Open the Trade Deal

For most of the 1990s, I was an ardent free trader.  I learned my economics from Marty Feldstein, Reagan's chief economic advisor, and I'm still someone who sees immense benefits in globalization.   We're going to need to figure out new models for trade, carbon tariffs, changes in currency trading systems, etc.  And our politics are dominated by trade, whether it's connecting the flood of illegal immigration to the effects of NAFTA or discussing the declining leverage of labor and the working poor.

After doing some calling around on this new trade deal announced on Thursday, there is one specific thing that gives me great pause.  It's not that the deal was negotiated in secret without the input of fair traders, or that the public voted against corporate trade deals with the 2006 elections.  I expect there will be some labor and environmental standards in this deal, there's no way that Rangel or Pelosi would have cut a deal that didn't offer at least a fig leaf.  And it's not that the Teamsters are against the deal, or Public Citizen, or that corporate interests are heralding the lack of enforceability on these various provisions.  Frankly, I have no idea if the deal is good or not.  I know good people that still want to educate themselves about the details of the deal, and that's a prudent strategy.  Sherrod Brown and the AFL-CIO are kind of in this boat, concerned about the details of the deal but not immediately dismissive.  

Here's what concerns me.  There was a big press conference on Thursday designed to create a certain type of message around the trade pact.  The Democrats won labor and environmental standards, but corporate America is happy as well.  You can see the reporting coming out with this messaging.  The problem is that the details of the deal are still secret.  I have talked to Congressman Michaud's office, to the USBIC, and to various trade groups, and none of them have seen the specifics of the deal.  

This is extremely problematic and dishonest of the people negotiating and announcing the details.  Pelosi, Rangel, Baucus, Bush, and the New Democrats knew that they could generate a huge raft of headlines on the trade deal without actually revealing the meat of the deal, so they did so.  This is pretty much how the war in Iraq was sold, how the Bankruptcy bill was sold, and  how NAFTA was sold.  

In fact, we have only three pieces of real information about the deal.  One, we know that it was negotiated by New Democrats, Pelosi, Baucus, and Bush, and that labor unions and fair traders were excluded.  And two, we know that the announcement was made to generate headlines without giving us the details to actually know whether the proponents of the deal were telling the truth.

And we know the deal is still secret.  The question is, why?

Tags: Betty Sutton, Fast Track, Frank Vargo, free trade, mike michaud, NAFTA, NAM, Nancy Pelosi, Tom Donahue, us chamber of commerce (all tags)



Re: Open the Trade Deal

You learned trade from Feldstein?  He was teaching mostly graduate macro theory, in my recollection.  At least, that's the class I sat in on. Unless you're talking about Ec 10, but that's not the same thing at all.

In any case, what's going on here is that the US has no interest in pursuing what we would recognize as free trade.  Free trade involves all goods and services. Labeling any kind of agreement involving the OECD that does not eliminate agricultural subsidies, and does not address free flows of labor (rather than just capital) is not.  And, you know, aviation and military trade is also heavily subsidized, and a large part of US exports.

The reason it's secret is that it undoubtedly consists of lots of corporate welfare.  But, of course, your question was rhetorical.

by jayackroyd 2007-05-12 08:08AM | 0 recs
"Free Flows of Labor"

Since when in any theory that actually works out mathematically is this part of the theory except in slave economics and labor arbitrage agendas?

It's not a "win-win" by any math or theory I have ever seen.

by Robert Oak 2007-05-12 09:52AM | 0 recs
Re: "Free Flows of Labor"

Can you give us a little more detail in that analysis?  The benefits to trade are pretty overwhelming. The difficulties arise when states impose barriers, not when they open things up.

You can argue, if you like, that some kind of trade management and employment categorization regime might be more effective, but the evidence for that is thin, if not nonexistent.

There's plenty of evidence, and longstanding literature, going back to Prebisch and Singer, of a global metropolitan center exploiting poor, resource rich countries on the periphery.  

But that's not free trade. The exploited countries are not permitted to engage in a free and open global labor market, a free and open global agricultural market, a free and open light manufacturing market. The "free trade" advocated by the OECD always contains significant limitations on the ability of poor countries to grow through trade.

Free trade is a slogan, not a policy, as is the case with so much of the conservatives' claimed agenda.   Just look at Cuba....
Implementing these programs, if you buy this model, has required systematic support for authoritarian regimes who enforce the exploitation.

by jayackroyd 2007-05-12 10:17AM | 0 recs
Ricardo itself

The goods of production are not mobile, this means domestic labor markets and if you look at Gomory and Baumol, section 2, the math clearly states that trading people enables labor arbitrage, it's right there in the math and unfortunately blogs do not have LaTex!

