Penn steps down; other heart attacks

Mark Penn stepping down from Clinton campaign... I guess now he can focus full time on destabilizing other countries instead of his own. [UPDATE AT 1153 AM, JOHN HAS POSTED ON SOME OF THE TRADE BAGGAGE OF THE DUDE WHO IS REPLACING PENN.]

Inside US Trade from Friday also had a number of heart attacks. Sen. Max Baucus (D-Mont.) said:

“My goal is to get a robust TAA signed by the president and once that occurs I think we will be in a much better position on Colombia. ... Taking on these issues can clear the way I think for the pending trade agreements.”... Baucus admonished both labor unions and business groups in the speech. ... But AFL-CIO Policy Director Thea Lee... said that if President Bush introduces the Colombia FTA bill over the objection of the congressional leadership, it will be defeated for a number of reasons: the economy is in recession, it is an election year and there is a Democratic majority in the House and the Senate. In addition, the last election in the House saw 27 free trade representatives replaced with fair traders, she pointed out."

It's true! More than 27, in fact. Check it out!

Rep. Jim Clyburn (D-S.C.), the House Dem Whip, also had some strange things to say. From IUT again:

According to Clyburn, Hoyer is “very supportive” of the agreement, but he is “not so sure that we got it at the point where we can get the full leadership to endorse it.” Everyone in the Democratic leadership voted for the Peru FTA, he pointed out. A Hoyer spokeswoman said Hoyer remains undecided on the Colombia FTA and said Clyburn did not accurately describe Hoyer’s position, however.

Clyburn said he would work with other Democratic leaders between through next week in order to get the Colombia FTA “in shape” for a possible vote, explaining that he expects the administration to submit the implementing bill next week in order to have the maximum number of legislative days for a vote this year.

He acknowledged that a vote on a controversial piece of legislation could be made more acceptable by linking it to another important bill. “A lot of times you cobble together coalitions to get things passed and people swallow on one end in order to get what they want on the other,” he said. “Whether or not that would be an approach we would take, I don’t know.”

He said White House cooperation on a new Trade Adjustment Assistance bill might help with the passage of the Colombia FTA and said this was a “big part” of Rangel’s “concerns.”


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Mark Penn. Wow.

Wowzers. WSJ (and the rest of the Western world) reporting on Hillary advisor Mark Penn meeting with President Alvaro Uribe to talk Colombia, and Penn is apologizing. Teamsters are hitting back, and Change to Win is hitting back. We'll stay tuned to see what happens, although both Hillary and Obama have said they will vote against the NAFTA expansion to Colombia, which Bush may try to submit to Congress as early as next Tuesday. (Saturday update: Uribe canceled Penn's firm's contract.)

Meanwhile, WSJ blog reports that Obama hits back against Uribe:

Sen. Barack Obama pushed back against criticism from Colombian President Alvaro Uribe, who said Obama opposes the free-trade deal between Washington and Bogota because of election politics.

“I think the president is absolutely wrong on this,” Obama told reporters on his plane Friday morning. “You’ve got a government that is under a cloud of potentially having supported violence against unions, against labor, against opposition.” The Illinois senator has promised to rebuild America’s reputation abroad.

Nutcake In related news, Max Baucus gives us his definition of nutcake; and Bob Novak further deflates his credibility by suggests U.S. labor is controlled by Venezuela's Chavez (funny, I worked on Venezuela a few years back and remember quite the opposite).

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

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New NAFTA facts for your brain and heart

The Bush administration is getting restless! The candidates' ongoing campaigning against the NAFTA trade model is putting quite a spotlight on their efforts to expand NAFTA to the union murder capital of the world (Colombia.) Bush's latest counterinformation is here; our latest countercounter is here. Get your facts on! Here's a clip:

CONCLUSION: Can we evaluate the promises on NAFTA? Yes, we can!

An army of think tanks and corporations spends millions every year in an attempt to muddle even the basic facts on NAFTA. We know that under NAFTA, the U.S. trade deficit is up, manufacturing jobs are down, wages are stagnant, Mexican immigration is up, Mexican growth is down, and policy space has been seriously limited. Bush administration officials and pundits can debate whether any of these facts matter, but they cannot make up their own facts, nor serve up irrelevant ones in the hope of distracting policymakers or the public from continuing to demand trade policy change.

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Great read on Mexico under NAFTA

Gabriel Palma is one of the best progressive economists in the world. Originally hailing from Chile, he decamped to Cambridge, currently serving as one of the few Keynesians that the neoliberals that took over his department haven't kicked out. I was in his class for about a week, before I realized that in order to take graduate econometrics, you must know something about math and statistics. At that point, after spending my undergraduate years fighting the man rather than taking the tougher classes, I decided to further postpone the learning. As I take night classes these days, I am kicking myself for not having bitten the bullet while it would have been easier.

Oh well. That doesn't stop me (or you) from getting your learn on with Gabriel's work on NAFTA and Mexico. The paper is a few years old, but it remains one of the better expositions of what went down before and since NAFTA went into effect. Among his findings:

  • Just nine countries account for 90 percent of manufactured exports from developing countries. Mexico is the only one of these to thoroughly go through the neoliberal ringer, courtesy of NAFTA and NAFTA-like policy changes.
  • Oil used to dominate Mexico's exports, but now manufacturing (increasingly high technology) constitutes the vast majority.
  • Like here at home, Mexican wages are scarcely above their 1980s' levels - whether you're looking at the maquila or non-maquila sectors. In the maquilas, you didn't have to pay anyone much of anything, since there was a bottomless pool of rural Mexicans separately getting displaced by Mexico's agriculture rules.
  • Unlike here, where bubbles and debt made up for the loss of demand brought on by the trade deficit, Mexico used export growth to make up for the loss of demand brought on by wage stagnation.
  • The traditional non-export manufacturing sectors have not seen hardly any increase in investment, meaning that the maquilas (which attracted tons of FDI) did not feed back into other sectors of the economy.
  • It turned out to be a weak substitute for real growth, however, since value added in the maquilas and auto sectors remains about where it was before NAFTA, despite the massive increase in both maquila exports and imports.
  • From just 2001-2002, 545 maquilas left Mexico for China, shedding hundreds of thousands of Mexican jobs. So much for that experiment. But as my colleague Carlos Salas shows in an upcoming paper, the few workers that got to keep their jobs have seen their wages bid up somewhat. And with absolutely none of this background, we can now see the Bush administration taking credit for the momentary respite from hell. Oh joy! A rounded development policy proposal is just around the corner, I. Am. Sure.

Now, as Rev. Jeremiah Wright might say, the chickens are coming home to roost. As CEPR documents in a recent paper, Mexico stands to lose an amount equal to 3 percent of their GDP due to the overreliance on the U.S. export market (bloated to massive deficits), which will now come crashing down thanks to our recession. Sustainable growth, anyone?

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The youth are getting restless

Progressive life in the U.S. can be rough. The two main political parties and many environmental and non-profit groups in the U.S. are not really structured to facilitate mass participation, university "activism" has turned towards the depoliticized navel gazing of much of "cultural studies", blogs are cool but limited and not immune from collective action problems plaguing other platforms for action, and the union movement has been generally on the decline for decades. How's a young person to tune in, turn on, and drop (metaphorical) bombz on the system?

United Students Against Sweatshops has filled an important void  in leadership development for young progressives. The coalition has offered many yoots their first exposure to labor and solidarity organizing, and perhaps and unfortunately their last exposure to open and honest debates about politics with a small p (as opposed to big P, as in Politico), as some of us in the early days of USAS grappled with. While the group has done pioneering work on overseas labor conditions (hence the name), it has also been at the forefront of making U.S. campuses more labor friendly, both by supporting cafeteria and TA unions, and changing attitudes of upper and middle class students.

It is vital that groups like USAS continue to flourish and grow, so that there are many many more people involved in moving our country forward. Anyone who wants to help with that vision is encouraged to turn out tonight for USAS' 10-Year Anniversary Celebration here in DC, or simply donate online to a worthy cause. You can do both or either here.

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Trade back-and-forth in OH

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

Clinton and Obama's showing in last night's Democratic debate gave us a few more glimpses into the candidates' plans for redirecting our trade policy. The highlight of the debate was both candidates' commitment to renegotiate or threaten to opt out of NAFTA. Though neither would commit to pulling out of NAFTA in the six month time frame, this is still a dramatic statement that we have not seen from either of the candidates previously. For more background on their stances, check out David Sirota's primer from yesterday.

This news will come as a great big sigh of relief for many Americans who have seen their lifestyles turned upside-down by our misguided trade policies - including NAFTA and almost a dozen clones that we've seen materialize since.

The CNN Political Ticker notes the moment and Ohio Senator Sherrod Brown's reaction:

Both Hillary Clinton and Barack Obama were asked if, as president, they would opt out of NAFTA in six months. Both candidates said they supported restructuring NAFTA and would use the threat of opting out of the agreement as a negotiating tool.

"They said it exactly right," Brown told CNN. "I want trade and more of it. I want it under different rules."

