naked capitalism
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We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,…have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money,
there will be a giant sucking sound going south.
…when [Mexico’s] jobs come up from a dollar an hour to six dollars an hour, and ours go down to six dollars an hour, and then it’s leveled again. But in the meantime, you’ve wrecked the country with these kinds of deals.
“[CLINTONI:] I also think [NAFTA] means the opportunity to go not only to Mexico but beyond Mexico into other nations in Latin America to develop stronger trading relationships that will boost our economy, the jobs, and the incomes of the American people well into the 21st century. …
In my mind, there is no question that this agreement is a significant net plus for the American economy. … [M]ore and more, smart manufacturers are deciding that they should locate where they’re going to have a highly productive work force and where they’ll be reasonably close to the market and where they’ll be very flexible to change product lines on a rapid basis. I think that this will help the American economy.
So how’d that work out and who was right? Ben Schreckinger in
the Atlantic:
According to a 2006
report from the left-leaning Economic Policy Institute, [NAFTA] led to
the loss of an estimated one million American jobs in its first decade . A 2012
poll found that 53 percent of Americans wanted the government to “do whatever is necessary” to amend or leave NAFTA, while only 15 percent wanted to remain in NAFTA as-is. In 2008, Rassmussen
found that 56 percent of Americans wanted NAFTA renegotiated, and Gallup
found that 53 percent believed its effects on the U.S. economy were “mainly negative,” compared to 37 percent who considered them “mainly positive.” A January
report by Public Citizen, a group that often criticizes free-trade agreements, found that
NAFTA had contributed to downward pressure on wages and increased income inequality in the U.S as that issue shapes up to be a defining one in 2016.M
Understandably, Hillary Clinton backtracked on NAFTA in 2008 (backtracked as a Democrat, I should say, to avoid the
“marital discord” trope), but of course by then the damage was done.
Eyes on Trade:
Senator Hillary Clinton, the front-runner for the 2008 Democratic presidential nomination, wonders why the North American Free Trade Agreement is “continuing to drive hundreds of thousands, even millions, of people from Mexico into our country,” she said in an interview. “We just can’t keep doing what we did in the 20th century.”…
…Clinton promoted her husband’s trade agenda for years, and friends say that she’s a free-trader at heart. “The simple fact is, nations with free-market systems do better,” she said in a 1997 speech to the Corporate Council on Africa. “Look around the globe: Those nations which have lowered trade barriers are prospering more than those that have not.”
“A little time out.” Now, I’m not necessarily averse to politicians who backtrack from a policies that are against my values and interests (
take that, Edmund Burke) but I would like to know that they don’t then
unbacktrack their backtracking, because that confuses my simple mind. And surely, as Secretary of State during Obama’s first term, she would have been privy to the negotiation of
future trade deals. So what does she think about them?
Here again it makes sense to look at Hillary has to say about trade deal in Hard Choices, the baseline she laid down if she should choose to run again. Here are the findings:
Rather thin, especially given
Clinton’s focus on commerce at State. You’ll notice, first, that oddly, or not, Clinton has nothing to say about NAFTA, unless the oblique reference to “learned the hard way” counts. And she has nothing to say about TTIP, TISA, or GATS. Here’s what she has to say about TPP:
It makes sense to reserve judgment until we can evaluate the final proposed agreement.
HAASS: Is it your sense that, given where this country is, in part also given where your own party is, the Democratic Party, that it’s possible right now for the United States to give the president the authority he needs to complete the negotiations of [the Trans-Pacific Partnership]?
CLINTON: Well, he can complete the negotiations. That is ongoing. And in fact, I have been briefed that there is progress being made on the so-called TPP negotiations. The challenge — and really, what your question was about — is whether there will be what’s called fast-track authority granted to the president…
HAASS: Trade promotion authority.
CLINTON: Trade promotion authority. Right now, I think that’s not likely, but that doesn’t mean that the treaty can’t be presented and considered on its merits [yes it does, see below], and particularly if it can be used to convince the American electorate [!!], as well as the Congress, that we have to address these internal at the border barriers to our products, we have to begin to take on state capitalism, because it’s one of our biggest competitive threats, we have to be able to raise standards on goods that are going to end up in our markets one way or the other, it may be possible — and I certainly hope it will be — to make that case. But, of course, it depends upon what’s in it. And we don’t yet have the final document.
However, for the entire alphabet soup of trade deals under negotiation now — TTIP, TISA, GATS, besides TPP – not only are
the negotiations, and even the texts of the deals themselves secret,
the drafts can be kept secret long after passage. Contra Clinton’s view, it makes complete sense, at least in a functioning democracy, for the public to know everything that was “on the table” through the entire process ’til “the final document”; how else can people evaluate the negotiating skills of the administration, and determine whether to send them back to the table to get a better deal? Or no deal at all? What Clinton
ought to be arguing for is an open and transparent process, but — lip service to a very undefined “the hard way” for public consumption in
Hard Choices aside — she doesn’t do that.
