Features » May 7, 2007

Making Trade Work for Everyone

Voters aren’t happy with the reality of free trade—and Democrats are starting to listen

By David Moberg

'I don't know any worker or trade unionist who is against trade,' says Steelworkers President Leo Gerard. 'But were are against exploitative trade that pits worker against  worker.'

The majority of Americans want their elected leaders to know that globalization isn’t working for them. Democratic politicians have heard the message and are now taking a few first steps to better regulate America’s integration into the global economy.

The November elections—when 37 House and Senate seats changed from “free trade” to “fair trade”—created a Democratic majority that needed to stake out a new position on trade. Globalization and offshoring of jobs ranked among the electorate’s top issues, according to polls by Greenberg Quinlan Rosner Research and Public Agenda. Results in key races indicate that Democrats could have picked up even more seats with a stronger message on global economic issues, according to an analysis by Chris Slevin and Todd Tucker of Public Citizen’s Global Trade Watch, an organization critical of corporate-backed free trade.

Recent public opinion surveys reveal that Americans often support globalization in theory but criticize the reality. Steelworkers President Leo Gerard put it this way: “I don’t know any worker or trade unionist who is against trade, but we’re against exploitative trade that pits worker against worker, and country against country, and that’s what this current round of globalization has brought.”

In a March Wall Street Journal/NBC News poll, Americans agreed, by a margin of 46 percent to 28 percent, that trade deals have harmed the United States. And late last year, a Pew Research Center poll found that nearly 44 percent of the people surveyed thought free trade had lowered wages, compared to 11 percent who thought it had raised wages.

The majority of House Democrats have opposed most previous trade deals, even more so under Bush than Clinton. But key leaders—including Speaker Nancy Pelosi, House Majority Leader Steny Hoyer and Democratic Congressional Campaign Committee Chairman Rahm Emanuel—have often supported free trade deals in the past. And the party’s influential business-financial supporters have largely embraced the same free trade agenda as the Republicans.

However, in March, Rep. Charles Rangel (D-N.Y.), chairman of the House Ways and Means Committee, with a mixed voting record on trade issues, proposed a “New Trade Policy for America” that sets conditions for the administration to win Democratic support for recently negotiated trade agreements with Panama, Peru, Colombia and South Korea.

Rangel would make all trade agreements require enforcement of core International Labor Organization (ILO) rights—such as the right to organize and prohibitions on child labor, forced labor and discrimination in employment—through the same dispute settlement mechanisms used to enforce business interests, like intellectual property rights. His proposal, hastily endorsed by the House Democratic Caucus, also insisted on enforcing multilateral environmental agreements, establishing a fair balance between poor countries’ access to drugs and pharmaceutical company patents, ensuring that government procurement promotes worker rights and guaranteeing that foreign investors in the United States are not granted greater rights than American investors (reversing one of NAFTA’s most controversial provisions).

Rangel’s proposal also called for more strictly enforcing existing trade laws, pressuring China to revalue its currency, opening markets for U.S. exports, increasing assistance for retraining displaced workers and expanding help to the world’s poorest countries.

Bush administration officials did not dismiss the proposal out of hand, but they are unlikely to accept it without modifications, which would then lose crucial Democratic support. Fair trade advocates were cautiously optimistic. “It’s a good step trying to fix what’s awful,” says Slevin, deputy director of Global Trade Watch. The AFL-CIO did not immediately endorse the deal, but Policy Director Thea Lee says, “This is a good step forward, but if there’s any weakening, all bets are off.”

The administration doesn’t want to include ILO core rights, preferring to require only that countries enforce their own laws or the equivalent of American labor laws. Free trade ideologues argue that including ILO-defined rights in the agreement could lead to challenges under future trade agreements to American labor laws. “In a rare show of honesty by the administration, they acknowledge in their proposal that labor standards in the U.S. are so bad that they fear they no longer meet ILO standards,” AFL-CIO secretary-treasurer Rich Trumka says. In any case, neither Democrats nor unions would accept anything short of ILO core rights.

But the issue is not only standards but also writing tougher enforcement mechanisms into any agreement. Despite requirements under the Central American Free Trade agreements to strengthen worker rights, recent reports in the New York Times and Washington Post about Guatemala highlighted the use of child labor, an assassination of a labor leader and other labor rights violations. Serious labor rights violations also have occured in Jordan, even though the Clinton-negotiated labor rights provisions there were the strongest of any recent trade agreement.

