislation (the TRADE Act) which would bring the procurement provisions of our trade deals up to a fair trade standard; and
• fair traders like Sen. Sherrod Brown (D-Ohio) and the U.S. Steelworkers are working diligently to monitor the stimulus bill and ensure that as much of it as possible is used to Buy American.

But Sarah Palin has pointed out the way forward: rather than falsely assume a bipartisan consensus in favor of Bush's trade deals with Korea and other countries, let's build on the true bipartisan consensus in favor of fair trade in government procurement and in other policy areas.

(Ed note: In the last two election cycles, Public Citizen has brought you detailed analysis of around 100 competitive and open seat congressional races. We found that the role of trade and offshoring increased in 2008 relative to 2006, and by all indications, 2010 will set a new record. Of about 170 races we are tracking, trade is playing in about 90 percent of them (150). That's right, we'll be releasing detailed candidate profiles of over 350 candidates - GOP, Democratic, and some third party.)

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

IMF on Capital Controls: For Them Before It Was Against Them?

Earlier this month the IMF published a working paper that examined the financial barriers between members of the East African Community (Burundi, Kenya, Rwanda, Tanzania, and Uganda).  The barriers could include the transaction costs inherent in the difficulty of finding a buyer, seller, or broker of a financial product, or the risk that a party to a financial transaction would default on a loan or otherwise fail to live up to contractual obligations.  The East African Community (EAC) economies are still maturing, so these barriers are expected.  However, the author of the paper chose to zero in on the controls placed on the international flows of capital in the EAC countries and urged that they be put on the chopping block:

Efforts can be made by EAC members to remove and lower their existing financial barriers. The fact that EAC countries have agreed to abolish existing capital controls [among themselves] by the year 2015 is a step in the right direction.

This paper comes just months after the IMF released a staff position note that suggested that “controls on inflows of foreign capital can be one tool in broad policy toolkit.”  In the paper, it noted that

policymakers are again reconsidering the view that unfettered capital flows are a fundamentally benign phenomenon and that all financial flows are the result of rational investing/borrowing/lending decisions. Concerns that foreign investors may be subject to herd behavior, and suffer from excessive optimism, have grown stronger; and even when flows are fundamentally sound, it is recognized that they may contribute to collateral damage, including bubbles and asset booms and busts.

To be fair, this paper criticizing capital controls in the EAC is an IMF “Working Paper”, which does not necessarily represent the views of the IMF like the previous “IMF Staff Position Note”.  Nevertheless, this paper on EAC suggests that the IMF may be drifting back to its old ways merely two years after the worst financial crisis since the Great Depression.

The EAC countries are no strangers to rapid flows of massive amounts of capital.  In June 2008, Kenya’s largest cell phone service provider Safaricom held an initial public offering (IPO) of its shares.  Strong demand from foreign and local investors alike pushed share prices high immediately following the IPO.  Many small Kenyan investors took out loans to purchase the stock.  When the global financial crisis came to a head in late 2008, though, the stock price collapsed as foreign investors sold their shares, and local investors were burned.

For a discussion of how capital controls could run afoul of WTO rules (how to fix WTO rules to prevent this) see our recent memo here.

Korea FTA Needs Some Fixin'

On Saturday, President Obama announced at the G-20 that his administration will move forward with the South Korea FTA and submit it to Congress for approval soon.  You can read the quick reaction from our own Lori Wallach here.  Today happens to be the three-year anniversary of the signing of the Korea FTA, and we know what that means: the FTA was negotiated by Bush for the benefit of his cronies in big business and before the financial crisis rocked the global economy.  The Korea FTA contains all the anti-democratic NAFTA and CAFTA investor-state lawsuit provisions that allow corporations to sue governments if the governments implement regulations that could reduce their profits (as we’ve seen recently with the El Salvador mining case). 

The Korea FTA also contains extremely deregulatory provisions in financial services which are in some ways more deregulatory than any other trade agreement to date.  This type of financial deregulation is completely inappropriate now that we have witnessed how financial “wizards” can devastate the economy with their wild, unregulated derivatives trading and risky gambling.  Furthermore, it contradicts the congressional efforts underway right now to re-regulate the financial sector.  The dangerous investor-state lawsuit provisions and financial services deregulation in the Korea FTA need to be stripped out before it is brought before Congress.

The Korea FTA, based on the flawed NAFTA model, could also be a disaster for working families.  Several studies on the Korea FTA as it is currently written illustrate the consequences of trying to pass the Korea FTA as it stands:

Dr. Robert Scott at the Economic Policy Institute (EPI) recently released a report on the probable employment impacts of the current version of the Korea FTA. His analysis found that the implementation of the Korea FTA would cost the U.S. about 159,000 net jobs over the next seven years due to a $13.9 billion increase in the U.S. deficit with Korea.

The U.S. International Trade Commission (USITC), an independent federal body that analyzes the likely effects of trade agreements for Congress, also found that the Korea FTA would result in an increase in the total U.S. trade deficit (see Table 2.3 in the report).  The structure of their model does not allow the total number of people employed to vary, so their report does not contain a net job loss estimate to accompany the estimate of the increased deficit. However, the USITC does have sector-by-sector estimates of employment changes, which show that workers in high-paying manufacturing industries will lose in the agreement (see Table 2.4 in the report).  The electronic equipment industry, for instance, will shed up to 0.4 percent of its workers.  The U.S. auto industry is projected to lose about 0.2 percent of its workforce due to the Korea FTA.

Of course, the corporate lobbyists have stepped up with their misleading models that predict job growth. One such study by the Chamber of Commerce predicts that hundreds of thousands of jobs would be created by the implementation of the Korea FTA.  A major problem with the report is that it only mentions the impact, under their model, of the Korea FTA upon exports.  Nowhere does it give an estimate of the increase in imports due to the FTA.  In a study on the economic impact of a trade agreement, you’d expect at a minimum to read estimates of the impact on both sides of trade flows, not just exports.  The Chamber study doesn’t give an estimate of the import impacts and is vague in its methodology section, which leaves the reader wondering if the Chamber study accounted for the effects of rising imports at all. A study failing to account for the rise of potentially job-killing imports would completely miss the mark on the jobs impact of an FTA.  The EPI and USITC studies, which explicitly account for changes in imports, are much more reliable than the Chamber study.

