Canadian NAFTA leak shake-up

Looks like NAFTA just contributed to one more job loss...

Ian Brodie, Prime Minister Stephen Harper's chief of staff, is expected to leave the Prime Minister's Office this summer, signalling a shake-up in time for a fall election...

Sources said Mr. Brodie made the decision before the delivery of a report looking into leaks of information regarding the North American free-trade agreement, which influenced the Democratic primary race in the United States. ...

It was later alleged that Mr. Brodie told reporters during the news media lockup for the Feb. 26 budget that Ms. Clinton's campaign had reassured Canadian diplomats that her tough talk on NAFTA was just posturing, although that wasn't what was subsequently reported. Mr. Harper appointed Kevin Lynch, the Clerk of the Privy Council, to conduct an internal investigation into the matter.

How to break a strike

Advocates of NAFTA argued that they pact would help keep consumer prices low and move the economy towards a more efficient allocation of resources. Just one serious drawback: such permanent tariff reductions remove political uncertainty from firms' cost-benefit calculation. Put differently, the price attached to risk was reduced. And manipulating risk levels is one of the few weapons that the working class has to gain concessions from the rich: think strikes, for instance.      

When firms can be certain that they will never have to pay tariffs on the reimportation of their products produced offshore, strikes matter a wee bit less, as this story over the weekend from the NYT summed up:

The auto industry’s longest strike in more than 40 years, a walkout at a parts supplier that disrupted production at 32 General Motors plants, will end within days if the picketing workers ratify a tentative agreement reached late Friday with their employer, American Axle and Manufacturing....

People involved in the negotiations have said they expect the agreement to call for closing two or three plants, offering buyouts worth as much as $140,000, and drastically reducing the wages and benefits of workers who remain with the company...

American Axle has said it needs to cut wages nearly in half, from about $28 an hour to as little as $14, to remain competitive with rivals that have squeezed similar concessions from the U.A.W. During the strike, the company threatened to permanently close the plants where workers were picketing and shift work to Mexico instead.

This is capping off nearly 15 years of NAFTA being used to break labor's back. Our friend Kate Bronfenbrenner did a study for the North American Commission on Labor Cooperation showing that after passage of NAFTA, as many as 62 percent of U.S. union drives faced employer threats to relocate abroad, and the factory shut-down rate following successful union certifications tripled. Such defeats provide the institutional backdrop to a generation of wage stagnation and corporate takeover of government.

Corporate takeover of everything department

And the food crisis roils on, thanks to NAFTA and WTO's neoliberalization of the food supply. Mexican farmers continue to be displaced in the wake of NAFTA:

“We migrate because we don’t think there are options,” Mr. León said. “The important thing is to give options for a better life.”

Viewed against the backdrop of rising food prices in a global marketplace, Mr. León’s fight to keep farmers from abandoning their land is much more than a refusal to give up a millennial way of life.

As Mexico imports more corn from the United States, the country’s reliance on outside supplies is drawing protests among nationalists, farmers’ groups and leftist critics of Mexico’s free trade economy. Earlier this year, as the last tariffs to corn imports were lifted under the North American Free Trade Agreement, farmers’ groups marched against the accord in Mexico, asking for more aid.

And the few that made it across the border are now getting slammed by ICE stings. And has anybody noticed that the destruction of Mexico's traditional economy and import substitution schemes have not led the way to more efficiency, but greater instances of narcotrafficking and narcoterrorism? I mean, seriously, we seem close to having a failed state on our borders.

In other news, apparently the Supreme Court is so taken over with corporate concerns that they can't even hear international human rights cases any more, most recently in the case of apartheid in South Africa. And though it's not directly trade related, I thought this piece on the Senate compromising on banning menthol cigarettes showed an outrageous form of health and environmental racism:

Menthol is particularly controversial because public health authorities have worried about its health effects on African-Americans. Nearly 75 percent of black smokers use menthol brands, compared with only about one in four white smokers.

That is why one former public health official says the legislation’s menthol exemption is a “cave-in to the industry,” an opinion shared by some other public health advocates.

“I think we can say definitively that menthol induces smoking in the African-American community and subsequently serves as a direct link to African-American death and disease,” said the former official, Robert G. Robinson, who retired two years ago as an associate director in the office of smoking and health at the Centers for Disease Control and Prevention.

McCain self censors from telling Americans what polls say they want to hear

Pew Center has a new poll out in response to this question (hat tip to Deborah James for the link):

In general, do you think that free trade agreements—like NAFTA, and the policies of the World Trade Organization—have been a good thing or a bad thing for the United States?

Bad thing: 48%

Good thing: 35%

In other news, Sen. John McCain (R-Ariz.) has come out in favor of punitive tariffs on climate change laggards, but according to the NYT:

In the prepared text of his speech, e-mailed to reporters on Sunday night and Monday morning, Mr. McCain went so far as to call for punitive tariffs against China and India if they evaded international standards on emissions, but he omitted the threat in his delivered remarks. Aides said he had decided to soften his language because he thought he could be misinterpreted as being opposed to free trade, a central tenet of his campaign and Republican orthodoxy.

As we noted a couple of months ago, McCain's (and Obama's and Clinton's) climate change policies are seriously limited by his beloved "free trade" deals.

Redundant trade, Larry Summers, NAFTA

This piece in the Times featured an issue that we will be doing a report on soon: redundant trade.

Cod caught off Norway is shipped to China to be turned into filets, then shipped back to Norway for sale. Argentine lemons fill supermarket shelves on the Citrus Coast of Spain, as local lemons rot on the ground. Half of Europe’s peas are grown and packaged in Kenya...

Increasingly efficient global transport networks make it practical to bring food before it spoils from distant places where labor costs are lower. And the penetration of mega-markets in nations from China to Mexico with supply and distribution chains that gird the globe — like Wal-Mart, Carrefour and Tesco — has accelerated the trend.

But the movable feast comes at a cost: pollution — especially carbon dioxide, the main global warming gas — from transporting the food.

Under longstanding trade agreements, fuel for international freight carried by sea and air is not taxed. Now, many economists, environmental advocates and politicians say it is time to make shippers and shoppers pay for the pollution, through taxes or other measures.

“We’re shifting goods around the world in a way that looks really bizarre,” said Paul Watkiss, an Oxford University economist who wrote a recent European Union report on food imports.

He noted that Britain, for example, imports — and exports — 15,000 tons of waffles a year, and similarly exchanges 20 tons of bottled water with Australia. More important, Mr. Watkiss said, “we are not paying the environmental cost of all that travel.”

Larry Summers had a must-read piece in the FT:

growth in the global economy encourages the development of stateless elites whose allegiance is to global economic success and their own prosperity rather than the interests of the nation where they are headquartered. As one prominent chief executive put it in Davos this year: “We will be fine however America does but I hope for its sake that it will cut taxes and reduce regulation and put more pressure on young people to study in the ways that are necessary for it to be able to keep competing successfully.”

The chief executive was sincere and he captured an important truth. Even as globalisation increases inequality and insecurity, it is constantly and often legitimately invoked as an argument against the viability of progressive taxation, support for labour unions, strong regulation and substantial production of public goods that mitigate its adverse impacts.

In a world where Americans can legitimately doubt whether the success of the global economy is good for them, it will be increasingly difficult to mobilise support for economic internationalism.

And Lori makes a point in the WSJ that a lotta folks have been missing:

Regardless of the ebb and flow of concern over free trade, some globalization critics say the dangers to the accord are real.

Next year's North American summit would be "an opportune time for a President Obama or a President Clinton to follow through on their pledge to renegotiate," said Lori Wallach, director of Public Citizen's Global Trade Watch division. She said either leader would be "under enormous pressure to make some changes in those agreements," in part because of the potential impact on domestic-policy priorities such as addressing climate change or the health-care crisis.

"The real issue that could threaten [Nafta] isn't politics, but the agreement's actual outcomes," not just for workers in the U.S. but also in Mexico in particular, she said. "People don't have a problem with trade -- it's this version of the rules."

Bitter fallout, murders, dodges, rules, deals

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Liability in a globalized world

Much of the U.S. consumer movement has encouraged the development of punitive damages, mostly because of the massive holes in our regulatory and social safety net structure. Now, the New York Times reports that other countries are pushing back when asked to enforce U.S. punitive damage awards.

