How did a U.S.
trade agreement with Peru of all countries become a political hot potato in the
recent Congressional Black Caucus CNN debate? With repeated polls showing that
strong majorities, including a majority of Republican voters, consider our
current trade policies to be damaging for themselves and the nation, trade is
an issue on which candidates seek to differentiate themselves.
Enter the Peru
trade pact. It was negotiated by President Bush to expand the North American
Free Trade Agreement (NAFTA) model to yet another Latin American country. Every
and any NAFTA expansion agreement sparks ire among Democratic party base groups
and increasingly among traditionally GOP-leaning small business owners, farmers
and ranchers. Sens. Barack Obama and Hillary Clinton have been racing to
out-anti-NAFTA each other as they have scrambled to adopt the critical
perspective on our trade status quo that former Sen. John Edwards brought to
the race and the majority of the American public shares.
after winning a majority in Congress in part thanks to the election of scores
of candidates running against the NAFTA trade model, Democratic congressional
trade leaders demanded changes to several pending NAFTA expansion pacts that
President Bush had completed the previous year. Bush agreed to add improved
labor and environmental standards, however, the core NAFTA provisions most
responsible for downward wage pressures and job loss remained untouched, as did
limits on imported food and product safety standards and inspection.
majority of House Democrats, 12 of 18 House committee chairs and every
Democratic presidential candidate for president opposed the Peru NAFTA
expansion, except Obama and Clinton. Why? During Monday night's debate, Obama
explained that he was for the Peru FTA because it contained improved labor
That answer must
have sounded odd - and depressing - to many Americans whose manufacturing,
professional and service sector wages are currently being flattened by global
labor arbitrage under NAFTA-style agreements or to those who have lost one of
those three million U.S. manufacturing jobs that were sent offshore or to a
farmer who has seen the U.S. become a net food importer under our current trade
standards in trade agreements are necessary, but they are not sufficient to
alter trade agreements' damaging economic outcomes on Americans in the short
and medium terms. Including forceful labor standards in trade pacts is
essential to paving the long path toward a more just global economy. Labor
rights requirements in trade pacts will provide workers in trade partner
countries with essential tools to organize for improved wages and conditions
over many decades as part of creating a social contract that may take a century
to establish, as it did in our own country.
However, a future
president has a duty to secure tangible gains for Americans who are losing
their jobs and seeing their wages stagnate today, and who fear for their
children's futures in the coming decades. That requires changing the status quo
trade model by eliminating provisions that promote immediate offshoring of U.S.
production and jobs.
What does real
change in the trade realm include? To start with, a future president must
remove the 'foreign investor' privileges that were pushed into our 'trade'
agreements starting with NAFTA by many of the 500-plus official corporate trade
advisors granted a special role in the process under the then-existing Fast
Track trade negotiating system. These foreign investor privileges subsidize
offshoring by removing the risks to U.S. firms otherwise associated with the
race-to-the-bottom strategy of developing country production.
Like NAFTA and
other NAFTA expansions, the Peru pact guarantees that U.S firms will receive a
'minimum standard of treatment" where they relocate, removing the
uncertainties of dealing with Peruvian law. The pact also allows U.S. firms to
avoid the uncertainties of Peruvian courts by empowering them to privately
enforce the agreement's investor guarantees using World Bank and UN tribunals.
How could this possibly be in the interest of most Americans?
Or consider how
NAFTA and its expansions gut various job-creating U.S. federal and state
procurement policies. The Peru FTA bans application of Buy America programs and
other federal and state domestic procurement preferences unless specific
exceptions are taken. All firms operating in Peru, including European or
Chinese firms, must be given the same access as U.S. firms to outsourced U.S.
government work, undercutting Congress' authority to ensure that U.S. workers
are employed with these tax dollars so they recirculate in our economy to
create U.S. jobs and strengthen local firms.
agreement's inclusion of these damaging NAFTA provisions is why presidential
candidates' positions on the pact have become a debate-worthy test of
commitment to real change. It is also why not one union, environmental, faith,
consumer, or family farm group supported the deal.
bringing up trade, offshoring and unsafe imports at every campaign stop,
there's plenty of time for all of the candidates to develop proposals that will
truly address the serious challenges we now face in the trade and globalization
is the director of Public Citizen's Global Trade Watch. A Harvard-trained
lawyer, Wallach has promoted the public interest regarding globalization and
international commercial agreements in every forum: Congress and foreign
parliaments, the courts, government agencies, and the media. Described as
“Ralph Nader with a sense of humor” in a Wall Street Journal profile, “the
Trade Debate's Guerrilla Warrior” in the National Journal, and “Madame Defarge
of Seattle” by the Institute for International Economics, Wallach has testified
on NAFTA, GATT-WTO, and other trade issues before over 30 U.S. congressional
committees, numerous other countries’ legislatures, the U.S. International
Trade Commission and the Office of the U.S. Trade Representative. Wallach’s
work in “translating” arcane trade legalese – indeed, entire proposed
international commercial agreements – into relevant, accessible prose has
had significant national and international impact.