With his announcement to fix the Korea FTA, President Obama has a historic opportunity to chart a new course in trade policy that benefits workers, maintains democratic control over public policy, and promotes economic stability rather than handing more power to multinational corporations and big banks as trade policy over the last 20-plus years has done.  Let’s hope he seizes the moment.

 

Lori Wallach’s full statement on Obama’s announcement is after the jump:

 

ONI Debate Heats up...in Bermuda

Yesterday, eight insurance lobbying groups released a letter opposing Senator Merkley’s amendment to the financial re-regulation bill that we discussed last week.   Merkley’s amendment would strip out a provision in the bill that allows a newly-established Office on National Insurance (ONI) to unilaterally negotiate and approve international insurance agreements that give foreign insurers broad new privileges.  The ONI could then preempt state laws that conflict with the agreements.

It’s not surprising that big insurers would launch an attack on the right of states to regulate their insurance markets. What is surprising is that one of the lobbying groups signing onto the letter is the Association of Bermuda Insurers and Reinsurers.  Yes, that’s right, insurance corporations that have benefited from the lax tax laws in Bermuda for years are now looking to tear down regulations through the ONI.

As small as Bermuda may be (only 68,000 people live on the island), Bermuda is second only to the U.K. as a home to foreign insurers in the United States. About 17 percent of foreign insurers in the U.S. are incorporated in Bermuda, compared to 18 percent that are incorporated in the U.K.

So, we must ask Senators who have not yet committed to supporting the Merkley amendment: Will you fight to preserve the right of states to regulate their insurance markets, or will you let tax-skirting insurance corporations in Bermuda erode crucial consumer protections?

(Thanks to Flikr user p_snelling for the photo)

Office of National Insurance: Subverting Democracy?

Proponents of NAFTA-style trade agreements are trying to pull a fast one on us by sneaking some devastating provisions into the Senate financial reform bill.  Right now there is language in the bill that creates an Office of National Insurance (ONI) within the Treasury Department that would strike down state insurance policies if the ONI believes that they violate trade agreement rules.  The ONI would also be able to negotiate and approve new agreements that give foreign insurers greater rights without having to ask for approval from Congress first.  Senator Jeff Merkley is leading the charge with an amendment to the bill that would prevent this dangerous seizure of state and congressional authority. Click here to urge your Senator to support Merkley’s amendment.

Think this is something that only threatens states like New York, where there are lots of foreign companies? Think again. Consider the stakes for Sen. Susan Collins of Maine, where the following foreign-owned insurance companies could benefit from an international trade pact drive towards lower regulation:

Great-West Lifeco Inc., based in Canada

Cunningham Lindsey Group Inc., based in Canada

Willis Group Holdings Limited, based in the U.K.

In fact, there are foreign insurance companies in every state in the Union that could take advantage of any new rights that the ONI would give them.  Check out the chart below to see the number of foreign insurance firms operating in your state.  Keep in mind, however, that the presence of even one firm would be enough to create problems for state insurance regulations.

  

10 out of 10 Economists Agree: We Were Wrong

After about a year of wrangling, we’re now into the final stretch of financial regulatory reform!  Sen. Dodd of the Finance Committee, Rep. Frank of the Financial Services Committee, and the White House have all said that a financial reform bill will likely be on the President’s desk by Memorial day.

As Global Trade Watch has extensively documented, the United States, in cooperation with other countries, must overhaul the WTO’s radically deregulatory financial services provisions if it wishes to enact meaningful financial regulatory reform.  Regulations specifying a maximum size of financial firms and prohibiting certain risky types of financial trading could be vulnerable to challenge under the WTO’s dispute settlement mechanisms.

Members of Congress must push back hard against those who are trying to remove the teeth from the reform proposals.  Wishful thinking about the capacity of financial services corporations to properly mange huge risks does not negate the fact that a tough regulatory framework is necessary.  This fact is illustrated quite clearly in the results of a 2004 survey of 84 finance professors conducted by the International Swaps and Derivatives Association. This survey would be a barrel of laughs if the consequences of these attitudes weren’t so disastrous.

Some of the highlights:

• 100 percent of respondents agreed with the statement that “Derivatives help companies manage financial risk more effectively.”
• 99 percent of respondents agreed that “The impact of derivatives on the global financial system is beneficial.”
• 81 percent of respondents agreed that “The risks of using derivatives have been overstated.”

It’s disheartening that these “experts” could not fathom the role that derivatives would play in the 2008 financial meltdown.  In their extended comments, many of them claimed that derivatives helped promote financial stability:

“[Derivatives] allow the transfer of risk from parties that don't want to bear risk to parties that can. For example, credit derivatives make the banking system safer.”

- James Angel, Associate Professor of Finance, Georgetown University: McDonough

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

 

 

Obama’s trade policy opportunity

By Lori Wallach

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

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

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

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

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

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

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

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

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

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

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

Live Blogging the Senate Finance Hearing on Kirk

Note: This is not a verbatim transcript. Not even close. It is an attempt to capture major areas of discussion of interest to EOT readers.

Is There an Outbreak of Amnesia at USTR?

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

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

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

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

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

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

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

USTR Citing the Chamber of Commerce's Slanted Website?

Given that the Chamber of Commerce is fiercely lobbying against the fairer trade model supported by President Obama and members of Congress (and against almost everything else the Obama administration is trying to achieve), it is shocking that the USTR’s webpage of links to trade data includes the Chamber of Commerce’s slanted “trade benefits” website. The USTR webpage lists all government agencies and then only the Chamber as sources of trade data – no unions, no universities, just the country’s main corporate lobby.

Did they miss the wonderful trade data resources of the Economic Policy Institute (EPI), the AFL-CIO, or our searchable Trade Adjustment Assistance database? Or, maybe the USTR staff just hasn’t had a chance to update the webpage in the 14 months since Bush left?—Actually, no, the page says that it was last updated on July 29, 2009.

