Dems Cut Trade Deal with Bush; Poised to Throw American Workers Under Bus

Democrats talked tough on trade to win a majority. Now they're poised to enter into a deal with Bush and his cronies that not one labor, environmental, small business, public health or consumer group supports.
Just 100 days after the Democrats rode into Washington on a fair trade mandate, shock has morphed into rage over last Thursday's surprise announcement by the Bush administration, Democratic Speaker of the House Nancy Pelosi, Ways and Means and Finance Committee Chairs Charles Rangel and Max Baucus, and a coterie of New Democrats and CAFTA 15'ers of a "Deathstar Deal" on trade. The deal could facilitate passage of various awful, pending Bush "free trade agreements" (FTAs), not to mention the danger it may pose to Democrats who go along with its terms. (See here and here for the blow by blow.)

Not one labor, environmental, small business, public health or consumer group supports the deal. Huge corporations praised it -- they see it as essential to the passage of more corporate trade agreements. Among these monied voices was the Chamber of Commerce president, who celebrated the deal's unveiling with a statement in which he said he was psyched about "assurances" he had received that the deal's labor provisions "cannot be read to require compliance" with international labor standards.

Why would Democrats pass a politically poisonous trade deal with the Bush administration instead of launching their own proactive trade agenda? Why not propose a forward-looking strategy that could satisfy public demand for new trade rules that tackle the stability-threatening trade deficit, stagnant wages and other urgent problems?

Most Democrats are asking the same question. The Deathstar Deal was negotiated in secret, legal texts were not made public, and it was abruptly announced without warning to most Democrats or Democratic base groups.

Reaction from the majority-making House Democratic freshmen, key Democratic members and labor and other party constituents concerned with trade ranged from stunned to horrified. Former Teamster President Jim Hoffa summed up what many were thinking when he said that the Deathstar Deal "sells out American workers" and that his union "will fight like hell to oppose this shortsighted agreement."

White House political czar Karl Rove did not issue a statement, but we bet he was gleeful. If this deal, which so far is only on the conceptual level, results in Congress having to vote on more Bush trade agreements, the political implications are even more cataclysmic than the policy damage. In one blast, this Deathstar Deal could result in the newly Democratic-controlled Congress passing Bush trade agreements by a majority of the minority GOP and a minority of the majority Democrats. This will alienate the Democratic base, split the Democratic Congressional Caucus, blur the distinction on economic issues between the parties à la NAFTA, give President Bush a major victory (and one that gets his foreign policy message off the Iraq disaster), and undermine the re-election chances of the many freshmen Democrats who won races in socially conservative districts campaigning against incumbents' NAFTA-CAFTA voting records.

From the public outline of the text, we know that most of the essential fixes (PDF), which unions and fair trade groups say are needed to de-NAFTA-ize the Bush trade agreements, were simply ignored in this Deathstar Deal.

The deal does absolutely nothing to address the Bush FTAs' ban on anti-offshoring, Buy America and Buy Local policies. Democrats, labor and statehouses across the country prize these policies as an innovative way to support sustainable local economies. Do senior Dems really want to explain to Americans why they consented to have these jeopardized in foreign trade pacts?

Further, nothing was done to fix the Peru FTA terms that would allow Citibank or other U.S. investors providing "private retirement accounts" to sue Peruvian taxpayers if Peru reverses its failed Social Security privatization. Peru's labor federations consider this FTA provision to be a major impediment to reversing this social catastrophe. Seeing Democrats beat back the Bush proposal here, Peru's labor federations asked Democratic trade leaders to fix this problem unaddressed in the Deathstar Deal.

The Deathstar Deal also does nothing to remove from the Bush FTAs the outrageous NAFTA-CAFTA foreign investor privileges (PDF) that create incentives for U.S. firms to move offshore and exposes our most basic environmental, health, zoning and other laws to attack in foreign tribunals. (Go here for our longer analysis of the Deathstar Deal's flaws.)

In the next few weeks, we will know if the Deathstar Deal is deactivated or whether it wreaks its ruin. In part, this will rely on whether a "deal" in principle can be translated into reality. For instance, Speaker Pelosi and other Democrats have long stated that the FTAs must be renegotiated to make the agreed changes part of the binding text of the agreements. But post announcement, White House and other GOP officials are now saying that they are not inclined to reopen the texts.

Democrats making this "deal" say it only applies to the Panama and Peru NAFTA expansion agreements, while key Republicans and corporate chieftains say it is the path to granting President Bush new blank-check Fast Track trade authority and passing Colombia and Korea FTAs. (Colombia's right-wing paramilitary-linked government has ruled over the assassination of 400 labor unionists: human rights groups, unions and key Democrats say no way FTA; while the highly problematic Korea FTA, which even some major corporations oppose, would be the highest dollar deal since NAFTA.)

Many hope Speaker Pelosi can save the universe,and help the party and Congress find its way out of the Deathstar Deal. For that to happen, fair traders' demands that the "deal" be rejected need to be channeled to her and other members of Congress NOW.
The authors are director and research director of Public Citizen's Global Trade Watch division.
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