Trade: U.S. policy needs re-fashioning

The 2006 midterm elections in the U.S. showed not only a strong desire for change in policy toward Iraq, but an even clearer desire for change in the U.S. trade model. According to a Public Citizen study (, in all 37 Congressional races where an incumbent lost or retired, the candidate advocating for change in trade policy beat their “free trade” opponent; in addition, 100 percent of fair trade candidates up for re-election won their race, most by large margins. Despite this mandate for change, it appears that Congress could pass four trade agreements with minimal improvements, but there is an opportunity to stop any future agreements until after the 2008 presidential elections.

In an attempt to respond to the call from U.S. citizens in the elections, Rep. Charles Rangel (D-NY), the new chair of the House Ways and Means Committee, and Sen. Max Baucus (D-MT), Senate Finance Committee chair, began in March a negotiation process with the administration ostensibly to make changes in the four trade agreements awaiting ratification (Peru, Colombia, Panama and South Korea) to benefit workers and the environment as voters had demanded. Unfortunately, the negotiations ended up being quite secretive, ignoring input from civil society and even much of the Congress.

Despite promising beginnings and strong statements from Rangel, the negotiations resulted in a deal that no labor, environmental or religious organization supports, but is widely praised by multinational corporations.

Positively, the deal calls for all signing countries to adopt and implement the five core International Labor Organization labor standards: freedom of association, collective bargaining, elimination of forced labor, abolition of the worst forms of child labor, and the elimination of discrimination in employment. It also calls for the recognition of seven Multilateral Environmental Agreements (MEAs), specific protections of forests in Peru, some minimal improvements in access to generic medicines and calls for foreign investors in the U.S. to not be given greater investment protection rights than U.S. investors themselves.

While most of these changes point toward the changes demanded by civil society, they are far too timid and leave out significant problems with free trade agreements (FTAs) today. Among many problematic aspects, the deal leaves untouched the outrageous investment provisions that create incentives for U.S. firms to move offshore and undermine democracy; does not address the agricultural policies in FTAs that result in increased hunger, social unrest and ecological destruction; does not address how FTAs ban anti-off-shoring laws and other governmental policies aimed at increasing employment; ignores labor’s long time demands to stop FTAs from overruling federal and state prevailing wage laws as well as laws that forbid government contracts with companies that do business in the Sudan or Burma or companies with poor legal and/or environmental records; and does nothing to address FTA limits on food safety inspection.

Due to the insignificant changes recommended in the trade deal, many Democrats will vote against the agreements. The first vote will probably be on the Peru agreement, possibly combined with Panama, some time before the August break. The Colombia agreement will be difficult to pass due to that country’s horrible record of corruption and the killings of union leaders, while the South Korea agreement faces strong resistance especially from U.S. car makers.

If the votes for Peru and Panama pass easily, it could be read as a sign that the trade deal made by Rangel is the new framework for future trade policy. It is important that these agreements not pass, or pass by small margins, to show the need to renegotiate trade policy with input from more stakeholders.

The overriding trade reality today is the ending of Fast Track, or Trade Promotion Authority (TPA) on June 30. The TPA gives the Congress’ constitutional authority to negotiate trade agreements to the administration: After the administration signs agreements with other countries, the Congress is limited to a simple yes or no vote, with no amendments. The result has been a series of trade agreements with catastrophic results for our planet and an explosion in the U.S. trade deficit - since the passage of Fast Track in 1973, U.S. balance of trade has gone from a small surplus to a deficit of $758 billion in 2006. The fact that the president has not even attempted to renew the TPA shows how unpopular these agreements have become.

Many had expected at least an extension of the TPA to finish the WTO Doha “Development Round” of negotiations, but those talks recently collapsed over what Brazil and India say was the U.S.’s unwillingness to lower its farm subsidies adequately. Renewal or extension of the TPA appears unlikely, though never an impossibility.

It is crucial that all people wanting to change U.S. trade policy pressure their legislators to vote against the remaining four trade agreements and refuse to renew the TPA for this administration. Faith in action: Call or write your legislators and urge them to vote against the remaining trade agreements with Peru, Colombia, Panama and South Korea. Also ask that they take advantage of the ending of the TPA to refashion U.S. trade policy so that it spreads the benefits of trade, protects people and the environment, and does not undermine democracy. Please go to the Interfaith Working Group on Trade and Investment ( for a reflection on the TPA and how to contact your legislator.