Then, take Paul Samuelson, the Godfather of economics, he clearly shows, with the math, , Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization

Even Blinder, not exactly Pro worker has admitted the labor arbitrage aspects of "borderless" labor markets with his recent 40M jobs at risk of being offshore outsourced, although he ignores the desire of corporations to insource (bring in cheap labor)...

and if you believe that magically forced migration for labor around the globe is a "win-win", may I suggest reading any historical economics text on slave economics, flooding labor supplies and what that did if you need more evidence beyond the loss of over 3M jobs in manufacturing alone and a trade deficit equal to almost 6% of GDP.

by Robert Oak 2007-05-12 10:28AM | 0 recs
Re: "Free Flows of Labor"

Free trade is a slogan, not a policy...

Must be like that whole "Pro-choice" thing with the Democrats...

Can I "choose" not to contribute to Social(ist) (In)Security? (Both of my grandfathers died in their mid-50's, and my dad died of cancer at age 41--  what are my odds of collecting at age 67?

Will any Democrat offer me a "choice?

As a single male(43yr old/no kids), can my "choice" be not paying the $3k/yr(70% goes to the schools) in property tax that is supporting a 40% dropout rate in a school district that seems to continually hire criminals and incompetents?

Will any Democrat offer me a "choice?

If I can "choose" to kill an 8 month 'fetus' in my womb(I myself was 'born' after only 31 weeks in 1964), can I also 'choose' to occaisionally smoke a joint?

by libertarian 2007-05-12 07:18PM | 0 recs
Re: "Free Flows of Labor"


So you think in your world that your employer would choose to continue to give you health care coverage?

I also don't have kids, but I would much rather put money into schools rather than youth detention centers, and gated communities.

The state can sometimes help a sorry life.

Also, not everyone has a 'choice' to abort at 8 months.  Many states don't even offer abortions after 13 weeks.  Also, a doctors opinion is most definitely brought in with a termination at 8 months, as he will be doing the procedure.  I don't think that women 'choose' to abort by themselves at 8 months.

by SandThroughTheEyeGlass 2007-05-13 01:35AM | 0 recs
Re: "Free Flows of Labor"

or she... pardon

by SandThroughTheEyeGlass 2007-05-13 01:36AM | 0 recs

I'm archiving this one.

First off, we've got your basic incoherence that characterizes any libertarian, in spades, because the tax you bitch about is the property tax.  "Property"  only exists because of an intrusive, coercive state that acquired the land by violence against innocent parties and retains ultimate ownership.

Then you go off on the single most successful government program that addresses a major element of market failure--inadequate insurance coverage for people too old to work.

And THEN you document yourself as my all time favorite kind of libertarian, that rare breed that is anti-choice.  There are people who don't believe you exist, and I don't have posts from them archived. But now I do. Thanks!!

And then, to top it off, you quote Heinlein.  Not merely the Heinlein who went to college at public expense.  But Heinlein the guy who talks about immorality of group action--you know, killing people--who graduated from Annapolis, a professional in a business devoted to killing people on behalf of a collective, coercive government.

The only trouble with archiving this myself is that the same people who doubt folks like you exist will suspect me of forgery.

by jayackroyd 2007-05-13 05:22AM | 0 recs
Very worrying

I had little doubt before the current round started that most of the FTAs would be greenlighted by Pelosi and Reid (Colombia gives them a figleaf) plus there'd be some warm words on fast track renewal and Doha, to cover the Dems in case the US's lack of fast track was blamed round the world for Doha's final demise.

It's not so bad.

What is bad is the way that Dem honchos have gone about it: the cloak and dagger stuff implies skulduggery that I don't think exists.

Would the current deal have been impossible if negotations had been more open? Perhaps.

Is there now any excuse for keeping the text agreed secret? Absolutely not.

For the very good reason that, in short order, it's bound to become public, because, despite its shady conception, it has to be executed in broad daylight.

Are Pelosi and Rangel a wee bit tipsy with power? Did they want to stick it to some allies (labor unions?) who they thought needed putting in their place?

Who knows?

The point is that such an ostensibly pointless proceeding invites questions about ulterior motive.

Not since the Hastings affair has Nancy gone so wayward.

by skeptic06 2007-05-12 08:22AM | 0 recs
Re: Open the Trade Deal

I am still mostly all for Free Trade. But only if it means that that it's free trade that's fair to the people. Free trade that helps us. Free trade where the labor standards, environmental standers and all that are exactly the same there and they are here. It takes away almost all incentive for off shoring but helps the flow of trade without killing American workers.

