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Trade Policy Not Just a Rust Belt Concern Anymore

by Lori Wallach, Director of Public Citizen’s Global Trade Watch division

If you listen to some corporate lobbyists and Beltway pundits, you’d think that only blue-collar workers without college degrees working in a Rust Belt factory should be concerned about NAFTA-style trade agreements. Not so.

Did you know that Alan Blinder, a former Fed vice-chairman, Princeton economics professor, and NAFTA-WTO supporter, says that 40 million American service sector jobs could be offshored in the foreseeable future? Economy.Com estimates (PDF) that nearly one million such jobs already have been “offshored” since early 2001 alone – one in six of those in information technology, engineering, and financial services.

Current U.S. trade policy represses the wage growth of all – not just manufacturing – workers. Trade does not affect the total number of jobs in the economy, but rather the composition and wages of jobs available. The claim that trade liberalization creates net benefits is premised on the notion that the losses caused by offshoring are outweighed by the gains in lower consumer prices from imported goods and services. But, as the grandfather of trade macroeconomic theory, Professor Paul Samuelson, noted in a landmark 2004 article (PDF), the theory and reality disconnect if the jobs being lost are the high-wage professional and service sector jobs now being increasingly offshored.

These facts might explain why now nearly three-quarters of Americans making more than $100,000 a year say that the trade status quo is a net negative.

It is true that the more than 70 percent of Americans who don’t have a college degree have been clobbered by NAFTA. This group turned against Democrats in the 1994 elections after the passage of NAFTA by a Democratic-controlled Congress blurred the partisan lines on economic issues, delivering control of Congress to Republicans who campaigned on a “God, guns and gays” platform. It was also this demographic that helped Democrats retake Congress – after the party opposed CAFTA almost to a one in 2005 and in 2006 campaigned nationwide for a new fair trade agenda.

And, the threat our current trade policy poses for the environment and consumer safety are equally serious. NAFTA-model trade pacts – like those now being proposed for Peru, Panama and beyond – establish outrageous foreign investor privileges that not only create incentives (PDF) for U.S. firms to move offshore, but also expose our most basic (PDF) environmental, health, zoning and other laws to attack in foreign tribunals. These rules in NAFTA have resulted in nearly 50 challenges of federal and state laws, leading to more than $36 million in taxpayer funds from NAFTA nations being paid to corporations.

And while 20 percent of the food we eat is imported, less than one percent of most categories of imported food are inspected. This, combined with inadequate inspections for other imported products, leads to the kinds of scares that we’ve seen with tainted toothpaste and toxic toy trains. Our current trade agreements set limits on how rigorous our product and food safety standards can be, limit how intensively we can inspect imports and actually requiring us to import meat that does not meet U.S. safety standards.

The choice is not between the status quo trade model and no trade. Rather, at issue is under what rules we will trade. Given the lived experience under the NAFTA model, it’s hardly surprising that most Americans – and a great many elected officials – oppose staying the course on the failed status quo. For more information on the trade state of play, visit our website and our blog.


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Flying a plane has constantly been a dream of mine, enjoyed reading your blog.

As a person who has been unemployed, and working for free half of my 41 year career (including the past 4 years)it is easy for me to understand what Americans face in this "hollowing out" and the coming Depression. I would never have believed before 1980 that Depressions were engineered by the elite financial class, but they are, just like wars and terrorist attacks.
My organization advocates the seizure of productive facilities by workers and organization for worker and community ownership. It is the only way we and this planet can survive.

Hi Mr. Moyers: You show on E.O. Wilson, is very interesting and I must commend Mr.Ed Wilson for such a dream.

Hopefully this will bring people to better understand what life is all about and yes it not about just we humans.

Hopefully his dream will come to be and we all learn why we must save this planet. There is no other .

I'm grateful to have Bill Moyers Journal back on the air.

What even Nazi sympathizer Henry Ford understood about paying fair wages so his workers could afford to buy his cars is lost on the profiteers of today.

NAFTA is just a precurser for the clandestine Security and Prosperity Partnership/North American Competitiveness Council trade pact among Mexico/U.S./Canada to blur sovereignty, exploit child/adult labor, bypass food quality standards, copyright, trademark, and all those other pesky laws that interfere with profiteering.

