The Democratic Party’s Draft Platform Doesn’t Oppose the TPP—That’s Bad Policy and Bad Politics

By Larry Cohen

Sorcher TPP sinking ship

Working-class Americans have had enough of trade policies that accelerate the race to the bottom.

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Honduras and CAFTA Show Why TPP Must be Opposed

Map of all countries which have ratified the D...

Map of all countries which have ratified the Dominican Republic–Central America Free Trade Agreement. (Photo credit: Wikipedia)

12/10/2015Brian Finnegan
This week, the governments of Honduras and the United States signed an action plan to begin addressing the widespread failure to enforce labor laws in Honduras. While this is a small step in the right direction, the Honduran government has not fully considered or included workers’ recommendations regarding this Monitoring and Action Plan. The Honduran government, employers and unions have reached consensus on some points, but major issues remain unresolved. The action plan should not have been signed until the parties reached agreement on the draft inspection law that is central to the viability of the action plan.

The plan also stops short of calling for stronger enforcement action should Honduras continue to fail. It is far too early for congratulations. Through such delayed and partial actions, the U.S. government has not acted effectively to defend workers’ rights in Honduras and with other trading partners. Continue reading

Lessons from 20 Years of NAFTA: Replace Failed Model with Good Trade Policy

by Stan Sorscher

Stan Sorscher

Stan Sorscher

The NAFTA model has failed.

When NAFTA (the North American Free Trade Agreement) took effect 20 years ago, we were promised mutual gain.

To be clear, everyone I know wants good trade policies that raise living standards at home and abroad. The question is not trade versus protectionism. It’s good trade policy versus bad trade policy.

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The 4 (or 5) Worst Market Failures in Human History

by Stan Sorscher

Stan Sorscher

Stan Sorscher

I’m a capitalist for one reason: to raise living standards in my community. A familiar mantra of capitalism guides me: Markets are powerful and efficient.

I’m also a realist, so I temper that mantra: Markets are powerful and efficient. And markets fail.

Market failure is an established, well-understood field of study in mainstream economics. Generations of economists accept the basics of market failure.

However, American economists turn their heads away at the mention of it, because it sounds like heresy.

Consider the four biggest market failures in human history:

  • Climate change: $40 trillion, so far
  • Health care in America: trillions per year, ongoing
  • The housing-financial asset bubble: at least $8 trillion
  • Free trade: $8 trillion, so far Continue reading

‘Free Trade’ Was Never Really About Trade

by Stan Sorscher

Stan Sorscher

Stan Sorscher

We need to think differently about trade.

First, let me say that I am 100% in favor of trade. Trade is when we do what we do best, they do what they do best, and we trade. Trade, done right, will raise living standards.

If trade is good, then free trade must be better, right? So consider this old joke about “free trade.”

  • It’s not free.
  • It’s not trade.

Twenty years after NAFTA we can add that it doesn’t work. It’s bad for millions of workers, families and communities around the world.

“Free trade” is not free. Our free trade policy encourages production to leave the country. We’ve lost millions of manufacturing jobs. More than 60,000 manufacturing plants were closed between 2000 and 2010 as production moved overseas. These costs are real.

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Good Trade Policy: Three ‘Thought Experiments’

by Stan Sorscher

Stan Sorscher

Stan Sorscher

The U.S. and 10 other countries are negotiating our next big trade agreement, called TPP. It’s time to re-examine what works and what doesn’t work.

Imagine a thought experiment, where we put environmentalists in each country in charge of negotiating the next trade agreement. Preposterous! I know. Stick with me. This is a thought experiment.

So, in this thought experiment our environmental negotiators would prioritize their interests — CO2 in the atmosphere, deforestation, endangered species, renewable energy, safe food, clean air and clean water.

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So-Called Free Trade — Bad Policy and Wrong Debate

by Stan Sorscher

Stan Sorscher

An editorial in my local paper is a good example of how we trivialize our public discussion of globalization and trade policy.

The editorial follows this logic: Trade is good. All trade is good. More trade is better than less trade. Maximum possible trade! Anyone who disagrees is protectionist or resentful.

I can immediately correct one misunderstanding. Everyone I know is in favor of trade. I am 100 percent in favor of trade. The issue is not “trade.” The issue is good trade policy, which raises my standard of living, or bad trade policy, which lowers it.

Similarly, I am in favor of capitalism. Even so, we can have real, significant, meaningful, legitimate debates about good rules for capitalism and bad rules for capitalism.

I am in favor of banks. We deserve serious policy debates about banking.

I am 100 percent in favor manufacturing. China’s manufacturing capacity is prodigious. It grows on the misguided principle of maximum possible output. As a result, air pollution in China is legendary, causing 750,000 premature deaths per year. In America, we debated clean air and clean water. Our public health and living standards are better for that debate.

I am in favor of copper, iron ore and titanium. However, it is bad trade policy for international trade tribunals to compel El Salvador to expose their people to unsafe mining practices, threatening more than a third of their clean water. Maximum possible mining threatens public health and safety in El Salvador.

It is bad public policy for a trade tribunal to overturn Ecuador’s $18 billion environmental penalties against Exxon, compelling the national courts to back down in the face of trade sanctions. Exxon has already damaged the environment, and been found guilty in court. Bad trade policy punishes Ecuador instead of Exxon.

These concerns are not new. Past trade negotiations identified them in writing, but dealt with them ineffectually.

