Dems Sell Out on Trade

Dems Sell Out on Trade

[from the June 4, 2007 issue]

When Democratic and Republican leaders announce they have fashioned a "historic" bipartisan compromise on trade, put your hand over your wallet. It probably means somebody has been sold out. In this case, we think it's the broad coalition of citizens--labor and environmental advocates and others--who want to reform corporate-led globalization. That includes all those voters who, last fall, elected new Democrats who promised to confront the multinational establishment. These insurgent forces have been pushed into a corner by the Democratic leadership's "free trade" gambit. We urge them to push back--hard--and defeat the agreement if they can.

Despite what you may have read, Nancy Pelosi's compact with George W. Bush is not a done deal. It is an intense fight--the first round in what we expect to be an epic intramural struggle for the heart and soul of the Democratic Party. The deal that Speaker Pelosi and House Ways and Means Committee chair Charles Rangel made with the Administration casts the Democratic leadership's lot with Robert Rubin and the multinational interests of business and finance.

This deeper meaning of the deal has been obscured by Pelosi and her lieutenants' hailing their "compromise" as a great victory for labor and environmental advocates. It's true that the bargain includes strong new language calling for enforceable labor and environmental rights, and activists are rightly celebrating that advance.

But look more closely. It is an empty achievement. The breakthrough language would be applied only to agreements pending with Peru and Panama--trivial in size and economic impact. The claim that this labor/enviro provision will become the template for future trade agreements is bogus. This deal is for Bush only. The next President will make his or her own deal with Congress. The same claim was made for the labor rights provision in the Jordan trade agreement Bill Clinton signed in 2000. It didn't change anything. In fact, Jordan has easily evaded what were thought--even by labor activists--to be solid protections in that agreement. If Pelosi is fighting for a genuinely progressive agreement, she should insist that Bush commit himself to the same strong labor/enviro rules for the stalled Doha round of the World Trade Organization negotiations. That would be a real victory.

The objective of Democratic leaders seems clear: to marginalize the fair-trade dissenters, coax the party into approving more trade agreements and, above all, grant renewed fast-track authority to the President. Fast-track effectively stymies Congress's influence on trade issues, denying any chance to make changes in negotiated agreements. That's why the business lobby loves it so. That the US Chamber of Commerce is delighted with Pelosi ought to tell you something.

All progressive Democrats should ask the leaders why they feel the need to rush into any new trade agreements. Their strategy gives away the majority party's new bargaining leverage. With growing ranks of trade critics among House and Senate Democrats, the party can demand much more from Wall Street and corporate interests. No new trade deals, for instance, until business endorses universal healthcare or accepts new controls on outsourcing and offshore financial schemes. Or dozens of other progressive reforms.

If House insurgents oppose Pelosi & Co., they may not have the votes to win, but they can force the Speaker into a very uncomfortable bind. She will have to win on Republican votes. That's the same game Bill Clinton played in the 1990s, enacting NAFTA and other job-killing trade agreements over opposition from the rank and file. Working people got the message--and many of them stopped voting Democratic. If the deal prevails, we predict the party will pay the same price again. Disenchanted voters will conclude, correctly, that nothing has changed in Washington. Insurgents will be doing the Speaker a great favor if they force her to abandon this grand compromise.

The deeper problem facing the Democratic Party is that it does not have a coherent strategy on trade and globalization, aside from going along with the status quo. The goal of establishing international labor and environmental rights is heroic, but it can't succeed as long as the trading system itself is flawed. Furthermore, in the best of circumstances it will take a generation for the labor rights struggle to make a dent in global wage differentials. Can working people wait twenty years? Can the American economy?

An economic strategy that promises basic change requires action in Washington, not negotiations in foreign capitals. It might be built around the following points: First, cap the swollen US trade deficits--stop the bleeding--and develop a more balanced international trade regime. Second, use the tax code to get control of US multinationals and force them to align with the nation's economic interests. Third, force the reform of one-sided international institutions like the WTO and IMF so they will serve people and societies, not just capital and corporations. Fourth, continue the long-term struggle to enact trade rules for people of all nations--protecting labor, the environment, economic equity and other progressive values.

All these matters are deeply complicated and controversial. If Democrats would at least start working on them instead of playing clever games with Washington insiders, they might convince Americans that they are serious reformers committed to serious change.