Brown voiced loud opposition to NAFTA during his 2006 Senate campaign, in which he unseated GOP incumbent Mike DeWine.

"If we say we want a different NAFTA," Brown continued, "they will negotiate, always with the threat of opting out if they don't, and that's exactly the right position. And I was thrilled, because I have not heard either of them specifically say that and they answered the question directly."

MLIVE, a Michigan news service, says that their state sympathizes with "Ohio's special beef":

Until now trade generally has been a low-profile issue in the long Democratic campaign. But Ohio has a special beef with U.S. trade policy, which union activists and many Democrats blame for a steep manufacturing decline.

Only Michigan has suffered a greater loss of manufacturing jobs than the 265,000 (23.7 percent) Ohio over the past seven years, mostly as a result of corporate outsourcing and plant closings. It's the worst jobs loss in Ohio "since the end of the Great Depression," according to the American Manufacturing Trade Action Coalition, a manufacturers association.

"Trade is an issue here," said Amy Hanauer, executive director of Policy Matters Ohio, an issue think tank, "and NAFTA is a proxy for trade. ... It may hurt Hillary Clinton."

The political consequences were made abundantly clear two years ago when Democratic Rep. Sherrod Brown unseated Republican Sen. Mike DeWine handily, chiefly by denouncing U.S. trade policy.

The New York Times reported this morning from the famous Midwest stumping-ground:

“We’re sick and tired of the empty promises and the same old story line about Youngstown and the mills,” said Phil Kidd, 28, a blogger and community activist who has sold 10,000 T-shirts that shout “Defend Youngstown” over the image of a steelworker wielding a sledgehammer. “The problem is that this is a rubber-stamp Democratic area so they know it’s almost a guarantee they’re going to get our vote. We just have to hope that this time whoever wins won’t forget about us.”

Both Democratic candidates have promised to remember, kicking off their Ohio campaigns here with fiery populist speeches they hope will appeal to the 100,000 Democratic stalwarts who live up and down the Mahoning Valley, the cradle of the Ohio steel industry and a place that has been shedding union-wage manufacturing jobs for the last 30 years...

Mr. Obama has also honed his message to tap into the anger and despair heightened by growing unemployment and the foreclosures that have felled 79,000 homeowners in the state. In a speech at Youngstown State University, he told the crowd he would give generous tax breaks to the middle class, establish a $10 billion fund to help homeowners facing foreclosure and provide incentives to companies that invest in struggling cities.

“Everywhere I go — not just in Youngstown, but everywhere — you see people who have worked in a plant for 20 years, put their heart and soul into building profits for shareholders,” he said. “Suddenly, the rug’s pulled out from under them; the job’s shipped overseas. They don’t have health care. They don’t have a pension. They’re trying to compete with their teenage kids for a job paying seven bucks an hour at the local fast-food joint.”

If the after-work crowd at the Golden Dawn tavern is any guide, Mrs. Clinton still enjoys solid support from the men whose rough hands and plain-spoken ways put them in the coveted demographic that analysts say hold the key to winning Ohio next Tuesday.

Many of the men who were sitting at the bar and salting their goblets of beer had clearly absorbed Mrs. Clinton’s contention that her opponent is too inexperienced to be president.

From The Washington Post, an elaborate lie-detector scale:

You would not think so from the way they have been attacking each other, but Clinton and Obama are not all that far apart on NAFTA. They both believe in free trade, but they both contend that the United States has gotten a bad deal from the way NAFTA and other trade deals have been enforced. Both candidates have used quotes selectively to slam each other. Two Pinocchios apiece.

ONE PINOCCHIO: Some shading of the facts. TWO PINOCCHIOS: Significant omissions or exaggerations. THREE PINOCCHIOS: Significant factual errors. FOUR PINOCCHIOS: Real whoppers. THE GEPPETTO CHECK MARK: Statements and claims contain the truth, the whole truth and nothing but the truth.

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Is it all about whitey?

"White Men Hold Key for Democrats", blared the Wall Street Journal headline, in discussing the Obama and Clinton's camp supposed courting of the white male "blue collar" vote in Ohio. Speaking as a white person (okay, and someone who had a class in whiteness studies led by a Korean guy who studied lesbian Iron Maiden fans in Appalachia), we're not that used to having our race pointed out to us quite so openly. That's what makes my new favorite blog, Stuff White People Like, such a hoot. (It's so true! I do totally heart standing still at concerts! lol lol, etc.)

Clearly, though, white men are a demographic group that left the Dems first in the 1960s-1970s, and again following the Dems' support of NAFTA in 1993-94, as Ruy Teixeira and Joel Rogers aptly showed in their 2000 book. This is a group that cares a lot about trade policy and economic security, and appealing just to the "latte-drinking, Prius- driving, Birkenstock-wearing, trust fund babies" crowd is not likely to play that well in Ohio, as evidenced by the Machinists' president using that as an epithet against the supporters of one candidate.

But, c'mon people, it's not just about white people, as a new study released today from my buds John Schmitt and Ben Zipperer from the Center for Economic and Policy Research shows. Among its findings:

Today, only 15.7 percent of all black workers are union members or covered by a union contract at their workplace. Twenty-five years ago, that share was 31.7 percent. Part of the reason for the decline in unionization among African Americans is the decline in U.S. manufacturing. But even within manufacturing, unionization rates have been falling. On average, manufacturing workers are now no more likely to be in a union than workers in the rest of the economy.
The study, which analyzed data from the Census Bureau's Current Population Survey, found that the share of African Americans in manufacturing jobs fell from 23.9 percent in 1979 to 9.8 percent last year. From 1983 to 2007, unionization rates among African Americans dropped from 31.7 to 15.7 percent. Unionization rates also dropped among whites (from 22.2 to 13.5 percent) and Hispanics (24.2 to 10.8 percent) during the same period, but the declines were not as steep as those for African Americans.

So it may be more apt to say that "The Economy Holds the Key for Democrats," or indeed for anybody wanting to compete in states where manufacturing and unions matter.

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Labor standards do not equal rising living standards

To listen to some of the recent chatter in the presidential debate about trade policy, you would think that the only problem with NAFTA is that it didn't contain core international labor standards in the main body of the text. As we've pointed out, core labor standards are only the beginning of what needs to be fixed with the failed NAFTA model, and many labor unions think even the labor standards achieved in the Peru FTA - supported by all the top contenders for president - didn't take us to where we need to be on that issue alone.

But this debate even obscures a larger issue: that labor standards are not going to put food on anyone's plate. As our own Lori Wallach notes over at Huffington Post,

Strong labor standards are necessary, but they are not sufficient to alter trade agreements' damaging economic outcomes for Americans. Labor rights requirements in trade pacts will provide workers in trade partner countries with essential tools to organize for improved wages and conditions over many decades as part of creating a social contract that may take a century to establish, as it did in the United States. However, a future president has a duty to secure tangible gains for Americans who are losing their jobs and seeing their wages stagnate today, and who fear for their children's futures in the coming decades. That requires changing the status quo trade model by eliminating provisions that promote immediate offshoring of U.S. production and jobs. The foreign investor protections included in these agreements directly incentivize offshoring by removing the risks normally associated with relocating to low-wage developing countries.

Indeed, the *best* case scenario for labor rights in an FTA over the short-to-medium term is that there is a lawsuit brought by the U.S. government against a developing country for failure to comply with labor rights (subject to multiple and difficult to meet conditions). This could be awesome, no doubt about it, and would provoke an important debate. But lawsuits alone will not put food on the table in either the U.S. or Mexico.

How did we get into the position where labor rights became the outer horizon of the thinkable? For some insight on the question, I highly recommend this article by Robert Howse, "From Politics to Technocracy". Howse is probably more sympathetic to the overall GATT-WTO agenda that we here at EOT, which makes some of his insights all the more interesting. His read on history is that the basic trade policy infrastructure was drawn up in a time of Keynesian welfare states in developed countries, where "one simply assumed a certain toolbox of effective nontrade policy instruments, and the stability and viability of the social bargains within states as well, or at least the stability of institutions that construct and reconstruct such social bargains." In other words, many in the group assumed massive domestic redistributive interventions in the "free market" were just fine, while they should be limited in actions between governments internationally. All of this, it was thought, could be technocratically managed, if one were to restrict "politics" to the domestic sphere.

But the growth of neoliberalism in the 1970s and 1980s (which I would argue was fed by this very group of trade lawyers) decimated the ability/willingness of states to have effective domestic responses to economic problems.

Continue reading "Labor standards do not equal rising living standards" »

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Afro-Colombians reiterate opposition to Colombia FTA

Marino Córdoba, founder of the Association of Internally Displaced Afro-Colombians (AFRODES), has a nice guest blog post at The Hill entitled "Why Afro-Colombians Oppose the Colombia FTA."  The whole post is worth a read, but the juicy tidbits include:

...At the end of 2007, angered by the strong opposition of the majority of Afro-Colombian communities to the U.S.-Colombia Free Trade Agreement (FTA,) Uribe created a new Commission in Colombia that directly challenges our legal governance structure.

