Fair Trade Contingent Now Formidable Opponent

Ron Kirk made some controversial comments affirming that the Obama Administration has no plans to reopen NAFTA, but would look to address labor and environmental concerns outside of the agreement. Whereupon David Sirota's head exploded. Or actually not - he made some side comments about the virtues of campaign promises, but he also stated that "I still hold out hope - based on the White House's rhetoric - that even though Obama is going back on his promise to reopen NAFTA, there will nonetheless be progressive trade policy changes soon." That's kind of interesting, and I think the optimism comes from the set of allies in Washington for progessive trade policy, moving the country in a new direction:

Trade is emerging as a source of friction between President Obama and congressional Democrats.

Trade critics on Capitol Hill are complaining about comments by Ron Kirk, Obama’s trade representative, who on Monday said Obama does not want to renegotiate the North American Free Trade Agreement (NAFTA) after all.

“I’m disappointed,” Sen. Sherrod Brown (D-Ohio) said of Kirk’s comments. “The president needs to understand there is strong opposition to more-of-the-same trade deals.” Freshman Sen. Kay Hagan (D-N.C.) also expressed disappointment.

Kay Hagan's opposition in particular is interesting. She has not taken any high-profile stands as a freshman, to my knowledge, and starting with trade means that she considers it an important issue to her constituents. The President will simply be bound by a very large and strong fair-trade component on Capitol Hill. The Colombia and Panama FTAs will offer a testing ground. Here's what Kirk had to say:

Mr. Kirk, who as mayor of Dallas was known as a strong advocate of free trade, also said the administration planned expeditious reviews of pending trade agreements with Colombia and Panama.

He said that Colombia had made “remarkable progress” in reducing violence — attacks against labor activists have been a key sticking point — but that other issues remained, and he vowed intensive consultation with Congress on the matter.

The Bush administration signed the agreement with Colombia in November 2006. But Congressional Democrats and United States labor groups have said the Uribe government must do more to stop the antilabor violence and hold perpetrators accountable, a position Mr. Obama supported during his campaign.

Regarding Panama, Mr. Kirk said that differences on labor standards, and the question of the country “possibly being a tax haven,” needed resolution.

Certainly, taking these concerns seriously, and putting conditions on these free trade agreements, represents a change in and of itself.

Stay tuned.

Transforming The Domestic Economy

The rage over the "Buy American" provisions in the economic recovery package are symptomatic of the entire reason why we're surging toward economic disaster. Let's go over this again: provisions like this are CURRENT LAW for federal procurement. When the federal government purchases, they purchase American goods. Just like every other country does. China is building a huge railroad with their initial stimulus package made entirely out of Chinese products. Every country does this. It's not controversial in the least.

Yet, it's only controversial when America, who has been selling out their industrial and manufacturing base for so long that multinationals expect nothing less, tries to implement the exact same policy they and the rest of the world have been doing for decades. This is ridiculous.

Last week the House of Representatives version of the bill stirred alarm in the EU and Canada by demanding that all iron and steel bought to rebuild the country’s crumbling infrastructure has to be American made.

Anxious lobbying by the EU has fallen on deaf ears as explicitly protectionist language was added to the Senate bill leaving it open to legal challenge under the rules of the World Trade Organisation (bullshit, federal procurement has never been and will never be subject to these trade agreements -ed) [...]

Big multinational corporations, including Caterpillar and General Electric which depend on foreign manufacturing plants, have launched a rearguard attempt to remove the Buy American provisions from the bill. The Emergency Committee for American Trade, another lobby group, is sending out shrill alarms that the stimulus bill could trigger a trade war that would ultimately damage American interests.

“Protectionism is the crackcocaine of economics. It may provide a high. It’s addictive and it leads to economic death,” said Richard Fisher, president of the Dallas Federal.

The Smoot-Hawley Tariff Act was put into place by corporate execs who wanted their companies to profit from the Depression. This measure is being opposed by the ancestors of those corporate execs who want to profit again. Any parallel between the two is completely absurd. It's the inverse.

Which is why even the free-traders in the Obama Administration are zipping their lips about these provisions.

Free-traders on President Obama’s economic team are suppressing concerns over Buy American provisions in the stimulus, derided as protectionist by corporate lobbyists.

Treasury Secretary Timothy Geithner and Obama’s top economic adviser, Lawrence Summers, have raised no objections to tough provisions in the House stimulus bill intended to ensure that U.S. iron and steel are used in any infrastructure projects, such as the construction of highways and bridges, even if they add to the project’s cost.

