Election 2008

Iowa Caucuses: The Good Guys Are Winning on Trade

Here's something you don't see often: actual details about the candidates' positions.
At the end of the day, when the madness of our election process is over, each of us is likely, no matter who we individually supported, to be disappointed. But, as I've pointed out since the 2006 elections, there is much to be optimistic about when it comes to the issue of trade---at least if a Democrat occupies the White House. If a Democrats wins the presidency, she or he will have, generally speaking, staked out a position on trade that begins to move us away from the disaster of Republican and Democratic trade policy over the past several decades. We can---and should---hold the winner accountable to what they have promised on the campaign trail. And that's the purpose of this post.

Thanks to the wonderful work of the Iowa Fair Trade Campaign, we can track the key trade-related statements of the Democratic candidates who are campaigning in Iowa. To give some context, I offer a few observations before going through the candidates' statements (the Iowa Fair Trade Campaign did not analyze statements by either Dennis Kucinich, who is quite good on trade issues, nor Mike Gravel because neither have active Iowa campaigns).

First, no candidate examined by the Iowa Fair Trade Campaign is, from my perspective, quite got the problem down pat. No one is willing to say, quite clearly, that there is no such thing as so-called "free trade." It's a myth, a slogan that is simply a marketing phrase---as is its counterpoint slogan "protectionism." With virtually every statement on trade, most candidates always feel the reflexive, defensive need to add to any critique of so-called "free trade" that "I am not a protectionist" and/or "I believe trade is good." The political elites---and I include the quivering traditional media which is trapped in the Economics 101 framework taught in colleges that extols so-called "free trade"---have trapped any decent candidate into believing that if they don't caveat their critique of the current economic model, they will be written off, mocked and pilloried for being a raging populist.

Second, a secondary frame that is at play is the seductive notion that there is a totally new world out there thanks to technology and so-called "free trade" is an essential element of the new world--we hear that rap from the pundits, economists, and, unfortunately, even a labor leader or two.

This is also idiotic. There is nothing new about trade. We've traded around the globe for all of human history. Technology does allow information and capital to move more quickly around the world.

So-called "free trade" agreements start out from the wrong premise: that trade agreements should be primarily about protecting investment and capital and, then, only as an afterthought, do the agreements wrestle with how workers and the environment should be treated. The central problem of so-called "free trade" is this--it has almost nothing to do with fair trading of goods and services between countries but about implementing other things that are secondary to fair trade.

The so-called "free trade" deal with Peru, like the other similar agreements, includes NAFTA-style Chapter 11 foreign investor rights. These rights encourage U.S. companies to move offshore, as well as open up basic U.S. environmental, health, zoning and other laws to attack (they allow a company to argue that a pro-labor or pro-consumer law constitute an unfair trade barrier and, therefore, needs to be eliminated).

These deals still allow companies to attack prevailing wage laws, recycled content and renewable energy policy remain.

These deals still contain agriculture rules that displace millions of peasant farmers increasing hunger, social unrest, and desperate migration.

These deals still allow food safety limits that require us to import meat not meeting our safety standards.

These deals still allow drug companies to extend patent rights that undermine affordable access to medicine.

These deals still let U.S. firms, such as Citibank, demand compensation if, for example, Peru tries to reverse course and end its awful social security privatization.

Third, and finally, generally speaking, I don't ascribe our potential good fortune on trade to the inherent good intentions of the candidates. To state the obvious, politicians care mostly about getting elected---and running on a platform embracing a failed economic model is not a great formula for success. I think Democratic candidates have been responding to Iowa voters' priorities by saying more about trade than ever before in recent memory. They generally have been apologizing for the effects of NAFTA (yes, a little late, perhaps), some saying they'll renegotiate it, fix it or even scrap it.

They have opened up their eyes and seen the light because people (voters) are speaking loudly and clearly on this issue. This political realization isn't just an outcome of the results of the 2006 elections, in which, as Public Citizen's Global Trade Watch clearly showed, the issue of trade (sometimes expressed via general anger over the economic disaster facing many people day-to-day) played an important role in the Democrats' takeover of Congress.

It's really the culmination of a long, persistent organizing campaign here and across the globe to expose, blunt and reverse a very destructive economic system--much of which has been imposed via so-called "free trade." In the U.S., even a majority of Republicans oppose the current trade deals our government has been imposing.