Cynically dubbed the Commission for the Advancement of Afro-Colombian People, it would undermine our communities’ ability to advance development strategies chosen by our people that comport with our needs and that help even the economic playing field... President George Bush and other U.S. Uribe allies, such as Rep. Gregory Meeks (D-NY), and the vast array of lobbying firms hired by the Uribe government are now trying to tout this outrageous Commission as evidence that Afro- Colombian concerns are being addressed as they push to pass the FTA.

Córdoba says that thanks to a vibrant civil society movement in the 1980s, Afro-Colombians enjoy full legal recognition of their cultural rights and collective ownership of their lands (he specifically mentions Law 70 of 1993 (PDF), a rather remarkable piece of progressive legislation that I'd encourage anyone to read).  Yet this recognition has been undermined by paramilitary organizations forcing Afro-Colombians off of their land: "Tens of thousands of us have been forced to flee... clear[ing] the way for the entry of oil palm plantations, logging operations, and mining projects advanced by allies of the Uribe Administration."

The Colombia FTA's Chapter 10 contains the same poisonous investor rights provisions as NAFTA, CAFTA and the Peru FTA.  If the FTA is implemented, these provisions will only exacerbate the situation, empowering foreign companies to engage in resource extraction made possible by the illegal and often violent forcing of Afro-Colombians off of their land — land supposedly guaranteed to them by Law 70.

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Pre-Super Tuesday reflections

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

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

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

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

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

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

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

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

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The Colombian Corporate Agenda... from the inside

Today, at an event at the Council of the Americas, a corporate organization, I was introduced to a delegation of corporate CEOs from Colombia: David Bojanini of South American Insurance, Manuel Carvajal of the Carvajal Corp., Antonio Celia of Promigas and Francisco Diaz of the Corona Organization.

The event was introduced as a discussion of whether the "free trade agreement" would help improve Colombia, but amongst the diverse panel made up entirely of CEOs of Colombia's corporations (but from different geographic regions, perhaps? Though not even sure about that...), no one said that the FTA would be a bad idea, omitting the perspective of most civil society groups in Colombia and not leading to much of a discussion.

Each businessman outlined their commitment to improving life in Colombia. Antonio Celia said, "we provide jobs...hoping that they [workers] will be compensated with commitment and personal reward." (I'm sure most Colombians would prefer a living wage)

They also said that as opposed to Mexico pre-NAFTA, Colombia's corporations have a real sense of social responsibility and the problems were different in Mexico. (a  reminder that drugs were one of the major issues during the NAFTA debate and last I heard most of our cocaine still comes from Colombia...?)

Bojanini said that he is "very concerned about the well-being of our employees. We have deep respect for our labor unions - many of our companies have unions. We support free association." (and still the most dangerous country for unionists in the world)

After going on about all the contributions of what they admitted was not a representative sample of Colombian CEOs, Francisco Diaz strained to say, "we're trying to tie this into the FTA..."

There was also the obligatory exchange about Venezuela and Chavez (that "purveyor of false populism" Bush mentioned last night in the State of the Union). The CEOs cited that the #1 market for Colombia corporations is the U.S. and #2 is Venezuela. The businessmen also said that the private sector has no control over this and will continue to send the "wrong signal" by exporting to Venezuela, but the government can't send the "wrong signal" by rejecting the trade agreement, because the top two exporters might switch places and then the world will end!!! ahhh!! This was an especially interesting statement given the frame of this forum as about Corporate Social Responsibility, but I guess by this point they had forgotten the corporate responsibility part...

The CEOs were also excited to announce that they were adopting a few conventions of a Human Rights Code of Conduct that they had written. I would think that since they wrote it they would sign up for all of it, but apparently some of the private-sector written Human Rights Conduct just went too far in supporting human rights.

And then they assured the people around the table including a few reporters that this forum and this trip was in fact "not a PR effort." (Well, at least with only the two reporters who showed up and the arguments full of holes, it wasn't a very successful PR effort.) 

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When will people get embarrassed about Colombia?

Nobody could accuse the Washington community of lawyers that is responsible for our trade policy of being overly concerned with social justice.

But, c'mon, give me a break. Usually when we have trade debates in this town, they center around making one-way streets into two-way streets, keeping the bicycle of trade moving forward, bashing protectionists and isolationists, engaging not retreating, etc.

Enter the debate around the Colombia FTA. Back in the 1990s, even some Clinton administration officials were cited in the Christian Science Monitor as thinking NAFTA expansion to Colombia was a bad idea - precisely because of the country's ongoing civil war and drug problem. Today, it's no secret that a majority of members of Congress and the entirety of the Democrats' base is utterly opposed to a Colombia FTA, both on the grounds that it's a NAFTA expansion and that it's the biggest unionist-murdering country in the world. In most popular discussions of the pact, this latter fact is THE talking points - people murdered. Thousands of them. With total impunity.

So when the advocates of the Colombia FTA take to the stage, they're rarely talking about bicycles or exports. Their main talking point is that UNION MURDERS HAVE GONE DOWN. Is there no shame?? Who cares if they're up or down... if you had to lead with that fact, you have a problem. In Europe, they have a whole host of social and developmental criteria before you can join the European Union. Not here. The bigger the freak social problems you have, the better.

A Republican at an event I was recently at put it bluntly: how many fewer murders do you want to see before you pass the FTA? What's the specific target? Some Dems in attendance had to respond that they would be glad to expand NAFTA to Colombia, but "more progress [on murder] needs to be made." It's like the saying about porn, I guess the Dems'll know sufficient murder reduction when they see it. Problem is, none of us'll know beforehand. Might it be time to get beyond the country-specific critique and blast the failed model instead?

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Divorced from reality

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

With last night's win for Obama and Huckabee, there will be increased scrutiny on the record of these candidates. (This has already begun over at IELP and the Custom House and here in the press.)

Huckabee has some comments on globalization and is perceived to be running an economic populist campaign. People will be looking for more detail. As governor of Arkansas, Huckabee was one of only 8 governors to explicitly put their state onto the procurement chapters of pending trade agreements including CAFTA (in 2004) and the NAFTA expansions to Peru and other Andean countries (in 2005).

Regular readers of this blog will know that there's a great deal of opposition to these procurement and other harmful trade pact provisions. Common state economic development and environmental policies are prohibited by trade agreement procurement rules. Such policies include:

  • Measures to stop the offshoring of state jobs;
  • "Buy Local" or "Buy America" policies;
  • Preferences for recycled content, renewable energy, alternative fuel vehicles and more.

Obama, for his part, has been further articulating his trade position over the last few months, after supporting the Peru FTA, and another past vote on a NAFTA expansion. As we've reported here, Obama has been taking increasingly specific positions on product safety, and made other comments in a note to the Iowa Fair Trade Campaign. All in all, trade is playing a major role in this race, as it did in 2006 as well. (For more on this argument, see David Sirota and John Nichols.)

But aside from some of the insightful analysis that's taken place, there's this from David Brooks in today's NYT:

Huckabee understands how middle-class anxiety is really lived. Democrats talk about wages. But real middle-class families have more to fear economically from divorce than from a free trade pact. A person's lifetime prospects will be threatened more by single parenting than by outsourcing. Huckabee understands that economic well-being is fused with social and moral well-being, and he talks about the inter-relationship in a way no other candidate has.

Stumo already took a jab at Brooks, but I asked an economist friend who specializes in labor and family economics to break it down a little more for me. Here's what she had to say:

Middle class families fear divorce because it put them at risk of poverty and bankruptcy. The problem, however, is not the failure of families to stick together, it's that the it now takes two incomes to raise a family. A generation ago, a single breadwinner could support a family, but this is no longer the case. The overwhelming majority of children living in married-couple families have no stay-at-home parent. This means, that today when a family gets divorced, the incomes are cut in half, whereas a generation ago, the mother could enter employment and thus the income fall would not be as large. Families with only a
male-breadwinner have incomes that are the same, in inflation-adjusted terms, as they were in the mid-1970s, whereas it is only families with a working wife who have seen their incomes rise. Trade policy certainly plays a role here, as median male wages are currently barely above their 1973 level.

And if you don't believe her, here's a nifty graph to prove it.


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NAFTA and WTO: job killer, or slave overseer?

Anyone who has spent time in social or political movements knows that language and slogans are often painfully fought out in overcaffeinated and excruciatingly long meetings in poorly lit rooms. When I was active in the sweatshop movement in the late 1990s / pre-9-11 2000s, the topic of discussions was whether our movement was "anti-globalization," "anti-corporate globalization," anti-Global Apartheid, "pro-people's globalization," or all or none of the above.

Immediately after 9-11, there were the long meetings about how and whether we should rhetorically connect the imminent war/invasion to the IMF/World Bank protests supposed to be happening in late September, 2001. And of course there is constant hand-wringing about the terms "free trade" and "fair trade," and what if anything any of these terms mean.

