Merkley Embracing Fair Trade Platform

By Arthur Stamoulis of Portland, Oregon. Arthur is the director of the Oregon Fair Trade Campaign.

The war in Iraq may have been the defining issue in the midterm elections last November, but in many individual races the economy -- and, more specifically, trade policy -- was the defining issue. According to the Democratic Strategist, thirty-seven “free trade” incumbents lost their seats to “fair trade” challengers in 2006.

Oregon House Speaker, and U.S. Senate candidate, Jeff Merkley seems to have learned from the last election. He has highlighted fair trade in stump speeches and campaign mailers, and last week, went a step further by speaking out passionately against the Peru Free Trade Agreement and denouncing Senator Gordon Smith for supporting it.

"Fair trade with Peru will ultimately benefit both of our economies, but this agreement doesn't get us there," he said. "We can't tie American workers' hands behind their backs. This NAFTA-based plan just doesn't cut it."

In a press release, Merkley pointed out that the Peru FTA contains several fatal flaws that would cost Oregon jobs, lock farmers and ranchers into a competitive disadvantage, and replace domestic products with imports at a time when the trade deficit is crippling the economy. He also faulted the Peru FTA for:

-Extending NAFTA's provisions that give foreign investors more rights than Americans to sue federal and state governments

-Enabling foreign investors to challenge American public health,environmental, zoning and labor protections in foreign courts

-Blocking government procurement rules that require the hiring of U.S. workers and "Buy American" provisions

-Setting limits on food safety standards that require the U.S. to rely on foreign regulators and inspectors

The Wall Street Journal recently reported that even Republican voters opposed free trade agreements by a two-to-one margin. In 2008, when “change” is the election theme candidates try to drive home, fair trade messaging will enable candidates enable candidates to differentiate themselves from proponents of the failed trade policies of the past -- helping campaigns to both turn out their base and win over swing voters.

More candidates should take Jeff Merkley’s lead in running on a fair trade and economic justice platform.

Comments

  • Jack (unverified)
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    So is he going to work to repeal NAFTA and GATT?

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    Arthur,

    Several questions, if you are interested, from a free trader who share some of your concerns about the Peru FTA:

    (1) Is there a model or an example of a “Fair” Trade Agreement, either proposed or in place, anywhere in the world? Just what makes a trade agreement “fair?”

    (2) If the Peruvian FTA does not pass, does the Oregon Fair Trade Campaign support continuation of the Andean Trade Preference Act for Peru? Or, if you do not, what would the tariff provisions be without any agreement and how would that be fairer?

  • Urban Planning Overlord (unverified)
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    Let's look at some of Merkley's claims in more detail:

    "lock farmers and ranchers into a competitive disadvantage"

    If Peruvian farmers can produce cheaper food for American consumers, isn't that a benefit to American consumers? Why should we pay higher food prices to protect "our" farmers from competition? Can't we do without a lot of environmentally damaging agricultural practices, such as livestock pollution of streams, misuse of public lands, dumping of pesticides in our waterways, etc.? Aren't a lot of Peruvian farmers dirt poor, meaning that opening our markets to them will enrich them and make their lives better?

    "replace domestic products with imports at a time when the trade deficit is crippling the economy"

    Wouldn't a free trade agreement open Peru to American products as well? American products that, in many respects, are superior to their Peruvian counterparts? Look at the chart on Page 7 of this document, which shows that the value of U.S. agricultural EXPORTS to Mexico has TRIPLED since NAFTA's inception, and has kept on par with the increase of agricultural imports from Mexico. Free trade not only means that Peruvians can export their goods to our country, it means that they have the opportunity to buy our goods freely, goods that they can now afford with the money they made from the exports!

    As for Merkley's attack on the legal provisions of NAFTA and the proposed Peruvian Free Trade Agreement, they are all necessary to prevent state and local governments like Oregon's (which Merkley has helped to run) from passing trade protectionist measures disguised as labor, environmental, etc. protections. Like "American workers only" provisions. If Peruvian workers can do the job cheaper, and just as well, why don't we retrain Americans to do the jobs Peruvians can't do as well? That's what free trade is all about, and BOTH nations benefit from it.

  • (Show?)

    Urban Planning Overlord,

    You still haven't answered my question from the other thread.

    MEXICO: I get really tired of those who claim that NAFTA has hurt, rather than helped the U.S. and Mexico. Is it coincidence that we have not suffered a significant recession since 1994, when NAFTA was passed? Is it coincidence that Mexico's economy has, after the disaster of 1994-95, gone steadily upward, enriching all classes of Mexicans? If all of that is the case then one would expect illegal immigration of Mexicans into the United States to have declined roughly commensurate, n'est pas? What have we seen since 1994 with respect to illegal immigration from Mexico?

