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 First it was withdrawn without a vote, then it was defeated.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.
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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."

Progressives are struggling to come to grips with today's global economy. Yet we're missing two key things: a map of where we're going and the power to steer this country in the right direction.

We know the direction we don't want to go. Seattle crystallized opposition to the ravages of globalization. But progressives haven't been able to agree on an alternative. More and more activists seem to recognize that what we must counter isn't globalization itself, but the neoliberal conception of globalization. We should be fighting not to stop trade across borders, but to ensure that democracy, workers rights and the environment are improved by a global economy -- not eroded by it.

Progressives are far from the levers of power that matter most. Over the past 25 years, transnational corporations -- with the blessings of successive administrations -- have used quick transfers of capital and production as a way to avoid government and unions, the traditional counterbalances to corporate power.

Do progressives have an agenda that both incorporates a long-term economic vision and pulls the right levers to control capitalism in an era of globalization? Yes and no. We are still grappling with day-to-day struggles and working in relative isolation. But the pieces are starting to fit together -- in theory if not yet in practice.

The following is a survey of progressive efforts to shape the global economy. A dynamic combination of approaches -- used vigorously, flexibly and to mutually reinforcing effect -- will have the greatest impact. The key will be expanding these efforts and finding the right mix.

The Rules

The neoliberal conception of globalization is enforced by a nexus of international institutions and agreements: the WTO, IMF, World Bank, U.S. Treasury, Federal Reserve, Deutsche Bank, NAFTA, MAI, etc. Robert Stumberg, a professor at Georgetown Law School and attorney for the Free Burma Coalition, warns that addressing these institutions and agreements must be part of any progressive strategy, since many of the most common tactics could be challenged under their provisions.

Even boycotts or voluntary codes of conduct, for example, could be held to be in violation of the WTO's "technical barriers to trade."

Progressives can deal with the international institutions in three ways: playing by the rules, working to change the rules, or simply ignoring the rules. Playing by the rules means scrambling to define the accepted common practice of an industry. "Industry will try to win the race to set its own standards -- and then they'll claim that's the accepted international standard," Stumberg says. "Then they'll say the ecological or social standard is a local standard and is therefore not acceptable."

Playing by the rules can yield results: President Clinton recently signed an International Labor Organization (ILO) agreement prohibiting indentured service for children, child prostitution and use of children in hazardous work. (Well, it's a start.)

Working to change the rules involves trying to influence the major institutional players. "The original conception of the international financial institutions is that they appropriately serve as a controlling influence over market forces," says Tom Schlesinger, director of the Financial Markets Center. "There's a lot of baby that shouldn't be thrown out with the bath water." In other words, we don't want to replace poorly regulated markets with unregulated ones.

Part of working to change the rules is contesting which institution's rules and regulations should take priority. If a WTO rule conflicts with an ILO rule, which should apply? Rather than accept WTO or NAFTA stipulations, activists can try to pick a better forum and make a case for its primacy. For example, Stumberg argues that it would be a violation of the First Amendment for the United States to prohibit non-governmental organizations or state governments from giving products "union-made" or "organically certified" labels. This kind of argument pits the Constitution against the WTO -- a battle the Constitution could win.

Ignoring the WTO may seem an ostrich-like strategy. But for the U.S. government, it may not be so absurd. "Frankly, anything the United States wants to do it can do," Stumberg says. "Under the recent Helms/Burton controversy, we simply refused to go to the hearing."

National governments still matter, and the U.S. government matters most. "The nation state is not completely eroded," says Clarence Lusane, author of Race in the Global Era. "It's still a fundamental entity in international politics. And capital is still state based, even though it functions globally."

While progressives should recognize the changing economic landscape, we'd be foolish to overstate the degree of change. Our biggest problem with the power of the national government is not how much it is eroding, but how far we are from it.

Local Motion

What can be done locally to combat globalization? Regulation is hard to do below the national level. But a variety of economic players -- a city council, a business, a foundation, a church -- are able to stipulate who they want to do business with under what conditions. The most visible example of this kind of stipulation is the flurry of living wage laws passed in recent years. The laws say, in effect, anyone carrying out government contracts must pay workers well above the minimum wage.

Of course, when contractual links demand too much, corporations will walk away. Municipal governments know this. But, they also are becoming increasingly smart about how to demand enough so that the contract is worthwhile for the companies and also pays off for the community. It takes a keen understanding of the economic realities to be able to call a corporation's bluff.

In Mississippi, where the training and community development organization Southern Echo operates, leaders are testing the bounds of what communities can demand. Co-director Leroy Johnson explains that under global capitalism, Mississippi has become "just a short stopping ground" for companies "as they moved further south to Mexico and Guatemala."