So, really, while the traditional media often frames the candidates' positions as pandering to early state voters or the Democratic base by taking positions against the status quo corporate globalization, the truth is that rejecting so-called "free trade" and calling for a new course on American trade policy is as big a winner (if not bigger!) in a general election when Republican voters will voice their opinions. All this is to say: the real heros in this trend are all the people who have worked for so many years, often withstanding the catcalls of the punditry and the party hacks, and that that work will not end no matter who is elected president.

So…drumroll, please: are here key issues on trade and the candidates' positions, as framed by the Iowa Fair Trade Campaign, with, where necessary, my own observations (I mix the order up a bit so as not to favor any candidate):

FAST TRACK (for some back ground on "fast track" read this): Commit to strengthening Congress' role in trade policy, by replacing the Fast Track negotiating process with a new system that includes readiness criteria to determine appropriate negotiating partners; binding obligations regarding what must and must not be in future trade agreements; the right of prior informed consent for states before they are bound to non-trade, investment, service sector and procurement rules in trade agreements; and the right for Congress to vote before agreements are signed.
Edwards: "[W]e need a new way to negotiate trade agreements that ensure they do not overstep into imposing one-size-fits all constraints which limit the domestic health care, education, environmental, safety and other policies that are essential to ensuring our nation's future. This new trade negotiating system must provide more opportunities for diverse public input in contrast to our current system which relatively advantages business interests while largely excluding non-commercial interests…I will tie both unilateral trade preferences and bilateral and multilateral trade agreements, as well as…future presidential Trade Negotiating Authority, to measurable progress on labor rights in the involved countries." (Statement to IA Fair Trade Campaign)
Obama: "I will replace Fast Track with a process that includes criteria determining appropriate negotiating partners that includes an analysis of labor and environmental standards as well as the state of civil society in those countries. Finally, I will ensure that Congress plays a strong and informed role in our international economic policy and in any future agreements we pursue and in our efforts to amend existing agreements." (Statement to IA Fair Trade Campaign)
Clinton: "I will not enter into new trade agreements or seek trade promotion authority, until my administration has done two things: reviewed all of our existing agreements to determine whether or not they are benefiting our economy and our workers; and crafted a comprehensive pro-America trade policy that will strengthen our country in the 21st century." (IA Fair Trade Campaign statement)
Dodd: When the strategic pause is suspended, and when I am satisfied that the time has come to begin negotiations on new and improved trade agreements, they will be conducted with full transparency. I will ensure that all parties are at the table including workers and family farmers and I will open negotiations to observers. There is no reason for trade agreements to see the light of day only after they are completed.
Richardson and Biden have not taken clear positions on fast track.
Analysis: while the statements are steps in the right direction, "fast track" is inherently a bad idea if it does not allow Congress to have it say on the specifics of any trade deal. The issue is not whether trade agreements have labor or environmental provisions--it's whether Congress has the power to amend and change trade deals. Ultimately, the issue on fast track boils down to how much you trust unchecked executive power. I don't--no matter which party is running the show.