Nor have they complained about a provision in the Senate bill that would go much further by calling for the use of U.S. iron, steel and other manufactured goods in infrastructure spending in the stimulus.

Some interests have also called for language to ensure that any spending on health technology in the stimulus goes to U.S. firms, and not those in India.

Support in both chambers means the iron and steel provisions, at a minimum, seem likely to be included in the bill sent to President Obama’s desk, despite an outcry from business groups and foreign governments that argue they could set off a new trade war.

Seriously, tough crap. The bottom line is that creating American manufacturing jobs multiplies the stimulus, and goes a long way to transforming what's so sick about this economy. We can leap from bubble to bubble forever, creating enormous pain and suffering in the down times, or we can build an economy that works, based on making things, and selling things that you make because people want to buy them, and because they can afford them because they have a job with a living wage. More from John Judis, who is absolutely correct that this would finally spur our huge global trade deficit that has been killing the economy for years.

Senator Dodd: Cut off Chinese imports until they stop poisoning us

This is the greatest blow to the neoliberal consensus I have seen in a long time. And it's a courageous call to action from Senator Dodd.

This is an issue of safety. Parents should be confident that the toys and food that they give their children have been inspected and are safe. That's why I am calling on the President to use his authority to immediately suspend all imports of toys and food from China. It's not enough to simply talk about working for fair trade agreements. We need leadership that will act to enforce fair trade. We have the legal right and power under the WTO to keep products out of our country that threaten the health and safety of our families, and I'm going to do all I can to ensure we do so.

Only in our similarly poisoned political culture would this be seen as controversial. The Chinese have been operating for years with virtually nonexistent labor standards, allowing them to overpower our manufacturing base by producing goods at rock-bottom prices. They have not created a flat world, but one completely tilted in their favor, which uses what amounts to slaves to give us complacent Americans 99 cent packs of tube socks. Predictably, this inattention to any kind of human rights or quality control has led to poisoned food, poisoned toys, foodstuffs made out of cardboard, toothpaste with antifreeze, and probably a hundred other various depredations we just haven't heard about yet. In this situation, the only sensible thing to do is to not allow such items into American homes until we can get a handle on how wide and deep it actually goes. Senator Dodd's call is Common Sense 101.

But, as HTML Mencken notes, this will be met with howls of "protectionism!" and "you want to kill our economy!" And those howls will be coming from a particular source:

The problem here is the 21st Century version of The Jungle, with the Chinese government in the place of the meat packers, the Chinese people being the Lithuanian immigrant workers, and the American public… is still the American public, being poisoned by Corporatist pigs defended, now as then, by a complacent and complicit intellectual class (back then, stodgy laissez-faire men; and now, neoliberal economists and globalization cheerleaders) whose anger is only aroused by the muckrakers and dissenters whose position Dodd, to his immense credit, echoes [...]

While the current FDA is amazingly incompetent and corrupt even by normal Bushite standards of incompetence and corruption (which is saying a lot), even the “best” Clintonoid FDA couldn’t possibly inspect all the food imports. The problem can only be solved by insisting through trade pacts that imported food is produced according to American environmental, labor, and safety standards. They want our market, fine; they must treat their workers, the environment, and consumers by our rules (which admittedly aren’t all that great right now, either, also largely in thanks to Corporate-whorish Sensible Liberals, but better by far than China’s). However, demanding such a remedy requires moral courage, something economics textbooks don’t teach — though there is apparently an esoteric chapter in them that instructs in the fine art of dishonestly using moral language.

If you want to see trade and globalization rocket up to the top of the public consciousness, you'll join with me in broadcasting Senator Dodd's call to action far and wide. I don't think he's the most populist candidate in the Presidential race; he's not calling for the cancellation of NAFTA or the WTO, for example. But he's bringing to light a very pervasive issue in completely rational and sensible terms, namely that we shouldn't let poison into our homes. This would be a bold first step into unmaking the ridiculous economic consensus that globalization is a net positive and "wouldn't you rather have lead paint in your toys than have to pay a dollar more for them?"

Senator Dodd's going to take a lot of heat for this one, let's get his back.

A Teachable Moment

On Saturday, a blogger asked Hillary Clinton about NAFTA, and she gave a wishy-washy "we'll have to study it" answer. Two days later, John Edwards attacks NAFTA in a speech about fair trade.

"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."