    Well?

  • iva (unverified)
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    Four million Peruvian farmers held protests this past summer in opposition to the Peru FTA -- that's from a country of 28 million. Clearly they do not agree that "opening our markets to them will enrich them and make their lives better."

    They look to the historical proof of NAFTA destroying small-scale Mexican agriculture. Yes, agriculture still functions in Mexico but not through local family farmers as it had for decades. Instead, we are able to buy dirt cheap apples and corn from Mexico because Cargill and other companies are able to implement agri-business practices internationally -- driving out of business both family farms in Mexico and family farms in the US.

    Why can Cargill do such things, seemingly defying the weight of "free market" checks and balances? Because we subsidize them with millions of tax dollars so that they can then sell their products for less than what it costs non-subsidized farmers to even grow their produce.

    I wish Free Trade and international economic policies were as simplistic as the Urban Planning Overlord makes them out to be. Unfortunately these things are complex and there is no such thing as opening up the markets and letting the products flow like wine. Because we don't live on equal playing fields to begin with -- Peruvians can't match up to our corporate powers and we can't compete with their under-paid labor force.

    Corporations use Free Trade as a race to the bottom, to make as much money as possible off the backs of working people. This is not a secret or a new idea, it's the foundation of Capitalism.

    It's time that workers demand protections be built into these trade agreements that limit the amount of exploitation and create standards not just for US workers and our environment -- but for all workers in this global environment.

    I commend Merkley, now I expect when he wins the Senate seat and be an advocate for working people everywhere.

  • (Show?)

    UPO, Unfortunately no American consumers don't neccessarily benefit from these agreements because in practice it isn't folks like Peruvian farmers that begin to send their foods; it is the multinational corporations who get to now go in and determine the details of trade that has resulted in small indeginous farmers being run out of business, and their land in many cases (and no I don't have links..it's documented all over the place).

    These agreements may say on paper that we can trade freely back and forth but in practice it doesn't work that way. Most of the countries with which we have these agreements have HUGE levels of poverty and we can brag all we want about "now they can buy our stuff" but in reality that isn't true because they can't afford it.

    Until we can make these agreements work in practice the way they are perported to on paper, they are anything but fair, and simply give multinational corporations more leverage and ways to increase their profits without truly benefitting either country.

    Also, as for damaging agricultural practices, the standards in the U.S. are immensely higher than around the world. We outlawed DDT years ago and yet we still receive it here because we import it right back into the country.

  • orftc (unverified)
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    Dave,

    The current model of international trade is about:

    (1) eliminating tariffs between countries with drastically different levels of economic and political development, so that large corporations can shift jobs around the world wherever labor is the most exploited and environmental protections and other public interest regulations are the weakest;

    (2) providing large corporations with new means of forcing deregulation; and

    (3) providing large corporations with new means of forcing privatization.

    A "fair trade" agreement uses international trade as a means of improving quality of life for ordinary people by enforcing base-level labor, environmental and human rights standards; aiding in local development; and improving transparency and accountability in policymaking. Check out the following for more info: http://www.citizenstrade.org/pdf/ctc_principles.pdf

    Regarding the Andean Trade Preferences and Drug Eradication Act, ORFTC has not adopted a formal position. Certainly, it has led in a large rise of vegetable imports from Peru -- with onion imports in particular making life difficult for Oregon growers.

    The differences between the ATPDEA and permanent trade pacts, however, are significant: (1) it's temporary and must be regularly renewed; (2) the U.S. can unilaterally impose sanctions if it choses; (3) the stated goal is about "drug eradication," not improved trade; (4) it doesn't include the harmful investment, procurment, intellectual property and services provisions found in FTAs; and (5) it doesn't dump corn, wheat and other subsidized products on Andean nations.

  • Pete Shaw (unverified)
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    Can we at least be a little honest about what are called free trade agreements? They have almost nothing to do with trade, but rather, are just a series of protectionist measures for corporate interests. And they are hardly agreements, at least in any sort of democratic terms. They are shoved down peoples' throats.

    The US-Peru FTA is nothing more than an expansion of NAFTA, and the only truth in the names is in the geography.

  • hris (unverified)
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    It's good to see so much discussion of trade on this blog. It's long overdue. And good for Merkley for speaking out on it. I'm voting for Novick, but if Merkley wins the primary, I'll be glad to vote for him--just wish I could say the same for other Democrats (Blumenauer, Hooley, Clinton, Obama, etc.)

