‘Fair Trade’ to the Fore

The debate over the need to revisit the North American Free Trade Agreement (NAFTA) before the March 4 primaries was welcome, but Barack Obama and Hillary Clinton were still short on the specifics needed to deliver on Americans’ demand for real change to failed globalization policy.

Obama started more than 20 points behind Clinton in Ohio and nearly caught up to her with his call to renegotiate NAFTA. But Obama’s momentum appeared to drop off when Canadian officials leaked that Obama’s top economic adviser reportedly had given Canadian diplomats assurances that the criticisms were not aimed at Canada.

Americans ought to wonder why the conservative prime minister of Canada chose to become involved in the Democratic primary in the US—particularly when there are reports that a Clinton aide gave similar assurances to Canadian officials. Anyway, Canada is not the problem with NAFTA. If anything, Canada’s labor and environmental standards are stronger than those of the United States. Mexico is the trade partner that refuses to play by the rules. It has labor and environmental standards but won’t enforce them.

Leo Gerard, president of the United Steelworkers (USW), noted that striking Mexican workers have been beaten and shot, their assets have been seized and the Mexican government in 2006 tried to replace the general secretary of the Mine and Metal Workers Union after he accused Mexican-owned mining company Grupo Mexico of “industrial homicide” after an explosion killed 65 workers. “I don’t think we should give any kind of special trade arrangement with a government that would behave like that towards the labor movement,” Gerard said. “They’re one step from Colombia,” he added. Colombia’s government has been linked to death squads that assassinate trade union activists—but President Bush still wants Congress to approve a free trade deal with Colombia.

“The evidence is very clear: It’s not just NAFTA; the entire trade regime doesn’t work,” Gerard said in a conference call with reporters. As Obama and Clinton headed to Pennsylvania, he added “We’re waiting to hear more details from the remaining Democratic candidates on what they’re going to do about China, revitalizing American manufacturing and their trade positions before we do any final endorsement.”

Candidates should move beyond their current pledges to renegotiate NAFTA to add improved environmental and labor standards. They also should agree to remove investor protections that promote offshoring, address our growing trade deficit with China and fix trade pacts procurement rules that ban “Buy America” and other job-creating procurement policies.

“We need to rebuild manufacturing in Ohio and around the country. That means redesigning trade policies. We need to act on currency, on trade enforcement, on import safety,” said Sen. Sherrod Brown, D-Ohio, who won his Senate race in 2006 in large part with calls for trade reform. “Next year, we must replace Fast Track with a process that ensures accountability, ensures benchmarks and addresses the problems with the NAFTA model.”

Although Texas has seen some increase in business along the border under NAFTA, Rep. Gene Green, D-Houston, said trade was not just an Ohio issue. “After NAFTA, even here in Texas, we lost plants and jobs,” Green said. “We need to change the rules and create a new paradigm on trade policy.”

Democrats in 2006 won Senate and House seats in Pennsylvania based on trade-focused campaigns. Trade and globalization could become a wedge issue in the general election as the Democratic nominee outlines clear distinctions with Sen. John McCain, R-Ariz., a strong defender of status-quo trade policies that benefit multinational corporations.

Obama and Clinton have similar records on trade in the Senate. Both voted against the Central America Free Trade Agreement in June 2005. Both were among a dozen Senate Democrats who voted in favor of a trade deal the Bush administration negotiated with Oman in 2006. Both supported a free trade deal with Peru, citing the inclusion of labor and environmental provisions that were not part of NAFTA, although they both missed the December 2007 vote that approved the deal. Obama and Clinton both told the Wisconsin Fair Trade Coalition that they would renegotiate NAFTA and CAFTA if elected president, and both promised to vote against trade deals with Panama and South Korea if they were presented to Congress. Clinton says she opposed NAFTA when her husband pushed it through a Democratic Congress in 1993, believing he should have pushed health-care reform instead, but she never spoke out publicly at that time.

Polls have shown frustration with current trade policy cuts across partisan lines. According to exit polls, 6 in 10 Ohio Democratic primary voters and 5 in 10 Texas Democratic primary voters believed the economy was the most important issue in the 3/4 elections. An October 2007 Wall Street Journal/NBC poll showed GOP primary voters believed by a 2-to-1 margin that “foreign trade has been bad for the US economy, because imports from abroad have reduced demand for American-made goods, cost jobs here at home, and produced potentially unsafe products.”

Since passage of NAFTA and creation of the 151-nation World Trade Organization (WTO) in 1995, the US has lost more than 3 million manufacturing jobs—one out of every six in the sector—with US manufacturing employment dropping below 10% of total jobs for the first time in modern US history, Lori Wallach of Public Citizen’s Global Tradewatch (tradewatch.org) noted. Replacement of manufacturing jobs with service-sector jobs has had an economy-wide effect in suppressing wage growth. US real median wages have remained flat while productivity has nearly doubled. The average worker displaced from manufacturing once earning $40,154 makes only $32,123 when re-employed. The US trade deficit last year was almost $800 billion—6% of the gross national product—which now even longtime defenders of the trade status-quo label as both a drag on US growth rates and a threat to US and global economic stability.

Public Citizen also noted that changes will be needed to WTO rules and the investment provisions of NAFTA to implement a dozen of the presidential candidates’ key health and climate policy proposals.

Although they have nothing to do with trade, Public Citizen reported that some of the health-care reforms could come under WTO jurisdiction, such as 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. In addition, proposals that address climate policy, such as increasing fuel efficiency standards, banning incandescent light bulbs, establishing new regulation of coal-fired electric plants and establishing national renewable portfolio standards, green procurement proposals and green industry subsidies come under the jurisdiction of existing US WTO commitments.

Most of us agree that “free trade” is a good concept, kind of like that mythical “free market,” but these trade deals are structured to benefit multinational corporations at the expense of working people, small farms and businesses. Obama’s top economic adviser, Austan Goolsbee, recently said, “There’s no one more in favor of open markets than me,” but he added, “if you look at these 900-page [trade] agreements, they’re two pages of what every economists says ‘yeah, that’s great’—opening tariffs—and then 898 pages of loopholes. It looks just like the tax code—protect this company and make sure they’re getting their money and these investor protections.”

We still need less free trade and more fair trade.

Hillary’s Kitchen-Sink Campaign

Hillary Clinton has shown a disregard for the good of the Democratic Party when she first said “Sen. McCain has a lifetime of experience, I have a lifetime of experience, Sen. Obama has one speech in 2002,” then claimed she and McCain were qualified to be commander in chief of the armed forces.

“I think that since we now know Sen. (John) McCain will be the nominee for the Republican Party, national security will be front and center in this election. We all know that. And I think it’s imperative that each of us be able to demonstrate we can cross the commander-in-chief threshold,” Clinton told reporters on March 6. “I believe that I’ve done that. Certainly, Sen. McCain has done that and you’ll have to ask Sen. Obama with respect to his candidacy,” she said.

With Obama continuing to hold a lead of more than 150 delegates, with primaries remaining in eight states (including Florida and Michigan) and two territories, Hillary is throwing everything she can at Obama, but he has been able to deflect her attacks so far. Under delegate allocation formulas, her prospects for the sort of blowouts it would take to make up the gap are slim, but her disparaging statements about Obama’s national security credentials probably will survive in Republican attack ads in the general election.

From The Progressive Populist, April 1, 2008

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