Still, as Europe rolls back its own social safety net, some European analysts are looking more favorably on the U.S. punitive damages' system as a stopgap measure to protect consumers. Ironically, U.S. courts, as reported in the article, are rolling back and limiting punitive damages claims... but with no social safety net to take its place. Seems like both continents are moving rightward, although in Europe, the frog may be getting so slowly boiled that there's less screaming about this issue. In the U.S., we may already be too boiled to tell.

Actually, we're not just moving back to a neutral place where there are no punitive damages. Through trade deals like NAFTA, corporations are actually creating systems of corporate "punitive damages" where the force of the law is used to their enrichment. Occasionally, they're claiming corporate-style punitive damages at the same time that they're using NAFTA to attack traditional pro-consumer punitive damages. From the NYT:

Foreign lawyers and judges are quick to cite particularly large American awards. Julian Lew, a barrister in London, recalled a Mississippi court’s $400 million punitive award against a Canadian company in 1995 with scorn. “It did bring America into total and utter contempt around the world,” Mr. Lew said.

The Canadian funeral home multinational, Loewen, at the bottom of this case actually used NAFTA to try to collect investor-state damages from the U.S. government for the attitude problems of the Mississippi "jury of your peers," in a case that the U.S. lost on the merits (the overall case was won on a technicality). We document the history here. Whatever one thinks of the tactics used by the Mississippi lawyers and judge, it seems like quite an overreach to make the U.S. government liable under NAFTA for these local problems that are just part of the institutional reality of this country.

Also, as we documented in our toy report, corporations are actually using offshoring as a way to limit their liability to consumers. As even the American Enterprise Institute's Doug Besharov conceded:

“[f]or many American claimants, the full enforceability of products liability laws stops at the shoreline. The situation worsens every year as imports fill more and more of the United States market... [the lack of liability creates an] artificial price advantage [that] will help [foreign producers] build market share, at the expense of United States consumers and insurers as well as competitors.”

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?

OK, so time to move on...

Yes, Hillary may have been for NAFTA before she was against it, but I'm pretty sure this applies to a large majority of the original NAFTA-boosters. And nevertheless, she voted for some NAFTA expansions, agreements that were almost word for word NAFTA or even worse, with Chile, Singapore, Australia, Morocco, Bahrain and Oman.

Obama has also denounced NAFTA in ads, in stump speeches and more, but he has also wavered, casting NAFTA expansion votes for the Bahrain and Oman FTAs.

So now what? We could, like many other blogs out there from which I'm gradually losing my vision from reading endless comments, speculate about how much of a liar either candidate is or how this is some plot to distract from Obama's "Wright" situation. But instead, it might just be better to move on and ask "what's next?" No, really. I mean I'm as partisan as the next DC partisan, but let's not dwell on this and instead do what progressives do, look ahead to what can happen with our economy, with human rights and with our foreign policy through changes to our trade policy.

And that's what both Obama and Clinton have proposed: substantial changes and new trade policies that address a lot of the problems that exist because of NAFTA and NAFTA-style agreements.

I encourage onlookers to NAFTA-gate and Clinton's records release to take a step back and really ask:

1. What do they say they will do when they get to the White House? and
2. How can I make sure they stick to what they say?

This is what economic justice advocates should be thinking about now and every day until Inauguration Day. Instead of debating minute differences and comparing past positions to new better informed trade positions, think about where we are now and what's next for our trade policy. Discuss in comments.

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

Let's not bicker and argue about who killed who

One of the funnier Monty Python scenes is in the Holy Grail movie, when a wedding (somewhat accidentally) turns into a blood bath launched by the knight Sir Lancelot of Camelot. The key line, as wedding guest after guest is murdered, is the bride's father, who does his fatherly best to salvage the occasion:

Please! Please! This is supposed to be a happy occasion! Let's not bicker and argue about who killed who. We are here today to witness the union of two young people in the joyful bond of the holy wedlock. Unfortunately, one of them, my son Herbert, has just fallen to his death.

You can see it in this video, about 5:40 minutes in.

A little bit of this quirky logic is at work in Rahm Emanuel's latest piece for the Wall Street Journal, which tries to get people to stop arguing about NAFTA (which he rammed through Congress), and instead focus on other happy things like a new social contract. Pretty heady stuff coming from a guy who ignored the fair trade sweep that happened under his nose as DCCC chair last cycle, costing the party several pick-up seats while inadvertently winning others.

First, he pretends like the end-all of the trade debate is the core labor standards debate, which is far from true. He comes pretty close to suggesting that something like NAFTA that happened in the past (even if it was willfully executed by him and a host of other humans, much like Lancelot in the clip) should not be debated in the present. Pretty odd sentiment for a week when history is in, as the country tries to sort out who got us into the recession, and when Obama's forceful reflection on the history of racism in America is moving hearts and minds.

But more importantly, there is the suggestion that somehow we EITHER focus on the debate about a social contract, or we fight for fair trade policies. Friends, as much as we've been truly moved by the stories of manufacturing decline in our country, Public Citizen simply would not be in this fight if the issue stopped there. We have gotten involved because the very domestic social contract that we've spent decades fighting for - on auto and pharmaceutical regulation, on democratic process, on consumer safety - was threatened by a trade agenda that delved deeply into the domestic sphere, limiting our policy space on domestic issues. Rahm's four domestic suggestions are: expand education, health care, green jobs, and savings. Absolutely sign me up, but first take note that these policies are limited by the WTO and other trade deals, and (though important) will not by themselves solve the problems of our fundamental lack of balance and effective demand in the economy (which will involve balancing trade and making the world safe again for regulation).

If having to talk to people like us about this fact is annoying to Rahm and others as they promise (not the same as deliver, is it?) a new social contract, - if we're the obstacle here - there is a very easy and quick solution: rewrite the rules, and don't waste time expanding them any further. It's not that talking about them is a distraction from the "real" issues, it's that so-called "trade" is a part of a "neoliberal contract" that must be rewritten as we fight for the things we want.

Why we should care about manufacturing employment and FTAs

There's been some fretting in the blogosphere about the NAFTA job loss numbers cited by the candidates, and generated by our friends at the Economic Policy Institute (EPI). I won't do a full response to the original American Enterprise Institute comment piece that sparked the musing. Suffice it to say that the Trade Diversion site has it right when they say that "trade affects the composition, not the number, of jobs in an economy." That's right, and tradable sectors like manufacturing lose out when there's a trade deficit. A few additional points, in no particular order:

1. There's things that you can criticize about the EPI methodology. Where people start to sound ridiculous is when they suggest that you wouldn't have more manufacturing jobs with balanced trade. You can debate the numbers, but you can't debate the underlying theory, or the political heart that EPI has after all these years trying to talk about an issue that matters to working people the neoliberal think tanks deny even exists.
2. I mean, seriously. It is amazing the kind of flak you take in this town for just trying to put a number on something that everyone knows is happening. And all over whether input-output tables like the kind you learned in matrix algebra are the best tools to use in looking at the problem! Seriously! That's what the "fuss" is about.
3. We've been running a trade deficit since before the Tokyo Round of the GATT, but it grew bigger after NAFTA and the WTO kicked in. To the extent that these deals offer incentives to offshore U.S. production in tradable sectors above and beyond that already promoted by the high dollar policy, then real people's work was affected.
4. But it's true that if the only thing you care about is reducing the trade deficit, then fights over FTAs are not a first order fight for you. They may be a second order political fight because you know that time spent negotiating and passing FTAs is time not spent fighting the trade deficit, i.e. you may think it's a good indication of absolutely backward political priorities in Washington. And that's right: it seems pretty clear that the 110th Congress will have spent a year working on the Peru FTA, and will have done nothing on the trade deficit. The chief first order reason to oppose FTAs remains that they're atrocious neo-liberal policy that do the wrong things for development, for democracy, and for regulation.
5. Bosses could use the threat of relocation to hold back wages, which because we have a national labor market, contributes to wage stagnation for everyone, not just manufacturing workers.
6. There's a startling lack of sympathy in much of the punditry's discussion of blue collar workers. Think to a time when you had a rough personal year - maybe you got fired, had a relationship fall apart, struggled with sickness. These are years that you will remember for the rest of your life, even as you try to forget them. They carry a deep psychic toll that you may never fully recover from. This is just a fraction of what many people who lose manufacturing jobs go through. Its a real cost to our economy and our democracy and civilization, and a major cost to these people's lives. It perpetuates the injuries of class that make progressive movement building very difficult.
7. Manufacturing is pretty sweet because it - like fast food jobs - doesn't require a lot of advance education. This is good, since most Americans don't have that much education. The thing is, there's simply not that many highly educated workers that the economy needs, with most jobs "of the future" projected to be in hospitality and related services. At a manufacturing plant, you can get on the job training, and have a pretty good shot of making a middle class income and being covered by a union contract. Whether you care about innovation or national security, manufacturing is also pretty important.
8. Some pundits like to say that manufacturing isn't in crisis because manufacturing output is at high levels. But this stat measures that total value of shipments coming from our manufacturing facilities, and doesn't take into account the value of imported parts. U.S. manufacturing value-added, a more appropriate measure, increased 13 percent between 1993 and 2006 – the exact same rate as between 1980 and 1993.
9. I have friends in service sector unions that say that it's important for progressives to talk about making bad service sector jobs into good jobs, just like was done with manufacturing. I don't disagree with that (I'm an SEIU member!), and I don't think that this contradicts any of the things that I've said.
10. If you don't think that manufacturing matters, then you may not care about a small trade deficit. But if you value macroeconomic stability and predictable trade flows (something more important if you've a developing country trying to to figure out the right degree of export orientation), then you should worry about a large trade deficit in the world's largest economy. In fact, you should worry about it a good deal more than the U.S. federal budget deficit, which is about half as large as the trade deficit.
11. If you think that having 2.3 million Americans or 1 in 100 Americans (and one in nine prime age black males) being behind bars is a national tragedy, then you might think it would be a good idea to have more entry level manufacturing jobs in the inner city. In fact, if we had a trade deficit that was the size of the budget deficit, we could (conservatively) create 1 million jobs. Wouldn't that be a good place to put some of those non-violent offenders?