Country of origin labels apply to every product sold in Amerian grocery stores except for meat, produce and nuts. The powerful meat lobby does not want us to know where our meat is coming from. Meat from China arrives in crates labeled fruits and vegetables.

The FDA has 650 food inspectors that cover 60,000 domestic food producers and 418 ports of entry. Inspectors 'look at' 1% of imports, of which half are turned over for lab inspection. Half of the 13 FDA inspection labs plan to close due to budget cuts.

Mr. Moyers: I watch your programs and really enjoy all. When I listened to the Lori Wallach on the WTO and Victor Gold, on the change in politics in the United States, they very well could be talking about Canada.

Lets face it, if we could go back 30 years in both trade and politics Canada and the United States were better off.

Where we are to day, with both politics and trade... Canadians and good hard working Americans are being poisoned by both.

The taxpayers / voters have lost what was once the peoples "government" , to a bunch of crooks, who have highjacked our legislatures.

These crooks dressed up as politicians use the party system, to abuse the power we entrusted them to govern with.

The system is broken, we cannot roit or protest in the streets, for they will use the power of "government" against us...therefore we must boycott any Candidate associated with a political party.

Wayne Coady
Cole harbour Nova Scotia Canada

Ryan, either you are lying about being "truly a liberal" (on the Internet, nobody knows if you're a ...) or else you have been very badly misled. Globalization (so-called "free trade") does not improve the lives of the world's poorest citizens. Quite the opposite: it improves the lives of the richest 0.01% of the population, but it puts everyone else in a race to the bottom.

Yes, Indians now have a higher standard of living-- but only temporarily, and only because millions of American jobs have been sent there. If you pay attention you will see that the smartest Indians know that their current good fortune is only temporary, because every improvement in the average Indian's standard of living simply hastens the day when the corporations will decide to "export" millions of Indian jobs to other countries where labor is even cheaper. Eventually all the jobs will end up in countries where there is no democracy and no freedom: the wages are low because the people who do the work are virtually enslaved.

Your fantasy of helping the poorest people in the world, just by letting them have our jobs, might actually work-- in an ideal world where there is no oppression, no overpopulation, no abuse of the environment, no slavery. But we don't live in an ideal world. In our world there are countries which have no labor standards, no environmental standards, no democracy. As Norbert Wiener said: "If you compete with slaves, you become a slave." If we allow corporations to put American workers in competition with people who are enslaved, then we are allowing corporations to enslave American workers.

A final note. You wrote: "Corporations do not cause poverty." Are you serious? Either you haven't been watching Mr. Moyers's programs very long, or you haven't been paying attention. The episode about Bechtel and the privatization of drinking water was especially wrenching.

Mr. Moyers I'm sure you mean well when you invite someone like Ms. Wallach on your program, but the road to hell is paved with good intentions. To put this plainly it would be like interviewing Pharma (drug lobby) about universal health care or asking the Heritage foundation about Iran (bomb them) very biased answers. Softball questions don't resemble journalism. Come on Bill this isn't Fox News.

NAFTA has many flaws that need pointing out. But to Moyers and his guest they don't really care about the flaws. They exaggerate the drawbacks of NAFTA and are intellectually dishonest on CAFTA. Free trade holds the possibility of improving the lives of the world's poorest citizens. When Moyers asks "How do we stop outsourcing?" You should reply, "Why should it stop?" The benefits for greater trade liberalization are quite well founded in academia. It's unfortunate that Mr. Moyers is unaware or unwilling to research these issues further. Read Bhagwati, Stiglitz, or Krugman.

It is also unfortunate that well meaning people will push policy that hurts the poorest humans on earth. The problem with the third world is poverty. Corporations do not cause poverty. Vietnam needs better jobs and capital to create growth and improve their citizens' lives. Stopping free trade with Vietnam will certainly hurt poor people.

Free trade has lifted millions out of poverty. For example India tried self-sufficiency and inward development for decades. They couldn't lower poverty. With capitalism and an outward looking export economy they've had great reductions in poverty and a much higher standard of living.

I do care about fellow Americans. But domestic policy failures have little relation to free trade. America benefits by the $trillions because of trade. Universal health care, higher minimum wage, increased earned income tax credits and fixing public schools will help people more than protectionism will. Consumers and the poor will be hurt enormously with protectionism. To those that push "fair" trade, usually this is just disguised protection or false altruism.

