Fast Track is Back
There's an old adage that trade negotiators think their work is like riding a bicycle: Either they keep pedaling forward or the bicycle -- the new global economy -- falls down. But after a decade marked by major steps in global economic "liberalization" -- more accurately described as "deregulation" or "corporate regulation" -- it is time to stop for a minute and ask which way this bicycle is headed and whether we want to go there.
The next big domestic political battle on globalization may come as early as this summer over a proposal to grant President Bush special "trade promotion authority" -- better known as "fast track" -- that would push trade deals through Congress with minimal debate. It will pit the fast-pedalers against a wide range of groups, especially the labor and environmental movements, who advocate what Economic Policy Institute President Jeff Faux calls a "strategic pause" in the current course of globalization.
Congress failed to renew fast track authority for President Clinton in 1997 and 1998. First it was withdrawn without a vote, then it was defeated. The vote united the majority of Democrats and a small bloc of Republicans, many of them conservative nationalists. Now, in a much different political climate, with a narrowly divided Congress and a Republican president, conservative Illinois Republican Rep. Phil Crane has introduced legislation for new fast track authority. Bush has staked his personal reputation on fast track, promising foreign leaders -- such as those at the Quebec Summit of the Americas -- that he would get it and claiming that the United States would be crippled in negotiating major deals, such as the Free Trade Area of the Americas (FTAA) or a new round of World Trade Organization agreements, without it.
Fast track proponents argue that the president needs such authority to conclude big trade deals. Otherwise factions within Congress will pick apart agreements that have been carefully crafted with a variety of trade-offs, and foreign government negotiators will not have confidence that U.S. negotiators can deliver on their promises. Of course, the first question should be what new global trade agreements, if any, are needed now? Setting that crucial issue aside, it is clear that fast track isn't necessary, even if it is convenient for negotiators to restrict democratic review of their handiwork. Presidents have only invoked fast track authority five times over a period in which hundreds of trade deals have been negotiated. Indeed, just before leaving office, Clinton trade representative Charlene Barshefsky admitted that fast track authority wasn't really necessary.
Critics repeatedly have argued that fast track is inherently undemocratic and that agreements like NAFTA and the WTO should be handled like treaties. Moreover, progressives insist that any legislated trade authority should require negotiators to include protections for labor rights and the environment, and that those protections should be enforced in the same manner as protections for intellectual property or other commercial goals -- including the option of trade sanctions.
The Crane legislation, however, specifically prohibits trade negotiators from including such enforceable labor and environmental provisions in the core of future trade agreements. This free market fundamentalism is out of touch with changing popular sentiment. Earlier this year, even major corporations in the Business Roundtable acknowledged that they could support some provisions for labor and environment in new fast track legislation. The hard line taken by Crane has, for the moment, stiffened Democratic opposition to trade promotion authority. Some influential Democrats with a history of voting as "free traders," such as Montana Sen. Max Baucus and California Rep. Robert Matsui, a leading proponent of fast track and NAFTA, have insisted the new legislation include strong labor and environmental protections.
The political prospects for Bush are also complicated by the slowing economy and the growing, record-breaking U.S. trade deficits. The buoyant growth of the late '90s temporarily masked the effects of globalization on jobs, but since the spring of 1998 -- while overall unemployment was low -- the U.S. manufacturing sector has lost about 750,000 jobs, with much of the loss a result of imports or investment shifts overseas.
The steel industry, faced with foreign producers dumping products in the U.S. market below their costs of production, has been in crisis for three years, during which time there have been nearly 18,000 layoffs and 18 company bankruptcies. With a growing number of Republicans joining Democrats in a call for action, Bush has agreed to ask the U.S. International Trade Commission to determine whether unfair trade practices have injured the industry enough to impose (within WTO guidelines) broad restrictions on steel imports.
The move, which Europeans and others have denounced as protectionism, was widely seen as a move (one that Clinton had rejected) to defuse a hot trade issue and win support for fast track. But the Steelworkers, despite administration pleas, continue to oppose fast track. In any case, simply undertaking an investigation does not guarantee action. And Bush is not supporting a bipartisan bill that would restrain imports for five years, tax all steel sold to share the pension costs of retired and displaced Steelworkers, guarantee loans for modernization, and encourage worldwide negotiations over reduction in global overcapacity.