Such convos aren't really my cup of tea. If you like any of these titles, peg 'em on. But in doing the research on our most recent toy report, I got a bit of a labeling bug too, this time around whether we should call NAFTA or WTO a "job-killing" agreement:

The shift of U.S. toy production to China has been a long time in the making. 1972 was the first year that America imported Chinese toys, following President Nixon’s visit to the country.  China was first granted normal trade relations status in 1981, meaning it faced lower tariffs than a communist country would otherwise face. This status was renewed every year through 2001. By 1986, China was actively liberalizing its economy and lobbying for membership in what would become the WTO, and was rapidly expanding its U.S. toy exports. By 1991, China had overtaken Japan as the number one U.S. source of foreign-made toys. Throughout the 1990s, the Clinton administration passed nearly a dozen trade agreements with China,  which continued to edge out other countries for U.S. toy market share. By the end of the decade, China accounted for a majority of toys sold in the United States.  When Congress approved China’s WTO membership in 2000, Chinese-produced toys already accounted for nearly 57 percent of U.S. toy purchases – a figure that has increased to 74 percent (nearly $15 billion) since that time.

These facts illustrate a point we try to make regularly on this blog, that many of the industrial impacts in terms of jobs occurred as tariffs were lowered (in the GATT or preference programs for poor countries) prior to NAFTA and the WTO. So when movement folks say that NAFTA is a "job-killing agreement," they:

  • are saying in a roundabout way that the U.S. trade deficit continued to increase after NAFTA, and with NAFTA countries in particular. With trade policy that either mandated balanced trade (s/t that is NAFTA and WTO-illegal) or under trade that automatically balanced due to exogenous factors, there would have been jobs in tradable sectors here that aren't here now; or
  • NAFTA's (essentially) permanent reductions in tariffs and investor rights incentivized companies that wouldn't have done so otherwise to relocate production overseas, thus reducing jobs in tradable sectors that might have been here otherwise.

When most people say NAFTA is a job-killing agreement, they do NOT mean that the total number of jobs in the US somehow declined (unemployment has been fairly constant, except during the late 1990s thanks not to trade policy but to Alan Greenspan). They are making a point about jobs in TRADABLE sectors (ie. primarily manufacturing), and linking either in a macro sense to the deficit, or in a micro sense in terms of the incentives affecting individual business decisions. Indisputably, there are fewer union jobs and fewer manufacturing jobs than there used to be, and we've been in a trade imbalance scenario, so somehow that has to be explained.

So why do corporations even fight for these trade policies, if they had already offshored so much of their production prior to NAFTA and the WTO? I think the short answer is that it's an unholy alliance between a few exporters (think Caterpillar and agri-business), with a lot of industries that have already offshored production (think toys, apparel) and want to lock in duty-free access for their products coming back into the U.S. market, and with the whole of the multinational corporate lobby (esp. the services and pharmaceutical sector, but also the above) who want some insurance against progressive political change. There's no quicker way to get backdoor, international deregulation at the state, local and national levels of government than pushing these deals.

So perhaps a more apt metaphor for NAFTA rather than "job-killer" is "slave overseer" or "prison guard." The new neoliberal world order begun in the 1970s has prejudiced people both in the U.S. and abroad, and agreements like NAFTA and WTO from the 1990s and today merely serve as an enforcement apparatus to lock in and maintain this state of affairs.

The problem remains that people would probably rather see themselves as dignified workers losing a job rather than as prisoners or slaves. So, I'm taking suggestions - best metaphor wins!

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Your secret's out

As Alan Greenspan wrote in yesterday's WSJ:

The surge in competitive, low-priced exports from developing countries, especially those to Europe and the U.S., flattened labor compensation in developed countries, and reduced the rate of inflation expectations throughout the world, including those inflation expectations embedded in global long-term interest rates.

As we will document in a report next week, the U.S. toy and retail industry, after offshoring all their production, consistently used the threat of higher inflation to further lock in their privileges. This is total bunk, of course, since CEOs have mostly pocketed the difference from their overseas labor arbitrage: the average toy and industry retail CEO makes over 19,000 times what their Chinese workers make.

Here's the chain of events: U.S. corporations pushed for less accountability: they got it when Congress yielded its constitutional responsibility to set the terms of U.S. trade policy by passing the Nixon-hatched Fast Track in 1973-74,  and then in later years gutted the funding for consumer regulatory bodies like the CPSC. Corporations pushed for greater ease in offshoring their production to countries with low wages and weak regulation: they got it when successive U.S. administrations and sessions of Congress signed off on a series of harmful trade policies under Fast Track. At the same time, corporations wanted to lock in their offshoring strategy’s profitability and insure against democratic accountability in the future: they got this too when Congress signed off on the expansive investment, trade and safety deregulation rules of agreements such as NAFTA and the WTO which authorize challenges in foreign tribunals of domestic safety policies that could limit imports.

Just in case this expansive strategic sense of Corporate "America" is getting you down, it also shows that our work to frustruate their efforts and advance our own interests can be similarly strategic. They've got a lot of pans on the fire: can we take over one of them? That's the spirit of this next song: Fugazi's "Oh":

number one in acquisitions
now there is no foreign soil
go global like a round thing
go global like a hole
to every money matchmaker
splicing green as fast as you can
let's break it down and start again...

you would never say you were out of time
coming with the fiction all the time
but there's a call coming on the other line
your secret's out

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Numerology, lingerie, and a half-hearted post

Dean makes a funny about numerology and David Brooks today:

David Brooks' column is full of nonsense on trade this morning. The point is to propagandize on behalf of current trade policy, which is taking a beating in popular opinion as of late. Brooks includes a wide range of factors which are somehow supposed to imply that the current trade policy is good.

Just to to take a couple of my favorites, Brooks points out from 1991 to 2007 the trade deficit grew to $818 billion from $31 billion. "Yet, .... during that time the U.S. created 28 million jobs and the unemployment rate dipped to 4.6 percent from 6.8 percent."

Let's see, according to my calculator, the sun came up 5,840 times during this period. Therefore, by Brooks logic, trade must facilitate astronomical processes. For those familiar with economic theory, the expected impact of trade would be on wages, not the number of jobs. And most workers have seen very small wage gains over this 16 year period as the bulk of the benefits of productivity growth have gone to highly-paid workers.

Brooks also cites a study by Robert Lawrence and Martin Baily that purports to show that 90 percent of the jobs lost in manufacturing are due to domestic causes. I have no idea what this is supposed to show. A trade deficit of 6 percent of GDP (now closer 5 percent) corresponds to at least 3 million lost manufacturing jobs. Does it make any difference for anything in the world how these lost jobs are divided between the loss of existing jobs or the failure to create new jobs? It certainly doesn't matter for any economic theory with which I am familiar.

Brooks also extols the fact that the people in this country have lots of kids -- that's great if you like global warming, otherwise it doesn't seem like such a great thing. Perhaps the best line is that the United States "benefits from low levels of corruption." This is probably because actions like having a CEO wreck a company, and then get a hundred million dollar severance package, are perfectly legal.

Tasini talks sweatshop lingerie:

When you slip on your Victoria Secret garb, remember this: it comes to you partly due to the wonders of so-called "free trade." And, in particular, that little Victoria Secret garment (I guess "little" is redundant in this context) may even hail from Jordan--which was supposed to be the poster child for how one forges the "right" kind of so-called "free trade" deal. But,  instead, Victoria Secret exposes the exact fallacy of so-called "free trade."

Billy Bragg takes on the corporate power mongers, in another in our series of Top 10 Best Songs About Trade:

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On the political divan

Late November is the time of year when we try to digest the food we've been shoveling in our traps for days, and also try to make some sense of the goings-on of the year. But the Washington Post had a story that is not helping my physical and psychological recovery any. There's a lot of scary stuff in there about how politics happens in this town (together with Rahm's questionable dating advice), but there are some quotes of note within (my emphases):

So this spring the Democrats, in concert with union leaders such as Sweeney, crafted a long list of requirements for any trade deal with the administration. The list included requiring other nations to "adopt, maintain and enforce basic international labor standards in their domestic laws and practices" and to implement and enforce multilateral environmental agreements; ensuring that foreign investors do not enjoy greater investment protections than U.S. citizens; and providing guarantees of access to affordable prescription drugs...

"We were able, thank God, to take yes for an answer," said Democratic Caucus Chairman Rahm Emanuel (Ill.), a member of the Ways and Means Committee.

Sweeney was meeting with foreign labor leaders in Berlin when the deal was struck on May 10, but both Rangel and Pelosi called to inform him of the news. At about midnight Berlin time, Sweeney spoke to the speaker on the phone. "This is a historic agreement," he told her.

But moments later, as Pelosi walked into the Speaker's Dining Room to hold a news conference with Schwab and Treasury Secretary Henry M. Paulson Jr., she found herself facing hostile Democrats. A handful of lawmakers opposed to the trade pact with Peru -- including several Democratic freshmen who had campaigned on the issue -- had squeezed themselves into the tiny room on the Capitol's first floor and stared stony-faced at the speaker.

"We're not against trade. We just want a trade system that works," said Rep. Betty Sutton (D-Ohio), a former labor lawyer who listened skeptically as the bipartisan group outlined its achievement.