On the other hand, maybe it’s not an oversight? While most of the administration is engaged in mortal combat with the Chamber, USTR Ron Kirk seems to be all warm and fuzzy toward the Chamber. Consider his comments at a speech there last year:

I couldn't think of a better, more welcoming environment than being right here at the Chamber….I was really excited about the opportunity to come and be with you today because -- I think I've got this thing figured out now, after 60 days; I've got it all down. But considering some of the audiences that I've been in over the last 60 days, I needed a little bit of home cooking, so to speak. So I feel like I'm very much preaching to the choir, and if so, please don't be offended.

This cuddly view of the Chamber is inconsistent with pursuing a new, fairer trade model, which the Chamber strongly opposes. Over half of Democrats in the House have endorsed this new vision for trade policy – by formally sponsoring the Trade Reform Accountability Development and Employment (TRADE) Act. (The Chamber has launched a campaign against the Democrats’ initiative.)

The Chamber of Commerce’s website purports to show the trade “benefits” for each state. The problem is that the Chamber’s website only covers states’ exports, as if the United States were not being swamped in a flood of job-killing imports.  Imports represent goods that American consumers and businesses have purchased from other countries that they could have purchased from U.S. manufacturers employing U.S. workers.  

The Chamber’s website says virtually nothing about the harmful effects of our massive trade deficit that accrued since the Chamber’s beloved NAFTA, WTO and similar trade deals went into effect. (Indeed, our trade deficit increased from $25 billion in 1993 to $263 billion in 2009 with NAFTA countries alone.)  EPI estimated that if we had balanced trade with Canada and Mexico, the U.S. economy could have supported about one million more jobs in 2004. Yup, the Chamber of Commerce site also makes no mention of the nearly 5 million manufacturing jobs that we've lost since NAFTA and WTO went into effect – that’s one out of every four manufacturing jobs.  Balanced trade could help U.S. businesses, but instead the large U.S. trade deficit is a significant drag on growth that is killing U.S. manufacturers and American jobs.

Plus, the Chamber dodges the wage stagnation that has plagued the U.S. during the era of Fast Track and NAFTA-WTO model trade deals. And it does not even get into all of the horrible import safety problems – tainted food, toys and more – or the trade tribunal attacks on key consumer, toxics and environmental law.

What is even stranger about the USTR linking to the Chamber  is that the Chamber has relentlessly attacked President Obama’s major policy priorities.  The Wall Street Journal has called the Chamber’s assault “the biggest undertaking in the Chamber's 100-year history.” Last year, the Chamber spent $140 million lobbying to prevent the administration from passing  health care reform, financial sector reregulation, and climate change legislation.

Instead of heaping praise on an organization that is attacking his boss’ goals and citing the Chamber as a reliable source of trade information, perhaps USTR Kirk could achieve more progress by  advancing the new trade model that so many members of Congress have endorsed.

Things USTR Should Give Up For Lent

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

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

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

Have a good Ash Wednesday!

Exciteable Young Men

As we pointed out last week, Obama's SOTU speech explicitly DID NOT call for passage of Bush's FTAs with Peru, Panama, and Colombia, just as it did not (unfortunately) spell out a new direction for trade deals that could gain the support of the American people.

He reiterated this "position" in his comments to the GOP House caucus:

CONGRESSMAN ROSKAM: -- Moving forward, I think all of us want to hit the reset button on 2009. How do we move forward? And on the job creation piece in particular, you mentioned Colombia, you mentioned Panama, you mentioned South Korea. Are you willing to work with us, for example, to make sure those FTAs get called, that's no-cost job creation? And ultimately, as you're interacting with world leaders, that's got to put more arrows in your quiver, and that's a very, very powerful tool for us. But the obstacle is, frankly, the politics within the Democratic caucus?...

THE PRESIDENT: On the specific issue of trade, you're right, there are conflicts within and fissures within the Democratic Party. I suspect there are probably going to be some fissures within the Republican Party, as well. I mean, you know, if you went to some of your constituencies, they'd be pretty suspicious about it, new trade agreements, because the suspicion is somehow they're all one way.

So part of what we've been trying to do is to make sure that we're getting the enforcement side of this tight, make sure that if we've got a trade agreement with China or other countries, that they are abiding with it -- they're not stealing our intellectual property or making sure that their non-tariff barriers are lowered even as ours are opened up. And my hope is, is that we can move forward with some of these trade agreements having built some confidence -- not just among particular constituency groups, but among the American people -- that trade is going to be reciprocal; that it's not just going to be a one-way street.

You are absolutely right though, Peter, when you say, for example, South Korea is a great ally of ours. I mean, when I visited there, there is no country that is more committed to friendship on a whole range of fronts than South Korea. What is also true is that the European Union is about to sign a trade agreement with South Korea, which means right at the moment when they start opening up their markets, the Europeans might get in there before we do.

So we've got to make sure that we seize these opportunities. I will be talking more about trade this year. It's going to have to be trade that combines opening their markets with an enforcement mechanism, as well as just opening up our markets. I think that's something that all of us would agree on. Let's see if we can execute it over the next several years.

But some in his administration seem to be taking their queues from elsewhere.

Here's Tim Geithner, as Inside U.S. Trade reported it:

"In a related development, Treasury Secretary Timothy Geithner on Feb. 3 testified to the House Ways and Means Committee that passing the pending three FTAs is a part of President Obama’s plan to double U.S. export in five years as is the effort to reach a Doha round deal. Rep. Kevin Brady (R-TX) asked Geithner if the pending three trade agreements are part of the president’s plan 'this year' and Geithner responded 'absolutely.'"

Here's Gary Locke, according to IUT:

USTR is trying to " 'address the outstanding concerns we have with the pending free trade agreements' with South Korea, Panama and Colombia. Asked at the event if Obama will submit the South Korea agreement to the Congress once the issue of access for U.S. autos in the Korean market is fixed, Locke said Obama is 'very supportive' of all three pending FTAs. He said that once issues with all three are resolved, they will be 'brought up' for a congressional vote."

And USTR Ron Kirk kinda takes the cake. According to IUT,

"According to [Rep. Jim] Moran, Kirk 'had very high praise for President Uribe [and] felt that he should have gotten the Nobel Peace Prize as much as President Obama for all that he has done in Colombia.' Kirk also feels that the Colombia FTA 'would be a very positive step forward,' Moran said."

Maybe it's just the snow falling down in Washington, but I can't seem to see how we get from Obama's general support of the notion of trade to these very specific advocacy points by what are perhaps some overly eager members of the administration.

