Tammy Baldwin And Fair Trade

In her new-- first, in fact-- television ad, Rep. Tammy Baldwin, a fair trade (as opposed to "free" trade) advocate has been reported to have gone after China. But that isn't really the point of her ad. True, China helped finance, the Republican takeover of Congress in 2010-- and especially helped the China-advocate who beat Russ Feingold, Ron Johnson. But what's behind Tammy's ad makes a much more important point about the corporate trade agreements conservatives support that are devastating the American middle class. She's always had a lot to say about well-paying jobs. It explains, in part, why's she's one of only three people running for the Senate being supported by Blue America this year. Last night she told me that "Protecting the future of Wisconsin's middle class goes hand-in-hand with protecting our American manufacturing. If we're going to honor the tradition of 'Made in Wisconsin' we need to be sure that there's a level playing field on which our companies compete in the global market. Things need to be fair-- fair trade means ending the practice of Chinese paper goods flooding the market with subsidized products. That's not a partisan issue, it's an American issue."

In the ad she says, "In Wisconsin we lead the entire nation in paper industry jobs. But China, they lead the world in cheating. And it's costing us jobs in Wisconsin. So I brought Democrats and Republicans together to put sanctions on China now and punish them for making billions breaking trade rules. When the rules are fair, Wisconsin workers come out ahead." There's a lot behind those 5 short sentences.

Wisconsin has been the #1 paper-making state for more than most Americans have been alive and Wisconsin has more jobs-- over 53,000-- in the paper industry than any other state. Tammy's Senate opponents are all "free" traders and, like Ron Johnson, are very much pro-China and have studiously avoided confronting the issue about how illegal Chinese subsidies are devastating Wisconsin's paper industry and making it impossible for the state to compete fairly. Half the paper industry jobs have vanished-- well, not vanished... they're in China now. and in return, John Boehner is Speaker of the House. Great deal for China!

Tammy, on the other hand, teamed up with a home-state Republican to pass bipartisan legislation to take on China's unfair trade practices, her CHEATS Act, which would allow the U.S. to impose countervailing duties on Chinese imports that are heavily subsidized by the Chinese government. In addition, Congress passed (370-39) bi-partisan legislation in March sponsored by Tammy to restore expiring trade sanctions designed to protect Wisconsin paper mills and a select group of other American manufacturers hard hit by cheap Chinese imports ("dumping"). And this month she introduced the PAGE Act (Purchasing American Generates Employment) to promote the U.S. (and Wisconsin) paper industry. The "Buy American" legislation that would require that any paper products purchased by the federal government must be grown, reprocessed, reused or produced in the U.S.

In his new book, The Fifteen Biggest Lies About The Economy, Joshua Holland waits 'til the very end to deal with the trade issue. Chapter 15 is called "There's Nothing Free About Free Trade." I want to share a little bit of it with you. Part of his thesis is that "free trade" is basically a corporate power grab-- and it's been a corporate power grab that has supporters on both sides of the aisle. Tammy isn'y among them.

It’s tempting to focus only on the economic impacts of trade deals such as NAFTA, but it’s just as important to dig deeper into the antidemocratic nature of the “free trade” orthodoxy pushed by Big Business. All too often, progressives tie themselves up in knots discussing trade because they argue the issue on corporate America’s terms, instead of going to the root of the matter: “free trade” isn’t free, and it often has nothing to do with what most people would consider “trade.”

If the central question we’re asking is “Free trade or protectionism?” the debate is already lost. That’s how the corporate globalizers have presented it and that’s how the media-- which clearly have a horse in the race-- report it. And that’s why the so-called free traders have been able to keep the upper hand.

Here’s the truth about “free trade” agreements. When you talk about trade policy, you’re really talking about the enormous influence of corporate power over democratic governance. Senator Sherrod Brown (D-OH), the gutsy leader of the fair-trade caucus, explained the close connection during the lead-up to the vote on the Central American Free Trade Agreement (CAFTA) in 2005. “Our political system is now up for the highest bidder,” Brown told me at the time. “Energy bills are written by oil companies and environmental bills are written by the chemical companies.”

Similarly, this trade agreement-- CAFTA-- but other trade agreements, too, have been written by a select few for a select few-- and that select few is typically the drug industry, the insurance and financial institutions, and the energy companies, and the largest multinational corporations. It’s the same old song, whether it’s international or it’s domestic.

In his book The Myths of Free Trade, Brown described thousands of corporate jets stacked up over D.C. as the vote neared, carrying industry execs eager to descend on the city to lobby for the agreement. Trade policy is clearly an insider’s game.