Mr. Moyers (and others reading this) if you're truly a liberal like myself you'll research free trade with more of an open mind and hopefully conclude that the poorest human beings on earth deserve a chance at a better life, that the benefits from free trade can be more equally distributed and that not all corporations are evil. Next time Bill have an opposing side or try to play devils advocate. Your viewers deserve better.

In regard to an earlier comment that the Smoot-Hawley Act led to the Great Depression---- the stock market crashed 8 months before this Act was on the books. A series of financial panics led to the depression, not this Act.

It is sad when an anti-trade zealot like Ms. Wallachs is not challenged by Moyers just because she piously says she would be all for international trade, if only... The sure giveaway was her diatribe against ever again allowing up or down, unamendable votes on USTR-negotiated trade agreements, no matter how much prior consultation with Congress there's been. Without that, as she knows very well, no other country will ever again venture to negotiate a serious trade deal with the US. Her priority is to stop trade deals and pass protectionist legislation, truly a finger in the dike approach.

93 percent of US job loss remains due to factors other than trade. Even the smarter union members know that demonizing international trade is simplistic and counterproductive. We need a more multifaceted discussion about preserving and creating new jobs in the US. If Moyers wants her to be our main window onto the national trade debate, then the intellectual quality of this program is in free fall.

Ms. Wallachs sound bite sounds just like all the other Union apologists. The majority of us don't agree with this line of thinking. Doesn't anyone remember the Smoot Hawley tariff and how it led to the Great Depression. Will some people ever learn?

I loved Lori Wallach and so glad the Journal is on the air. My only problem is remembering to turn on the TV - I've gotten so used to having it off. But I do get the podcasts. For this episode, after receiving notification from Public Citizen, I remembered to turn on the TV and I reminded all of my friends too.

Ms. Wallach did a GREAT job dispelling the myth that NAFTA is good for the majority.

Mr. Azourian, I will point out that the meat imports from China are smuggled into the U.S. courtesy the black market, and that it is the absense of stringent food and drug import inspection controls that Ms. Wallach is referring to.

It is obvious that an often uninformed popular culture is shaped by MSM with incentives to keep information that affects our jobs and healthcare and infrastructures from from us.

When the greedy plantation society mentality and the sycophants who promote them own the farm, the rest of the principled country gets to read all about the exclusive, invitation-only arranged shotgun wedding the day after, once it’s all over.

And that says it all about the new third world order of the Plantation States of America: Always the bridesmaid, but never the bride.

Thank you, Mr. Moyers, for your fine efforts in uniting the public to take back the media and the airwaves.

Most truly yours,

Thank you for this article! It answers my question -- why are good (any) jobs, particularly in Michigan, harder to come by?

My work, career, industry have all gone to India, Canada, -- every place but in the USA (Michigan).

My masters degree in education is of little value, economically speaking. I have too much experience, too much education, yet I worked like a dog to become "educated" -- go figure!

Thanks again for this interview and information!

Great interview on these so called trade agreements , or slave agreements as I like to refer to them. Can't wait to check out Lori's web-site. Please do more shows on trade as the American people need to be better informed. These deals are BAD for the American People. There is no upside for the average person. We are being sold down the river.

Because of your Journal " restoration " I'm back pledging to PBS.THANK YOU.
Your interview with Mr. Gold didn't go remotly close to the neo-cons driven by Israel first, that's what drive them, NOT spreading democracy. It explains why the Dems aren't doing much to bring the troops home, Israel wants us to stay......

Ms. Wallach, I hope you won't mind some constructive criticism. Your analysis was excellent, but your rhetoric (your use of words and gestures) was not really appropriate for the venue.

I'm sure that the ability to speak in "punchy one-liners" is an important talent, on a certain type of TV show; but it isn't necessary on any of Mr. Moyers's shows. Your comments were valuable, but I couldn't shake the feeling that I was suddenly watching a "children's edition" of the Journal.

You don't need to speak that way to Mr. Moyers, or to his viewers. We don't have the woefully short attention span of a small child, or of a Congressman. We don't use Mr. Moyers's show as background noise while we do the household correspondence. We actually sit down and pay attention.

Next time you're invited, watch some past episodes, and notice how Mr. Moyers's other guests communicate with us. You'll see what I mean.

In reply to Ed Arzouian's comment: "She kept citing the environmental standards for NAFTA and complaining about losing jobs to Canada."