LABOR STANDARDS: Trade agreements must incorporate requirements to adopt into domestic law and enforce the five basic internationally-recognized core labor rights as stated in the eight fundamental International Labor Organization (ILO) conventions dealing with freedom of association; the right to organize and bargain collectively; the elimination of all forms of forced or compulsory labor; the effective abolition of child labor; the elimination of the worst forms of child labor; and the elimination of discrimination in respect of employment and occupation. Failing to meet such standards must be subject to the same dispute resolution and enforcement mechanisms and penalties that apply to the commercial provisions of the trade agreements.
Clinton: "Strong, enforceable labor and environmental provisions must be part of the core text of every trade agreements. If they are not, our workers will have to compete on an unfair playing field. That is not acceptable." (IA Fair Trade statement)
Biden: "All trade agreements must contain labor and environmental standards… Our trade policy should not reward exploitation of people." (IA Fair Trade statement)
Dodd: "I will insist on fair trade, vigorously enforce existing trade agreements, and ensure that new trade agreements include strong worker and environmental protections." (Statement to IA Fair Trade Campaign) (IA Fair Trade statement)
Obama: "We'll add binding obligations to protect the right to collective bargaining and other core labor standards recognized by the International Labor Organization. And I will add enforceable standards to NAFTA, the World Trade Organization (WTO), CAFTA and other Free Trade Agreements (FTA's) currently in effect." (IA Fair Trade statement)
Edwards: "Agreements must have their core strong protections for the global environment and the five basic internationally-recognized core labor rights as stated in the eight fundamental (ILO) conventions…Such provisions must be enforced with the same mechanisms provided for enforcement of other commercial provisions." (IA Fair Trade statement)
Richardson: ""Trade agreements must require developing nations to improve their labor, human rights and environmental practices. I will insist that trade agreements demand adherence to core ILO standards… Such trade agreements must be vigorously enforced by the WTO…Countries that do not enforce national law and internationally binding obligations will be subject to dispute settlement under the WTO." (Statement to IA Fair Trade Campaign)
Analysis: look, all the candidates have bought the mantra about labor standards. But, in my opinion, this is an easy lift. The problem is that trade deals that are structured to protect capital and investment first, and, then, as an afterthought, address those bothersome issues like slave labor, are always going to favor the corporate terms for trade.

ENVIRONMENT: Trade agreements must allow nations to follow environmental, health and safety standards adopted in reliance on the precautionary principle, recognizing the legitimate rights of governments to protect public health, safety and the environment. Trade agreements must incorporate requirements to adopt into domestic law and enforce the major Multilateral Environmental Agreements, which comprise the global consensus on basic environmental protection. Failing to meet such standards must be subject to the same dispute resolution and enforcement mechanisms and penalties that apply to the commercial provisions of the trade agreements.
Obama: "We should add binding environmental standards so that companies from one country cannot gain an economic advantage by destroying the environment." (Statement to IA Fair Trade Campaign)
Clinton: "Strong enforceable labor and environmental provisions must be part of the core text of every trade agreement" (Statement to IA Fair Trade Campaign)
Biden: "All trade agreements must contain labor and environmental standards. Our trade policy should not reward…low environmental standards."(Statement to IA Fair Trade Campaign)
Edwards: "I will insist that new trade agreements include strong rules on environmental protection. As the world's biggest customer, our trade deals can be vital tools to ensure that progress is made in addressing the threat of global climate change [and can] ensure that poor environmental practices do not create unfair competitive advantages, and that those who are willing to destroy the planet do not profit from their irresponsibility. And trade agreements should not be allowed to override the multilateral environmental agreements that represent the global consensus of sovereign nations about vital environmental measures." (Statement to IA Fair Trade Campaign)
Richardson: "Trade agreements should truly prioritize social and environmental objectives…Trade agreements, when properly conceived and implemented, must require developing nations to improve their labor, human rights and environmental practices… I believe the U.S. should offer a grand bargain to the members of the WTO: All of the members of the WTO should agree to adhere to and enforce the core ILO standards and the Kyoto treaty." (Statement to IA Fair Trade Campaign)
Dodd: "I will] require trading partners to meet environmental standards." (Statement to IA Fair Trade Campaign)
Analysis: more or less the same issue was with labor rights. You can't tinker around the edges and slap on some provisions to protect the environment when the basic frame of corporate-style trade is anathema to a health planet.