Musings on Spitzer, trade and sex trafficking

The news that Gov. Eliot Spitzer was caught on a wiretap soliciting sex across state lines is shaking the country. If you're like me, the most surprising thing is that politicians think they can get away with this kind of thing, especially when there is a paper and phone trail. My wife informed me at my birthday dinner last night that she would not attend the news conference if I ever attempted something like that!

But the news on this got me thinking about human trafficking, which, as far as I know, is not at all what Gov. Spitzer is being investigated for. No, it's because I recently saw this Kevin Kline movie Trade, which is not the best movie in the world, but which is based on stories of real-life trafficked women in the article "The Girls Next Door" by Peter Landesman. According to estimates in the article, there are as many as 10,000-50,000 individuals kept in sex slavery in the United States every year, mostly trafficked from Eastern Europe and Latin America and then brought across the U.S.-Mexico border.

The whole article is chilling, but this paragraph provided some context:

Donna M. Hughes, a professor of women's studies at the University of Rhode Island and an expert on sex trafficking, says that prostitution barely existed 12 years ago in the Soviet Union. ''It was suppressed by political structures. All the women had jobs.'' But in the first years after the collapse of Soviet Communism, poverty in the former Soviet states soared. Young women -- many of them college-educated and married -- became easy believers in Hollywood-generated images of swaying palm trees in L.A. ''A few of them have an idea that prostitution might be involved,'' Hughes says. ''But their idea of prostitution is 'Pretty Woman,' which is one of the most popular films in Ukraine and Russia. They're thinking, This may not be so bad.''

This recalls the 14 years of Juarez murders, where women that were thought to be trafficked were murdered. A lot of advocacy groups on the border relate this to NAFTA, because of the boom in border maquiladora activity, at the same time of a general decline in rural employment and developmental state strategy in the 1980s and 90s locked in by NAFTA. This of course parallels what has been happening generally in developing countries and the former Soviet Union, where NAFTA-WTO like policies have been adopted over the last several decades.

Mainstream media editorial boards might not have a problem ignoring the men who lose manufacturing jobs as a result of economic restructuring. But these trafficked females are the other side of a move towards more precarious social structures in the NAFTA-WTO period. As everyone from Karl Polanyi to Saul Alinsky recognized, anyone concerned about the majority's economic welfare has an interest in trying to mediate the pace of even otherwise benign economic change. How much more so with our trade policy, which is plainly not benign for the majority? When you read the stories of desperation brought on by restructuring, the call for global full employment and industrial democracy becomes all the more pressing.

Fair trader replaces Denny Hastert in special election

Yep, a big surprise over the weekend as former Speaker Dennis Hastert (R-Ill.) - an anti-fair trader in 20-out-of-20 votes over nearly as many years - was replaced in a special election by Democrat Bill Foster in a very GOP-leaning district west of Chicago.

Foster, like so many of the candidates that have run for office in the last few years, campaigned heavily on critique of the trade status quo, even running paid ads on trade, which you can see here.

Day before Ohio

Our regular readers will have noticed that we have not been rounding up all the back and forth between Clinton and Obama on the NAFTA issue. Indeed, by sheer number of press hits, NAFTA is the top story in the country.

Part of the void at EOT is that I've got a pretty insane fever and am bedridden, while some of our other contributors are also out. But it's actually for a reason: there's been quite a bit more heat than light in much of the coverage, and it would be exhaustive to try to correct all the errors in the coverage and reporting, as the media grapples with a story that has been all but shut out of the mainstream debate over the last 15 years.

Take the ongoing story about the memo leaked from the Canadian government supposedly showing Obama gave a wink-wink on NAFTA. As the Cleveland Plain Dealer reported, citing one of our own:

Lori Wallach, director of Global Trade Watch, a group that is sharply critical of U.S. trade policy, said she is drawing no conclusions from the memo.

"What it means about any U.S. candidate is really hard to decipher because it's all coming through the lens of a right-wing Canadian government," she said.

Wallach said she sees no difference between the trade votes of Obama and Clinton, and thinks both have moved closer to her group's position during the campaign. "Neither of them started out as great champions of trade reform," she said.

Ohio Democratic Sen. Sherrod Brown, an outspoken opponent of U.S. trade policy who hasn't endorsed a candidate, said he regards the memo as "much ado about nothing" because it comes from a conservative Canadian government.

Brown said he doesn't see much difference on trade between Obama and Clinton despite the two campaigns' fierce fighting over the issue.

"I don't think anybody's going to vote on the difference between Hillary and Barack on trade," he said.

Or take the editorial by Jagdish Bhagwati in the Financial Times, where he lays out the neoliberal case for Obama:

Mr Obama’s main union support comes from the Service Employees International Union and the Teamsters, neither of which is protectionist: the SEIU’s membership is in the non-traded sector and, except on the issue of Mexican trucks coming into the US, Teamsters do well as trade expands. By contrast, Mrs Clinton’s support comes heavily from the AFL-CIO, which holds strong anti-trade views. This matters because the IOUs you sign during campaigns provide a straitjacket that can restrict your policy options.

Uhh, I don't know even know what these terms mean, but I do know that Change to Win was the federation that actively opposed the Peru FTA last year, and the Teamsters are one of THE most active members of the Citizens Trade Campaign, which has been extracting commitments from the candidates all throughout the race. And if you're worried about restricting your policy options, the WTO poses a much bigger threat to Hillary and Barack than do unions, as we showed in a report last week.

What we're seeing is the mainstream press and elite commentators trying to grapple with a perspective that is very common in middle America, but all but shut out from news outlets. They're getting the facts and the players wrong; they're misrepresenting the issues at stake. The fact that the Democratic primary dragged on this long - to the point where people in Wisconsin and Ohio are actually making a difference in selecting the nominee - means that fair trade issues have to be addressed. Is there a way we can make this happen every four years?

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

New report: Clinton, McCain, Obama - can we go a little deeper?

As long promised, we published a report today that Mary Bottari and I wrote that looks in detail at the Clinton, McCain and Obama plans on health care and climate issues. Our focus is on what changes need to be made to the WTO, NAFTA, and other trade pacts to allow for needed policy space in this area. Here's the press release for the report:

To Implement Domestic Campaign Policy Priorities on Health Care and Global Warming, Future Presidents Must Alter Existing U.S. Trade Commitments

New Public Citizen Report Identifies Changes to WTO, NAFTA Rules Needed to Facilitate Candidates’ Proposals on Health and Climate

WASHINGTON, D.C. – Public Citizen today identified changes needed to World Trade Organization (WTO) rules and the investment provisions of the North American Free Trade Agreement (NAFTA) to implement a dozen of the presidential candidates’ key health and climate policy proposals.

