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June 29, 2007

Back in May, Democratic Congressional leaders and the White House announced a major breakthrough in trade negotiations, and the press quickly touted the historic compromise.

According to THE WASHINGTON POST, "Democrats are the main beneficiaries of a deal with the Bush administration's trade negotiator," and "Faced with the reality of a Democratic majority in Congress, the Bush administration agreed to major concessions to put its trade agenda back on track," writes the MIAMI HERALD.

Yet many critics were puzzled how so many sources could speak positively and definitively about trade expansions for which text had yet to be released to the public.

This past week, texts of four trade expansions with Panama, Columbia, South Korea, and Peru have finally been released and certain trade watch dog groups do not believe the agreements adequately address the shortcomings of the NAFTA model created during the Clinton Administration in the early 90's. "It's like they put a new roof on a condemned building. And a condemned building is gonna cave on you no matter what you do," explains Lori Wallach, Director of Public Citizen's Global Trade Watch.

JUST IN: Read the latest press release from the House Democratic Leadership regarding the four pending trade deals.

Ms. Wallach founded the Global Trade Watch division of Washington, D.C.-based Public Citizen in 1995 to track and foster debate about the implications of globalization on jobs, wages, the environment, public health and government accountability.

"The public's had it with the NAFTA model. It's meant real damage to people: unsafe food, downward pressure on wages, lost jobs," explains Wallach in her interview with Bill Moyers.

For more on Ms. Wallach's take on how trade deals affect American workers, visit the Blog.

NAFTA/CAFTA in Perspective
The official report issued by the United States Trade Representative, Canada's Minister for International Trade, and Mexico's Secretary of the Economy, "NAFTA: A Decade of Strengthening a Dynamic Relationship," boasts that NAFTA is "an example of the benefits that all countries could derive from moving forward with multilateral trade liberalization." Creating the world's largest free trade area, the goal of NAFTA was to provide for "freer flow of goods, services and investment" and integrated economies. In difficult economic times, however, many critics of NAFTA claim that free trade is responsible for negative effects on job markets and overall economic stability.

While the USTR reports on the positive statistic that "total trade among the three NAFTA countries has more than doubled, passing from US$306 billion in 1993 to almost US $621 billion in 2002," the Economic Policy Institute has found that "between 1994 and 2000, the U.S. lost more than 3 million jobs and job opportunities—equal to 2.3% of the labor force." Read state by state reports from Jobs with Justice on job losses attributed to NAFTA.

A study from the Carnegie Endowment for International Peace, "NAFTA'S PROMISE AND REALITY: Lessons from Mexico for the Hemisphere," finds that NAFTA "has been neither the disaster its opponents predicted, nor the savior hailed by its supporters." A review of the report in THE NEW YORK TIMES explains that the CEIP study "concludes that the pact failed to generate substantial job growth in Mexico, hurt hundreds of thousands of subsistence farmers there and had 'miniscule' net effects on jobs in the United States."

In the United States, job losses associated with the trade deficit increased six times more rapidly between 1994 and 2000 than they did between 1989 and 1994, according to figures from the Economic Policy Institute (EPI). Even critics of NAFTA acknowlege that these statistics cannot be directly attributed to NAFTA. The EPI paper does not condemn further trade liberalization: "There is no doubt that, in the long run, a system of both freer trade and fair trade which ensures that all participants play by a well-defined set of humane, market-based rules can maximize incomes for most, if not all, countries around the world.... Existing trade agreements should be repaired and rebuilt before moving ahead with another round of broad, new trade details."


What is "fast-track"?
Trade Promotion Authority or "fast-track" is the power granted to the Executive Branch to negotiate international trade deals with the assurance of an up or down vote in Congress, without the inclusion of any legislative amendments and with limited debate, provided the President notify Congress at least 90 days prior to entering into any agreement.

This power was first granted to President Ford in the Trade Act of 1974 (P.L. 93-618), and according to a 2003 report from the Congressional Research Service, "At the time, there was little if any controversy about the legal restrictions that Congress imposed on itself. It was viewed that Congress had achieved an enlarged role in trade negotiations through consultation and notification requirements."