Many of Sweeney's fellow union leaders delivered even harsher assessments of the new trade accord. Change to Win, the six-million member federation that now ranks as the AFL-CIO's main rival, issued a news release on May 25 saying that the agreement "does not represent the basis for the type of new U.S. trade policy that this nation desperately needs."

Even some leaders of the AFL-CIO's own affiliates rejected the agreement, saying they do not trust President Bush with the enforcement of its labor provisions...

It is a dilemma that leaves Rep. Xavier Becerra (D-Calif.), a Ways and Means Committee member, wondering whether, in incorporating provisions on environmental and labor standards in the deal, his party has proven that it can deliver benefits to the working men and women who helped return it to power.

"Trade has to be sold as something that's good for us. This deal goes partway towards addressing that. Whether it goes all the way . . .," the congressman said, his voice trailing off.

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AFL "unalterably opposed" to Colombia FTA

There have been recent ruminations that the Dems might actually consider bringing the Colombia FTA to the floor next year (ie the November 2 Inside U.S. Trade story entitled, "Rangel Willing To Consider Colombia FTA Next Year If Support Warrants"). But unlike with the Peru deal, the AFL-CIO is taking a hard line on this one, saying it "remains unalterably opposed" to the Colombia FTA. In a letter sent to both the House and Senate last Thursday, the day of the Peru vote, the AFL said:

"...two trade union leaders were murdered in Colombia within the last week... These murders are only the most recent and tragic reminders of the danger experienced by our Colombian brothers and sisters... More troubling, the vast majority of those responsible for the over 2,200 murders of trade unionists since 1991 are still at large and face no criminal charges. Even with the recent convictions, the impunity rate remains over 97 percent... passing the U.S.-Colombia Free Trade Agreement at this time would cost the United States considerable leverage over Colombia to encourage continued progress on human rights."

Attached to the letter is a laundry list of issues of concern, which could be summarized thusly:

  • There are still more murders of trade unionists in Colombia than in any other country.
  • The rate of impunity for the murder of trade unionists from 1991-2007 is between 97 and 98 percent.
  • Dialogue between unions and the government is sorely lacking, and the ILO Office in Colombia lacks the political support, funding and staffing necessary to adequately fulfill its role (and its mandate will expire in October 2008).
  • Colombia's labor laws are not in compliance with core ILO standards.

Read the full text of the letter, as well as the attachment, here (PDF).

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Trade on the Trail, Part Cinco

This week was a big one for trade on the trail.

"Clinton Pledges to Revisit Trade Deals" says the Financial Times:

"I think it is time that we assess trade agreements every five years to make sure they’re meeting their goals or to make adjustments if they are not,” she said in a speech in Cedar Rapids, Iowa, which stages the first caucus vote in the presidential nomination process next January. “And we should start by doing that with Nafta.”

"We have to change our economic course just as we have to change course in Iraq and change course when it comes to healthcare,” she said.

In addition to the five-year trade reviews, Mrs Clinton said she would appoint a federal trade enforcement officer who would monitor compliance with trade agreements.

She also pledged to expand the trade assistance adjustment programme, which retrains manufacturing workers who lose their jobs when employers relocate to other countries.

She would extend the TAA to redundant service sector workers, whose jobs have mostly been “offshored” to India, and to workers whose employers have relocated to countries that have no trade agreements with the US, such as China.

Women's Wear Daily does a good job of laying out all of the candidates' positions. Here are some highlights:

Fred Thompson: "I was one of the strictest advocates of imposing restrictions on the Chinese for their behavior of exporting dangerous materials to countries and tying some of our trade policies to what they did in that regard...They still have not done enough...but in terms of turning our backs on free trade, that's not the direction to go."

Rudy Giulliani: "We can't say that because these agreements weren't perfect, because they have problems, we're going to turn our backs on free trade...We're a country that depends on exports and we're also an entrepreneurial country."

Hillary Clinton: "The Bush administration has filed roughly the same number of enforcement actions under our trade agreements that were filed during one year of the Clinton administration...That is unacceptable. When I'm president, we're going to start enforcing them again and we're not going to enter into them unless we think they're going to be good for American workers."

Barack Obama: "We wholly agree with the labor movement that labor and environmental provisions have to be included in the core of labor agreements. Business has said historically that it couldn't be done until now," the [Obama] aide said, referring to an agreement Democratic leaders reached with the Bush administration to include stronger labor and environmental provisions in four pending trade agreements.

Mitt Romney: "has pressed Congress to act immediately on two pending trade deals with Colombia and Peru, a campaign spokesman said."

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

Continue reading "Trade on the Trail, Part Cinco" »

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Change to Win Unions oppose Peru NAFTA Expansion

Read the House and Senate letters - really, they're right on the mark!

And while there has been some talk in the news of the a labor divide, many AFL-CIO member unions have also come out against the Peru and Panama FTAs. Check out the Machinists for example.

And don't forget about Peruvian labor - also opposing. As reported in CongressNow (sorry - not linkable):

"The problems with worker rights in Peru can't be fixed with only Supreme Decrees from President Alan Garcia," said Julio Cesar Bazan, president of Confederacio Unitaria de Trabajadores, a Peruvian labor federation with strong ties to the AFL-CIO, through a translator on a conference call today. Such decrees, he said, do not have the force of law but rather make regulatory changes...

"We in Peru know that once the trade agreement is ratified, there's not going to be any effort at all by the Peruvian government to pass the general labor law," Bazan said.


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NAFTA Highway Deregulatory Gambit Thwarted

As we recently reported, the Bush administration and multinational trucking companies and the mainstream media have been trying to ram through a sweeping Reaganomics of the Road agenda. As part of this effort, they'll use whatever phony justification imaginable - from creating competition and consumer savings to building interracial harmony. (P.S. - we like those things too.)


Well, now, the people's branch has spoken. First, the House voted overwhelmingly earlier this year to block the Reaganomics of the Road agenda. And yesterday, the Senate voted 75-23 in favor of Sen. Byron Dorgan's (D-N.D.) amendment to block the NAFTA highway program. All the Democrats voted for the Dorgan amendment, as did a majority of Republicans (25) and Sen. Bernie Sanders (I-Vt.). All 23 opponents were Republican... oh, and the sole representative of the Lieberman-for-Lieberman party.

Interestingly, all the presidential candidates voted the fair trade position, unlike many times in the past: Biden, Brownback (who has never voted the fair trade position), Clinton, Dodd, and Obama. Only McCain did not cast a vote.

You can read our full release after the jump:

Continue reading "NAFTA Highway Deregulatory Gambit Thwarted" »

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Big Biz: Labor Rights are "Pretty Nuts"

In case you were worried that the Deathstar Labor standards were enforceable, once again big business sets it straight. Here's from Inside U.S. Trade:

Randy Johnson, U.S. Chamber vice president of labor, immigration and employee benefits, on Aug. 28 said the Chamber was “uncomfortable with, but bought into” the May 10 compromise incorporating the 1998 Declaration on Fundamental Principles and Rights at Work of the International Labor Organization (ILO) into trade agreements...

He said the Chamber is opposed to going beyond the ILO principles to also include the ILO conventions in FTAs, or inserting in FTAs an enforcement mechanism in the U.S. for ILO conventions. “We’ve gone as far as we’re going to go,” he said, calling the ILO a “crazy place,” some of whose ideas are “pretty nuts.”

For a little more background into the distinction between the conventions and the declaration, and why a lot of folks are calling for the former, see Human Rights Watch's short and sweet report from June (PDF).

The same article also said that the Chamber wants to expand "NAFTA into the Free Trade Area of the Americas, 'if for no other reason to send a message around the world that we’re not going to let everybody else in the world come in and take over the Americas.' Donohue noted that other countries are signing FTAs in Latin America." Good to know the Monroe Doctrine is alive and well!

Finally, a separate article in IUT noted that:

In a related event, two Peruvian labor unions in an Aug. 20 letter to members of Congress said that the U.S. and Peru would have to go further than they appear willing to do in order to achieve real reform.

The letter, signed by leaders from the Central Unitaria de Trabajadores del Peru and the Confederacion General de Trabajadores del Peru, argues that the labor deal struck between the U.S. and Peru is insufficient because new labor obligations refer only to the 1998 Declaration on the Fundamental Principles and Rights at Work of the International Labor Organization, but not the eight specific ILO conventions on fundamental labor rights.

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Will you scrap NAFTA or fix it? Answers courtesy of the AFL-CIO Democratic presidential candidate debate

Trade is coming up again and again and will be a crucial issue in the 2008 election.

From last night's AFL-CIO Democratic presidential debate:

What do you think of the answers? Post away!

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Gene Sperling: "[trade adjustment] assistance is the pre-nup of public policy"

Live from Yearly Kos - Panel: What it Means to be a Progressive in a Global Economy with Thea Lee, Chief Economists, AFL-CIO, Austan Goolsbee, professor of economics at the University of Chicago graduate school of business and Gene Sperling, senior fellow for economic policy at the Council on Foreign Relations and the Center for American Progress and moderated by Andrei Cherney, founder and co-editor of Democracy: A Journal of Ideas.