The changes were detailed in a report, “Presidential Candidates’ Key Proposals on Health Care and Climate Will Require WTO Modifications, Overreach of WTO Highlighted by Potential Conflicts with Candidates’ Non-Trade Proposals,” released today, available at http://www.citizen.org/documents/PresidentialWTOreport.pdf

“Growing public ire about our current trade and globalization policies’ damage to Americans’ economic prospects has played an enormously important role in this election, with most candidates committing to reform NAFTA,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “But candidates and voters have little idea that some of the candidates’ domestic policy priorities on health care and climate change could be limited by the overreach of so-called trade agreements like the World Trade Organization. The need for a comprehensive overhaul of the WTO could not be more urgent.”

Although they have nothing to do with trade, key health care cost containment proposals on the creation of health insurance risk pooling mechanisms, reduction of pharmaceutical prices and electronic medical record-keeping, a proposal to expand coverage by requiring large employers to provide health insurance and a proposal to establish tax credits for small employers as an incentive to provide health insurance fall within WTO jurisdiction. In addition, proposals that address climate policy, such as increasing CAFE (Corporate Average Fuel Efficiency) standards, banning incandescent light bulbs, establishing new regulation of coal-fired electric plants and establishing national renewable portfolio standards (RPS), green procurement proposals and green industry subsidies come under the jurisdiction of existing U.S. WTO commitments.

“Corporate lobbyists, previous U.S. presidents, and ‘free market’ think tanks worked hand-in-hand to lock in corporate privileges on health care, energy and other domestic policies and shield them from small ‘d’ democratic reforms of the kinds proposed by Clinton, McCain and Obama,” said Todd Tucker, research director for Public Citizen’s Global Trade Watch division and an author of the report. “Now is the moment presidential candidates must stand up for their important domestic platform priorities and commit to renegotiate the WTO and other flawed trade deals.”

Moreover, the candidates haven’t addressed the need to renegotiate other provisions in trade deals like the WTO, NAFTA and other NAFTA-style trade deals that severely limit future presidents’ policy space to enact legislation on non-trade issues.

“Trying to work within the tiny policy space permitted by existing WTO rules would result in the challenges surrounding America’s health care debacle and the global climate crisis being defined so narrowly as to ensure real redress is impossible,” said Wallach. “The candidates must reject corporate calls for watering down their proposals and instead emphasize opening up the much-needed policy space to provide real solutions to pressing domestic concerns.”

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.

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.

Global justice on the move, with global ambulance chasers right behind

I am pretty jazzed from a great weekend spent with the Citizens Trade Campaign, whose far-flung organizers from around the US came to town this past weekend for a national meet-up. These coalitions - from Oregon to Maine, from Texas to Minnesota and all parts in between - are truly the front-line for the campaign to overhaul our trade policies to align them with the public interest. There was a lot of fascinating presentations on the trade-linkage to immigration, climate change, labor, and higher education issues, which I think will be fueling a lot of interesting work in the year ahead. Indeed, the resolutions and other policies that this group will be pushing - especially at the state level - are part of those educational building blocks that will help us move towards our goals over the coming decades, which is what it will take to fundamentally change the way we approach global warming policy.

Incrementalism is also a feature of the other side's approach to the issue. As ITN documents in their latest issue, corporate interests have made some calculated gambles on a series of investment cases which - even if they don't produce an immediate win - chip away at the public interest by building very pro-corporate case history.

The first was a NAFTA case brought by a Canadian corporate cattlemen group against the U.S. border shut down following the episodes of mad cow disease in Canada. This coalition maintained that this US action - even though they had no observable investment in the US - violated their investor rights in the US. The NAFTA panel ruled against jurisdiction on the claim, even though they have done nearly the opposite in the SD Myers case where there was little or no overseas investment. And they also left the door open to challenge of the US food safety measure under other parts of the NAFTA agreement. So, lost the battle, but well positioned for the war. (Note that these precedents aren't binding on future panels, so unpredictability reigns!) 

The second item of interest is the advice being given to Internet gambling companies that are dismayed that the Bush administration bowed to pressure and removed gambling services from WTO jurisdiction. The global "ambulance chasers" - out to help corporations claim victimization and bilk all sorts of payments out of the corporate handout that is our "trade" policy - are advocating that these companies use bilateral trade and investment agreements to get compensation for not being able to serve U.S. gambling addicts their online fix. This is precisely the kind of corporate checkmate that our "trade policy" allows - first we get you at the WTO, then under CAFTA, then we let investors privately get you under other treaties, etc. - all the while getting payments from taxpayers. When are we going to see some elected officials willing to face down these jerks and kick over the chess table?

The field narrows, and advice from Feingold

This just in... Romney to pull out... On trade, Romney started out his campaign by talking about how great offshoring was, only to end up in Michigan talking about fighting for manufacturing jobs. A strange thing, democracy - when it works, it ends up changing the positions of those in power.

Even Huckabee, who as governor of Arkansas signed his state up for the procurement chapters of NAFTA-style deals, channels some of our own Holly Shulman from earlier in the week:

When President Bush agreed with House Democrats on a stimulus package centered on big tax rebates, for example, Mr. Huckabee raised the hackles of supporters of free trade by arguing that the plan in effect subsidized the Chinese manufacturers of imported consumer goods. And he argued that the money would be better spent building roads, bridges and other infrastructure projects at home, irking proponents of limited government.

In the wake of Edwards losing the race, there are now new power centers pushing on Clinton and Obama to fair trade it up. As John Nichols writes:

"Talking about experience and idealism is so much conversation for Wisconsin people," says Feingold, a three-term U.S. senator who serves with Obama and Clinton and who flirted with making a presidential run of his own this year. "We'd like to hear something about what they're going to do. It's amazing to me that this campaign has gotten as far as it has without getting down to specifics. But Wisconsin voters expect more from the candidates than the slogans." Like what?

Feingold says that the two remaining serious contenders for the nomination need to bone up on trade policy -- and its impact of real people in places like Wisconsin.

"I would urge them to be aware of the devastation that has occurred for people in the state over the past twenty years as a result of trade policies that were forced through Congress without any concern for working people in states like Wisconsin," says Feingold, who has since coming to the Senate in 1993 consistently opposed the free-trade agenda of both the Bill Clinton and George W. Bush administrations.

The campaign — especially on the Dem side — could get pretty interesting as the candidates grasp at something — anything — to differentiate between the two. Feingold's suggestion seems pretty savvy to me.

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

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.

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.) 

New(ish) intelligence on trade

When Congress is in recess, it's always a good time to catch up on some of the academic and think-tank writings on globalization. Hey, it's definitely more interesting than the horse-race among the 2008 candidates for president, now in it's second year.

• Bruce Campbell of the Canadian Centre for Policy Alternatives takes a look at the corporations operating in Canada that pushed for the Canada-U.S. FTA in 1988, which paved the way for NAFTA in 1993. (Here in the U.S., the Canada FTA counted among its supporters: John McCain (and Biden and Dodd), and had among its opponents Duncan Hunter and Bill Richardson (in a rare fair trade vote).) Campbell finds that, despite the promises of these companies at the time, they have actually reduced their number of employees by 20 percent, while increasing revenues by nearly 130 percent. (CEOs have also seen their pay relative to workers more than double since 1988, during which time workers' wages have not budged in inflation adjusted terms.
• Ann Helwege and Melissa Birch from the Global Development and Environment Institute at Tufts University take a look at Latin America under neoliberalism, and find that the claims that poverty has been reduced are highly suspect. Namely, once you exclude Mexico and pre-96 Brazil (and even these are contested), most major economies in Latin America have seen rising or stagnant poverty. Moreover, as they point out, no one should be getting a cookie for modest poverty reduction even where it may have occurred: the lives of folks making $2.01 a day versus those making $1.99 a day are broadly comparable and desperate, even though $2.01 is considered above the poverty line. Moreover, if income is increasing (which it nearly always does), we ought to see poverty decline. The rate of improvement is what matters. In some of these cases where poverty has actually increased (in some cases while income has increased), we have a major problem.
• Josh Bivens at the Economic Policy Institute summarizes some of his recent work looking at claims of benefits from trade from major trade boosters, and finds them sorely wanting. The point made by Josh and in related work is that, if we're going to pursue a trade policy that contributes to massive stagnation of incomes of the majority, the chattering classes should at least expect to see a massive increase in national income. As Josh shows, a high growth figure from trade is questionable. So on both normative and positive analytical grounds, the status quo is pretty unattractive.
• Nancy Birdsall at the Center for Global Development does a fairly comprehensive mainstream literature review for the case that high levels of inequality can actually hinder growth, primarily through creating or interacting with failed markets and institutions.