Put differently, I don't see how any of these FTAs get the administration anywhere but voted out of office. Obama seems to get that, but I'm not sure that his staff do.

Obama's Path Forward, or Bush's NAFTA for 'Nam?

Last night, President Obama's State of the Union speech touched on trade matters. Specifically, he said:

We need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America. To help meet this goal, we’re launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistent with national security.

We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we will lose the chance to create jobs on our shores. But realizing those benefits also means enforcing those agreements so our trading partners play by the rules. And that’s why we will continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea, Panama, and Colombia.

According to Reuters:

Daniel Price, a lawyer at Sidley Austin and former White House adviser to George W. Bush, said many would be "puzzled" by Obama's failure to explicitly urge approval of the deals and instead only call for stronger trade ties.

Indeed, corporations have been pushing hard to get Obama to explicitly call in SOTU for completion of the WTO Doha Round in the sorry state in which it exists today, and to pass Bush-negotiated FTAs with Panama, Colombia and Korea, and to adopt Bush-initiated financial service deregulation talks with Asia.

Obviously, they lost on that count. Still, it was surprising that Obama didn't reference his fair trade campaign commitments - especially given the appeal of that issue across the aisle, as shown in recent polls. But Obama's careful phrasing leaves open the possibility that, rather than adopting Bush's trade policies as his own, and pass NAFTA for 'Nam, Obama can push for a different kind of trade model, and try out this new model with our trading partners in Asia and Latin America.

The politics and policy of the latter are what makes the most sense. We lay out some of the way Obama could carve this path forward in our comments on the proposed Asia trade deal (Trans-Pacific Partnership):

The TPP negotiations would be the first entered into by the new administration. For that reason, they provide the opportunity for the administration to translate into action President Obama’s campaign commitments to reform the past U.S. trade agreement model so that pacts can deliver benefits to more people, and so that the various problems he identified with the past model’s foreign investor, procurement, import safety, service-sector, procurement and other provisions are remedied. Indeed, TPP negotiations could be used to correct these problems with respect to past Clinton and Bush administration-negotiated U.S. “Free Trade Agreements” (FTAs) with Australia, Chile, Peru and Singapore.

There were some great comments also posted from Rep. Mike Michaud (D-Maine) and our friends in the National Farmers Union, AFL-CIO, Friends of the Earth, Citizens Trade Campaign, Oregon Fair Trade Campaign and the Teamsters.

Finally, Obama's export promise is a step in the right direction, given our overwhelming trade deficit, and a decline in exports of 19 percent last year. However, by our calculations, a doubling of exports would imply a 15 percent annual export growth rate, sustained over the next five years. That's almost double the annual average from 2004-08. Moreover, if imports grow at their 2004-08, we would still be left with a trade deficit by 2014. That means that we need a trade policy (I dunno... like the TRADE Act) that commits to looking at both sides of our trade balance ledger.

Road Trip!

It looks like U.S. Trade Representative Ron Kirk will be touring the country in a series of meetings this year.  He’ll tout the benefits of trade agreements generally, but he’ll focus on the Trans-Pacific Partnership (TPP) since its first negotiating session is slated for mid-March of this year. The potential TPP countries now include Vietnam, Australia, Peru, Chile, Singapore, Brunei, and New Zealand, though more countries might join the negotiations soon.

According to Inside U.S. Trade (subscription only), even big business is skeptical of the tour’s mission:

[T]wo business sources said they doubted a series of meetings across the country would do much to sway the public perception of trade.

The meetings should be a two-way street, however, if Kirk follows through on his promise to incorporate feedback from these meetings in the process of developing negotiating objectives for the TPP.  The Office of the USTR has said officially that they are still in the early stages of developing negotiating objectives, but the Bush administration’s trade model is still lurking under the surface:

Private-sector sources this week speculated that the negotiating objectives identified by the Bush administration in 2008 for the TPP Agreement may serve as a basis for the current administration, both because the objectives are so broad and because those original objectives were developed by career officials still in place at USTR.

These previously defined negotiating objectives include all the nasty provisions that we’ve seen in previous agreements like NAFTA and CAFTA such as intellectual property rules, financial services, foreign investor rights, and government procurement.  Right now the inclusion of these inappropriate issues in the TPP is a wide open question. Greater congressional involvement in the negotiating process could help ensure that we are negotiating for an agreement with higher standards.

(Thanks to Flickr user Focx for the image)

The Return of the NAFTA Election Cycle?

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

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

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

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

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

It's it? What is it?

Fair traders have focused a lot on getting the Obama administration change course on the Bush administration's failed trade and investment policy. The message we've gotten consistently is that this new approach is still being thought out, discussions are being had, and the new approach is coming out soon and we'll hear about it.

Is this the "new" policy?

The two sides recognize the importance of open trade and investment to their domestic economies and to the global economy, and are committed to jointly fight protectionism in all its manifestations.  The two sides agreed to work proactively to resolve bilateral trade and investment disputes in a constructive, cooperative, and mutually beneficial manner. Both sides will expedite negotiation on a bilateral investment treaty. The two sides are committed to seeking a positive, ambitious, and balanced conclusion to the Doha Development Agenda in 2010.

What about this?

President Obama opened a potentially bruising battle within the Democratic party on Thursday when he pledged to complete a long-stalled trade agreement with South Korea that he inherited from President George W. Bush.

The fair trade response was swift:

“I can’t for the life of me understand why we would want to extend the Bush economic and trade policies,” said Senator Sherrod Brown of Ohio. “It’s unacceptable to say we’ll put in some side agreements. It’s still Bush trade policy, which is as bankrupt as Bush fiscal policy.”

And earlier this week...

Members of the House Trade Working Group called on the Obama administration Wednesday to review current U.S. trade agreements and push for a trade overhaul in the upcoming World Trade Organization ministerial meeting.

“We want to work together to develop a trade agenda that we can all be proud of,” said Rep. Louise Slaughter (D-N.Y.) during a press conference.

Rep. Michael Michaud (D-Maine) and Slaughter said they want Obama to live up to campaign promises on trade by dismissing the Doha round trade liberalization talks, agreements aimed at lowering trade barriers for developing countries, and start a compete overhaul that focuses on labor rights for American workers.