Edwards goes on to argue in his speech that NAFTA was "written by insiders in all three countries" -- a move that the Associated Press interprets as a direct critique of former President Clinton's leadership. While this may be an over-interpretation -- how can Edwards criticize NAFTA without criticizing Bill? -- he's obviously using Bill Clinton-style 1990s centrism as a foil, something which now puts him at odds with not one, but two, Clintons. It's an intriguing move, given Bill's popularity with the Dem primary electorate, but Camp Edwards appears to be banking on the fact that some primary voters will associate NAFTA with the D.C. Dem establishment that Edwards, and now to some extent Obama, is running against.

Edwards has now come full-circle, offering his critique of politics as usual explicitly in the terms of regular people vs. DC insiders. It's exactly the kind of insiderism on display in today's awful WaPo op-ed from DLC acolytes Harold Ford and Martin O'Malley that Edwards is attacking. He is expressly waging an inside vs. outside war. That's what the focus on lobbyist money is all about. And it's very resonant. The question is whether you can build a coalition with that critique, given that it will be blocked access at every turn.

"Wasting My Time"

Charlie Rangel is shocked that there's so much misunderstanding about the secret trade deal, the contents of which have still not been released publicly or even to members of the Democratic caucus:

"I think there's a lot of misunderstanding with the agreement," House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, told PBS' Nightly Business Report. "I cannot see how anybody would be upset in the Democratic Party, except for one thing: they were not included when we had the press conference."

That's actually why YOU would be upset, Charlie, because you've never met a microphone you didn't like. Why the party rank-and-file is upset is because you've kept the deal under lock and key, and what is leaking out suggests that the White House is rewriting the deal as we speak and any labor provisions will not be binding.

This is NAFTA II, the re-NAFTA-ing, (how many times can I go back to the well of that joke?), and despite qualified support from labort organizations, the process of this deal should give anyone who expects fairness in trade policy pause.

Rangel is a creature of the past when it comes to trade policy. The majority of the House Democratic caucus wants to see American worker competitiveness protected and not sold out so multinationals can roam the world looking for the cheapest wage. Ignoring that majority opinion is not advisable, but it's precisely what Rangel wants to do.

Rangel has stressed his desire to restore bipartisan support for trade through an "American" trade policy, rather than a Republican or Democratic one.

In the interview, Rangel offered no apology for the deal that was struck and said the only thing he would do differently was to reach it "much faster. I'd ignore a lot of people that really was just wasting my time, and didn't intend to support it all."

Carl Pope of the Sierra Club offers the best explanation I've seen of why these trade deals still benefit lobbyist-driven interests instead of the public interest:

What do I mean by saying these agreements are unbalanced? Well, if a signatory to a typical trade agreement violates the patent protection rights of a US drug manufacturer to provide cheaper life saving medicines for its population, the drug company can bring a legal action against it. But if the same country brings down drug prices for import into the US by using forced labor, a union can't do anything about it. If Peru revokes a logging concession granted to US timber companies, regardless of the fairness of the original agreement, the timber company can sue for damages. But if the same US timber company illegally logs Peruvian mahogany and imports it into the US, a sustainable US hardwood competitor can't file for damages -- even under the proposed, "environmentally more friendly" terms being talked about.

Certain laws -- those which protect businesses -- are given a special priority, and companies can use trade agreements to sue governments for cash compensation if a pesky environmental or public health measure stand in the way of their profits. Neither unions nor environmental groups have the rights given to businesses to make sure that worker’s rights and the environment are protected; for this they would have to depend on the US government which, under its present leadership, is hardly a reliable cop on the beat.

It's actually worse than that, if the labor and environmental deals in the bill are stripped out by the President or put into unenforceable "side deals." What little media exposure there has been on this issue has taken the side of the "bipartisan compromise" that is neither bipartisan or a compromise. And every day that they remain secret, and especially every day that Charlie Rangel insults the majority of the Democratic caucus, I will be incredibly skeptical.

Cutting Through Ice

Progressives did a great job getting people in office in 2006 who share the same values. But it's going to take decades before we get enough turnover in office where that's going to make a real difference. Sure, the caucus is for the most part right on the Iraq war, but that's a layup. On too many other fronts, we're not seeing a lot of movement on the issues on which Democrats supposedly ran.

The biggest disappointment is that Democrats are stubbornly refusing to sever the ties between government and Big Money interests in the form of lobbyists.

House Democrats are suddenly balking at the tough lobbying reforms they touted to voters last fall as a reason for putting them in charge of Congress.