Rain on the scarecrow as the border blockaded

January 3rd, you know what that means? Only 40 more days until the Dee-Cee presidential primary vote! I can't wait! D.C. has always had a unique role in the nation for our role in the presidential primary process. Sure, there's SOMETHING happening in Iowa today, but it's not until a candidate wins the D.C. primary that they're truly considered anointed.

In all seriousness, voting in America's last inland colony is not today's top news. No, just wanted to remind everyone about the Iowa Fair Trade Campaign's excellent web resource on the candidates' positions on trade, available here.

There's been a lot of paeans to corn ethanol during this season, and with good reason: Iowa's farmers are taking it on the nose. As we've written before,

While the volume of U.S. corn and soybean exported increased as predicted by NAFTA’s proponents, the prices received by American farmers declined to the lowest levels in recent memory. While American farmers received $12.64 per bushel of soybeans (in inflation-adjusted terms) when the NAFTA predecessor Canada FTA went into place in 1988, that price halved to $6.30 by 2006. In inflation-adjusted dollars, farmers received $4.29 a bushel for corn in 1995, the year the WTO went into effect and a year after NAFTA went into effect. But a decade later in 2005, the bushel price was at a low of $2.06, and only started increasing with the recent ethanol boom  – a development that is threatened with derailment as Brazil and other agricultural exporters plot WTO challenges against U.S. corn ethanol subsidies. 

But don't take my word for it... after all, there's a reason that John Cougar Mellencamp is a political figure on par with Oprah in Iowa.

The corn issue in Iowa is connected to the corn issue in Mexico, which has been a lot in the news recently. (See our fact sheet for more.) In particular, the final phasing in of NAFTA tariff cuts in Mexico happened, and folks in Mexico were none too happy about it. (video in spanish)

As we've written about before, Latino civil rights groups are calling attention to NAFTA-style policies, which are destroying the Mexican countryside, which has led to massive displacement of people towards the United States.

As the AP reported,

Mexico's Roman Catholic Church has warned that the changes could spark an exodus to the U.S.

"It is clear that many farmers will have a difficult time competing in the domestic market, and that could cause a large number of farmers to leave their farms," the archdiocese said in a statement issued on New Year's Day.

Dozens of farm activists in Ciudad Juarez blocked one lane of the border bridge leading into El Paso, Texas, to protest the unrestricted imports of U.S. corn, as part of a 36-hour demonstration that started in the first minutes of the New Year.

They had pledged not to allow any U.S. grain into the country...

"The open battle against NAFTA begins," read a banner headline in the daily La Jornada.

In Mexico City, activists announced plans to march through the capital and hold a nationwide conference on Jan. 14 to plan further protests.

"This is going to be a complicated year, and there will certainly be a lot of demonstrations," said Enrique Perez, a spokesman for the National Association of Farm Distributors, one of the groups organizing the marches.

Mexico, the birthplace of corn, obtained a 15-year protection for sensitive farm crops when NAFTA was negotiated in 1993. That protection period ran out on Jan. 1. Mexico still grows almost all of the corn consumed here by humans, but imports corn to feed animals.

Mexican politicians from all major parties agree that a NAFTA renegotiation needs to happen. An area where there might be some common ground with the candidates for president, many who are talking about doing something that sounds an awful lot like renegotiation of NAFTA.

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!

Christmastime for corporations (in Germany, err, here)

Just in case you were worried that the corporate masters weren't getting enough of a Christmas this year, what with record CEO pay and booming inequality, never fear. It looks like they may get to gobble up U.S. Postal System, liquiefied natural gas terminals, Mexican peasants, the right to avoid obeying the law overseas, and right to not give back to the community. Let's quickly review:

The Bush administration is on the cusp of formally revealing what they're going to give the European Union to "compensate" for their Internet gambling providers not being able to sell in the U.S. market. As we detail in our release here,

To compensate Europe for the removal of the U.S. gambling sector from WTO jurisdiction, the Bush administration reportedly proposes to bind U.S. storage and warehousing, and postal and delivery to WTO jurisdiction, among other service sectors. Compensation talks have been conducted behind closed doors without input from congressional committees whose jurisdiction would be compromised by the proposal.

What this could mean in practice is that there would be additional pressures to privatize and deregulate not only our postal service, but also our safety policy around dangerous LNG terminals. Oh, yeah, and this is just for the right to maintain a gambling policy that corporations don't like - a policy that treats foreign and domestic gambling firms THE SAME.

Exhibit Two takes us to Mexico, where corporations have reportedly used NAFTA's investor-state system to beat back the Mexican government's right to have a sugar policy for its small peasant producers, rather than allow U.S. high fructose corn syrup exporters and users (the soft drink companies) to run roughshod over a rare policy that keeps Mexicans employed in Mexico. Now, Mexican taxpayers will be ordered by a secretive World Bank court to pay what will probably be tens of millions of dollars to companies like Archer Daniels Midland.

As we wrote about the case back in 2005, Mexico's regulations of HFCS, which it will now be forced to compensate ADM for, were one of the few ways that governments could take active steps to keep farmers on both sides of the border from being squeezed by huge agribusiness corporations. It turns out that's it's inconsistent with NAFTA to help society's most vulnerable.

The final stop is north of the border, in Canada, where U.S. oil companies are using NAFTA to get around having to give back to the community where they are drilling by spending some research and development dollars there. This parallels Big Oil's efforts to  avoid having to pay taxes in Ecuador, where it is using a NAFTA-style tribunal under the U.S.-Ecuador Bilateral Investment treaty to not only not pay, but try to get out of being arrested for not paying. Luke Eric Peterson has the skinny on the Mexico, Canada, and Ecuador cases right here.

And in our ongoing Trade Musical Hits, here's Rage Against the Machine's "Testify," directed by Michael Moore.

Breaking News from Oregon: OR and Mexico Labor Leaders Rally Against NAFTA Expansion

For immediate release:

Labor Advocates from Oregon and Mexico Speak Out Against NAFTA Expansion

Event Outside the Portland Federal Building Highlights Reasons to Oppose Pending Bush Administration Trade Deals

Portland, OR — Trade advocates from both the Pacific Northwest and Mexico voiced their opposition to Bush administration proposals to enact new free trade agreements with Peru, Colombia, Panama and South Korea during a rally outside the Edith Green/Wendell Wyatt Federal Building this afternoon. They said that existing trade pacts such as the North American Free Trade Agreement (NAFTA) have hurt working people both in the United States and abroad and that the NAFTA model of trade should not be expanded into South America and Asia.

“Before NAFTA, people in rural Mexico were able to survive growing food for themselves and for sale in local markets. Since NAFTA, most people have been unable to compete with imports from the United States and many have been forced to leave their homes in search of dollars,” said Centolia Maldonado Vasquez, a community leader with the Binational Front of Indigenous Organizations from Oaxaca, Mexico. “Before Congress decides to sign a new NAFTA-style trade agreement with Peru or Colombia, it should consult with Mexico’s indigenous peoples, farmers, small business owners and migrants about the impact that NAFTA has had on them.”

Just like NAFTA, pending free trade agreements require developing countries to reduce tariffs on agricultural imports and other protections for their domestic agricultural sectors. Because many staple foods grown in the U.S. receive large subsidies from the federal government, they can be sold on the international market for less than the cost of production, making it impossible for poor farmers in developing nations who receive no subsidies to compete. This pushes large numbers of people in agricultural-dependent rural areas off their land, compounding problems with drug production, poverty and undocumented migration.

“Many immigrants now living and working in the United States are here because they were pushed off their land by international trade policies that ruined their ‘free market’ systems,” said Andrea Cano, executive director for the Oregon Farm Worker Ministry. “Expanding NAFTA-style trade agreements into Peru and elsewhere will only compound problems with rural poverty and unemployment in those countries. These trade agreements that favor only big business are disastrous for working people on both sides of the border.”

The removal of tariffs also has a negative impact on working people in the United States. According to an analysis of U.S. Labor Department data conducted by the Oregon Fair Trade Campaign in late 2006, 68,000 Oregonians have lost jobs due to offshoring and increased foreign imports since NAFTA was enacted in the mid-1990s.

“We continue to see family-wage jobs in the United States move abroad to wherever labor is the cheapest and environmental regulations are the weakest,” said Gregory Pallesen, vice president for the Association of Western Pulp and Paper Workers. “This is obviously devastating to communities throughout the United States, and it isn’t particularly good for working people abroad either. Congress needs to put an end to this model of trade once and for all.”