“As our nation’s representatives prepare to head to Geneva, we want them to know that the trade act not only represents a way here at home, it also mirrors calls from many WTO countries to turn around the WTO,” said Michaud. “This represents exactly what many nations have called for at WTO: a review of the existing views and the will to fix what is broken.”

The adminstration has expressed desire for a way forward on trade, and it sounds like there are a lot of paths towards this goal. But the path can't be backwards to Bush-era policies.

Sen. Bunning Gets Lit Over Canadian Anti-Smoking Law

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

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

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

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? 

Obama Administration Considers Cutting Lobbyists from Trade Policy Panels

The word on K Street is that the Obama administration is considering cutting lobbyists from federal advisory panels, including trade-related panels. Some of the committees must be re-chartered next February and sources close to the situation say that the administration is likely to either tell agencies to ban lobbyists from the panels or to provide the agencies influential guidance suggesting they avoid having lobbyists serve on the committees. The catalyst for this change is supposedly Norm Eisen, special counsel to the president for ethics and government reform, also known as the White House “ethics czar.”

As expected, this is causing some tremors on K Street, and Roll Call reports that some lobbyists are “aghast at the move.” This is unsurprising, considering the extent to which industry has lobbied to monopolize these panels. If the Obama administration follows through on this move, it could be an important step in reforming U.S. trade policy to reflect more than just corporate interests. 

Senators Request Climate Change Legislation that Builds the American Economy

A group of forward-thinking senators have come together to ensure that climate change legislation doesn’t disadvantage existing U.S. manufacturers.  Last week ten senators, including Sherrod Brown (D-OH), Russell Feingold (D-WI), and Arlen Specter (D-PA) wrote a letter to the president expressing support for a border adjustment program and other initiatives that would maintain a level playing field for American manufacturing in any climate change legislation. 

The senators wrote, “It is essential that any clean energy legislation not only address the crisis of climate change, but include strong provisions to ensure the strength and viability of domestic manufacturing…Any climate change legislation must prevent the export of jobs and related greenhouse gas emissions to countries that fail to take action to combat the threat of global warming comparable to those taken by the United States.” 

Obama should heed the senators’ call to support responsible climate change legislation because it would not only increase manufacturing opportunities in the United States, but would pressure other countries to do their part to fight global warming.  For more on this, see our fact sheet entitled Trade Agreement Threats to State Climate Change Policy.

Business Leaders Lobby Obama to Push Through Harmful FTAs

Reuters reported on Wednesday that the leaders of six major U.S. business groups have called for President Barack Obama to back speedy passage of NAFTA-style “free trade” agreements (FTAs) with Colombia, Panama and South Korea. Wisely, the president has yet to send Congress any of the bilateral trade deals negotiated by former president George W. Bush with the three nations.  In addition to pressing for passage of the three pending trade agreements, the groups urged Obama to pursue “major market-opening agreements with the Asia-Pacific and beyond,” essentially advocating for even more NAFTA-style FTAs. 

In a letter to the president, the associations acknowledged that trade agreements can ship jobs overseas, and stated that "[T]rade agreements can have adverse effects on specific industries, workers and communities…”. Actually, this is true, and Obama knows it. On the campaign trail, President Obama repeatedly expressed opposition to NAFTA and promised to usher in an era of U.S. trade policy that would require respect for labor rights, environmental standards, and human rights. The Colombia FTA is especially controversial due to the repressive regime of President Álvaro Uribe. Colombia has a longstanding and egregious record of violations of labor and human rights, especially with regard to those of its indigenous and Afro-descendant peoples. 

In addition to gaining a reputation as a notorious corporate tax haven, Panama has some of the most secretive, least transparent banking and financial laws in the world. This is exactly the wrong approach to the current global financial crisis. This problem would be made worse by the FTA.

It is up to Americans as taxpayers and voters to ensure that the new administration does not bend to the will of agents of corporate globalization, and instead works to fulfill its campaign promises. 

USTR Refuses Public Disclosure of US-Russia Trade Agreement

[Editorial note: This post is written by guest blogger Steve Charnovitz of George Washington University Law School.  The views expressed herein are solely those of the individual contributor and do not necessarily reflect those of Public Citizen.]

This is a follow-up to my blog post of July 20, 2009 about my efforts to use the Freedom of Information Act (FOIA) to get the Office of the U.S. Trade Representative (USTR) to release the text of the US-Russia Bilateral Market Access agreements signed on November 19, 2006.  After several unsuccessful efforts by email and phone to get the text, I had written to the USTR FOIA officer, Carmen Suro-Bredie, on November 19, 2008.  The US-Russia agreement was negotiated as part of Russia’s longtime efforts to join the World Trade Organization and I was interested to see the precise terms of this legal arrangement.

Ms. Suro-Bredie denied my request in a letter dated July 28, 2009 which I received on August 3.  She said that the completed trade agreements are considered “foreign government information” that are exempt from disclosure under Exemption 1 of the FOIA.  In addition, she described her turndown letter as a “complete response to your request,” and advised that “I am closing your file in this office.”

Although I was surprised about how long it takes to get a response from USTR (251 days elapsed between November 19 and July 28), I was not surprised by USTR’s position that it will disclose only what it is required to by law. As a veteran USTR watcher, I have observed that USTR is hardwired to keep trade treaties and negotiations as secret as possible from the American public. Bureaucracies are highly resistant to change, even when a new Administration comes to office promising “Change We Can Believe In” and specifically pledging that it wanted a presumption for FOIA disclosure and greater transparency and accountability in government. So I was not surprised by the turndown of my request for transparency.

Reflections on today's State Department Investment Hearing

I testified at the Obama administration's hearing on the Model Bilateral Investment Treaty (BIT) program today at the State Department, along with many many corporate types.

The Model BIT is important because it also serves as a model for the investment chapter of U.S. "free trade agreements," which both basically incentivize the offshoring of jobs and investment by making it very very easy for U.S. corporations to set up shop in a developing country and not have to deal with such pesky matters as normal types of interactions with poor country governments.