Now that they are running things, many Democrats want to keep the big campaign donations and lavish parties that lobbyists put together for them. They're also having second thoughts about having to wait an extra year before they can become high-paid lobbyists themselves should they retire or be defeated at the polls.

The growing resistance to several proposed reforms now threatens passage of a bill that once seemed on track to fulfill Democrats' campaign promise of cleaner fundraising and lobbying practices.

"The longer we wait, the weaker the bill seems to get," said Craig Holman of Public Citizen, which has pushed for the changes. "The sense of urgency is fading," he said, in part because scandals such as those involving disgraced lobbyist Jack Abramoff and former Rep. Duke Cunningham, R-Calif., have given way to other news.

Lobbying is a protected right in the First Amendment, and I don't want to see it go away any more than I would want a free press to be stopped. But making former lawmakers wait a couple years before crossing over and becoming lobbyists, and making lobbyists disclose details about the big money they scrounge up in contributions, is just sensible good-government stuff. Furthermore, it's terrible politics to rant and rave about a culture of corruption, only to leave the door open for that corruption after the election is over.

Second is this pernicious secret trade deal, the details of which have still yet to be released to the general public or the media. Of course, this didn't stop the traditional media from defending the deal and calling it a grand breakthrough in the spirit of high Broderist bipartisan compromise. The only compromise here is that members on both sides of the aisle have no problem screwing the American worker. Fair-trade Democrats were denied a chance to see the final agreement before the announcement (the US Chamber of Commerce, on the other hand, got a nice long look). Worse, the deal is just a precursor to giving the President fast-track authority, essentially a line-item veto for trade, so that the puny and unenforceable labor and environmental standards that might be in the deal could be legally wiped out with the stroke of a pen. The good news is that the majority of Democrats don't support the deal and will fight its passage, but it's not clear that will be enough.

The story on trade is really about seniority in the leadership and the top Congressional committees means that the majority opinion of the caucus can always be overridden by someone at the top. An additional example is fuel economy. All of the top Presidential candidates want to boost mileage averages, and even the Senate Commerce Committee approved a bill that would raise CAFE standards to 35mpg by 2020. But in the House, the relevant committee chair is John Dingell. Of Michigan. And he's not likely to budge, stiffening at the very hint of criticism.

U.S. Rep. John Dingell said he’s just a simple Polish lawyer from Detroit who is not running for higher office and not trying to make political points.

So he took umbrage today with a speech given last week by U.S. Sen. Barack Obama, an Illinois Democrat who is running for president. In a speech to the Detroit Economic Club, Obama chastised the auto industry for not working harder to achieve better fuel-efficiency standards.

Dingell used his speech to the same organization to shoot back:

"I admire Sen. Obama’s enthusiasm..… But with all due respect, as the Sopranos would say — I would not travel to Chicago for the purpose of teaching people how to butcher hogs."

They don't butcher hogs in Chicago anymore, incidentally. And if I fucked up the auto industry the way the Big 3 have in the US over the past decade, including having to sell Chrysler for a fraction of what it was purchased for in 1998, I'd welcome any advice I could get. The truth is that fuel economy is the killer app of the 21st century, and the technology is with us today to make cars faster and to go further using less. But stubborn men like John Dingell want to protect the profits of their corporate buddies.

This is a major problem, not atypical, where the status quo bumps up against those who want real change. Progressives want to reduce the corrosive power of money in politics, give American workers a chance to compete without being priced out of the global market, and create a revolution in alternative energy in the name of environmental and national security. These are not controversial issues. But there is a generational political divide that is going to take a long time to breach.

Cry Me A River

I'm going to try not to engage in a bit of schadenfruede when I present this story.

Wal-Mart Stores Inc. posted its worst monthly same-store sales results in at least 28 years, tallying a 3.5% decline in April due to this year's early Easter as well as generally challenging economic conditions for consumers.

Wal-Mart's 3.5% drop in the four-week period ending May 4 at U.S. stores fell below its earlier forecast of "flat" sales to a 2% decline. In a recorded phone message Thursday, Wal-Mart blamed bad weather last month in most U.S. regions and the early Easter on April 8, which pushed many Easter sales into March.

The truth is that there's not really much growth available for Wal-Mart in the United States. Communities that don't want them have learned how to organize and block their entry. And they can't add market share in the small towns they've obliterated (which are losing population to boot). So their sales figures are sort of doomed.

None of this is to say that they aren't making money, just less money than before. The cruel irony is that this isn't good enough for boards of directors and greedy corporate execs... like the ones who work at Wal-Mart. Live by perpetual growth, die by perpetual growth.

