"Free trade" has produced some of the most
contentious political debates of our times.
Economist Joseph Stiglitz argued in a famous April
2000 article in the New Republic, "Economic policy
is today perhaps the most important part of
America's interaction with the rest of the world.
And yet the culture of international economic
policy in the world's most powerful democracy is
not democratic."
During the George W Bush
years, economic policy received far less attention
in political discussion than before; the use of
military force took center stage. However, the
trade and development debate went on, and it
continues to affect fundamental questions of
global poverty, inequality, and opportunity. Under
a new Democratic administration - or under
a
Republican administration that demotes the
neo-cons in favor of the more traditional, realist
foreign policy establishment - it is likely that
economic policy will again become the most
important part of America's interaction with the
world. And it is likely that it will remain
profoundly undemocratic.
The injustices of
neo-liberal trade policy and the hypocrisy of US
stances in international negotiations have
produced an upheaval in multilateral institutions
such as the World Trade Organization (WTO), and
this has helped to transform the debate about the
global economy. But trade is also an important
domestic issue. Today, trade policy plays an
important role in the battle for the soul of the
Democratic Party.
One of the major
accomplishments of the Bill Clinton administration
was to move to the fore of the Democratic Party a
faction led by the centrist, corporate-friendly
Democratic Leadership Council. Working with
pro-"free trade" Republicans, Clinton and the DLC
made passing the North American Free Trade
Agreement (NAFTA) in 1993 and approving US entry
into the WTO in 1994 into bipartisan crusades. The
coalition in favor of corporate globalization was
always tenuous, however. In recent years,
especially as the Bush administration implemented
an increasing belligerent foreign policy, the
"free trade" coalition has frayed.
Shifting center of
gravity The center of gravity around
trade issues has been slowly shifting in the
Democratic Party throughout the Bush years, as
candidates have found that popular disaffection
with "free trade" deals can be a potent political
force. As a result, trade debates have grown
increasingly contentious. The Bush
administration's need to resort to desperate
measures in order to pass Central America Free
Trade Agreement in 2005 - and the fact that it
squeaked through Congress with the smallest
possible, 217-to-215 majority - reflected the
conflict.
When the Democrats swept the
November 2006 elections and regained control of
Congress, many of the victorious campaigns
featured prominent pledges to oppose pro-corporate
trade policy. In an excellent post-election
analysis, Public Citizen's Global Trade Watch
documented a major defeat for the "free trade"
coalition. Its report tracked seven senate races
and 28 House contests in which "fair trade"
advocates ousted "free trade" incumbents or won
open seats previously held by advocates of
neo-liberal deals. In contrast, no fair trade
incumbents were unseated.
Whether the wave
of revulsion against corporation globalization
will propel a lasting change in Democratic
policy-making will depend largely on figures like
Representative Charlie Rangel (Democrat -New
York), House speaker Nancy Pelosi
(Democrat-California), and Max Baucus, the Montana
Democrat who became chair of the Senate Finance
Committee. These political chiefs certainly do not
represent the fair trade activists at the base of
their party.
In late 2006, Bush visited
Vietnam the week before Thanksgiving, and he hoped
to bring with him news of Congressional approval
of Permanent Normal Trade Relations with that
country. This measure would have served as a
stepping stone to a free trade deal and an
endorsement of Vietnam's entry into the WTO. It
didn't happen. The bill failed to secure the
two-thirds majority it needed to pass, with many
emboldened Democrats rallying to defeat it. The
New York Times declared that the vote, which was
supposed to be an easy victory, instead signaled
"a deep disappointment and embarrassment for the
White House".
It may prove a temporary
setback, however. Both Pelosi and Rangel voted in
favor of the Vietnam trade legislation, and
promoters of the measure would like to see it
resurrected. In May 2007, Democratic leaders
announced that they had brokered a deal with the
White House to resume the bipartisan push for
"free trade" agreements, ostensibly with stronger
labor and environmental provisions attached.
True to form, the deal was negotiated in
secret, without input from environmental, labor or
public interest groups - or even participation
from the majority of Democratic lawmakers who view
the "free trade" agenda with suspicion. What the
agreement will mean in practice, and whether
opposition lawmakers and the citizens who put them
into office will accept the Bush-Rangel deal, is
still being determined.
Congress passed a
trade deal with Peru in late 2007 over the
opposition of labor and environmental groups, and
discord has flared up once again over a possible
agreement with Colombia, although election year
politics make its passage unlikely.
The
costs of 'free trade' at home Debates
over international trade and development policy
can often seem distant to most people. Yet the
battle within the Democratic Party shows that
these issues matter a great deal to Americans as
well as citizens overseas. Under the market
fundamentalist policies of neo-liberalism, the
international economy has been managed for the
benefit of a very narrow slice of the population.
It has placed the US Treasury and the
International Monetary Fund in positions as
economic overseers on a global plantation. This
type of domination goes against the values of all
those who decry sweatshop economics abroad.
It also has costs at home. The interests
of Wall Street are not the same as our national
interests or the interests of working people. As
successive administrations in Washington have
enforced a type of market fundamentalism in
foreign affairs, they have too often pursued a
parallel set of policies domestically.
Since the days of Ronald Reagan,
Americans, too, have been locked into the
trickle-down economics of the "golden
straightjacket", which has been a lot more golden
for billionaire families than it has for typical
citizens. For some, like those left behind after
Hurricane Katrina, when a stripped-down government
did little to help those in New Orleans who could
not afford to evacuate themselves, the results
have been tragic.
Sadly, neo-liberal
economics are not the exclusive purview of
Republicans. Indeed, given the Bush
administration's international recklessness, an
increasing number of corporate elites are turning
to the Democrats to implement their economic
agenda. In a front-page story entitled, "GOP is
losing grip on core business vote", The Wall
Street Journal reported in October 2007 that the
party could be facing a brand crisis as "some
business leaders are drifting away from the party
because of the war in Iraq, the growing federal
debt and a conservative social agenda they don't
share." Their defections will only increase
tensions within the Democratic Party.
The
ongoing battle in Washington has made clear that
many centrist Democrats who denounce Bush's
imperial globalization would be all too eager to
return to Clinton's pro-corporate vision for the
global economy if given the chance. But it also
indicates that their position may not be as
politically viable as it once was. A decade and a
half after NAFTA moved the trade debate to the
fore of political discussion, the broken promises
of "free trade" agreements are making
neo-liberalism's "clouds of gold" ever harder to
sell.
The majority of Americans have
reason to cry foul at such deals and to pressure
their leaders to enact a truly democratic economic
agenda. Citizen demands for good jobs, for full
employment, and for investment in the public good
go hand in hand with the call for fair trade and
economic human rights throughout the world.
Mark
Engler, a Foreign Policy In Focus
analyst, is author of How to Rule the World:
The Coming Battle Over the Global Economy
(Nation Books, April 2008), from which this
essay was drawn. He can be reached via his Web
site www.DemocracyUprising.com.
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