You can read my testimony here, but essentially I laid out a few paths for reform of these provisions:

1. End the BIT program and cut out the investment chapters. Easy, and perhaps desirable, but also a bit blunt.
2. Reform specific provisions of the BIT and FTAs to allow for prudential regulation of financial markets and certain other exceptions. This solves certain problems, but importantly might fall too far below the radar screen to have the public feel that the administration is really living up to Obama's fair trade promises during the campaign.
3. And the great middle path, the TRADE Act, which sets out a process for the GAO to discover the facts of the job impacts of trade and investment provisions, while also laying out an investment chapter of trade deals that would garner broad support from the American public.

USTR Advisory Groups Need To Be Improved

[Editorial note: This post is written by guest blogger Steve Charnovitz of George Washington University Law School. The views expressed herein are solely those of the individual contributor and do not necessarily reflect those of Public Citizen.]

Having advisory groups is important for governments and international organizations.  Left to themselves, government bureaucrats and international civil servants are often unimaginative and lack good ground-level information.  As I have noted in my scholarship over the past decades (see my website at http://www.charnovitz.org), the role of nongovernmental organizations (NGOs) has been especially fruitful and vital in international trade policy going back to 1920s.

Official US advisory committees for trade policy hark back to the Randall Commission in the 1950s.  The process was regularized in the Trade Expansion Act of 1962 which authorized the USTR to seek advice from industry, labor, and agriculture, and then further formalized in the Trade Act of 1974 which set up the advisory committee system.

Currently USTR has eight formal advisory committees.  See http://www.ustr.gov/about-us/intergovernmental-affairs/advisory-committees.

For two of them, the Agricultural Technical Advisory Committee and the Industry Trade Advisory Committees (ITACs), there is no information on the USTR website as to who got invited to sit on those Committees. Thus, I cannot comment on whether those committees have sufficient expertise and balance.  In my view, the USTR website should be completely transparent as to who sits on those advisory committees. 

For the other six committees, the USTR web does have information regarding Committee membership.  For some of these, balance and diversity is lacking.

The top level committee is the Advisory Committee for Trade Policy and Negotiations (ACTPN).  Of the 32 members, 27 come from business, two from universities or think tanks, one from a labor union, one from the federal government, and one from a state government. 

Clearly that is imbalanced.  Other than the labor union member, there are no NGOs (such as Global Trade Watch), religious leaders, foundation representatives, well-known trade economists (such as Professor Jagdish Bhagwati), or experts in international trade law.  The lack of consumer NGOs is especially odd given that consumers are the biggest beneficiaries of trade.  Also missing are experts from other countries, such as the South Centre in Geneva or CUTS in India.  I learned recently that China’s sovereign wealth fund has an international advisory committee. If China has grown out of its historical parochialism, why can’t the United States solicit the advice of most of the world that is outside of the United States?

USTR Should Devote More Attention to Worker Issues

[Editorial note: This post is written by guest blogger Steve Charnovitz of George Washington University . The views expressed herein are solely those of the individual contributor and do not necessarily reflect those of Public Citizen.]

Does USTR care about the workers who produce the goods and services in world trade?

There is reason for doubt.

In my 34 years of being a USTR-watcher, I have observed that the level of interest in labor, employment, and worker issues at USTR is exceedingly low.  Labor is viewed by USTR as a problem, not an opportunity.

A quick look at USTR's website confirms this disinterest.  Under the “Trade Topics” being addressed by USTR (see http://www.ustr.gov/trade-topics), the topics of Employment and Workers are not listed.  The topic of "Labor" is listed, but perusing it today, on July 23, 2009, one sees that the most recent USTR press release was in June 2007 and the most recent speech was in 2005.  Think about that! 

Over seven months into the Obama Administration which promised change, USTR has not said or done anything reportable about the topic of Labor.  See http://www.ustr.gov/trade-topics/labor.

The USTR 100 Days Progress Report (dated May 1 posted at http://www.ustr.gov/sites/default/files/USTR%20100%20DAYS%20PROGRESS%20REPORT.pdf) shows a similar inattention to issues relating to "workers," "employment", "labor," or "jobs."  Sadly, those words do not appear in the Report.  Perhaps USTR is doing something constructive behind the scenes, but if so, they should be more transparent about it.

What is the employment dimension of US trade policy? That's simple. USTR should be paying attention to how trade helps or hurts workers in the United States and in other countries.  US trade policy should be crafted with an eye toward assuring that it benefits US workers and consumers, but all too often, USTR has shown much more interest in using trade policy to help special interest producer groups.

On July 16, 2009, I tested out the new "Ask the Ambassador" feature on the revamped USTR website to ask Ambassador Kirk what USTR has done during the Obama Administration regarding trade adjustment assistance, a program to help US workers, firms, and communities hurt by international trade.

So far I have not received an answer to the question I asked.  Moreover, my question was not selected for posting on the USTR blog.  In the three days after Monday when I wrote about the USTR blog on this website and noted how USTR emphasizes photos of Ambassador Kirk rather than questions and answers from citizens, I see that the Ambassador's staff has posted four new photos of him (dated July 22).  Apparently at USTR these days, photos of the Ambassador’s travels is more important than answering questions from the public.

 Here is the question I asked the Ambassador through the USTR website:

“Mr. Ambassador:

Under 19 USC Sect. 2392, the Deputy US Trade Representative serves as chairman of the Adjustment Assistance Coordinating Committee.  The Committee includes officials from the Departments of Labor, Commerce and SBA.  Although neglected by the Bush Administration, this Committee can play a central role in improving the capacity of the US government to deliver vital adjustment benefits to workers, communities and firms. I have two questions. 

First, how often has this Committee met since January 20, 2009?  Second, will you commit to holding these Committee meetings in public so that there will be more transparency and accountability?

Thank you.

Steve Charnovitz”

I eagerly await an answer to my question about when USTR will step up to meet its statutory responsibilities to coordinate the delivery of trade adjustment assistance benefits.  As I pointed out in an article I wrote many years ago in the California Management Review, “Worker Adjustment: The Missing Ingredient in Trade Policy” (see http://cmr.berkeley.edu/search/articleDetail.aspx?article=4686), an effective worker adjustment program is a prerequisite for gaining greater public support for open trade. 

Sadly, the Obama Administration seems more interested in photo opportunities rather than fulfilling its responsibilites to use trade policy to help American workers. 