And certainly, adapting our force posture is a key element of our comprehensive strategy. But so is strengthening our alliances through new economic and security arrangements. We’ve sent Marines to Darwin, but we’ve also ratified the Korea Free Trade Agreement.
EPI reported in July, 2013 that the US-Korea free trade agreement had
already cost the US 40,000 jobs and increased our trade deficit by $5.8 billion. According to EPI,
The tendency to distort trade model results was evident in the Obama administration’s insistence that increasing exports under KORUS would support 70,000 U.S. jobs. The administration neglected to consider jobs lost from the increasing imports and a growing bilateral trade deficit. In the year after KORUS took effect, the U.S. trade deficit with South Korea increased by $5.8 billion, costing more than 40,000 U.S. jobs. Most of the
40,000 jobs lost were good jobs in manufacturing.
Oopsie. I guess “the little time-out” was over when the Korea deal rolled around. And Clinton at State must have “evaluated” the “proposed agreement” and exercised her “judgment” and given the deal the big thumbs up, or it would not have have passed. And guess what! We — and by “we,” I mean American workers, not the political class — “learned the hard way” again, as 40,000 jobs were lost. Granted, the Korean dealmakers aren’t in NAFTA’s league, where
almost 700,000 jobs were lost, but they’re in there punching all the same. Kudos.
* * *
I’d like to close by posing three “wonky” questions on trade that Clinton — indeed, any candidate — should be pinned down on.
1) Do you believe that the negotiations and the working texts for trade deals like TPP, TTIP, TISA, and GATS should be kept secret? And as a follow-up: If not, when, if ever, do you think that records of such negotiations should be made public? Should they be censored?
2) Do you believe that the
Investor-State Dispute Settlement mechanism, which would give foreign corporations the right to sue the United States for lost profits in unaccountable trans-national courts, is a violation of state sovereignty? And a follow up: Do you believe that Achmea Insurance should have been able to sue Slovakia for lost profits
because Slovakia passed a single payer system?
3) Do you believe that trade deals should abolish or water down the precautionary principle, or should they fully support it?[3]
Don’t wait for the political class to ask these questions; they never will. Ask them yourselves, if you get into a Q&A session on the campaign trail. Or phone your Congress critter’s office. Or write letters to the editor. Or even post to social media. Because, as we see from the record above, trade deals are big deals, and the Democrats shouldn’t be allowed to pose as populists unless they get very specific about policy outcomes (and none of this “share your pain” crapola, or whatever today’s version of that is;
“authenticity,” or some damn thing). I may have more questions, but this should do for now. Readers, please add or improve — further questions should be asked on “ratchet” and “rollback” — and a big hat tip to alert reader Mellon for all the work on trade.
NOTES
NOTE [1] NAFTA was signed by George H. W. Bush in December 1992, and then ratified under Bill Clinton in November 1993. In debate, both Bush and Clinton disagreed with Perot.
It’s important that we have good information to make judgments. And when I looked at some of the trade agreements that the Bush administration sent our way, I voted against CAFTA. I don’t want to give fast-track authority to this president.
Sure, but “this President” was Bush. What if Clinton were “this President”? Would she feel differently?
The precautionary principle is detailed in Article 191 of the Treaty on the Functioning of the European Union (EU). It aims at ensuring a higher level of environmental protection through preventative decision-taking in the case of risk. However, in practice, the scope of this principle is far wider and also covers consumer policy, European legislation concerning food and human, animal and plant health.
The chemical and pesticide industries are using the Transatlantic Trade and Investment Partnership (TTIP) negotiations to attack the EU’s use of the precautionary principle, says an adviser to the Greens/EFA groups of MEPs.
Writing an opinion piece in the latest issue of Chemical Watch’s
Global Business Briefing, environment and health adviser Axel Singhofen says the last 12 months have seen “a surge of attacks” against the precautionary principle by law firms, academics, MEPs and industry bodies. Last October, for example, 12 CEOs, including those of Bayer, BASF, Dow, Henkel, Solvay, Novartis and Syngenta, wrote to the presidents of the European Commission, Council and Parliament, calling for the formal adoption of an “innovation principle” to counterbalance what they termed “precautionary legislation”.
NOTE I know
Warren says a lot, and good for her, but leftish Democrats have an unfortunate tendency to think that
performative utterances are a large subset of speech acts, when in fact they are an extremely small one. “I do” is a performative utterance; it changes a real social relation. A speech on the rubber chicken circuit, or on YouTube, or even at Netroots Nation, no matter how fervent, is not. I am seeing speeches from Warren. I’m not seeing hearings. I’m not seeing investigations. I’m not seeing bills. I’m not seeing things done that legislators do.
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