No matter what kind of deal they were going to strike the Progressive Caucus, Labor, Other Fair Traders, Environmental groups etc. Even if it was a deal they wouldn't like. They should still have been at the table.

This is the first big test in the progressive/fair trade movement. If we can stop these bad deals and get better deals. Then we truly have a strong movement. If we can't. We need to work harder.

by Populista 2007-05-12 08:24AM | 0 recs
anti labor deal

The Teamsters, and I suspect most of labor, are opposed to this anti-labor deal. _1.asp

John Foster
GCC/IBT Local 4C

by jfoster 2007-05-12 08:29AM | 0 recs
Re: Open the Trade Deal

Sweeney, at the AFL-CIO is waiting for further analysis of the deal before passing judgement. /pr05112007a.cfm

by jfoster 2007-05-12 08:37AM | 0 recs
Re: Open the Trade Deal

As a former, over six years ago, lobbyist, there could be many, many reasons for selective secrecy but I'd bet that it's because someone needs to be bought off.  That someone is probably, but not necessarily a Member of Congress but it could be even a foreign leader or a trans-national billionaire.  Probably it is, for example, some key Committee Chairman or leader who has a bottom line of an exception for some industry such as domestic sugar or grain or coal or cotton or software.  The administration don't really want to give up these special little favors (that could be worth billions) but they know they might need powerful Sen. X or Rep. Y.  This is a negotiation.  It needs sunlight.  Nothing is more insiderish & back room than trade deals though the tax code is a close second.

by howardpark 2007-05-12 09:07AM | 0 recs
Leverage Points: Places to Intervene in a System

#6 The structure of information flows (who does and does not have access to what kinds of information) - Donella Meadows

I believe the entire notion of so-called "free trade" has evolved to secure further advantage to establishment corporate vehicles. One needn't live in developing countries for much time objectively to recognize labor/environment "fig leafs" for what they are. Yes. You got it. They are, indeed, fig leafs.

I also note (to avoid any possible inference) that it is not necessary to appeal to conspiracy theory to explain how this has happened. Capitalism has become an extraordinarily powerful self-organizing system, now dominated 1) by the systemic "success-to-the-successful" archetype (accruing to corporations, "free-market"-type framing, politicians, economists, profiteers), and 2) by increasingly unregulated (from a systems perspective) positive growth/profit feedbacks.

Are Humans Smarter Than Yeast? (video clip: 8.5min)

by Akonitum 2007-05-12 09:18AM | 0 recs
Re: Open the Trade Deal

if the corporations are happy then by default labor is fucked

by jed 2007-05-12 11:19AM | 0 recs
need more and more of free trade

If one listens to the Bushies the reason workers have not felt the benefits of free trade is that there has not been enough of it.  The country needs more and more free trade before workers experience the rewards.

by realtime 2007-05-12 12:28PM | 0 recs
Re: Open the Trade Deal

There is no such thing as a "free trade agreement"-

things like NAFTA are actually old fashioned Republican protectionism dressed up as free trade- kind of like Bush's Clear Skies Initiative.  

What these deals really do is protect multinational corporations from competition and market forces:
1.  They prevent local control- remove the idea that a town council can get together and decide they don't want Wal-Mart or Dow building across the street from a school.

2.  They give a market edge to multinationals and prevent potential local and regional competitors from truly competing.

3.  They permanently drive the cost of labor down- which pretty much erodes a key component of true capitalism- which says that the value of your good or service, including labor, goes up depending on demand.  

I think Clinton was a good president- he would have been great had he been on the correct side of the trade issue.  Had Clinton been where Sherrod Brown is- the Dems would not have lost nearly the numbers they did.  Why not vote Republican if the Democrat is gonna side with your boss on not protecting your job?

by jgkojak 2007-05-12 01:03PM | 0 recs
The deal is not so secret

The "fair traders" were given lots of input. They met with Rangel & Levin and their leaders Mike Michaud and freshman Betty Sutton organized several group and individual meetings with Rangel or Levin.

The Ways & Means staff distributed the the details of "the deal" yesterday morning. And stakeholder groups like the AFL or the Chamber all have it. As do Congressional offices. So the details are out there and not so secret.

by NewDemRex 2007-05-12 01:28PM | 0 recs

If it's public knowledge, give us a link to the text of it.

If you can't, it's secret.

by Geotpf 2007-05-12 03:10PM | 0 recs
Re: Open the Trade Deal


I wonder when us 'little people' will get to see it.

'Course we are all doin' so well and all.

Don't bend over...yer liable to get a very unpleasant surprise.

by Pericles 2007-05-12 02:17PM | 0 recs


Advertise Blogads