Bush’s new trade agreements faced an uphill battle even before Rangel’s challenge. Unions and human rights advocates will oppose any agreement with Colombia, where 77 trade unionists were killed last year. And American auto, agricultural and other industrial interests, as well as unions, have spoken out against the Korean trade deal, which South Korea’s unions and farmers oppose. U.S. fair trade advocates also criticize the Peru and Panama agreements but more for the damage they’re likely to cause those countries than for harm to the United States.

Slowing down ‘fast track’

Beyond the negotiations over the new Democratic conditions for accepting the four signed trade agreements, a bigger battle looms this summer over renewal of “fast track” authority that gives the executive branch the power to push for approval of trade agreements with little debate and no amendments. Fair trade advocates are determined to block its renewal. They also propose an alternative arrangement that would grant Congress a bigger role. Under the AFL-CIO’s proposal, similar to principles endorsed by the Change to Win labor federation, Congress would set “readiness criteria” to determine what countries qualify as potential negotiating partners and to mandate objectives on labor rights, the environment and investment. Then Congress would have to certify that the agreement meets those objectives before it would vote under rules of expedited debate and without amendment.

The battles over both the new trade agreements and fast track are likely to be more important politically than economically. If Democrats stick to their new principles and reject or replace fast track, they will signal a new direction for the party and raise the bar for global economic negotiations. That is likely to both help Democrats in the next election and to pressure presidential aspirants and free trade Democrats to adopt the new perspective.

“People aren’t idiots,” Lee says. “Everyone can read the results of the last election and look forward to the next election and see that trade and the middle-class squeeze will be central issues. I don’t think anyone on the Democratic side wants to see a messy split on trade.”

Easier said than done

But actually relieving the pressure squeezing American workers will take bolder action. With the world already wide open to trade and investment, new trade deals will have relatively little effect for good or ill until the new rules are applied globally. “If we had a law saying no more trade agreements, it wouldn’t make that big a difference,” says Dean Baker, an In These Times contributing editor and co-director of the Center for Economic and Policy Research (CEPR), a Washington think tank.

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• Reader Comments

  There’s NOTHING “free” about free trade as it is currently practiced. It is nothing more than a plan to enrich already wealthy elites around the world. Sure, there are the basic economic priciples of comparative advantage and Pareto optimality, but these textbook theories do not come to fruition in reality. Free trade is nothing but a scheme that makes it easier for corporations to find cheaper labor and lax enforcement of environmental standards usually under the protection of an authoritarian regime. No modern economy got that way DUE to free trade, most had protective tariffs and other governemental intervention (like Japan, for example) during their development.

  One good thing about free trade though, is that it is actually helping to unite the Democratic Party. Many of the newly-elected “Blue Dogs” ran as ANTI-free traders joining their more progressive brethren.

  Posted by lams712 on May 7, 2007 at 3:20 PM

  lams,

  Don’t get too excited about the Democrats — they are united and have been united on free trade for decades. They are united with Republicans, Wall Street and Big Business and listen only to lobbyists and forked-tongue economists.

  “The November elections—when 37 House and Senate seats changed from “free trade” to “fair trade”—created a Democratic majority that needed to stake out a new position on trade.” is just semantics. There will be talk of tariffs (Currently China taxes our goods at 25% and we tax them at 2.5%.) hearings and a load of BS leading up to the election. We’ll hear about how CEOs are making too much. Workers are weighed down with premiums, etc. Then, like Social Security and Medicare it will be buried once again.

  “...rather than NAFTA being a win-win-win for Mexico, Canada and the United States, wages of workers in all three countries have stagnated since it was implemented.”

  I have written to congress, unions, financial publications since NAFTA was up for a vote in 1993 — nobody gives a damn.

  NAFTA was initiated by Bush the First and pushed through by Clinton.  The American Jobs Creation Act of 2004 was a PR bipartisan boondoggle, creating jobs without regard to Americans and placating European complaints about US gov. subsidies.

  The real meaning of free trade is the freeing of transnational corporations from U.S. restrictions protecting our workers — ESHA, EPA, minimum wage, and a whole load of pension and health care benefits. 401(k) plans were instituted for corporations NOT workers.

  A few in congress have tried to raise the issue but it goes nowhere — too many powerful people are many huge fortunes the way it is.

  For fair trade we would need to require foreign imports to be made under U.S. type restrictions, the insurance and pharmaceutical industries to be completely overhauled, and prevent the conflicts of interest so prevalent with corporate directors who give each other fortunes at the expense of shareholders and citizens.

