Michael P. writes:
Does anybody have any idea about how bad the Dems were snookered in
brokering their
new trade agreement with Bush?
[For people who haven't followed this, the Dems have just agreed to pass
two bilateral so called "Free Trade Agreements", signed by Bush, with
Panama and with Peru. Two larger, more problematic, FTAs wait in the wings
(Korea and Columbia). The larger step, down the road, would be giving Bush
"fast track" authority for the WTO negotiations (presumably time is running
out on this). However the Democrats also say that yesterday's agreement
will be their "template" for all future trade policy.]
In addition to the immediate significance of the FTAs, people have been
watching this for any signs of deviation by the Congressional DP from the
Clinton-era free trade policy and overall neoliberalism. In economic
policy, some of the most hard-line Clinton-ites have been brought back to
power by the Congressional Democrats (eg Peter Orszag as head of the
CBO). However, some felt that since trade policy was more under the aegis
of Rangel and Levin the FTAs might indicate whether the "liberal" wing of
the party intended to rethink past policy, at least a little.
As it has turned out, the Democrats are simply seeking to exactly duplicate
the Clinton-NAFTA approach: a core Republican trade agreement (NAFTA was
provisionally signed by GW Bush his last month in office) to which they add
3 points:
- a labor "rights" agreement (in the case of NAFTA the North
American Agreement on Labor Cooperation)
- an environmental agreement (The North American Agreement on
Environmental Cooperation), - some alleged compensatory social
programs (displaced worker retraining, community impact funds, etc).
However, in today's treaties the underlying economic fundamentals even
worse than NAFTA. The Democrats are adding labor and environmental
provisions that are not just cosmetic but just duplicate already existing
cosmetic agreements, and the compensatory programs are entirely undefined.
1) The addition of the ILO "core labour standards" sounds high minded
but will change nothing in the US and little in Panama and Peru (who have
already have such provisions). In fact, these standards are limited to 4
long standing international treaties on: slavery, child labour, job
discrimination, and 'the right to associate and bargain collectively' (a
1949 treaty - don't get excited). A summary of the treaties' provisions
can be found at:
http://www.adb.org/Documents/Handbooks/Core-Labor-Standards/Part2-Core-Labor-Standards.pdf
The labour treaties can be valuable for fighting the most extreme forms of
abuse in the 3rd world - in certain amenable political situations. Peru
even already has a bilateral trade agreement with the US that includes
these provisions (in the Andean trade arrangements). In the last year, the
Dems have been clear to say that these provisions will change nothing
inside the US. They have resisted the Republican demand for an explicit
"safe haven" provision (excluding that part of the FTA from enforcement in
US courts) and they often infer that they can draft language which will
achieve the same effect (the Dems repeated this at the press conference).
2) I can't speak with personal detailed knowledge about the 7 standard
environmental treaties
(see
http://www.bilaterals.org/IMG/pdf/07_05_10_New_Trade_Policy_Outline.pdf for
the list). I believe the US has already ratified all seven (CITES,
Montreal Protocol, etc). The Democrats say that the developing countries
would now have to accept enforcement of the environmental treaties through
the trade treaty mechanism.
3) The Dems have offered little specifics and no dollar figure on
their "compensatory programs" which they will work out with the White
House, after the treaty is passed.
4) Needless to say, as in most "trade" treaties today, there is only
limited additional impact on actual trade with a notable negative effect
on agriculture in Panama and Peru. But mostly these bilateral FTAs
treaties binding each other to economic policies (neo-liberal ones) and
foreign investor "rights" - provisions that failed to pass the multilateral
mechanisms. Think Soviet Friendship Treaty, but for today's economic elite.
Panama is 80% (by GDP) a service economy (the Canal services and
regional banking as a "haven"). The agreement will help give U.S.
investors access to Panama's financial services a major step for the
bankers, greater foreign investor "protections" (privileges and immunity
from law), stricter intellectual property provisions and cargo
security-intelligence provisions (both important given how much passes
through Panama). In terms of trade, media reports said that the major US
export anticipated was liquor and the agreement was quickly welcomed by the
liquor producer association.
In Peru the agreement was negotiated by the lame duck President
Toledo when he had a 10% approval rating. During the recent Presidential
election, the current President Alain Garcia promised to block the
agreement without major improvements in Peru's favor (his opponent favored
dropping the FTA without even trying to improve it). Opinion polls showed
vast majorities against the treaty. The new President abandoned his
promise his first month in office, placed neo-liberal economist Hernando de
Soto in charge of a "renegotiation", and ended by accepting the same deal.
For a sample of opposing statements on Panama and Peru see:
http://www.citizenstrade.org/pdf/reasonstoopposeperufta.pdf
http://www.oxfamamerica.org/whatwedo/campaigns/ft_agreements/news_publications/feature_story.2006-07-19.1227905046/?searchterm=peru%20trade
http://www.citizenstrade.org/pdf/oxfam_perufactsheet.pdf
Paul
"They have forgotten nothing and they have learned nothing"
Said of the French Bourbon monarchy upon returning to power after the
French Revolution and Napoleon