In their book Whose Trade Organization, Lori Wallach and Patrick Woodall found that among the hundreds of “experts” who sat on the advisory boards that hammered out the thousands of pages of WTO and NAFTA rules, there were only a handful of representatives of labor. The rest were multinational execs and various lawyers, lobbyists, and sundry industry experts. There was almost zero input from human rights groups, environmentalists, or the rest of society. It’s not only that the treaties we’ve signed are flawed, but the process by which they’re created makes it all but impossible that they would benefit working people or protect our commons. These are simply not corporate America’s priorities (nor those of its counterparts in Japan or the EU).

...Pressuring countries to adhere to the economic policies of the “Washington Consensus,” whether they’re popular or not, is job number one for the bi multinationals, because a majority of governments on the planet today are, to varying degrees, democratic. And democracy is a huge challenge to many of the big multinationals’ interests. Workers’ movements, environmentalists, pesky public interest groups, and, above all, voters exert various degrees of influence on those elected representatives.

Trade treaties constrain legislatures to remain true to the prevailing orthodoxy. Most folks don’t know this, but when state lawmakers draw up new legislation, they often drop a line to the office of the U.S. Trade Representative to make sure their bills comply with our trade commitments.

Other countries acting on behalf of their biggest corporations can challenge laws that aren’t “WTO legal.” These aren’t about widgets being shipped from here to there; the range of what falls under the catchall “free trade” is astounding. A few of the more notorious decisions include:

A Massachusetts law preventing state and local governments from doing business with the brutal dictatorship in Burma was overturned by domestic courts after a WTO challenge. An EU policy that gave preferential tariffs to small banana
exporters in Europe’s former colonies was successfully challenged by the United States after lobbying by the Chiquita banana company.

Venezuela, backed by Brazil, successfully challenged provisions of the United States’ Clean Air Act that kept fuels with higher
levels of pollutants out of the market.

The WTO has an enforceable arbitration process, but it isn’t always necessary to lodge a formal grievance. Because the vast majority of challenges to various domestic laws have been upheld, merely the threat of bringing a case is usually enough to make governments rethink their legislation. This is common when it comes to health, environmental, and food safety laws. In the first ten years of WTO arbitration panels’ operation, all but two such challenges brought before them prevailed.

In NAFTA and in regional deals such as CAFTA and the proposed Free Trade Area of the Americas (FTAA), the business community managed to get what it had tried and failed to achieve in the WTO: the ability of multinationals to cut out the middle man and sue governments directly for the loss of profits resulting from a regulation or a law they consider too “burdensome.” Under those rules, “signatory governments are required to provide extensive rights and privileges to foreign investors,” who are then “empowered to privately enforce these new rights by demanding cash payment from governments” that don’t give them what they want, according to a report by Public Citizen.

The cases are decided behind closed doors in “private tribunals operating outside the nations’ domestic court system”:

The track record of cases demonstrate[s] an array of attacks on public policies and normal governmental activity at all levels of government-- federal, state and local. Even though these NAFTA cases implicate commonplace public policies, the investor-state system is a closed and unaccountable one. Citizens whose policies are being attacked have no avenue of meaningful participation and neither do the state and local officials they elected to represent them. [Domestic] court decisions can be challenged and jury decisions undermined, yet no judge or jury has standing to participate in the private NAFTA tribunals.

These rules shift significant amounts of risk from investors to governments. At the same time, they sharply limit what governments can ask for in return.

The common response to this critique is pretty straightforward: most of the parties to international trade deals such as the WTO are democratic states. Their legislators are elected by the people, and when they enter into a treaty, they’re doing it on behalf of those who put them in office. Hence, democracy is safe, even if democratic governments don’t always have the freedom-- the “policy space”-- to advance their constituents’ interests.

But we have to remember those private jets stacked up over Washington during the run-up to the vote on CAFTA. That trade deal faced stiff public resistance-- one poll taken in the weeks before Congress voted found that three out of four Americans opposed trade agreements that resulted in job losses at home, even if they resulted in cheaper goods and services. And cheaper goods were a central selling point for the deal.

As the vote neared, it looked as if George Bush might have become the first president to fail to get a trade agreement through Congress in forty years. But all of the lobbying might of various business groups came to bear on members of Congress. As the Washington Post reported, “A prominent business leader recently laid it on the line: Business groups are prepared to cut off campaign contributions to House members who oppose the pact. ‘If you [lawmakers] are going to vote against it, it’s going to cost you,’ Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce, warned recently during a meeting on Capitol Hill.” Several years later, months before the 2008 presidential elections, Donahue would announce a $60 million war chest dedicated to punishing those whom the Los Angeles Times described as “candidates who target business interests with their rhetoric or policy proposals, including congressional and state-level candidates.” “We plan to build a grassroots business organization so strong that when it bites you in the butt, you bleed,” Donohue said.

