Andrew Hounshell Is Taking On Boehner's Toxic "Free" Trade Agenda

When I first talked to Andrew Hounshell, the Democrat running for Congress in Ohio's 8th district, the seat currently occupied by John Boehner, I was a little worried because all I knew about him is that he was a friend of Obama's and that he's a steel worker and a vice president of his local union, the International Association of Machinist and Aerospace Workers (IAMAW). I soon realized that just because President Obama invited him to introduce him at the big Cincinnati campaign rally last September that didn't mean he would be parroting any of Obama's specific policies. In fact, when we talked about U.S. trade policy, Andy kept referencing Ohio Senator Sherrod Brown, not President Obama. Many people see Obama's trade agenda almost as corporate and Big Business-oriented as George Bush's was and John Boehner's is. Andy talks about "fair trade," not so-called "free trade."

When we spoke a few days ago he was working out some of the problems that Boehner and Obama pushed through as part of the U.S.-Korea "Free Trade" Pact last year. "John Boehner," he told me, "is still using the same model for the Trans-Pacific deal but it's been working out very badly in the Korean deal. Obama should abandon the approach. U.S. exports to Korea are down by 9 percent since the deal was implemented and imports from Korea are way up. And, just like many of us who opposed the deal predicted, the U.S. trade deficit when Korea is up by 30 percent. That means we're losing good manufacturing jobs. That nine percent decrease in exports to Korea since the trade deal began amounts to over $3 billion. Speaker Boehner never talks about losses like that when he pushes these policies. Our exports to Korea are up by around $800 million; there's no balance there."

The big multinationals don't have any problems with this kind of imbalance. They don't care what currencies their profits come in as. Although he's no longer a Member of Congress, long time corporate whore and founder of the Congressional Trade Working Group, David Dreier made a speech in 2009 on the House floor that pleased the campaign donors who financed his long DC career. "It goes back to my education in college; and that is, the notion of the United States of America playing a leading role in global economic growth so that we can increase the number of good American jobs. That means good jobs right here in the United States of America. I believe that trade is key to that. Trade, global trade, is going to play a big role in creating jobs, jobs, jobs." Really? Joshua Holland, cut Dreier's corporate cheerleading to ribbons in his book, The Fifteen Biggest Lies About The Economy.

Dreier gave that speech during the most severe unemployment crisis the United States had faced since the 1930s. It’s a stunningly counterintuitive assertion, because trade agreements facilitate the offshoring of jobs to countries with lower labor costs, which in turn beefs up companies’ profits. That dynamic is evident in executive pay—a 2004 study by the Institute for Policy Studies found that “CEOs at companies that outsource the most U.S. jobs are rewarded with bigger paychecks.” The authors found that “Average CEO compensation at the 50 firms outsourcing the most service jobs increased by 46 percent in 2003, compared to a 9 percent average increase for all CEOs at the 365 large companies surveyed by BusinessWeek.”

As Dean Baker put it, “The truth is, we carefully structured these trade agreements-- we put great effort into it-- to put our manufacturing workers into competition with manufacturing workers in developing nations.

"That meant going to these places and asking: What kind of problems does General Motors face if they want to set up a manufacturing plant in Mexico or Malaysia or China? What can we do to make it as easy as possible? That means that they know they can set up their factory and not have it nationalized, not have restrictions on repatriating profits, etc. Then they need to be able to import the goods back into the United States, and that means not only making sure there are no tariffs or quotas, but also that there’s no safety or environmental restrictions that might keep the goods out."

The offshoring trend can only get worse as long as we stay the present course on trade. Alan Blinder, a conservative economist at Princeton University, estimated that as many as 29 percent of U.S. jobs are offshorable.

And it’s not simply a matter of jobs sent overseas. In a 2007 study analyzing fifty years of research, economist Josh Bivens argued that the current (and largely bipartisan) trade regime adds some bucks to the paychecks of America’s highest earners but keeps wages down for 70 percent of the U.S. workforce, even adjusting for the greater purchasing power they might enjoy because of cheap imports flooding the shelves of Wal-Mart. He found that corporate-driven “free-trade” agreements not only increase the gap between richer and poorer countries, but also add to inequality among citizens of wealthy states such as the United States. Bivens estimated the direct cost of “free trade” deals to families in the middle of the economic pile to be $2,135 per year. That’s about 50 percent more than the same family pays in federal income taxes annually ($1,495).

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).

Ohio voters were savvy enough to elect Sherrod Brown to the Senate and-- despite $18,868,809 spent by Josh Mandel against him, as well as another $13,870,821 in Dark Money from shady outfits with money from Rove, the Koch brothers, the U.S. Chamber of Commerce (which launders illegal money into American election for interests in China) and Adelson-- to reelect him with a margin of nearly 300,000 votes. It's crucial for the whole country to have someone like Brown in the Senate when trade policies are discussed and decided on. It will be just as crucial to have a steel worker, rather than another career politician and lawyer, in on those discussions in the House. If you'd like to help Andrew Houshell replace John Boehner, please consider a contribution here at the Blue America Act Blue page. And then watch Sherrod talking about trade with China below-- something that suddenly filled U.S. Chamber campaign chests with lots of unaccounted for cash.