As you may have guessed at first both Sperling and Goolsbee sputtered off the talking point that globalization is inevitable (WRONG/BESIDE THE POINT: of course we could change the rules if the political will existed) and that technology has at least been a cause of the economic insecurities workers in this country feel - and the cause of the loss of jobs, etc. Sperling said that we can not ignore the huge productivity gains and consumer benefits (click to read about the Center for Economic and Policy Research's research that proves the losses in wages far outweigh the gains).

Goolsbee and Sperling insisted that we must shift the focus to what to do now about the inevitable globalization. Some ideas: universal healthcare, energy independence which will drive down gas costs and trade adjustment assistance (though Sperling said he would not instruct a presidential candidate to talk about this first - because it's the equivalent to the "pre-nup of public policy" and to workers it's "a great idea for what I do after I lose my job and am scared to death").

But when the questioning started these guys were just out of answers. Sperling said apologetically that he admits "the final word was not in on globalization." Goolsbee, when asked about the investment rules, shrunk in his seat and said that "this really backfired." Sperling added that progressives should be against international agreements that undermine our domestic environmental and health policies.

Goolsbee continued, "when domestic regulations are challenged on a widescale" in trade tribunals and the US loses, "that will be the end [of these provisions in trade agreements]."

You heard it from him. Tell a friend, tell your elected officials - don't keep making more NAFTA-style agreements that contain these expanded investor rights provisions that even according to NAFTA-advocates have "really backfired."

More about this breakthrough panel and more panels at Yearly Kos to come...

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Machinists formally come out against Peru and Panama FTAs

We've posted a full letter from the Machinists - a leading AFL-CIO member union - to Congress demanding members' opposition to the Peru and Panama FTAs. You can find the PDF here. Here's an excerpt:

We are writing on behalf of the International Association of Machinists and Aerospace Workers (IAM) to express our opposition to the Panama and Peru Free Trade Agreements. While we applaud the efforts to improve worker rights, these agreements fall far short of satisfying the concerns we have repeatedly raised with respect to a number of issues. In view of the significant losses that IAM members continue to suffer as the result of bad trade agreements, we give especially close scrutiny to any new proposals...

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TAA Politrix

Trade Adjustment Assistance (TAA), also known as burial insurance, is a targeted federal program for trade-displaced workers: hardly anyone that needs it gets it, hardly anyone that is certified as eligible for it ends up receiving it. Wage insurance, one aspect of a retooled TAA package under consideration, is even sadder, as Thea Lee of the AFL-CIO put it in March testimony to Congress:

Wage insurance does not help workers get good jobs. On the contrary, the most frequently invoked rationale for wage insurance is that it promotes “rapid reemployment” by encouraging workers to look for, consider, and accept lower-paying jobs they would not otherwise take.[1] Getting workers to take bad jobs does not fit within any good jobs strategy we would propose.

In fact, getting workers to take bad jobs is not a worthy objective at all. Our national focus cannot be rapid reemployment to the exclusion of job quality, because this would argue for the elimination of all assistance for displaced workers. It is undoubtedly true that eliminating all assistance for displaced workers would result in more higher-skilled workers finding reemployment more quickly at Wal-Mart and McDonald’s, but this would hardly be a desirable outcome for higher-skilled workers, for the lower-skilled workers they displace, or for the economy as a whole.

Across the political spectrum, over at the National Review, TAA and its associated problems are seen in little better light:

Why does a worker who loses his job to foreign competition have any greater claim on public support than a worker who loses his job to domestic competition? Or, for that matter, a worker who loses his job as a result of technological change in his industry? Or the declining popularity of his product? Sen. Olympia Snowe (R., Maine) argues that we have an obligation to help the worker who loses his job to imports because free trade is a “policy choice.” But this is no answer at all. Allowing domestic competition is a “policy choice” too... An additional problem is that much of the extra money spent will go to federal job-training programs, which may not truly constitute “help” since they rarely have any positive effects on trainees.

So why are we even talking about this crummy program? Well, from today's Inside U.S. Trade:

Ways and Means Committee staff are discussing bringing the Peru and Panama free trade agreements, as well as legislation to reauthorize and expand the Trade Adjustment Assistance (TAA) program, to the House floor to be voted on at or near the same time in the fall, sources said... In the absence of fast track trade negotiating authority, TAA could be used as leverage for action on one or more free trade agreements, sources said. A private-sector source said discussions of this possibility are underway in both the House and Senate. He said that consideration of TAA alongside the FTAs would likely make votes in support of trade pacts easier for many Democrats.

Oh, so that's why we are having this discussion: to facilitate further NAFTA expansions. This is not the first time a TAA-for-FTA deal-making gambit but has been attempted. But as we documented in a report from a few years ago, nearly every member who has made these kinds of deals in the past has been left out in the cold, including over TAA. And as the folks over at Inclusion have been making clear for a while, progressives should be working for universal programs for the unemployed/displaced, rather than trying to do stupid and ineffectual burial insurance programs for targeted groups of workers that are going to have a very hard time accessing even the meager help available from a government that doesn't want to give it to them in any case.

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The Skinny on May 10 Chronology and Labor

In confirmation of some previous reports, from today's National Journal's lobbying blubs (they get the date wrong, fyi, it's May 10):

It's not nice to surprise John Sweeney. The AFL-CIO president was on a conference call with union chiefs on May 11, explaining the federation's ongoing talks with House Democratic leaders on trade policy, when word came that this self-same leadership was at that very moment announcing a bipartisan trade-policy deal at a press conference. Worse, the deal didn't sound quite like the one that labor leaders thought they had agreed to. Sweeney's next phone calls were, you guessed it, to Capitol Hill.

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Steelworker forum shows sharp differences on trade

Yesterday and today's Steelworker forum gave the Democratic candidates for president a chance to pronounce themselves on trade. Here are their statements, from strongest to weakest. Without clicking on the links, see if you can match the gender pronoun-less position with the candidate!

  1. "[The candidate] criticized, but not by name, other candidates who have either voted for or supported foreign trade agreements such as NAFTA, or who have proposed "fixing" those trade agreements to stem the loss of millions of American manufacturing jobs. "You can't fix NAFTA... You have to repeal it and start over." Any candidate not willing to take that position should not be taken seriously."

  2. "[The candidate] told the crowd that a priority for [the candidate's] administration would be to reform trade agreement like NAFTA. "The last thing we need are more trade agreements like NAFTA."

  3. "[The candidate] avoided discussion of the North American Free Trade Agreement, which [the candidate's spouse], former President [Wile E. Coyote], backed and which unions blame for the loss of jobs. [The candidate] promised to make sure trade agreement provisions are kept to ensure fair trade... Unlike fellow Democratic candidates... who spoke to the conference Thursday and took questions from the floor, [the candidate] left without participating in a question-and-answer session planned by the union.

In other candidate news, Wonkette had a pretty funny write up of the Clinton machine and trade over here, Mitt Romney continues to dodge any meaningful discussion of anything including trade, and frequently rumored candidate Wes Clark puts himself on the really wrong side of history by not only covertly endorsing NAFTA expansion to Panama, but actually writing a column about it.

Answers: a) Rep. Dennis Kucinich (D-Ohio); b) Former Sen. John Edwards (D-N.C.); c) Sen. Hillary Clinton (D-N.Y.).

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CAFTA member Honduras slashes minimum wage... in order to compete with low-wage Nicaragua

The National Labor Committee has posted an action alert that shows just how much CAFTA has not lifted all boats, but to the contrary is creating pressures to capsize the whole working class flotilla:

First it was Alcoa workers in Mexico who were pitted against lower wage Honduran workers.  (They were told by Alcoa that they "could hire two Hondurans for every Mexican.")  Now that Alcoa has busted a union organized at its wire harnessing plant in the El Porvenir Free Trade Zone in Honduras--immediately firing all 50-plus union leaders and organizers--local Alcoa management is threatening that if the workers continue to organize, the plant will be shut down and relocated to NICARAGUA, where "labor is cheaper and workers don't make so many demands or cause problems." Alcoa's race to the bottom strategy has spread from the U.S. to Mexico and now to Central America, where under CAFTA the workers are being pitted against each other to work for less and abandon their legal rights...

In a related CAFTA-esque step backward, the Honduran Government has just reduced the minimum wage in the South of Honduras (including the department of Santa Barbara) from $178 to $136 a month. This is a 24 percent drop in wages, from 74 cents an hour to 57 cents. The largest free trade zone in Central America, the recently completed Green Valley Industrial Park is conveniently located in Santa Barbara to access the 57-cent-an-hour wages.  San Pedro Sula, where the majority of the maquila factories are concentrated, is just 20 miles or so from Santa Barbara.  How long will it be before wages drop in the rest of Honduras? The last time the export factory workers’ wages were at or lower than 57 cents an hour was 5 years ago. Today's 57 cent an hour wage is, in terms of real purchasing power, much lower due to inflation.

