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September-October 2010
Vol. 35, No. 5

Trade: “Free trade” agenda moves ahead

Despite campaign promises to review existing trade agreements and to forge a new trade policy before signing or trying to ratify any new agreements, the Obama administration is moving forward with four trade agreements built on the same failed policies of past accords. Both President Obama and Secretary of State Clinton have expressed interest in finalizing multi-year negotiations with South Korea, Colombia and Panama while also working to form a Trans-Pacific Strategic Economic Partnership Agreement (TPP) with seven countries in Asia and South America. All of these negotiations are based on the same failed trade model that candidate Obama railed against during his presidential campaign.

The controversial negotiations with Colombia were initiated by President Bush in May 2004 and appeared to end in November 2006 when both countries signed the agreement. Yet while the Colombian congress ratified the agreement in 2007, the U.S. Congress chose not to hold a vote on the agreement due to fear of losing the vote. This agreement is especially controversial in the U.S. because of Colombia’s terrible human rights record. According to the International Trade Union Confederation, 48 of the 101 union leaders killed around the world in 2009 were killed in Colombia. There have also been a number of news stories linking members of the administration and Congress to paramilitary groups responsible for carrying out a campaign of terror throughout the countryside, including the killing of innocent young men and then dressing them as rebels to show that they are killing insurgents. The U.S. Congress should not ratify the Colombia Free Trade Agreement (FTA) until these serious human rights problems are better addressed by the Colombian government.

Of the three trade agreements that Congress could consider ratifying this year, the Panama trade negotiations could be considered the least controversial, though they are tinged by two particularly controversial aspects: 1) The past president of Panama’s National Assembly (September 2007 – August 2008) is alleged to have been involved in the killing of a U.S. soldier in 1992, and 2 ) Panama has long been a tax haven and financial paradise used by many wealthy individuals and businesses to avoid paying taxes. After the recent financial crisis, this second point is especially controversial, as the trade agreement could undermine some of the financial reforms that were recently passed and allow Wall Street firms to sue the U.S. government over its public policies.

The U.S.-South Korea FTA is perhaps the most controversial of the non-ratified agreements due to the size and strength of the Korean economy relative to the U.S. After Mexico, it would be the largest trading partner to negotiate a “free trade” agreement. U.S. auto makers are especially concerned about increased competition from Korean car makers and Koreans are particularly concerned about the agreement forcing the importation of U.S. beef that many are concerned contains BSE, or mad cow disease.

While it was President Bush that initiated these three trade negotiations, the TPP could be considered to be president Obama’s first trade initiative. “The president and I intend for the Trans-Pacific Partnership to be our first 21st century trade agreement,” U.S. Trade Representative Ron Kirk recently stated. Although currently involving just eight countries, the United States hopes the pact will eventually cover all members of the Asia-Pacific Economic Cooperation forum, including China.

None of the well-known problems with these types of trade models that candidate Obama complained about have been addressed in any of these agreements. If ratified, they will continue the same decimation of rural sectors, increases in medicine prices, privatization of public services and undermining of democracy that past FTAs have brought to the U.S. and partner countries.

Ironically President Obama says he is promoting these trade agreements as a way to boost jobs in the U.S., though candidate Obama stated that trade agreements like NAFTA “are not working for American workers.” His statement as candidate is closer to the truth. In testimony before the U.S. Trade Representative in March 2009, Public Citizen’s Global Trade Watch showed that “…under the current FTA model, U.S. real median wages are still scarcely above 1973 levels, while income inequality has risen to levels not seen since the robber baron era and 4.3 million U.S. manufacturing jobs – one in four of the entire sector – have been lost. The U.S. has become a net importer of food and has seen its total agriculture trade surplus plummet. U.S. export growth to current FTA partners has been 6 percent while export growth to non-FTA partners has been 14.4 percent. The United States had a trade deficit of $200 billion in 2008 with the 14 U.S. FTA partners.”

With the tight Congressional schedule and upcoming elections, it is difficult to know when or if these agreements will come to a vote in Congress, but there is a good chance that they will consider the agreements during the lame duck session of Congress, after the November elections and before the new legislature takes power. Luckily, there is a good bill that has been introduced in both houses of Congress, the TRADE Act, which will reform U.S. trade policy for the better. Until this bill passes, no other FTAs should be ratified.

Faith in action:

Contact your senators and ask them to oppose ratification of these trade agreements. If your senator is already a co-sponsor of the TRADE Act, thank him/her; ask for his/her support if he/she is not a co-sponsor.

Learn more about the TRADE Act on Public Citizen's website.

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