“It’s not just folks whose jobs are shipped overseas who suffer from current trade policies. The offshoring of U.S. jobs puts a downward pressure on wages and benefits for all of us,” said Madelyn Elder, president of Communication Workers of America Local 7901. “The issue of jobs and stagnant wages is definitely a voting issue for many Americans. Congress is making a big mistake if it helps the Bush administration advance its trade agenda.”

Labor advocates highlighted their opposition to the Peru Free Trade Agreement, which is expected to reach the floor of Congress in early November.  To date, Congressman Peter DeFazio (D-4^th) is the only member of Oregon’s Congressional delegation who has committed to voting against this trade agreement.

“These trade agreements are being negotiated without looking out for American workers. We need to decline to sign any new agreements, including the Peruvian agreement, and begin to fix the damage existing agreements have caused,” said Joe Kear, business representative with the International Association of Machinists, which represents workers at the Freightliner Truck Plant in Portland. “Half the workforce at the Portland Freightliner plant is on layoff, primarily because the work has left for Mexico little by little since the enactment of NAFTA. This past March saw the last commercial Freightliner truck produced in Portland, as production of the high-end Coronado model, once exclusively built in Portland, moved to be made solely in Mexico.”

###

Enclave Economy v. Straw Men

My friend Kevin Gallagher of Boston University has a new book out from MIT Press with Lyuba Zarsky called "The Enclave Economy: Foreign Investment and Sustainable Development in Mexico's Silicon Valley."

Unlike a lot of the Friedman-ite platitudes about eating sushi with a Bengali venture capitalist while talking on a cell phone, Kevin and Lyuba actually bothered to go to Mexico and talk to businesspeople and others to learn about the impact that NAFTA has had on Mexico's peoples and policies. Their major case study is Mexico's IT industry, and how it stacks up against its counterparts in Asia and elsewhere.

The picture they paint is not pretty. Under Mexico's pre-NAFTA import substitution regime, the country was able to produce a wide variety of electronics, and at one point nearly 95% of the value-added content of television production. In the 1970s, the government laid out a comprehensive policy to build a domestic computer industry, including by limiting foreign ownership and requiring that firms source nationally and locally. Deemed "an extraordinary success," the program began to unravel and domestic firms began to disappear. First when NAFTA facilitate the massive move-in of multinational companies with less long-term investment in the region, but instead only a temporary commitment to take advantage of low wages. And second when the multinationals traded out Mexico's less than $3-an-hour wages with China's less-than-$1-an-hour wages when that country acceded to the WTO in 2001 and also decided to let footloose capital set up shop without committing to China either.

Why did this happen? Kevin and Lyuba find plenty of blame to go around, but a major culprit is flawed trade deals like NAFTA, which "constrict the scope for developing countries to undertake targeted industrial policies":

Rules on intellectual property rights, for example, make it difficult to develop comprehensive innovation policies. Investment rules outlaw the ability of developing countries to leverage concessions from foreign firms such as content requirements for local suppliers or support for local training. Investment rules also allow private foreign firms to sue national governments when new and un-anticipated (by the investing firms) social and environmental  cut into profits under the argument that such regulations are "tantamount to expropriation." Moreover, the macroeconomic policies need to support contemporary trade agreements - high interest rates and tight fiscal policies - also make it more difficult for governments to design effective policy and offer credit to domestic firms.

Kevin and Lyuba have a summary piece of their book over at IRC.

Contrast this with some other stuff floating around DC recently.

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.)

National Latino Congreso to Congress: Oppose Bush's NAFTA Expansions!

NEWS RELEASE, October 7, 2007

National Latino Congress Unanimously Passes Resolution Calling on U.S. Congress to Stop Signing New Trade Agreements

Latino Leaders Say U.S. Cannot Address Immigration without Changing Course on Failed Trade Policy

Los Angeles, CA – Reflecting on the root causes of poverty and migration in Latin America, the National Latino Congreso has unanimously approved a resolution rejecting new trade agreements based on the North America Free Trade Agreement (NAFTA), and calling on the U.S. to change its international economic policies, which so far are largely to be blamed for producing wealth and income inequalities abroad, as well as at home. In the case of Latin America, policies promoted by the U.S. have also resulted in the impoverishment and displacement of millions of rural inhabitants.

The resolution adopted on Saturday Oct. 6 by delegates of the Second National Latino Congreso , comes at a moment in which the U.S. Congress considers a new trade agreement with Peru, which largely mirrors NAFTA. The adopted resolution reads, in part:

“Therefore, be it resolved that the organizations present at the 2007 Latino Congreso, are strongly opposed to expanding the failed NAFTA and CAFTA through the “free trade” agreements between the United States and Peru, Colombia, and Panama, and will mobilize our constituencies to work in vehement opposition to their passage, and call on the U.S. Congress directly to reject these agreements.”

The resolution specifically condemns national lawmakers who are attempting to push anti-immigrant legislation while continuing to push for expansion of trade and economic policies that force families to emigrate in the first place. More than 1,000 Latino leaders present applauded the passage of the resolution, calling it an important step towards addressing the obvious link between current U.S. trade and economic policies, and migration.

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.)

Malarkey.

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:

Why is NAFTA interfering with our transportation policy?

Forget the NAFTA Superhighway for a second and think NAFTA Trucks. That's right, multinational trucking companies are trying to use NAFTA to deregulate our transport safety regulations.

Five groups sued today in federal court to block a Bush administration plan to allow Mexico-domiciled trucks to roam the country’s highways as soon as Saturday.

The suit, filed in the U.S. Court of Appeals for the Ninth Circuit in San Francisco, maintains that the Bush administration’s pilot program, which authorizes up to 100 carriers based in Mexico to perform long-haul operations within the U.S., violates several key congressional requirements. The groups filing suit include Public Citizen; the International Brotherhood of Teamsters; Sierra Club; Environmental Law Foundation; and the Brotherhood of Teamsters, Auto and Truck Drivers, Local 70.  The groups filed an emergency motion asking the court to delay the pilot program before it goes into effect in a matter of days...

In 2001, a NAFTA tribunal ordered the U.S. to fully open its border to Mexico-domiciled trucking companies. In response, the Bush administration said it would implement a pilot program to allow up to 100 motor carriers from Mexico full access to U.S. highways. However, the project violated U.S. laws governing the conduct of pilot programs, in addition to a 2001 congressional mandate that Mexico-domiciled trucking companies meet U.S. safety standards regarding hours of service, driver training and licensing, and vehicle safety before being allowed access to the nation’s roadways.

Congress this year held hearings examining the plan to allow trucks from Mexico to travel beyond the border zones. Lawmakers uncovered serious safety deficiencies and deemed the pilot program a sham and in violation of existing law. In response, Congress passed a measure designed to ensure that any pilot program does not circumvent safety standards or congressional oversight and that such a program is conducted within strict parameters designed to facilitate informed decision making.

On Aug. 6, the Department of Transportation Inspector General released a report finding that the system used to monitor Mexico-domiciled carrier drivers with license convictions is not yet adequate. Officials still don’t have the data necessary to identify drivers not permitted to operate on U.S. highways. Further, the system designed to ensure that Mexico-domiciled carriers comply with U.S. motor vehicle manufacturing safety standards is incomplete, and it is not clear whether the drug and alcohol testing program is functional, the inspector general found.

This ain't about Mexican or American people, folks, cuz its mostly U.S. multinationals that operate in Mexico and are the ones pushing the NAFTA attack on safety standards. Welcome to neoliberalism, where any channel is as good as the next if the cause is deregulation.

Read more from Sen. Sherrod Brown's (D-Ohio) office after the jump.

The NAFTA Superhighway: Myth and Reality

At Global Trade Watch, we get a lot of panicky calls from folks worried stiff about the so-called NAFTA Superhighway and its sinister cousins, the Security and Prosperity Partnership (SPP) and the North American Union (NAU).  (Almost as many as people wanting information about how to "get their goods out of the docks" - seriously.) What exactly are these things?  Stephen Colbert gets truthy with it:

Humor aside, there actually are pieces of this story that are worth taking seriously.  As described in an excellent Christopher Hayes article in The Nation, the "Trans-Texas Corridor" (TTC) is exactly like the NAFTA Superhighway, except it's real.  At an estimated cost of $185 billion, the TTC is proposed to be "4,000 miles of highway, rail and freight corridors... up to four football fields wide at points, paving over as much as half a million acres of Texas countryside. The first section will be built and operated by a foreign enterprise, and when completed it would likely be the largest privatized toll road in the country."  Read the Hayes article for the full background on the TTC, as well as background on the SPP/NAU conspiracy theories.