And incidentally, all retail sales figures are down as the economy slows, perhaps due to those $3.50 a gallon gas prices. Again, the greed is getting the better of this economy. Maybe that's why these trade deals have increased importance, so additional markets can be forced open and labor costs can plunge even lower.

1.8 Million Jobs

The last time that our corporate Dem minders patted us on the head and told us that they had everything worked out while they got together with lobbyists and the business community to sell American jobs down the river was when China entered the WTO. This was supposed to open up new markets and be a goldmine for the US economy. And it was - for the very rich. For anyone that works for a living it was a nightmare.

Contrary to the predictions of its supporters, China's entry into the World Trade Organization (WTO) has failed to reduce its trade surplus with the United States or increase overall U.S. employment. The rise in the U.S. trade deficit with China between 1997 and 2006 has displaced production that could have supported 2,166,000 U.S. jobs. Most of these jobs (1.8 million) have been lost since China entered the WTO in 2001. Between 1997 and 2001, growing trade deficits displaced an average of 101,000 jobs per year, or slightly more than the total employment in Manchester, New Hampshire. Since China entered the WTO in 2001, job losses increased to an average of 441,000 per year—more than the total employment in greater Dayton, Ohio. Between 2001 and 2006, jobs were displaced in every state and the District of Columbia. Nearly three-quarters of the jobs displaced were in manufacturing industries. Simply put, the promised benefits of trade liberalization with China have been unfulfilled.

On the same day that George Bush and the Democrats make a "deal" on trade policy, the Census Bureau announced a six-month high in the trade deficit, with exports outpacing imports by $64 billion. We don't make anything in this country anymore, and that's a national security issue as much as it is an economic one. The power of multinational corporations to write our trade policy has gotten completely out of control, and the public knows it. That's why so many populists and fair traders won last November. And yet corporate Dems continue to sell out the American worker.

There is no way that this latest trade deal should be allowed to pass without enforceable labor, environmental and human rights standards. We barely have any jobs left to hemhorrage.

Sellout on Trade?

What a busy day. Gonzales testifies all day in the House, a series of Iraq votes and now this very scary prospect of a "deal" on trade agreements which at first glance does not seem friendly to progressives and populists.

The Bush administration and the speaker of the U.S. House of Representatives, Nancy Pelosi, breaking a partisan impasse that had dragged on for months, were expected to reach agreement late Thursday on the rights of workers overseas to join labor unions. Both sides predicted that the agreement would clear the way for U.S. congressional approval of several pending trade agreements.

Democrats said the accord would be a major victory in their campaign to ensure that trade deals provided for the rights of workers to organize and that trading partner countries banned child labor and slave labor [...]

Trade specialists say that approval of these deals, with labor guarantees, could provide a template for future trade accords winning approval in Congress, where sentiment against trade deals in general is high. Many Democrats elected as part of the party's sweep last autumn ran by promising to block future trade deals.

Despite the endorsement of Rangel and Pelosi, many Democrats say that half or more of the Democrats in Congress may vote against the deal. But the agreement is expected to pass with strong backing among Republicans, whose leaders will urge them to vote with President George W. Bush on the matter.

The Bush administration hopes that this agreement paves the way for a much broader deal to extend Bush's authority to negotiate future trade accords and get a quick up-or-down vote on them.

That authority, known as "fast track" trade negotiating authority, expires June 30.

A very large portion of the Democratic rank and file in the Congress, particularly a number of so-called "moderates," ran on a progressive populist trade policy that demands that American jobs aren't shipped overseas to the lowest bidder. This is an issue where an old-school fair-trader from a textile family and Lou Dobbs are in absolute agreement. Unless you have global labor, human rights and environmental standards, you cannot give multinational corporations this kind of power. And by the way, with "fast track," essentially a line-item veto for trade, the President can strip out all of the agreements made in this "deal" anyway. The fact that no details have been released, the fact that the business-friendly New Democrat Coalition was instrumental in the deal, the fact that the most slavish corporatists love the deal, all of this is extremely troubling. The trade policy of this country has destroyed the middle class and threatened our economic security.

The good news is that the fair trade Democrats are unhappy with the process, and appear to be willing to fight for it. I think that populist Democratic Senators like Jon Tester, Jim Webb and Sherrod Brown should simply put a Senatorial hold on any legislation of this kind until the Democratic leadership listens to the majority of their membership on this.

Stay tuned.