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Skill biased technological change too biasey these days

Back when me and my friends were but wee lads, during the good ol' Reagan years, middle class parents who had learned to accept being beaten by the man counseled their kids to skill up. "You're not going to be the bloke [uhh, I grew up in England??] that builds the widgets for the house, you're going to have to go high end, get some sweet design skills, and make the whole house."

If we needed any further evidence that this line of argument was but wishful thinking, that nothing is impossible in the land of magic wishes and corporate-run economies, that houses can float across borders, that the real issue is about POWER (i.e. not accepting the beat down), here yinz go:

FOUR years ago Henry Scott, a media consultant living in Manhattan, hired Sergio Guardia to design a weekend house on a wooded site in Kerhonkson, N.Y. Mr. Guardia, an architect who was born in Bolivia and trained at Harvard’s Graduate School of Design, came up with plans for a futuristic house set on thick steel beams cantilevered over a hillside.

The house, which was meant to feel like a capsule suspended in the woods, was perfect for the North Carolina-born Mr. Scott, who said he loves nature — when it’s behind glass. Because of allergies, he said, “I didn’t want to have a lawn to mow or bushes to prune.”

Mr. Scott responded enthusiastically to Mr. Guardia’s vision. But when they priced the house, he said, “there was no way I could afford it.” The steel supports (which ended up costing $47,000) were budget-busters, but they were essential to the design.

So Mr. Guardia, of the Manhattan firm of Guardia Architects, suggested having the wood parts of the house — the floors, doors, window frames and cabinetry — made in Santa Cruz, Bolivia, where his sister-in-law, Cecilia López, is an architect, and where labor costs are much lower than in the United States.

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Pay day, not payback

Clinton administration trade and economics official Gene Sperling had a curious op-ed today. Sirota wrote a little context on Gene's piece. But I was especially struck by how Gene admitted that critics of the Deathstar Deal have a point when they say it will do nothing to raise U.S. living standards, that other policies are needed. This is similar to what Paul Krugman said in his piece on the soft bigotry of the deal last week.

Juxtaposed with this admission however is Gene's lede, falsely suggesting that fair trade groups are claiming that "following the Democratic sweep of Congress last year, it's time for partisanship and payback."

Besides the basic point that democracy doesn't work unless the voters are having their will represented by the officials that they elect (calling this a payback seems pretty cynical), Gene seems to be suggesting that fighting for fair trade policies is some sort of special interest fight.

Peanut_butter A special interest payback scenario would be if my Grandma, who makes delicious delicious homemade peanut butter, demanded some sort of tax break on peanut grinders but only for old ladies that live in her home of Blytheville, Arkansas.

Or, in a more relevant example for the Peru FTA, like pharmaceutical giants demanding that governments protect their monopoly patents for excessive periods of time, or Citibank benefiting from a provision in the FTA that gives it rights to sue the Peruvian government if the people in Peru reverse their failed social security privatization.

But there is no prominent labor rights or fair trade group that has taken a special interest approach to their demands on trade deals. Fair trade groups have suggested that we go beyond the failed Jordan FTA model to talk about trade policies that actually raise living standards both here and abroad. This is a very "general interest" or "public interest" approach, not a special interest approach. In fact, it's what democracy looks like.

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Stinky fruit and real internationalism

Ever smelt a durian fruit? It's the world's most pungent fruit. That's what came to mind reading today's Times:

Leon E. Panetta, a former chief of staff to President Bill Clinton, said he had been concerned, once the Democrats took control of Congress, that “an awful lot of blood in the water” would prevent the parties from coming to terms on “low-hanging fruit” like immigration and trade....

The change in November has made it easier for Mr. Bush to pursue his trade agenda and his long-cherished goal of immigration overhaul. In the trade deal, the administration’s unlikely partner was Representative Charles B. Rangel, the tough-talking Democrat from Harlem. The White House acceded to his demands for child labor and environmental protections in several pending trade pacts

It's not clear to me how a Deathstar Deal that the entire Democratic base opposes and that includes labor provisions that business groups themselves say are non-binding is anything worth celebrating, and it seems downright off to characterize these as "low-hanging fruit." Sen. Byron Dorgan's (D-N.D.) hime in:

after six years of being virtually ignored by the administration, many Democrats remain wary. Senator Byron L. Dorgan, Democrat of North Dakota, complained on Friday that the Bush White House had “never been very interested in anything except the way they wanted to do business.” Mr. Dorgan said he was not impressed with the fact, given the change of party power, that they are talking. “That gives credit for low expectations,” he  said.

In related news, The Times reports on forward motion in the world of international solidarity - and its coming from the Teamsters on their first visit to China, while business does it's best/worst to undermine people everywhere:

For years, American unions refused to have any dealings with China’s government-controlled union because it is not independent.

But now, American union leaders say that encouraging union leaders here may actually raise standards in China and around the world, thereby making American jobs more competitive.

“I think a dialogue with them is very constructive,” Mr. Hoffa said. “You can’t ignore a union that claims to have 100 million workers.”...

The visit comes as  China’s only official union is pressing multinational corporations like Wal-Mart and McDonald’s to allow unions in their Chinese factories and stores.

Though long regarded as friendly toward management, the government-controlled union is starting to flex its muscle and is also helping to draft a new labor law that some American corporations are opposing on the grounds that it is unfair to corporations operating here and gives too much power to workers.

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Machinists: no more flawed deals, labor provision concerns too

Machinists Union Opposed to More Flawed Trade Deals
Washington, D.C.

May 14, 2007 - The International Association of Machinists and Aerospace Workers (IAM) today announced it will vigorously oppose any trade deal that fails to fully incorporate internationally recognized labor standards as defined by the International Labor Organization (ILO) Conventions.

“The actual text of the agreement has not yet been made available and widely varying reports of its contents raise serious and troubling questions,” said IAM International President Tom Buffenbarger. “Any agreement must be clear and unambiguous with respect to all of its provisions.”

Based on initial reports, the IAM is highly suspicious that the trade deal is seriously deficient in many respects. In addition to concerns over internationally recognized labor standards and adequate enforcement mechanisms, the IAM is also raising questions over other provisions of the proposed trade deal, including procurement and investment issues.

“The Machinists Union will vigorously oppose any trade agreement that does not benefit our members,” said IAM International President Tom Buffenbarger. “This Administration has demonstrated all too often its unwillingness to defend workers’ interests and enforce our trade laws.”

The IAM is one of the largest industrial trade unions in the U.S., representing more than 700,000 active and retired members under more that 4,000 contracts in transportation, aerospace, manufacturing, shipbuilding, electronics and defense related industries. For more information, visit

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Change to Win and Grassroots groups respond to deal

Workers Oppose Bush-Congress Trade Deal

The following is a statement by Anna Burger, Chair of Change to Win:

WASHINGTON DC -- “On behalf of the six million members of Change to Win unions and its Leadership Council, we are disappointed that House Democratic leaders joined with the Bush Administration yesterday to announce a trade deal that is more free than fair.

The agreement does not represent the basis for the type of new U.S. trade policy that this nation desperately needs. Despite improvements in labor and environmental standards, workers remain at risk because the proposal fails to address how to protect U.S. jobs or create new ones. It undermines our prevailing wage and Buy America laws. And it hands foreign firms operating here more privileges over U.S. companies. For working America, that is not a deal.

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Teamsters: Deal "Sells Out American Workers"


Official Statement By Teamsters General President Jim Hoffa (Washington, D.C.) –

Teamsters General President Jim Hoffa released the following statement today about new trade policy guidelines forged by the Bush administration and House Democratic leaders in Congress:

To my great disappointment, Democratic leaders in the House joined with the Bush administration yesterday to announce a trade “deal” that sells out American workers.

I am baffled as to why there is such eagerness to give this president -- who is unwilling to enforce current labor and trade laws -- a victory by continuing to pass more NAFTA/CAFTA-like trade models that send good-paying jobs overseas. 

The deal, which is wrongly dubbed “A New Trade Policy For America,” does nothing to protect American jobs or help create more jobs at home. The race to the bottom will only continue.

Therefore, this “deal” is NO DEAL for the Teamsters or American workers, and we will fight like hell to oppose this shortsighted agreement.

There are many members of Congress who know the reality of having their communities destroyed and broken as a result of bad trade and globalization policies. So I question why there was so much urgency to have a “deal,” especially without the support and backing of all of organized labor and the workers we represent.

We are pleased that these negotiations have resulted in enforceable labor and environmental chapters, including making core International Labor Organization standards enforceable. But this will not prevent the offshoring of jobs, nor will it lead to the creation of jobs. The Democratic majority should have delivered more to American workers.

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AFL-CIO, Steelworkers and Sen. Sherrod Brown statements

Statement by AFL-CIO President John Sweeney on U.S. Trade Policy Developments May 11, 2007

America's trade policy has been broken for decades.  Living standards have been depressed.  Families have been squeezed.  Our trade deals have cost millions of jobs and encouraged exploitation of workers and the environment. 

Read Sweeney, USWA, and Brown statements after the jump

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Labor process? Labor content?