There are much more concrete problems that require our attention, as Hayes describes after the jump:

Ivory Tower Meets The Campaign Stump

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

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

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

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

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

• For years now, Washington has been passing trade deal after trade deal that works great for multinational corporations, but not for working Americans. For example, NAFTA and the WTO provide unique rights for foreign companies whose profits are allegedly hurt by environmental and health regulations. These foreign companies have used them to demand compensation for laws against toxins, mad cow disease, and gambling - they have even sued the Canadian postal service for being a monopoly. Domestic companies would get laughed out of court if they tried this, but foreign investors can assert these special rights in secretive panels that operate outside our system of laws.

• The trade policies of President Bush have devastated towns and communities all across America. But let's be clear about something - this isn't just his doing. For far too long, presidents from both parties have entered into trade agreements, agreements like NAFTA, promising that they would create millions of new jobs and enrich communities. Instead, too many of these agreements have cost us jobs and devastated many of our towns.

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

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

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

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...

New Report Reveals How Pending Trade Agreements Will Worsen Imported Food Safety Problem

Our new report is out! You can read the press release below and here, take action on the Public Citizen homepage, and read the report (PDF).

New Report Reveals How Pending Trade Agreements Will Worsen Imported Food Safety Problem by Increasing Food Imports While Replicating Limits on U.S. Food Safety Policy From Past Trade Deals

U.S. Food Imports Double Since NAFTA and WTO, Which Set Limits on Border Inspection, Safety Requirements; Analysis of New Data Details Safety Problems With Latin American NAFTA Expansion Targets That Are Major U.S. Seafood Importers

WASHINGTON, D.C. – Remedying serious problems with imported food safety will require significant reforms to trade policy as well as improvements in domestic laws, according to a report released today by Public Citizen’s Global Trade Watch division.

The report, Trade Deficit in Food Safety; Proposed NAFTA Expansions Replicate Limits on U.S. Food Safety Policy That Are Contributing to Unsafe Food Imports,   documents the connection between trade agreements that limit domestic food safety policies to facilitate trade and the growing safety threat posed by food imports, which have doubled since implementation of the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) agreements. Available projections for the proposed Free Trade Agreements (FTAs) with Peru, Panama, South Korea and Colombia show an increase in food imports, while the deals would also replicate past trade pact limits on safety standards the United States can require for imported food and how much inspection is permitted.

“We face a perverse situation in which Congress is rushing to address serious safety problems with the growing amount of imported food Americans consume while four more NAFTA-style trade deals are pending that will undermine Congress’ ability to ensure our safety,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “This is a trade problem that is not just about China, but rather goes to a trade model that prioritizes increasing the volume of traded food over safety.”

A steadily increasing amount of food on U.S. dinner plates is imported. Nearly $65 billion in food is imported annually – almost double the value imported when NAFTA and the WTO went into effect. More than 80 percent of the seafood Americans eat is imported.   In the NAFTA-WTO era, seafood imports have increased 65 percent. Between 1995 and 2005, shrimp imports alone jumped 95 percent.   In 2005, the United States, formerly known as the world’s bread basket, became a net food importer for the first time, with a food deficit of nearly $370 million.

Major report coming out today; CD gives teaser

This is from Martin Vaughan in Congress Daily:

Sen. Sherrod Brown, D-Ohio, said last week he will soon introduce legislation to ensure that if faulty products are recalled, there is a way to pay for it. A spokeswoman said the bill will require importers to have insurance to cover that cost. Details remain to be worked out.

While the bill would initially have focused on tires and auto parts -- a response to the June recall of 450,000 Chinese-made tires by a New Jersey distributor -- its scope might ultimately be broader. "The influx of contaminated and unsafe imports from China -- ranging from toothpaste to tires, pet food to fish, has made it glaringly clear that we must better protect our supply lines -- and hold importers accountable," the Brown spokeswoman said.

Brown today will join Global Trade Watch Director Lori Wallach and Ranchers-Cattlemen Action Legal Fund CEO Bill Bullard to release a report claiming that provisions in NAFTA and other trade agreements are partly to blame for making imported food less safe.

The report will include an analysis in particular of seafood from Peru and Panama, two countries whose free trade agreements with the United States might see congressional action this fall.

To maximize coverage in regional news outlets, the report is being unveiled at events nationwide including ones in New Orleans, San Francisco, Texas, and the Pacific Northwest.

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.).

On NAFTA, Hillary called a pickpocket, leader of band of child criminals, and good at avoiding responsibility or the consequences of her actions

The South Africa wire services ran a story that termed Hillary an artful dodger for her responses to questions at a forum by AFSCME and other labor groups:

Slick Hillary? Former President Bill Clinton earned the nickname "Slick Willy" for his mastery in the political arts of ducking and dodging. He had a knack for convincing people on both sides of an issue that he agreed with them. His wife may not be as smooth, but Sen Hillary Rodham Clinton is doing a passable impression of the ever-parsing former president. Would she pardon Scooter Libby? No comment. Would she nominate a union leader to be secretary of labour? Maybe. Would she repeal the North American Free Trade Agreement? Can't say. .. Shortly after Rep Dennis Kucinich vowed to repeal the North American Free Trade Agreement, Clinton was asked if she would move to scuttle it. She dodged. "Like anything," Clinton said, "NAFTA had some positives, but unfortunately had a lot of downsides."

According to Wikipedia:

The Artful Dodger is a character in the Charles Dickens novel Oliver Twist. The Dodger (whose real name is Jack Dawkins) is a pickpocket, and so-called by his skill and cunning in that respect. As a result he has become the leader of the gang of child criminals, trained by the elderly Fagin... The nickname "Artful Dodger" is still commonly used to refer to someone who is good at avoiding responsibility or the consequences of his or her actions. "Artful Dodger" is also Cockney rhyming slang for "lodger".

To be fair, Hillary has come out with a statement against the NAFTA expansion to South Korea, although not to Peru, Panama and Colombia. For some more on the situation, check out these pieces by Ralph Nader and Hillary's previous primary challenger Jonathan Tasini (who reminds us that " People who criticize Sen. Clinton need to recognize when she has taken the right position.")

Latino groups call for opposition to anti-Latino, Deathstar-ed deals

This from across the wires...

Members of Congress, Latino Civil Rights and Immigrant Groups Say NAFTA-Style Trade Pacts Fail Latinos in the U.S. and Abroad

Latino Organizations United in Opposition to NAFTA-expansions to Peru, Panama and Colombia; Call on Congress to Chart a New Course on Trade

Washington, DC — As the fight over immigration heats up in Washington, U.S. Congress must oppose proposed NAFTA expansion agreements with Peru, Panama and Colombia that are expected to increase pressure on millions of small farmers in those countries to attempt desperate migration to the United States, said Latino civil rights leaders and members of the Congressional Hispanic Caucus in a press conference today.

Major Latino organizations including the League of United Latin American Citizens (LULAC), the National Alliance of Latin American and Caribbean Communities (NALACC) and the Dolores Huerta Foundation today sent a letter to the U.S. Congress reiterating their opposition to the proposed trade agreements after the recent release of freshly re-negotiated texts of the agreements failed to address the key concerns of the Latino community in the United States and abroad.   

“It is unbelievable that in the middle of a contentious debate on immigration, Congress is being asked to pass trade agreements that are certain to increase the pressure on impoverished small farmers in Latin America to attempt to come to the United States,” said Brent Wilkes, the Executive Director of the League of United Latin American Citizens (LULAC), the nation’s oldest and largest Latino civil rights membership organization. “We wrote repeatedly to the U.S. Congress requesting that the agricultural provisions in the agreement be fixed, and we are disappointed that the new text released this week for the FTAs doesn’t fix them.”

The agricultural rules included in the Peru, Colombian and Panama agreements mirror closely the agricultural rules from NAFTA that resulted in over 1.3 million lost jobs in Mexico’s rural sector.  Undocumented migration from Mexico to the United States has more than doubled since NAFTA was enacted in no small part due to failed trade policies.  In the case of the Peru, Colombia and Panama agreements, these same agricultural provisions will foreseeably result in the displacement of large numbers of peasant farmers — increasing hunger, social unrest, and desperate migration at a minimum; and according to a report of the Colombian Ministry of Agriculture, will lead to an increase in drug cultivation and violence. 