    There was an excellent op-ed in yesterday's San Francisco Chronicle. Check it out:

    http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/11/20/EDNKTDF27.DTL

    I hope it's ok to drop a little of it here:

    "The profits of U.S. grain companies, already subsidized under the U.S. farm bill, rose higher when NAFTA allowed them to dump cheap corn on the Mexican market, while at the same time it forced Mexico to cut its agricultural subsidies. As a result, small farmers in Oaxaca and Chiapas couldn't sell corn anymore at a price that would pay the cost of growing it. When corn farmers couldn't farm, or auto parts and maquiladora workers were laid off, where did they go? They became migrants. The real, dirty secret of trade agreements is displacement. During the years NAFTA has been in effect, more than 6 million people from Mexico have come to live in the United States. They didn't abandon their homes, families, farms and jobs willingly. They had no other option for survival. Farmers and workers throughout Central America, who saw what NAFTA did to Mexicans, have protested, marched, and even fought in the streets of El Salvador, Guatemala, and most recently Costa Rica, to stop ratification of the Central American Free Trade Agreement. Now that rebellion is spreading to Peru. No major union or organization of poor farmers wants the trade agreement that the Bush administration negotiated. No wonder. They don't want to say goodbye to their families, and start looking for work in Los Angeles, San Francisco or New York. To get the Peru treaty through Congress, its supporters claim it will protect labor rights. Peruvian unions don't believe this promise any more than they believe it will bring them jobs. Today a huge mining corporation, Grupo Mexico, has provoked a strike by demanding that miners work 12 hours a day instead of eight in Peru's largest copper mine. Since NAFTA passed, the same company has forced strikes and cut thousands of jobs at its Mexican mines to cut labor costs, and the government there has also cooperated. Toothless labor rights protections never stopped union busting and job elimination in Mexico. They won't in Peru either. Those freshmen members of Congress have a better grasp on global reality than their party leaders, who are enthralled by the siren song of big contributions from corporate free traders. But those newly elected Democrats will have a hard time going back to their districts and explaining to constituents why their party allowed the treaty to pass. Party strategists think Democrats can accept big contributions to support the Bush free trade program. They calculate that unions, workers, displaced immigrants and those hurt by the treaties have nowhere else to go in 2008. They're wrong. They could stay home - the Democrats certainly won't be giving them much reason to get out and vote."

  • (Show?)

    Having multinationals be able to set up shop in Peru, bypass environmental and safety standards and then import their products helps neither Peru, or American farmers or consumers. UPO thinks that unsafe but cheap crap is an improvement for the world, when it is actually the opposite.

    Of course, in UPO's view, anyone who cites valid objections to flawed trade deals like NAFTA, CAFTA or the proposed Peru deal are "protectionism" luddites, never mind whether it is true or not.

  • (Show?)

    Amen to that one Lestat.

    At what point does a person with POV different from the Blue Oregon Norm become a troll?

    UPO has been directly challenged and questioned on specifics on at least three different threads in the last 48 hours and he declined to answer any of them.

    As this trend continues, he looks less like an earnest informed advocate of a contrary position and more like an idiot who can only repeat his mantra of:

    Free Trade, Free Trade, Free Trade

    It's becoming a waste of bandwidth, but luckily I'm still learning new info from his opponents.....

  • (Show?)

    Agreed Pat. Some of the comments in this thread are informative about what is flawed in the Peru agreement and other "free trade" agreements.

  • (Show?)

    Orftc, thanks for the reply.

    You did not cite an existing or proposed example of a Fair Trade Agreement. Let me ask again. I would be especially interested in a Fair Trade Agreement between a low-wage (third world, developing, poor) country and the US (or a developed country). Your last post slightly suggests that fair trade agreements “eliminating tariffs between countries with drastically different levels of economic and political development” are problematic or not possible. If this is so, then how do we give export opportunities to poor countries?

  • Francisco (unverified)
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    It is great for Oregon voters to have politicians like Merkley who listen to the people. People are understanding after so many years of NAFTA and the WTO that these treaties are not good for democracy but benefit selected special interests like multinational corporations who have a seat at the table in a closed-door negotiating room. These threat democracy because any local and state labor or environmental regulations would be deemed WTO illegal.

    Kudos to Merkley!

  • Jack (unverified)
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    "Fair trade" agreements between advanced industrialized democracies like the US and impoverished kleptocracies like Peru, Mexico, etc. strike me as being impossible to implement in the real world. "Fair trade" is little more than business as usual, just with a happier face. The whole freaking point of these agreements is to bypass American labor and environmental laws, not to mention gutting American unions.

    And it always struck me as funny that "protectionism" is a bad word among certain economic ideologues. Apparently some think it's a crime against humanity to protect our own economy, to protect our own people, and to protect our own sovereignty. Freetraitor ideologues would sell their own grandmother into slavery if it protected their return on investment, er, "benefited the American consumer."