Presidential fast-track authority allowed for the Administration to negotiate the Tokyo Round (1974-1979), yet when time came to craft legislation, Congress argued that it should have a more active role in that process. A compromise was reached whereby Congress would put a draft bill through a 'mock' legislative process, allowing for committee input and amendment proposals, and the President would then submit a bill for expedited passing based on the Congressional draft.

Fast-track was subsequently renewed by several bills until it lapsed in 1994, before being revived again by George W. Bush is 2001. After a long partisan battle in the House and Senate, the President signed the Trade Bill of 2002, reinstating fast-track on August, 6, 2002, which, after several further amendments and extensions, is now set to expire on June 30, 2007.

References and Reading:
Public Citizen's Global Trade Watch
"Global Trade Watch (GTW) is a division of the non-profit organization Public Citizen that promotes democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor 'free trade.'"

"Bipartisan deal puts trade back on track" by Pablo Bachlet, MIAMI HERALD, May 11, 2007.
"Democrats are the main beneficiaries of a deal with the Bush administration's trade negotiator."

"Bipartisan Trade" Editorial, WASHINGTON POST, May 12, 2007.
"Faced with the reality of a Democratic majority in Congress, the Bush administration agreed to major concessions to put its trade agenda back on track."

"Labor, Drugmakers Not Sold on New Trade Accord" By Kim Chipman, BLOOMBERG, May 12, 2007.
"[The deal] also applies to pending deals with Colombia and South Korea, that Democrats say need more review."

"Path Is Cleared for Trade Deals" By Peter Goodman and Lori Montgomery, WASHINGTON POST, May 11, 2007.
"Analysts said the compromise essentially ensures congressional passage for the pending trade deals with Peru and Panama."

"Bush and Democrats in Accord on Trade Deals" By Steven R. Weisman, THE NEW YORK TIMES, May 11, 2007.
"[The deal] has immediate importance for four countries - Colombia, Panama, Peru and South Korea - that are seeking to enter into trade pacts with the United States. But officials in Washington predicted that the agreement's effect would go beyond those countries and could be a template for all trade deals, including a possible worldwide accord."

National Association of Manufacturers on Fast-Track (pdf)
Read "To the Point: Trade Promotion Authority" from the National Association of Manufacturers, in support of the extension of fast track.

Read the letter from Six Fair-Trade Democrats to House Democratic Leadership, May 10, 2004.
"Chairman Rangel has agreed to obtain consent from leadership before announcing any deal with the Administration. However, we request that the leadership reserve judgement on whether or not to accept this deal until members of the Caucus have had the opportunity to read and discuss the proposed text and form a Caucus consensus on how to proceed." (PDF)

Baucus, Rangel form PAC, by Alexander Bolton, April 17, 2007, THE HILL.
"House Ways and Means Committee Chairman Charles Rangel (D-N.Y.) and Senate Finance Committee Chairman Max Baucus (D-Mont.) have set up a joint fundraising committee to collect political contributions they are receiving from lobbyists hoping to win the lawmakers' favor."

Speaker Pelosi on the Trade Deal.
"Today marks a new day in trade policy so that we can raise living standards in the U.S. and abroad, expand markets, spur economic growth and uphold strong labor and environmental standards."

Senator Dorgan on the Trade Deal.
"But this is kind of a Rip Van Winkle moment again. We have an announcement of surging trade deficits, and the Congress just sleeps through it, the White House sleeps through it. Instead of deciding there is a crisis we ought to deal with, we now see a bunch of people going to the White House and embracing, saying: We have got a new agreement between House leaders and the President with respect to how we are going to proceed on certain trade agreements."

NBC News/Wall Street Journal Poll on Trade

Turkey, China Sign Trade Deal
Turkey and China yesterday signed a protocol to boost trade between the two countries. Turkey intends to increase its trade with China to $50 billion in five years from an estimated $14 billion this year, State Minister Kürsat Tüzmen said.

Read a chapter from THE SELLING OF "FREE TRADE" by John R. MacArthur

Photo by Robin Holland

Published June 29, 2007

Also This Week:

Lori Wallach, Director of Public Citizen's Global Trade Watch, on the secret trade deal negotiated by leaders of the Democratic Party and its implications for labor unions, consumer groups and the environment.

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