Reports are streaming in constantly to our headquarters, and I thought I would share two very interesting findings from Inside U.S. Trade (sorry, not linkable).

First, on whether labor had been consulted:

Both Pelosi and Rangel acknowledged that they had gotten no feedback from labor groups on the agreement and Rangel said he understood that the AFL-CIO was still seeking the reaction from its union president. But Pelosi emphasized that she and Rangel had consulted with labor at the beginning of the process and insisted that the agreement announced at 6 pm had literally been reached that afternoon. But an opponent of the deal expressed doubts that the press conference involving Schwab and Treasury Secretary Henry Paulson along with the senior members of the House leadership, as well as the leadership of the New Democrat Coalition, could have been brought together within an hour’s notice. This source speculated that the announcement might have been made on May 10 to head off an expected announcement by the Teamsters that they will oppose the deal.

Second, on whether the labor "deal" will even be in the agreement's text:

The agreement is to have “legally binding” labor and environmental standards in FTAs, but there is no consensus on whether that means reopening those FTAs already signed. House Ways and Means Trade Subcommittee Chairman Sander Levin (D-MI) said he does not see how there can be a legally binding obligation without reopening already signed agreements. But Schwab said for Peru and Colombia, the U.S. could insert the obligations into the implementing language… Similarly, Ranking Ways and Means Committee Member Jim McCrery (R-LA) said the threshold of legally binding could be met by either having Peru reopen its agreement or finding another way.

We'll be posting more as we get it...

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Apostasy in trade economics land

Alan S. Blinder, Princeton economics professor (as well as former Fed dude, and former Clinton administration booster for NAFTA and WTO) has written a piece for Sunday's Washington Post about his awakening to the new dimensions of trade policy in the 21st century:

I'm a free trader down to my toes. Always have been. Yet lately, I'm being treated as a heretic by many of my fellow economists. Why? Because I have stuck my neck out and predicted that the offshoring of service jobs from rich countries such as the United States to poor countries such as India may pose major problems for tens of millions of American workers over the coming decades. In fact, I think offshoring may be the biggest political issue in economics for a generation.

When I say this, many of my fellow free-traders react with a mixture of disbelief, pity and hostility. Blinder, have you lost your mind? (Answer: I think not.) Have you forgotten about the basic economic gains from international trade? (Answer: No.) Are you advocating some form of protectionism? (Answer: No !) Aren't you giving aid and comfort to the enemies of free trade? (Answer: No, I'm trying to save free trade from itself.)

The reason for my alleged apostasy is that the nature of international trade is changing before our eyes. We used to think, roughly, that an item was tradable only if it could be put in a box and shipped. That's no longer true. Nowadays, a growing list of services can be zapped across international borders electronically. It's electrons that move, not boxes. We're all familiar with call centers, but electronic service delivery has already extended to computer programming, a variety of engineering services, accounting, security analysis and a lot else. And much more is on the way.

It's worth reading the whole piece, where Blinder goes into how technology has facilitated offshoring, and how the integration of new pools of labor from China and the former USSR have - in his view - changed conditions dramatically. (If you're interested in the dimensions of services trade and policy, you can check out the work we've been trying to call attention to for 15 years, over here.)

What is striking in these arguments, as Dean Baker has pointed out, is the concern for the most highly skilled workers, while over a decade ago, Blinder argued (and appears to still argue) that lower skill, lower wage workers should be subjected to race-to-the-bottom competition. And as for this particular wave of technological change, that's been going since the 1970s, and we've known about the fall of the USSR for, uhm, well, since Scorpion did this song way back when (back before we had NAFTA, WTO, etc.)

Better late than never, I guess. But from the way Blinder is getting pushed around in the profession, it looks like most economists have bought their ticket to destination: never.

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New World Poll on International Trade

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

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

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

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

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Rangel speak at IIE

House Ways and Means Chairman Charlie Rangel (D-N.Y.) gave a speech last night to the Peterson Institute for International Economics.

Worth noting is the continued deliberations over what/how/if labor rights may/could/should/will be incorporated into FTAs and Fast Track. Follow the full verbatim transcript after the jump.

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Corporate lobbyists hate Americans, part deux

Well, we've already heard from the U.S. Council for International Business and the Emergency Committee for American Trade, and they told us that they hate working Americans. Today, we found out (not that this is really a huge surprise or anything) that the National Association of Manufacturers does too! NAM will oppose any free trade agreement that includes new labor standards for American workers. This from Bloomberg's Mark Drajem - sorry, not linkable:

The National Association of Manufacturers, the largest industrial lobbying group, said it will oppose new trade agreements unless Democrats agree to exempt the U.S. from new labor provisions. [...] The business group is joining organizations such as the U.S. Chamber of Commerce in objecting to proposals, pushed by Democrats in Congress, that the organizations say may force revisions in state and federal labor laws such as those that limit the ability of workers to strike.


Also, in a rare moment of candor, NAM president John Engler actually said this, as reported in the article: "In addition to the labor provisions, the manufacturer's group opposes Democratic proposals to change the intellectual property provisions of the pending agreements so that developing countries can make cheaper versions of generic drugs sooner, Engler said."

In other words: "Our profit is more important than your wages or life-saving medicines." Catnip anyone?

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What to do about China?

Today, Global Labor Strategies posted an excellent consideration of Chinese labor rights and China's role in the global economy, and what a progressive outlook on the Chinese economy might look like. The concluding section is particularly cogent:

Workers, communities, and countries throughout the world are confronting the challenges posed by the emergence of China as a global economic powerhouse. About 25% of the global work force is now Chinese. Indeed, China has become the focal point for many Americans' feelings of insecurities in the global economy. [...]

Some in the labor movement and Congress have begun to recognize that simply criticizing the Chinese state fails to address the dominate role of global corporations in the global economy. Roughly 66% of the increase in Chinese exports in the past 12 years can be attributed to non-Chinese owned global companies and their joint ventures. Foreign owned global corporations account for 60% of Chinese exports to the US. Indeed, if the US retail giant Wal-Mart were a country it would be China’s 8th largest trading partner. The "Chinese threat" is less about trade with China than it is about trade with Wal-Mart and GE. Global corporations move to China to lower labor costs -- and they use those lower labor costs as a lever to drive down wages and working conditions for workers in other countries, and even within China itself.

Obviously, the China issue is only going to get bigger, and it would serve progressives well to start thinking about what a fair and just vision of the global economy might look like with regards to the world's biggest labor pool. Global Labor Strategies has taken the lead in following Chinese labor issues, so those interested should definitely keep an eye on their work.

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Do we really want a trade agreement with this country?

How again is it at all conscionable that we are negotiating an FTA with Colombia, where the government stands aside while union organizers are murdered at a ghastly rate of 140 a year since 1991? USLEAP, the U.S. Labor Education in the Americas Project, has just released a fact sheet (PDF) with some of these damning numbers:

  • Over 400 trade unionists murdered since Uribe took office in mid-2002
  • Only 7 convictions for these murders
  • Only 1 conviction for the last 236 trade unionists murdered, 2004-2006
  • Only 2 convictions for the 326 trade unionists murdered since 2003

Also according to the fact sheet, from 2003-2005, Colombia accounted for 65 percent of the world's murders of trade unionists. By these counts, approval of a U.S.-Colombia FTA would give frightening new meaning to "race to the bottom."

Update: There is a great op-ed in today's Baltimore Sun using these numbers. It's by Carol Pier, a researcher at Human Rights Watch, who doesn't mince any words:

If the U.S.-Colombia Free Trade Agreement enters into force, U.S. producers will compete directly against Colombian producers whose workers often cannot exercise basic rights without risking their lives. The United States will also have demonstrated a double standard in its "war on terror," rewarding with much-coveted trade benefits a country that stands by while its narco-terrorist paramilitaries crush fundamental human rights.
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U.S. Corporations: Keeping the Wages Flat

Fair trade advocates have long called for stronger labor standards in trade agreements. It's worth taking a look at who actually opposes such standards and who is for them. The good people over at Global Labor Strategies have just issued a new report, "Undue Influence," which examines this topic head-on as it plays out in China. Almost exactly a year ago, the Chinese government put forward a series of proposals to reform labor laws that, while far from being ideal, represented a step forward for worker's rights. Almost immediately, U.S. multinationals began to actively undermine the government's efforts - the American Chamber of Commerce in Shanghai even made a veiled threat that the law would lead to divestment from China as it would "negatively impact the PRC's competitiveness" (translation: Chinese wages might rise a little!).

Now, remember that normally we hear from the pontificating class in the U.S. that labor standards are an imposition that will harm poor countries' ability to develop. Yet here we have the government of a developing country push for strengthened labor rights with backing from citizens in that country and the people opposing it are U.S. multinationals (a similar situation happened in Peru where former President Toledo pushed for stronger labor provisions in the Peru-US FTA and was rebuked by the administration). So the next time you hear someone preach about the dangers of putting "standards" into trade agreements because they would harm people in developing countries, remind them who really supports and opposes that stance.

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