On the eve of the vote, the Bush administration started to cut deals with members of its own party who were resisting the pact. The Los Angeles Times reported, “For more than an hour, lawmakers milled about the House floor and gazed at the electronic scoreboard displaying the vote tally, which showed CAFTA several votes short of the mark.” Nancy Pelosi, then the House minority leader, told the Times, “Right there in front of us, for the world to see, they were twisting arms, making deals, changing votes.” Finally, when the count reached 217 to 215, the vote was gaveled to a close, and the deal had scraped through by a hair.

Yet if the pressure on lawmakers here in the United States was great, it paled in comparison with that brought to bear on leaders of smaller, poorer states such as Costa Rica. Lori Wallach, the director of Public Citizen, noted that “The U.S. ambassador to Costa Rica, Mark Langdale, was slammed with a rare formal denunciation before Costa Rica’s Supreme Electoral Tribunal in August after he waged a lengthy campaign to influence the vote on CAFTA. As part of that [campaign], Langdale employed misleading threats and suggested there would be economic reprisals if CAFTA were rejected.” The Bush administration repeatedly threatened to remove Costa Rica’s trade preferences-- which waived some duties on products it exports to the United States-- if the Costa Rican people rejected CAFTA in a referendum.

This kind of geopolitical arm-twisting is par for the course in venues like the WTO. In 2001, immediately after the attacks of 9/11, U.S. trade representative Robert Zoellick made the case that advancing the Anglo-U.S. model of corporate “free” trade was key to winning the “War on Terror.” At the time, author Naomi Klein wrote, “Zoellick explained that ‘by promoting the WTO’s agenda, these 142 nations can counter the revulsive destructionism of terrorism.’ Open markets, he said, are ‘an antidote’ to the terrorists’ ‘violent rejectionism.’”

The United States has become infamous among trade observers for using that kind of rhetorical “linkage” to advance its agenda, but it’s far from unique in that regard. These kinds of power plays are especially evident in negotiations between wealthy states and the developing world, so-called North-South negotiations.

As Aileen Kwa, who analyzed the back-room deals in which trade agreements are formed in great detail, wrote, “In comparison to the United States, the EU is usually more sophisticated in the rhetoric it adopts... it promotes its agenda at the WTO as being ‘in the interests of developing countries.’ This is ironic since developing countries’ assessment[s] of their own interests are the complete opposite.”

The highly developed states use economic blackmail-- threatening poorer countries’ trade preferences and foreign aid accounts-- and blatantly undemocratic methods to overcome the developing world’s concerns about these deals and get them to sign on the bottom line.

In their seminal book Behind the Scenes at the WTO, Kwa and coauthor Fatoumata Jawara cast a bright light on the murky world of international trade negotiations. “Any country whose political system operated as the WTO... [does]-- where... rules were routinely ignored, and people or interested groups routinely used bribery and blackmail to achieve their political ends-- would not only be rightly condemned by the international community as undemocratic and corrupt, it would also face a real and constant threat of revolution,” they wrote.

Crucial meetings are held behind closed doors, excluding participants with critical interests at stake, with no formal record of the discussion. When delegates are, in principle, entitled to attend meetings, they are not informed when or where they are to be held. Meetings are held without translation into the languages of many participants, to discuss documents which are only available in English, and which have been issued only hours before, or even at the meeting itself. Those most familiar with issues (Ambassadors) are sometimes discouraged or prevented from speaking in discussions about them at Ministeria meetings. “Consultations” with Members on key decisions are held one-to-one, in private, with no written record, and the interpretation left to an individual who has a stake in the outcome. Protestations that inconvenient views have been ignored in this process fall on deaf ears. Chairs of committees and facilitators are selected by a small clique, and often have an interest in the issues for which the committee is responsible. The established principle of decision-making by consensus is routinely overridden, and the views of decision-makers are “interpreted” rather than a formal vote being taken... Rules are ignored when they are inconvenient, and a blind eye is turned to blackmail and inducements. The list is endless.

A free-market transaction, remember, has to be free of coercion. All parties have to have access to the same information. By these standards alone, “free trade” is anything but.

Let me leave you with this one last thought: let's make sure Tammy is elected in November, instead of some corporate whore eager to carry out the bidding of Big Business, no matter how many American jobs get shipped overseas. You can help Tammy here.