  Instead we’ll continue to gamble U.S. lives with uninspected food, counterfeit drugs and other goods which took decades to assure safety. Continue to exploit cheap labor here and in their home countries. For a few dollars or even a few cents off prices we are endangering the health and safety of millions of people.

  I have yet to hear any candidate in either party seriously address these problems. I doubt if many at the top in government are even aware of just how bad is becoming.

  Posted by whattheheck on May 7, 2007 at 4:27 PM

  whattheheck:

  You are absolutely correct in your critique of the Democrats. What I was saying is that many of the newly elected “blue dogs” are now actually against free trade joining the progressives against deals like NAFTA. Of course, there are still too many Dems on the side of corporations rather than the people, including much of the Democratic leadership.
  I agree with everything you have said regarding “free” trade. In 1993 I was a college student arguing with my economics professor over whether or not NAFTA would lead to more jobs and higher wages. I wish I could tell him to his face “I TOLD YOU SO” in light of the fact that wages in all three NAFTA countries have been stagnating for 14 years now. (I still got an “A” in the econ. class even though the professor disagreed with me).

  “I have yet to hear any candidate in either party seriously address these problems. I doubt if many at the top in government are even aware of just how bad is becoming”

  I think John Edwards and Dennis Kucinich are the only ones even making free trade an issue.

  The mainstream media though, is what has really let the people down. It seems that both “liberal” and conservative outlets either portray free trade as something only positive or they don’t discuss trade issues at all.

  Posted by lams712 on May 7, 2007 at 7:09 PM

  lams,

  I never had an econ class, but forty years in business gives a pretty good idea of what is workable. When NAFTA was first proposed I suspected it was another case of our elected people swallowing what the experts said with no thinking on their part. That or worse yet, they realized it was good for their contributing base and screw the rest of us. Probably some of each.

  In the mid 1980s a client whose company was buying fasteners from Asia told me he saw them dumping plating solution out the back door into a rice paddy — think of how many people this must have effected in twenty years just to make a few cents more on a package of screws.

  I have read about a dozen books related to globalization. Perhaps the most disturbing is, “Who Will Tell the People?” by Richard Grieder. Mexicans who come here to do the dirty work at cheap wages are still better off than those who work for some U.S. corporations in their home country.

  I know many people who have been adversely affected by the offshoring — some are now luckily retired like me, but others have a long stressful time ahead. I have two sons in their forties, one has lost his job twice so far and the other had two people let go last week leaving the whole office on edge. They know the statistical work they do could go to India any time.
  I really have little hope this will change. Lou Dobbs has been reporting on the selling of the U.S. middle class for a couple of years, but I have yet to learn of any affect other than to give folks a chance to vent.

  At one time I thought when the unions started getting pinched there would be a backlash — not so.

  It looks a lot like the way the holocaust developed, just segment by segment over a long enough time that organized resistance was way too little and too late.

  Moberg calls for more training. Training to do what? We can’t all go into nursing. My neighbor’s daughter was let go after 19 years with a company and retrained to computers. After two years as a temp she was finally hired full time with benefits. Within a year the company was sold and left town, but not before she was fired again.

  I switched to computers at age 52 and managed to work to age 67 when my last client left.

  The problem is at the top with our economic policies favoring the big guys with the big bucks. Unless there is a major reversal and emphasis on safety, health and a genuine concern for all people there will be sad times ahead.

  Posted by whattheheck on May 7, 2007 at 8:34 PM

  The Chamber of Commerce is the biggest pro-Free Trade Lobbying body in Washington.  The Chamber of Commerce promotes fast track legislation which will push through at least the last pending 4 trade deals.  The Chamber of Commerce responds to multinational, national, regional, and local business interests. They are one of the largest lobbying groups, along with the NRA, in DC.  Our seemingly benign local Chambers are undermining the people, the jobs, the economy of not only USA wokers but workers worldwide.  Perhaps its time we acknowledge the power of local Chambers of Commerce and scrutinize their actions on legislation.  What does the Chamber of Commerce have to do with global trade?  Perhaps the Chamber has as much influence on Free Trade as the Democrats and the unions.  Quite honestly, what is the Chamber of Commerce’s policy on Free Trade, NAFTA, DR-NAFTA, CAFTA?

  Posted by Wethepeople on May 7, 2007 at 11:41 PM

• extended discussion >>>Continued...

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