For instance, when China entered the WTO in 2001, it signed an “accession agreement” with several conditions designed to make trade a two-way deal. China’s national policies flagrantly violate those conditions. China openly manipulates its currency. China demands that U.S. companies transfer technology to Chinese domestic producers. Foreign companies are discouraged or prevented from selling to China’s domestic consumers, and Chinese producers receive subsidies and incentives that drive our producers from the market.

Free speech, free press and labor standards are notoriously weak in China. China has a rich history and amazing culture. However, they lack the institutions of civil society for democratic debate about serious policy issues.

This harms workers and producers in America.

In our NAFTA and WTO debates, advocates of so-called free trade promised us a rising standard of living, balanced trade and millions of good new jobs. Instead, U.S. companies shifted 2.4 million jobs abroad, while eliminating 2.9 million jobs in America. Our cumulative trade deficit since NAFTA is over $7 trillion. Our economy is de-industrializing, and we are losing strategic opportunities to produce the next generations of products.

These are fundamental flaws in our trade policy that lower our standard of living — well worth a serious public discussion. Nineteenth century “free trade” theory may work well in a textbook, but it has profound conceptual, economic, social, environmental, and political shortcomings in our real 21st century global economy.

Challenging bad policy is the way democracy works.

Both Barack Obama and Mitt Romney found fault with aspects of our trade policy (at least during election campaigns). Candidate Obama recognized the weaknesses in our trade theory, and promised better trade agreements all through the campaign. Candidate Romney says action on China’s currency manipulation will be a top priority.

In at least one respect, our so-called free trade policy is fabulously successful. It’s really about putting investor and business interests at the highest priority, while sweeping aside the environment, labor rights, human rights, public health and reasonable regulations. Investors go first; civil society comes after. Maximum possible trade! It’s great for companies who move production to countries with low-wages and weak democracies.

Dave Johnson says this in plain language:

The business advantage China offers is not low wages — it is that in China the people do not have a say, and here people have a say. When people have a say they say they want better pay, health care, retirement, vacations, sick pay, protections, worker safety, clean environment and taxes to support the country — things like that — the very things China offers to let our businesses escape from.So what China offers is that China is “business-friendly.” Because people there do not have a say, so they can’t ask for the things people should have.

When our newspapers and policy-makers trivialize globalization and dismiss legitimate public concerns as “resentment” or protectionism, they weaken our democracy.

The Trans-Pacific Partnership (TPP) is the Obama administration’s signature trade agreement, which is being negotiated in total secret. Text was leaked recently, showing that TPP will be worse than the past agreements. A crummy deal, negotiated in secrecy is not saying much for democracy.

Popular disillusionment with so-called free trade is real. It is based on personal experience, rational analysis, and looking out the window.

Voters, workers, families and Main Street businesses sense serious problems with our domestic economy. Whatever those problems are, they are made worse by so-called free trade. We won’t solve either unless we deal with both.

Stan Sorscher is Labor Representative at the Society for Professional Engineering Employees in Aerospace (SPEEA), a union representing over 24,000 scientists, engineers, technical and professional employees in the aerospace industry. He has been with SPEEA since 2000.

The Week of Walking Backwards

by Leo Geraerd

USW President Leo Gerard

As the Occupy Wall Street movement spread across the nation last week, politicians in D.C. flipped the bird at protesters – including those camping in Washington’s McPherson Square.

Here’s how: While occupiers sought political focus on the unemployment, impoverishment and foreclosures suffered by the nation’s non-rich 99 percent, politicians considered three major pieces of legislation and passed only the one that will help the wealthiest 1 percent and hurt the remaining 99 percent.

Senate Republicans murdered-by-filibuster the American Jobs Act, which would surtax the 1 percent to provide jobs for the 99 percent. The Senate did pass the currency manipulation bill, but House GOP leaders refused to schedule a vote on the measure that would protect jobs for the 99 percent by punishing countries that undervalue their currencies to artificially lower prices on their exports.

By contrast, both houses of Congress adopted the so-called Free Trade Agreements with Panama, Colombia and Korea, which will, just like their predecessor NAFTA, destroy jobs held by the 99 percent.

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The Movie “The Constant Gardener” explains what’s wrong with Free Trade

by Stan Sorscher

Stan Sorscher

In a somewhat contentious Town Hall meeting, some of my Congressmember’s constituents (including me) were challenging his adherence to free trade policies. In his defense he said, “Go watch The Constant Gardener.” So I did.

Many scenes are shot in Africa, with vivid images of urban slums and timeless poverty, where people express dignity, strength and courage every day. A foreign pharmaceutical company conducts drug trials using legions of Africans as test subjects. The experimental protocol ignores the villagers’ interests, killing many of them, providing none of the protections we would normally expect of clinical trials in a Western democracy.

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Why I oppose the U.S. – Columbia Free Trade Agreement

By Duane Campbell

Duane Campbell

The production of unemployment, instability, and poverty around the world is produced by  the economic policy known as neo-liberalism.  Neo liberalism is the current stage of capitalism. Trade agreements, like NAFTA ( North American Free Trade Agreement)  and the proposed trade agreements with Columbia and an important part of neo-liberalism and  actually increased poverty for many.

So called “Free Trade” agreements, like those presently proposed for Columbia, Panama, and South Korea produce economic winners as well as losers.  The winners are the transnational corporations.  The losers are the workers on both sides of the border.

Free trade is the elimination and/or lowering of taxes and other trade regulations between countries with the purpose of increasing exports .   The Administrations argues   that the FTA will create jobs and economic stability for Colombians, yet experience with prior free trade treaties, such as NAFTA,  has shown that free-market agreements lead to more poverty for the majority and increased wealth for a few multinational corporations. Continue reading