  • Urban Planning Overlord (unverified)
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    Kevin, as long as the GDP per capita in the U.S. is six times the GDP per capita in Mexico, and the U.S. has a labor shortage for lots of jobs (hmmm...) there will be millions of Mexican illegal immigrants in the U.S.

    What NAFTA and sound economic policies have the potential to do, over several decades, is narrow that gap to the point where Mexicans do not have an economic incentive to cross the border.

    If Mexico adopts the types of free market economic policies adopted by nations in East Asia, it can ramp up its current 3.5 percent per capita GDP growth rate and narrow the gap that much faster.

    Or it can follow the discredited economic notions of "dependencia" zealots of the 1960's, or the "Bolivarian Socialism" of Hugo Chavez, that have now been gussied up as "anti-globalization" arguments and remain nobly poor, with suitably low life expectancy, high infant mortality, etc.

  • edison (unverified)
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    "Can we at least be a little honest about what are called free trade agreements? They have almost nothing to do with trade, but rather, are just a series of protectionist measures for corporate interests. And they are hardly agreements, at least in any sort of democratic terms. They are shoved down peoples' throats."

    Exactly.

  • jaybeat (unverified)
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    UPO writes:

    What NAFTA and sound economic policies have the potential to do, over several decades, is narrow that gap to the point where Mexicans do not have an economic incentive to cross the border.

    This is the line we have been told over and over again since NAFTA. Since that has been in place well over a decade, why is it that the trends so far are in completely the opposite direction.

    I also hear a lot that when so-called "free trade" agreements don't produce the benefits for both the poor and the rich countries that were promised, the poor country's failure to implement so-called "free market" reforms (which almost universally require poor nations to sacrifice the well-being of their citizens for the well being of rich nations' banks and corporations).

    Taken together, it is not hard to conclude that so-called "free trade" is in fact a huge scam, designed to convince people in both rich and poor countries to support policies that benefit only multi-national corporations and the politicians to whom they contribute.

    Certainly the "transition" of Paul Wolfowitz from a senior architect of neo-conservative philosophy to president of the world bank is extremely telling. Both neo-conservatism and the financial and trade apparatus of rich nations (WTO, World Bank, etc.) share a common objective--corporate hegemony at the expense of everyone and everything else.

    Not exactly objectives that belong in a website for progressive Oregonians, if you ask me.

  • (Show?)

    Trade is a complex issue, whether fair, free, or what have you. It is an issue that divides the Democratic coalition. It deserves considered discussion among Democrats, not mere sloganeering. Trying to balance concerns for our own domestic workers/consumers with concerns for the poor of the world is not easy. Consider the following from Paul Krugman's NY Times op-ed "Divided Over Trade" (5/14/07):

    "Should we go back to old-fashioned protectionism? That would have ugly consequences: if America started restricting imports from the third world, other wealthy countries would follow suit, closing off poor nations’ access to world markets.

    "Where would that leave Bangladesh, which is able to survive despite its desperate lack of resources only because it can export clothing and other labor-intensive products? Where would it leave India, where there is, at last, hope of an economic takeoff thanks to surging exports — exports that would be crippled if barriers to trade that have been dismantled over the past half century went back up?

    "And where would it leave Mexico? Whatever you think of Nafta, undoing the agreement could all too easily have disastrous economic and political consequences south of the border."

  • Urban Planning Overlord (unverified)
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    Jaybeat says: the poor country's failure to implement so-called "free market" reforms (which almost universally require poor nations to sacrifice the well-being of their citizens for the well being of rich nations' banks and corporations).

    Is that what happened in Japan, South Korea, Taiwan, Singapore? Is that what has been happening in China, India, Thailand, Malaysia, even Indonesia and the Philippines?

    It's sad when your political shibboleths are maintained in the face of actual facts.

    According to the country surveys provided by the Economist magazine, GDP growth in Mexico has averaged 2.8% over the past five years. In the U.S. it has averaged 2.7%. So Mexico isn't losing ground. Over the next five years Mexican GDP growth is forecast at 3.4%, compared to our 2.7%. So Mexico is projected to gain ground on us.

  • (Show?)

    UPO, what is the GDP growth of Mexico vs. their population growth?

    Any bets that is a net losing number.

  • Urban Planning Overlord (unverified)
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    this is blueoregon

    Economist Country Survey - Mexico. Population growth 2002-06 = 1.2%. Economic Growth 2002-06 = 2.8%.

    Meanwhile, the comparable numbers for the U.S. are population 1.0%, Economic Growth 2.7%.

  • Urban Planning Overlord (unverified)
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    Oops. Try this. http://www.economist.com/countries/Mexico/

    <h2>And then go to the "Change Countries" button, and get some education.</h2>
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