Yet the trick is not just to attract more corporations or to stop them from coming, Johnson argues, but to extract a fair deal for workers and communities while they're in town. "We're not living under a cloud of stupidity," he says. "We don't expect these companies to stay for a long time. We expect them to stay here five or 10 years. But during that time, we expect them to pay a living wage."

Contractual agreements aren't as strong as regulations: They can't set industry-wide standards. But they are more supple, and they can give incentives for businesses to achieve higher than minimum levels of compliance. Fred Azcarate, executive director of Jobs with Justice, is enthusiastic about the potential of living wage campaigns to mobilize constituencies. "But our own self-criticism would be: At the end of the day, how many workers are covered? So far, at least, the numbers are not very high."

While transnational corporations can slip the ties to national government, they have a harder time slipping their ties to the public. Consider the apparel industry: Clothes production is easy work to move. And it's difficult for U.S. regulators to do much about labor standards internationally -- even if they were inclined to try. But consumers can win battles if they choose their targets wisely. People of Faith Network and the National Labor Committee, for instance, pressed The Gap to adopt a code of conduct. Such tactics have since become a common way to rein in abuse of subcontracted labor. United Students Against Sweatshops picked up the battle over Third World working conditions and has taken it to nearly 150 campuses in the United States and Canada.

Likewise, publicly held corporations can't afford to ignore pressure from their shareholders. Organizing investors was instrumental in isolating South Africa during the days of apartheid, and it's a significant factor in today's anti-sweatshop campaigns. The Boston-based United for a Fair Economy has introduced 14 resolutions at shareholder meetings this year-including at Citigroup, GE, AT&T and Disney. Resolutions include reporting requirements for "corporate welfare," campaign contributions and lobbying expenses; proposals to broaden stock ownership among employees; and formulas to set a ratio between the pay of average employees and CEOs. You don't have to win the vote to change policy, stresses director Chuck Collins. "If resolutions get 8 or 9 percent of the vote," he says, "that starts to rock the boat a little bit."

Public pressure is a strategy that's well suited to today's economy: It cuts through national borders and networks of loose accountability. When strongly asserted, it also establishes a sense of public accountability for corporate behavior. Public pressure is a tactic that could be made stronger if governments established better monitoring and rules for access to corporate information. Yet even at its best, public pressure has its limits. For starters, corporations that don't rely on public image or sell consumer products are basically immune to outside pressure.

Developing Alternatives

We are against sweatshops, polarization of income and underinvestment in workers and equipment. But what are we for? "You've got to close off the low road, but you also have to help pave the high road," says Joel Rogers, co-author of What Workers Want. Activists must build a viable alternative vision of how to sustain high-wage, good-quality jobs. Rogers has been instrumental in setting up the Wisconsin Regional Training Partnership, a consortium of companies and unions trying to develop skills among workers and increase capital investments among companies so that the region's manufacturers can break into the "virtuous circle" of high-wage jobs with high-productivity workers.

The difficulty within the American system,Rogers suggests, is that it's in no single company's best interest to invest in workers. Once they can command higher wages, workers can look for a job with another firm at better pay. Regional training partnerships are designed to generalize the benefit -- all employers within a region contribute, and all workers and employers benefit.

Some critics charge that Rogers paints a rosy, "win/win" world. He replies that while there has to be profit for the private sector, companies also can be forced to accept fair terms for workers. "You need to make capital an offer," Rogers says, "but it also has to be an offer it can't refuse."

This progressive vision has attractive elements, but it's not enough for Errol Louis, co-founder of the Central Brooklyn Federal Credit Union and a longtime veteran of battles for community economic development in New York. "Real families need real jobs and real consumer choices," he says. "The seductive part about globalization is that these companies can fit the bill. They can deliver."

Until Louis sees a concrete and large-scale plan, he's focusing on how to get the most out of what's happening on the ground. "Where I see globalization in my face is a place like 125th Street," he says. "It's very different than when I lived there as a boy. Until a few months ago, there were failing shops, mom-and-pop stores, lack of consumer choice. There was just enough to keep people at subsistence level or just above. And there was a lot of money flowing out."

Now even if you were trying to ignore globalization, you can't miss it: "The Disney mouse is there, The Gap is there, Body Shop is there, it's all happening at the Magic Johnson Theater," he says. "There's not much in it for small-scale entrepreneurs. But big boxes are always helpful for entry-level and low-wage jobs. It's not ideal, but let's face it, low-wage jobs is part of what we need."