INVESTMENT RULES: FOREIGN INVESTOR RULES THAT PROMOTE OFFSHORING, UNDERMINE DOMESTIC PUBLIC INTEREST LAWS: Foreign investors must not be given the right to sue governments directly under trade agreements. The investor privileges included in most trade agreements expose our domestic environmental, public health, zoning and other public interest laws to potential challenge by foreign corporations in secret tribunals. Trade agreements must not allow private investors and corporations to compel governments to pay compensation for the costs of complying with laws, regulations, or other policies to protect the public welfare.
Edwards: "Rather than foreign investor protections that promote offshoring and job loss, agreements must have at their core strong protections for the global environment and the five basic internationally-recognized core labor rights as stated in the eight fundamental International Labor Organizations (ILO) conventions." (Statement to IA Fair Trade Campaign)
Dodd: "I will use the power of the Presidency to ensure Congress passes a law to remove the enforcement mechanisms that allow corporations to directly challenge state local or federal public interest laws for perceived loss of profit and will ban such provisions from any future agreements. I see this as a critical part of insisting on trade agreements that put the interests of all Americans first." (IA Fair Trade statement)
Obama: "With regards to provisions in several FTA's that give foreign investors the right to sue governments directly in foreign tribunals, I will ensure that this right is strictly limited and will fully exempt any law or regulation written to protect public safety or promote the public interest. Our judicial system is strong and gives everyone conducting business in the United States recourse in our courts. The tribunal system was created to ensure that our investors would have access to similar protection abroad. I understand the concerns surrounding this issue, and am committed to working to address them." (Statement to IA Fair Trade Campaign).
Clinton, Richardson and Biden have not taken clear positions on the issue.
Analysis: this is really crucial and relates to the point I made previously. If you don't remove investor rights, then, the labor and environment provisions are weak, toothless window dressing. It should trouble fair trade supporters who might be supporting the candidates who are not clear on this topic.Changing Course on the Current Doha Round WTO Expansion: The IFTC letter urged all presidential candidates seeking support in the Iowa caucuses to: Commit to oppose the current direction of the WTO Doha Round and to call for a new direction in global trade talks to prioritize protections for workers, the poor, health and the environment, and to ensure that global trade rules do not undermine the ability of governments to regulate in the public interest.
Edwards: "Our more than decade-long experience with the WTO and its agreements evidences too many negative outcomes domestically and other nations around the world for us to agree to expand the WTO's authority as currently proposed in the Doha Round. As a nation, we need to let our WTO trading partners with which we have material trade deficits know that that the current WTO constructs are simply not working. We need to focus on fixing these rules and the protocols under which challenges are made and decisions are rendered." (Statement to IA Fair Trade Campaign)
No other candidate submitted a statement on the issue.
Analysis: it speaks for itself.

Reviewing and, as Necessary, Renegotiating NAFTA and other Existing Trade Agreements: Commit to review and assess NAFTA and other bilateral trade agreements, particularly their impact on our jobs, wages, working conditions, environment, consumer safety and democratic protections. Such a review must include recommendations on how to address problems in existing agreements, up to and including renegotiation.
Dodd: "I will take a strategic pause in negotiating new trade agreements while we assess the strengths and weaknesses of the existing ones." (IA Fair Trade statement)
Obama: "One of the first things I'll do as President will be to call the Prime Minister of Canada and the President of Mexico and work with them to fix NAFTA. And I will add enforceable measures to NAFTA, the [WTO], CAFTA and other [FTA's] currently in effect..And We should amend NAFTA to make clear that fair laws and regulations written to protect citizens in any of the three countries cannot be overridden simply at the request of foreign investors." (Statement to IA Fair Trade Campaign)
Biden: "I would review NAFTA and the terms of other trade agreements." (IA Fair Trade statement)
Edwards: "When I am president, the first step I would undertake is a careful assessment of our existing agreements, so that we can ensure we do not repeat past mistakes and identify if and how our existing agreements require modification." (IA Fair Trade statement)
Clinton: "As President, I will review NAFTA and work with our trade partners to correct its shortcomings." (Statement to IA Fair Trade Campaign)
Richardson did not make his position clear on this to the Iowa Fair Trade Campaign
Analysis: if you read this far, you probably understand that Dennis Kucinich, who, again, was not included in this analysis because he isn't campaigning in Iowa, has it right---NAFTA should be repealed. NAFTA can't be fixed or modified if it retains the basic framework.

Last thought: I believe Democrats should have a very clear, straightforward overarching vision for trade that goes something like this:

Democrats believe that the First Principle of trade should be that it enhances the quality of life of communities here and around the world. Democrats believe that every American should have a job with decent wages and dignity at work. We also believe that our country's role in the world should be to promote strong partnerships with other countries so that we can exchange goods, services, and ideas that raise the living standards of people everywhere. When living standards for people around the globe allow them to provide for their families, then, they are not forced to become economic refugees and move to other countries to survive. Democrats also believe that economic progress is possible without poisoning our air, streams, lakes, food and the rest of our environment. So, with that in mind, we, then, will work to create trade agreements that cherish those ideas and allow corporations to implement those principles.
Jonathan Tasini is Executive Director of the Labor Research Center.
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