USTR Misleads the Public on the Status of Unimplemented Free Trade Agreements

[Editorial note: This post is written by guest blogger Steve Charnovitz. The views expressed herein are solely those of the individual contributor and do not necessarily reflect those of Public Citizen.]

Although President Obama claims to be for "free and fair" trade, he and his Administration have made no progress in securing the implementation of the three already-negotiated U.S. free trade agreements (FTAs) with Korea, Panama, and Colombia.

Yet while I can understand how the Administration would continue to sit on these agreements, since Obama campaigned against trade during the election, I do not understand why USTR seeks to misrepresent the status of these FTAs in the American political process.

The US-Korea Free Trade Agreement was signed on June 30, 2007. Neither President Bush nor Obama have sent “the final legal text of the agreement” plus implementing legislation to the Congress pursuant to Section 2105 of the Trade Act of 2002. Nevertheless, the USTR website states that the status of this agreement is “Pending Congressional Approval.” Obviously, this USTR statement is untrue. Before Congressional approval can occur, President Obama will need to formally send an implementing bill to the Congress along with a copy of the FTA. That discretionary Presidential action has not occurred, and so it is incorrect for USTR to suggest that any action on the FTA is now “pending” in the Congress.

The US-Panama Trade Promotion Agreement was signed on June 28, 2007. The status of the Panama FTA is the same as the Korea FTA, that is, the agreement continues to collect dust on the shelf within the Executive Branch. No implementing legislation has been sent to the Congress. Nevertheless, the USTR website states that the status of the Panama agreement is “Pending Congressional Approval.” Again, the USTR website promulgates a falsehood.

The US-Colombia Trade Promotion Agreement was signed on September 22, 2006. A protocol of amendment was signed later to make changes in the agreement to accommodate new U.S. demands on labor, environment, investment, and other issues. The revised agreement was sent to the Congress by President Bush with implementing legislation. I discussed this sad episode in my blog posting of December 14, 2008, “The Bush-Schwab Policy on the Colombia FTA Has Failed.” Because the implementing legislation sent by President Bush expired at the end of the 110th Congress, that legislation is no longer pending in Congress. To my knowledge, no one has introduced it in 2009. Nevertheless, the USTR website states that the status of the Colombia agreement is “Pending Congressional Approval.".

On July 17, 2009, I attended a presentation by Larry Summers, the Director of the White House National Economic Council. During the Q&A session, I asked Dr. Summers about the status of the three pending FTAs. He responded:

Will the Real New Dems Please Stand Up?

The (New) Democratic Leadership Council has just put a 14-page brief called "Toward a New Trade Agenda," and it offers anything but.

It starts off with some relatively unobjectionable material, like tariff reform for Middle Eastern and the very poorest countries.

But then, it takes a weird turn.

It calls for climate and procurement policy to be subordinated to commercial policies.

It lauds the president's food-safety plan, not because it will resolve the problem, but because of the optics: it will "ease globalization anxieties."

And while the DLC admits that the inherited Bush trade agreements with Panama, Korea and Colombia are problematic, and focuses on too small markets, it nonetheless calls for Obama to "clear the decks" by passing them. This call appears to be based on several miscalculations:

1. That FTAs "do seem to have helped boost exports." Actually, as we've shown, U.S. export growth to non-FTA countries outstrip that to FTA countries. And, as it happens, the DLC shows it too, in their Table 3. FTA country exports grew 47% from 2000-08, while non-FTA countries grew 77 percent.
2. That FTAs are divisive, but that the way out is through. Ed Gresser, the author of the report, goes to pains to note how much opposition within the party there is to the FTAs. He writes: "with trade only one of many issues on its agenda, the administration has a pragmatic interest in limiting these conflicts to genuinely important topics. And so, with the FTAs modest in scale from the start and now fading under the impact of structural change in technology and logistics, it is time to remove them from the starring role." Uh, did I miss something? These fights are divisive. Check. They require lots of political capital better spent on other fights. Check. FTAs actually aren't that useful. Check. SO LET'S PICK THAT FIGHT. There you have it folks: let's build the party by destroying it. I haven't seen such sectarian thinking since my school days!
3. FTAs help foreign policy by pleasing foreign heads of state. Actually, as Gresser notes elsewhere in the piece, we should care less about heads of state and more about the broad public diplomacy that our trade policy represents, and which FTAs undermine. (Think Mexico and Peru.)

Gresser also has a nasty habit of not taking fair traders' arguments seriously. He notes that many "unions and 'populist' politicians did not support—and often outright opposed—the agreement with Peru. They now oppose the three remaining agreements as well, despite the labor and environmental provisions. Their opposition to the Panama agreement in particular suggests the main question is not really about environmental and labor policy, but rather a more basic alarm over competition from poor countries."

Hmm. By unions and populist politicians, does he mean a majority of the House Democratic Caucus? Does he mean the 16 New Democrat Caucus members that opposed the Peru FTA?

Trade and Transparency: Steve Charnovitz Guesting Here Next Week

On Monday, a bunch of NGO representatives including GTW's own deputy director, Bill Holland, attended a meeting with USTR regarding transparency in trade negotiations. Ironically, USTR was not particularly, well, transparent about what it proposes to do regarding transparency, as Inside U.S. Trade acknowledged in their story "This Week Likely to Bring New Signs of Obama Trade Policy" (subscription only, sorry):

USTR officials present at the meeting offered little information on which measures USTR would be prepared to take, nor for a time line for completing the new policy.

...Most of the meeting was spent discussing a draft document prepared by [Knowledge Ecology International] outlining 16 specific demands on transparency, sources said. Those demands include increased NGO representation on formal advisory committees and the release of negotiating documents.

Next week, Eyes On Trade will tackle some related issues as Steve Charnovitz, one of the leading scholars on the intersection of the WTO and environmental policy, will join us as a guest author. Steve is an associate professor of law at The George Washington University Law School and a former director of the Global Environment and Trade Study at Yale University. He blogs occasionally over at the International Economic Law and Policy Blog.

Kirk Confirmed

Mayor Ron Kirk is now Ambassador Ron Kirk, the 16th U.S. Trade Representative (USTR), working for the 44th President. The post of USTR was created in its preliminary form by President John F. Kennedy, and exists to coordinate and lead the trade activities of the Departments of State, Commerce, Agriculture, Treasury, and Labor.