The record on NAFTA, the model for Bush's high-priority negotiation of a new FTAA, also has increased public skepticism about the current direction of trade negotiations. While NAFTA may account for the net loss of as many as 766,000 jobs in the United States from 1994 to 2000, according to a recent EPI report, it has done very little to protect labor rights or improve the environment in Mexico, Canada or the United States.
This track record, along with the evolution of the movement against corporate globalization, has also forged greater unity among a larger number of labor, environmental and citizens groups. Now the coalition, which is being coordinated by the AFL-CIO, includes organizations like Oxfam, Human Rights Watch, feminist groups and new religious alliances that were not active in earlier fast track battles. Moderate environmental groups like World Wildlife Fund and Natural Resources Defense Council, which Clinton persuaded to support NAFTA, are now also on board. Many congressional Democrats and citizens groups are so angered by Bush's aggressive conservatism that they are even less inclined than usual to negotiate some compromise that would give Bush the appearance of a victory.
At the same time, citizens groups have raised the stakes. The AFL-CIO now demands that trade agreements "must not undermine public services or public health, nor allow individual investors to challenge state laws in secret," as NAFTA's infamous Chapter 11 protection of investor rights has permitted. Also, AFL-CIO President John Sweeney says that "trade authority must delineate responsibilities for investors, not just rights, and must not require privatization and deregulation as a condition of market access."
Republican strategists are concentrating first on trying to consolidate their own party's support. Some -- but not all -- of the 40 or so Republicans who have voted against fast track or other globalization initiatives are likely to be persuaded that they must support their president (just as some wavering Democrats were loyal to Clinton when he was in office). Then the Republicans likely will offer the minimum possible concessions to win over a few Democrats. The pro-corporate Democratic Leadership Council, for instance, has praised Bush's trade principles as a "reasonable start," lauding him for not insisting on trade sanctions to enforce labor rights but chiding him for failing to support the International Labor Organization. There is a chance that Republicans might agree to language permitting negotiation of labor and environmental protections that would be enforced only with fines rather than trade sanctions. While this would be relatively ineffective as enforcement, it might give political cover to pro-corporate, free-trade Democrats to vote for fast track.
However fitfully, workers rights and the environment are becoming part of the mainstream debate over globalization, creating new problems for the Bush administration. The administration still has not submitted the completed free trade agreement with Jordan to Congress, partly because the Republican right-wing is so opposed to provisions in the treaty text that prohibit the countries from relaxing labor or environmental laws to gain trade or investment advantage. Some Republican strategists argue for adding a letter of understanding that only fines, not trade sanctions, will be used, even though most people read the treaty as permitting the use of sanctions. On another front, the proposed free trade agreement with Vietnam, which does not include protections of workers or the environment, threatens to undermine an innovative and apparently fairly successful agreement that permits Cambodia to increase its exports of garments and textiles to the United States as it improves protections of labor rights.
Fast Track is Back but the Political Climate has CHanged
by David Moberg
Workers rights are more important in the fast track debate in part because globalization has created new problems. The ILO reports that forced labor, slavery and criminal trafficking in human beings, especially women and children, are rising and taking "new and insidious forms." Although it has no enforcement power, the ILO last fall asked all of its government, business and labor members to do whatever they could to avoid contributing to the widespread use of forced labor in Burma by the military government, often in support of foreign investors' projects. In response, the AFL-CIO and the International Federation of Chemical, Energy, Mine and General Workers' Unions (ICEM) protested this spring at shareholder meetings of Unocal and Halliburton (Dick Cheney's old firm) for their involvement in Burmese projects, and a bipartisan group of senators introduced legislation to ban all imports from Burma.
But without -- at a minimum -- strong and enforceable language in all global economic agreements, the process of globalization will continue to undermine workers everywhere. Labor, environmental and other citizens groups are likely to turn the debate over trade promotion authority into a symbolic battle over globalization itself. "The fast track debate becomes a proxy for globalization and a referendum on NAFTA, because FTAA is an extension of NAFTA and fast track's most immediate importance would be to facilitate FTAA," argues Mark Levinson, director of research and policy for UNITE, the garment and textile union. "On FTAA we're highlighting hemispheric-wide union opposition. This is an anti-worker approach to the global economy. It's bad for workers here and in developing countries, and that's what we're against."