The reason the US is losing jobs to Cananda has nothing to do with environmental factors; rather, Canadians are well-educated, meaning they can read directions, and they have universal health care, which absolves the company of providing that expensive benefit. Toyota, for example, built a plant in Canada instead of Alabama after discovering they'd have to print special 'comic books' to instruct Alabama workers, and pay medical benefits at American HMO rates.

While the Canadian workers earn more per hour, Toyota actually pays less per worker overall.

BTW, this is the first mention I've heard of Canadians worrying about losing jobs to Mexicans. I know they've found some tunnels at the southern border, but none quite that long.

I thought it was an excellent segment and Ms. Wallach was a compelling, well-informed and entertaining guest.

Obviously we've got to whammy the pols about these insane trade deals. They can still be killed, just as an outraged populace managed to quash the Dubai ports contract, the notion of turning Social Security into a Wall Street windfall and the latest wrongheaded immigration legislation.

People are finally waking up to the urgent economic threats we face now and this is due in great part to your efforts, Mr. Moyers. Your speeches over the past year or so were my first beacons in the darkness so well-sustained by corporatist media. The segment with Ms. Wallach this evening was wonderful, too; she was a superbly informed and very engaging guest.

A relatively modest number of people stand to make a great fortune by deconstructing the wealth of the middle-class with "free" trade. Warren Buffett's Rule #1 is "Never Lose," because the ill-effects of losing are far greater than most people recognize. Heiber's Law #1 is: Valuable things that go unprotected will soon go missing, usually by means more foul than fair.

Now, some executives are telling you that protectionism is bad for your industry, your job, your income, your pension, your health care and other benefits. If, however, you examine their own employment contracts you will discover the most protectionist, welfare oriented contract ever wrought by an army of highly paid, crafty lawyers.

We'd be walking in a journalistic desert
without your program. That fact scares the hell out of me.......because there is
so little intelligent and thoughtful conversation (no matter the stripe) and too few Americans paying attention to
the erosion of their protections.....Is it
possible that four and one half years later 40% of the people in this country still think Iraq is responsible for 9/11?

Years ago a non-American friend said to me that the United States would always be the most powerful country in the world....
My reply: Do you mean like the British Empire?

Lori Wallach, was great had all her facts down! Told it like it is, NAFTA is one of the worse things that ever happen not only to American workers, but foreign workers as well!

Mr. Arzouian, must be one of the Corporate Fat Cat's getting rich off everyone else's misery! The fruit wouldn't roit, they'd just have to pay a living wage to someone to pick it! McCain made a claim that even for $10 dollars an hour you couldn't get people to pick lettuse. His office was flooded with calls of people asking 'where's those jobs?'

The one fact she left out, was sure in China and Mexico they get paid $6 a day, they can live there on that! We can't! (and we can't work there, they enforce their laws against it). Why doesn't anyone esplain the difference in the cost-of-living in these other countries?

Holy crap, Bill, you sat there nodding your head to Lori Wallach of Public Citizen like one of those toy puppies in the rear window of car.

Could Ms.. Wallach’s views on NAFTA have been anymore slanted or biased?

She kept citing the environmental standards for NAFTA and complaining about losing jobs to Canada. Canada’s environmental laws are more stringent than the US’s!!! Remember Canada signed the Kyoto Accord, the US didn’t.

Then Wallach cites the meat import clauses of NAFTA and worries about Chinese imports, apples and oranges of course..

The US does not import meat from China. The US does import meat from Canada and again Canadian standards are higher than US standards.

Canadians are more worried about NAFTA than the US. Canada fears losing its jobs to Mexico. Let’s keep in mind that a majority of US voters want to see fewer Mexicans crossing illegally into the US. Perhaps if the Mexicans have more jobs they won’t come. Of course the flip side is that California fruit growers will tell you that without Mexican workers the fruit will rot on the vines.

Maybe next time you can provide a counterpoint to Ms. Wallach, something more based in reality?

Tell you what, Bill, have me on the show and I’ll make Ms. Wallach look like a blithering idiot.

Is she married to Lou Dobbs?

I try to remember to watch the "Bill Moyers' Journal" every Friday night, and it would be so very helpful to have a comment in the weekly TV Bylines (or whatever they are called) about the program and its contents.

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