David Imbroscio, author of Reconstructing City Politics, is not as skeptical as Louis of the existing progressive economic alternatives. Community development corporations and banks, credit unions, worker ownership, municipal ownership, community land trusts, co-ops -- these are all moves in the right direction, he says. The problem is, each of these has been tried on such a small scale that it exists in a vacuum. What's needed is not only to expand and replicate the individual efforts, but to create a rich and dynamic climate in which the different types of initiatives reinforce each other.

Once these types of initiatives expand, Imbroscio argues, they'll begin to change the structure of the local economy. Then as these initiatives begin to comprise a substantial portion of the local economy, they also begin to build a local power base -- and command the attention of local politicians who otherwise spend their time scrambling to give tax breaks to large corporations. "The question is: Are we dedicating enough resources to these institutions?" he asks. "If you can put all these together and bring them up to scale, I really think that they have a lot of potential."

Imbroscio is aware of some of the problems of each model -- all can be diverted from their primary purpose, or controlled by corporate interests, or function undemocratically. But, he maintains, they are also our best hope for building the foundation of an economy constructed in opposition to neoliberal free-market principles. This is an alternative economic structure that is viable in a globalized world.

We Are the World

What about the rest of the world? The most damaging -- and wrongheaded -- argument against introducing labor and environmental sanctions to the WTO is that they will hurt developing countries. Activists in the United States need to be clear that the goal is not to protect jobs here, but to improve standards everywhere. As Jeremy Brecher, co-author of Global Village or Global Pillage, puts it: "If your program is that we're going to get more of those jobs here, I don't think that's adequate. I think it has to be that we're going to improve jobs here, and we're going to complain like hell about the IMF and U.S. Treasury approach that's dismantling the education system in Mexico."

For unions, the idea of cross-border solidarity is old -- that's why so many of them are called "international brotherhoods." Indeed, there was a time when unions, not nation-states, were envisioned as the primary counterbalance to corporate power. But beginning in the '50s, when industry started moving work overseas, unions halted at the U.S. border. Corporations began to press their advantage, and used low-wage workers in other countries to whipsaw U.S. workers and unions, putting a constant downward pressure on wages.

Unions like UNITE have realized that they must ignore borders and follow the work. According to Alan Howard, assistant to the president of UNITE, the union's cross-border strategy is beginning to show some limited results. In the Dominican Republic, there has been a steady trickle of plants organized after a breakthrough campaign in 1994. And UNITE now is working in coordination with local unions to move up from the plant level to negotiate a contract covering all workers in an industrial park in the Bonao free-trade zone. "There are 200,000 workers [in the free-trade zones] in the Dominican Republic," Howard says. "When we went there [in 1994], there was not a single collective bargaining agreement." Roughly 5,000 workers are now covered; the ongoing negotiation would add another few thousand.

International solidarity is also a key component of the movement to cancel enormous amounts of foreign debt in poor, developing countries. "For years, we'd been working on other ways to aid developing countries, from tuberculosis control to micro-credit lending programs," says Joanne Carter of Results, a Washington-based international anti-poverty organization. "But it just gets clearer and clearer that if we don't address the underlying structural issues -- debt burden, the way it puts them in a position that they are controlled by foreign institutions -- you can make incremental progress on other issues, and that can be wiped away."

The problem is the crippling conditions that the enforcers of global capitalism -- the IMF, the World Bank, central banks and private lenders -- impose on lending or development assistance. Following a rigid neoliberal program, global capital always prescribes the same basic strategy: develop an economy that favors exports over domestic production, scrap social programs, privatize industry, and don't even think about cooperative or other models of economic development. In short, it's a recipe for disaster.

Debt relief clearly would give developing countries some much-needed breathing space, but it's just a step along the way. "Too many groups have tended to say the problem is debt, when that's not really the problem," Carter says. "The problem is neoliberalism -- the economic philosophy that's being pushed on these countries -- and the control by unaccountable institutions."

What's Next?

Can the fragmented strategies we now have emerge as a viable and coherent political approach? Will they ever have the power to balance corporations we expected government to have? These are essential questions for the early part of this century.

"There's an important role for seasoned radicals in the coming months," says Allen Hunter of New York University. "They need to bring a concern for global equity and sustainability to local economic development strategies. And they need to bring a concern for local and transnational perspectives to national politics."

The WTO protests in Seattle showed our capacity to mobilize a constituency large, broad and angry enough to put a critique of globalization on the national agenda. Now we need to expand the base of an already fractious movement; walk the line between outrage with the system and a belief it can change; and forge a forceful and coherent alternative vision.

David Dyssegaard Kallick is senior fellow of the Preamble Center.