Kirk was confirmed on a 92-5 vote, with Sens. Robert Byrd (D-WV), Jim Bunning (R-KY), Kit Bond (R-MO), Johnny Isakson (R-GA), and Bernie Sanders (I-VT) opposing.

Just miliseconds after Kirk was confirmed, the Citizens Trade Campaign and 350 other civil society organizations sent Kirk a note of congratulations, and called for Kirk to help usher in a "New Day on Trade," moving past the NAFTA-WTO model (and its extensions to Panama and other countries) and embracing fair trade.

He has long been active in trade issues, and is a Fast Track critic. According to the Dallas Morning News (3/8/02), Kirk blasted his Democratic primary opponent Ken Bentsen in the 2002 U.S. Senate race for casting “the decisive vote to give this trade bill a one-vote victory in the House of Representatives without any real guarantee of help for workers who lose their jobs because of trade.”

Live Blogging the Ron Kirk Hearing

I'll be attempting to live blog the Ron Kirk hearing before Senate Finance Committee.

• 5:06 pm: Chairman Max Baucus (D-Mont.) is kicking things off things. "Those who have followed internatinoal trade agreements are battered... your job will be to fight rearguard action on slipping on these commitments."
• Baucus says that Kirk's tax problems should not be a dealbreaker.
• Things are off to a good start with TAA.
• Baucus is introducing customs reauthorization and and an enforcement bill, and a preference bill.
• 5:08 pm: "I want to pursue 3 pending agreements. We should start with Panama. That is the one that is most ready for action and least controversial. I am also ready to set benchmarks on Colombia and Korea."
• We need to export more to Asia. Bilateral engagement is necessary; a regional approach might also bear fruit.
• Sen. Chuck Grassley (R-Iowa): 5:12 pm: You just released your Trade Agenda. You don't have staff to explain to our committee what it means. It was vital that you said trade would play most valuable role in the recovery.
• It raises some concerns. I don't know what president means that we should build on labor standards in existing agreements. I'm reserving judgment on what these issues mean. The May 10 compromise was hard to reach, and we have yet to see 3 pending FTAs approved. IF the president reopens the May 10 compromise, he risks losing support for the trade agenda.
• I was also concerned that the report said trade may not reflect equity and employment. Our trade has reflected that for some time.
• I am concerned about mixed signals on NAFTA renegotiation. If we open up NAFTA, Mexico may want to change tariffs on corn.
• 5:18 pm: Sen. John Cornyn (R-Texas) introducing his constituent Mayor Ron Kirk.
• USTR must be clearly and calmly against protectionism.
• As mayor of Dallas, Kirk supported NAFTA and attracted investors to Dallas.
• Mayor Kirk may not be first choice of those who oppose trade, but he is first choice of president.
• Kirk: 5:22 pm: The president and I believe that trade plays a key role in our economy, and that the US will be a leader in setting the rules. Cheaper foreign products help hard pressed American families, and exports help create jobs. The overarching benefits of trade are diffuse, and the pain is concentrated.
• I am a raging pragmatist.
• We're not going to do deals just for the sake of doing them.
• Our focus will be on enforcement.
• We'll work with our partners in the WTO to advance Doha forward in the right direction. We'll see how we can get pending bilateral agreements moving, and negotiate new ones.
• In an appropriate time, Obama will require authority to negotiate new agreements and bring them to you for approval.
• Restoring the bipartisan negotiation will take time.
• 5:26 pm: Baucus hurried Kirk up, and is asking him the 3 standard questions on his background.

How will you restore biparistanship? I want 45 sec answers.

• Kirk: I will talk to you.
• Baucus: How do you engage China?
• Kirk: This will require a comprehensive strategy. We'll use all resources within WTO, we need to make them a consumer society.
• Baucus: Softwood lumber?
• Kirk: We'll mvoe forward in a collaborative way.
• Baucus : SPS?
• Kirk: We will press EU to get SPS measures based on sound science, and not fear.
• Baucus: Your enforcement prioirites?
• Kirk
• Baucus: Is Panama FTA ready to move?
• Kirk: We believe Panama is closest to being ready, and we're going to do an expedited review of all pending agreements.
• 5:32 pm Grassley: How do we reverse downturn in trade. Implementation of Colombia FTA is my number one prioirity. Will you do it this year?
• Kirk: I cannot commit to a certain timetable. We're going to advance in a strategic, not tactical manner.
• Grassley: There was good faith negotiations two years ago. When you ahve good faith between two political parties, you shouldn't look for other consensus or rengotaition.
• Grassley: It was hard for me to accept May 10 labor compromise. I am worried that it has not yielded 4 agreements. I don't know that I will move from that standard.
• Kirk: we are going to look at all agreements. The 5 elements of the Peru FTA will help move us forward so that people cna believe in trade.
• Kirk: Domestic labor law should be set by Congress.
• Grassley: will you commit to reject agricultural renegotiation in NAFTA.
• Kirk: I don't see how levying new tariffs will help strengthen the agreement.
• Stabenow: I am deeply concerned about Korea FTA on autos.
• Kirk: I realize that there are two sides to the story. I don't have "deal fever," but I didn't accept this job just to enforce what's already there. We need to create that level playing field. It's also a huge market.
• QUESTION ON COOL. 5:40 pm
• Kirk: We want to make sure that foods we eat are safe.
• Wyden: the middle class does not like these trade agreements. What do you plan to increase support of middle class?
• Kirk: We're going to utilize technology to tell the real story. Our website is "so" 1987.
• Snowe: 5:44 pm: USTR has not taken any action on a public petition since 1996. I am worried about enforcement. What actions would you take?
• Kirk: I am going to honor president's commitment to you.
• Cantwell: 5:46 pm: We need a CHina bilateral on energy. What kind of benchmarks on Korea?
• Kirk: Part of restoring America's confidence is to meet benchmarks. We don't have these defined yet. In case of status quo, it's not acceptable.

My editorial note: Wow. That was the shortest and least substantive hearing on ANY matter I've ever heard. And this was for a confirmation for the official responsible for implementing the fair-trade agenda that helped win Democrats their elections in 2006 and 2008. Pretty offensive.