“We are calling on members of Congress today to realize that in order to fix the immigration problem of the United States, we need to look at the root cause.  If we don’t fix the failed NAFTA model of free trade, we’ll be fighting over immigration again and again,” said Gabriela Lemus, Executive Director of the Labor Council for Latin American Advancement.

UPDATE: Mark Drajem from Bloomberg reports on the pending Peru, Panama and Colombia FTAs:

Under the current fast-track treatment, Congress must accept or reject a trade agreement without change. Still, even with the changes worked out between the White House and House Ways and Means Committee Chairman Charles Rangel of New York, supporters from the U.S. Chamber of Commerce don't expect a majority of Democrats to support either of those agreements.

The accords were dealt a blow today as the largest U.S. Latino groups wrote members of Congress opposing them, arguing that a flood of subsidized U.S. agriculture exports would push farmers in those countries off the land.

"This deal would continue to generate economic inequality and a deterioration of social standards both at home and abroad, and continue to make migration to the United States the only option for many working families in Latin America,'' the League of United Latin American Citizens and other Latino groups wrote in their letter.

 

What's this stuff doing in our "trade" agreements?

Two rather outrageous "trade" disputes were recently ruled on, one brought through NAFTA and one through the WTO.  These are worth looking at briefly because the provisions under which these cases were brought are bound to make you scratch your head and think, "what the heck are these things even doing in trade agreements anyway?"

First, a NAFTA tribunal ruled against an aggressive move by UPS, which sued the Canadian government over Canada Post, the country's government-owned postal service, in 2000 using NAFTA's "Chapter 11" investor rights provisions.  UPS claimed that Canada Post enjoyed an unfair competitive advantage because, as succinctly put by a Canadian Press reporter, "[Canada Post's] services such as Express Post and Priority Courier draw on an infrastructure of sorting facilities, mailboxes and post offices that private firms must provide for themselves."  UPS was contending that the very existence of Canada Post as a publicly owned corporation, funded by government money and using a government-established infrastructure, cost UPS $160 million in lost revenues.

All-American Hershey's chocolate: made in Mexico

While we're on the topic of plants closing and moving to Mexico, last Thursday there was this story in the L.A. Times: "Hershey plant to kiss Oakdale goodbye." Hershey is closing the doors of its plant in Oakdale, California, moving all 575 jobs to Monterrey, Mexico. But it's not just this one plant:

The 113-year-old company has described the plant shutdown as part of a "global supply-chain transformation." Some 3,000 of Hershey's 13,000 workers will lose their jobs, including as many as 900 in the company's hometown of Hershey, Pa., where the streetlights are shaped like Kisses. By 2010, Hershey says, the moves will save shareholders as much as $190 million annually.

"The financials are compelling," Chief Executive Richard H. Lenny told a meeting of market analysts in February, saying labor costs in Mexico are 10% of those in the United States. Asked about the negative publicity that would come with the plant closures, he said the decisions were "gut-wrenchingly difficult — but in the best interests of the business."

The article mentions protesters and a Hershey employee who said, "Milton Hershey's ideal was stability for families, but there's none of that anymore. There's no more moral connection between business and working-class America." Sadly, the words of these outspoken folks will probably fall on deaf ears — as Oakdale's congressional representative, George Radanovich (R-Calif.), has a 100 percent anti-fair-trade voting record, having voted wrong on 15 out of 15 trade votes since taking office in 1995.

Studying the real-world effects of NAFTA

We've been tipped off to a neat project, 33 Months, which documents the August 2003 closing of a Maytag plant in Galesburg, Illinois. Some 1,800 jobs were lost (see Public Citizen's database of federal trade adjustment assistance [TAA] records), moved to a new plant in Reynosa, Mexico. The project is being coordinated by undergraduates at Galesburg's Knox College — where the man who signed NAFTA into law, former President Clinton, is scheduled to give the commencement address this weekend.

The project's website/blog has plenty of personal stories, interviews, and perspectives on NAFTA, TAA, trade as an election issue, and more. Worth a look.

Keep on (NAFTA) trucking?

Even though NAFTA was passed over ten years ago we are still seeing the underhanded attacks it has allowed on the regulatory state. The latest example comes with a recent announcement by the Department of Transportation of a program for truck companies based in Mexico (many of them U.S. multinationals) to do long-haul trucking outside of their current limited range.

Concerns have been raised for years about many of the inadequate regulation and oversight over these trucking companies'  safety and environmental standards. As our director Lori Wallach notes, “this situation highlights how NAFTA threatens essential public safety and environmental quality in ways totally unrelated to trade.”

The program was announced recently after having been negotiated mainly in secret. Transparency has long been a problem for trade negotiators, but it appears they have gone too far this time as the program may be illegal. Public Citizen has joined with a number of unions and environmental groups to sue the Department of Transportation, noting that the normal period of time given for public input into such programs was not respected this time. To find out more read our press release on the challenge (and a longer timeline and backgrounder on the case here and here) and stay tuned here as the story develops.

Me and Giuliani Down on the NAFTA?!

The New York Sun has a report on Rudy Giuliani's opposition to NAFTA in 1993. Hot excerpt:

If some of Mr. Giuliani's other strayings from the free-market fold have explanations —complicated ones, but explanations nonetheless — it's a bit harder to make heads or tails of his opposition to NAFTA in 1993.

"I continue to be concerned about the effect it would have on the job situation in New York City," the mayor-elect said in November of 1993, quoted by Newsday. "It is somewhat a narrow perspective, but it's my most important narrow perspective, which is the people of New York City," he said. "I don't think it would help New York City."

In the current campaign, Mr. Giuliani hasn't made free trade a major theme. But he did address the topic briefly at the Club for Growth meeting last weekend, in response to a question from the audience. "We no longer have separation between a domestic economy and a global economy," Mr. Giuliani said. "It's one in the same thing. And I generally agree with the principles of free trade and I think and increasingly have become more convinced of those principles because I almost think they are inevitable. If we fight them we hurt ourselves, if we embrace them we kind of move to the future."

MyDD wades into NAFTA debate

A request for background on NAFTA from Matt Stoller over at MyDD.Com has unleashed a torrent of comments (including some plugs for good source material), which you can chime in about over here.

Portland's brush with bad trade policies

Oregon Public Broadcasting did a featured story on the first hand the affects of failed trade policies. In Portland, Oregon, 800 union employees of the Freightliner plant will lose their jobs on Friday. Meanwhile, Freightliner announces the construction of a $300 million plant in northern Mexico. OPB does a great job of connecting the closing with the more-of-the-same trade policies that have sent thousands of jobs overseas.

Click here for the full story:

[Machinist] Anthony Smith: "It seems like there are a lot of jobs that seem to be leaving. As soon as you get a decent job with a decent wage it goes somewhere else but, I guess that's just the way it is."
—
It seems to have been 'the way it is' for the last 15 years -- as one trade agreement after another has been passed -- and hundreds of thousands of jobs have left the U.S.

Up until recently, most economists maintained that agreements like NAFTA enrich the U.S. economy. But a growing number are now saying that the downside may be deeper than believed.

Former Federal Reserve Board vice chairman, Alan Blinder, now estimates 30 million jobs could be shipped out of the country in the next couple of decades. And not just manufacturing jobs -- any job that can easily be moved -- like that of a computer programmer, an accountant, graphic designer or film editor.

There is a rally on April 4th outside of the Portland Federal Building at noon to oppose Fast Track and the loss of Oregon jobs organized by the Oregon Fair Trade Coalition.

No Amor for NAFTA, sez Amores Perros star

Dreamboat actor Gael Garcia Bernal no tiene amor para el NAFTA.

According to the Associated Press, Bernal said,

After not achieving their commercial objectives at the World Trade Organization, [the EU and the U.S.] want to impose unjust conditions on us through regional pacts.

The interview with Bernal, conducted in Spanish at a release party for an Oxfam International report, also focuses on the impact of NAFTA on small farmers in Southern Mexico. Some quotes in English were also picked up over at the Organic Fair Trade blog, and a good run-down of Oxfam's report is available from Grand Rapids' Media Mouse blog.

Of course, not that the WTO escalation would be a walk in the park for Mexico. In fact, the World Bank - no hater of NAFTA-WTO style trade pacts - predicted that Mexico would experience net losses under the likely Doha Round outcome.