Fast
Track Negotiation Authority (now euphemistically entitled “Trade Promotion
Authority”) is now being deliberated in the Senate; and, if granted without
some changes to the measure that has already passed the House, which implicitly
prohibits labor and environmental protections, it will undoubtedly accelerate
the ‘race to the bottom.’ It is this
administration’s intention to negotiate bi-lateral and multilateral trade
agreements with 31 Latin American countries and as many other extra-hemispheric
nations willing to accept the terms; and, it would like to do so under similar
terms as those prescribed in the NAFTA and GATT agreements.
The
House measure (H.R. 3005) does nothing to protect “hard-won” labor standards;
the right to freely associate, the right to bargain collectively, the banning
of child or compulsory labor and other discriminatory practices. The University of Maryland, School of Public
Affairs recently found that 93% of Americans believe “countries that are part
of international trade agreements should be required to maintain minimum
standards of working conditions.” Over
80% wanted to ban products made by children under age 15. Nearly as many (78%) believe the WTO should
take into account labor standards and the environment when adjudicating trade
disputes (74% support restrictions on imports of products produced under
conditions damaging to the environment).
The
Bush Administration and the majority of Republicans, supported by the business
community, claim that labor and environmental issues should not be a part of
any trade agreements; that social issues would be best negotiated separately
under other auspices (i.e. International Labor Organization, etc.). Representative Sander Levin (D) countered
this argument with, “….Certainly, labor or environmental issues can have
‘social aspects’ that may involve humanitarian or human rights considerations
about conservation of natural resources.
But it is unrealistic to suggest that as the issues operate among
nations, they are not in substantial measure economic in their nature. Indeed, the intensity of the controversy
over them, especially between nations, is in good part because they are
economic, and not just ‘social.’”
The Economic Strategy Institute’s economist Peter Morici in his book Labor Standards and the Global System states that “….Better enforcement of {core worker} rights would likely promote trade that increases income and growth, both in industrialized and developing countries.” While, “….denying workers the right to bargain collectively perpetuates distortions in the labor market, and results in inferior allocation of resources.” I believe, that in the long run, the same can be said of environmental issues. Morici’s views make good economic sense. In developing countries where there is a surplus of labor and trade unions are discouraged, if not forbidden, wages tend to the subsistence level. Workers without discretionary income do not make good customers. Therefore, they cannot be expected to buy our high tech goods and services. The end result being, that we lose the manual jobs but, do not gain a commensurate increase in the high tech market (witness the huge trade imbalance we have with China and, to a lesser degree, with Mexico).
The
only winners will be the multi-nationals who will gain by their lower labor and
environmental costs. However, their
advantage will not be sustainable.
Absent higher standards of living, the majority of the goods produced by
the multi-nationals in third world countries will be sold in the U.S., Europe
and Japan. Eventually there will be a
glut in the limited markets precipitating retrenchment and the correspondent
flight of financial capital; that is what happened to the south-east Asia so
called ‘economic tigers’ in 1997 that nearly caused a world wide depression. There is no reason to believe that, absent
any meaningful changes, it will not happen again.
Vote on Fast Track is
Soon.
On
May 1, 2002, Senate Majority Leader Daschle, appearing before the press after
meeting with President Bush, announced that he would bring up the measure
before the Senate within the next ten days.
Being of a suspicious nature, I suspect that Fast Track Negotiating
Authority was traded for a generous farm subsidy bill (Senator Daschle is from
a farm state).
As
of this writing, the Senate has not voted on the Trade Promotion Authority
measure; however, all indications point to its early passage. Unfortunately, it is very likely to pass
with only a few sops to organized labor, grant displaced workers tax credit to
help pay for health insurance and some assistance for retraining workers whose
jobs will be lost as multi-national corporations move their operations to low
wage countries with few, if any, restrictions.
Before
granting the Administration ‘fast-track’ negotiating authority, it should, at
the minimum, incorporate the following provisions: No trade agreement will be signed that will jeopardize, penalize,
or preempt our democratically hard-won environmental, safety and labor laws,
nor allow other countries to lower their standards to gain trade
advantages. Agreements shall provide
for labor, environmental, and local interest representation in the primary and
appellate tribunals authorized to adjudicate trade disputes, with all
deliberations to be held in open courts.
If,
as I suspect, (because of the high power opposition) none of the above
suggestions will have been adopted, then please change the above question to
read:
Art Peracchio
5-16-02