Page 1 of 2 COMMENT Why Obama shouldn't cave on trade
By Roger Bybee
Like torch-bearing villagers descending on a heretic's home, leading
commentators in the United States and from the United Kingdom have warned US
Democratic presidential nominee Senator Barack Obama in menacing terms: stop
"pandering" to unions on the issue of unrestrained corporate globalization.
"The kinds of conditions that he has promised labor he would try to negotiate
are really non-starters," MSNBC's Andrea Mitchell ominously declared on July 1.
"All bets would be off. You can't go there."
Translation: Obama must prove his independence from such
special interests by quaffing heartily from the "centrist" chalice of undiluted
"free trade".
However it might please the pundits who overwhelmingly support unfettered free
trade, for Obama to drink the "free trade" Kool-Aid would be toxic and could
cripple his presidential bid. Unfettered "free trade" is immensely unpopular
with the American electorate (see below for a summary of polling data) and
represents a ruinous economic policy that has decimated working families and
industrial communities by gutting the nation's manufacturing base.
Free-trade's shriveling support is openly acknowledged by some of its most
ardent champions. "It's a very unpopular position," admits Robert Reich, who
identifies himself as a free-trader, even though he fought for strong labor
protections to be included in trade agreements when he served as president Bill
Clinton's labor secretary. "In Michigan, you can find almost as many
free-traders as you can chicken hawks. There are not many."
But it's precisely this "very unpopular" position that a sizable posse of
pundits is pressing Obama to adopt in the name of winning over voters in the
"center". For example, his call for imposing strong labor and environmental
standards in existing and future trade deals would be politically and
economically disastrous, proclaim even "liberal" editorialists and pundits
afforded major exposure.
Shifting ground
Clearly, Obama's own carefully calibrated, oft-shifting messages on "free
trade" have invited this deluge of bad advice. Despite his background as a
community organizer among workers whose steel mills had shut down, Obama has at
times advocated a passive adjustment to corporate globalization and its most
devastating effects. These remarks earned plaudits from The New Republic's Josh
Patashnik, who praised a 2005 speech focused not on "stop[ping] trade or
globalization" but asserting "the government wasn't doing enough to compensate
the losers."
But Obama's increased contact with actual voters during the early primaries
showed them to be infuriated with the North American Free Trade Agreement
(NAFTA) [with Mexico and Canada, which came into effect in 1994] in particular
and "free trade" in general. In the Iowa primary, populist Democrat John
Edwards finished an unexpectedly strong second to Obama, largely based on his
forceful criticisms of "free trade". Anti-outsourcing Republican Mike Huckabee
scored a surprising first-place finish in Iowa.
In neighboring Wisconsin, Obama's advocacy of a hard-hitting anti-outsourcing
position was richly rewarded with a big win on February 19 that captured a
majority of white working-class males. Outside a GM plant since slated for
closing, Obama denounced "a Washington where decades of trade deals like NAFTA
and China have been signed with plenty of protections for corporations and
their profits, but none for our environment or our workers, who've seen
factories shut their doors and millions of jobs disappear."
By calling for NAFTA's re-negotiation and challenging other key elements of the
current "free trade" system, Obama provoked a sharp escalation of pressure from
the media elite to swear off far-reaching reforms of global trade. Here are
four examples:
A Seattle Times editorial demanded that Obama "state that he will not backtrack
on [support for "free"] trade."
The USA Today editorial board reproached "the candidates' [Obama and Clinton]
willingness to pander on free trade – and their party's growing willingness to
accept the labor movement's defeatist anti-trade positions."
A New York Times editorial excoriated opposition to unfettered "free trade" as
"posturing."
The New York Times Magazine ran a column by financial writer Roger Lowenstein,
who argued that Obama's political acumen would be tested by his willingness "to
reclaim a moderate position on trade."
Steady drumbeat
After securing the nomination, Obama evidently felt the pressure to soften his
profile on trade in a Fortune magazine interview, offering that his
anti-corporate globalization rhetoric may have gotten "overheated and
amplified", and left his final position ambiguous and open to widely varied
interpretations. Meanwhile, the drumbeat of pundits calling for Obama to fully
repudiate his anti-free trade position continues unabated. For example, on June
30, the BBC's Matt Frei sternly warned in Newsweek that "the Obama campaign has
virtually issued an ultimatum to Mexico and Canada to renegotiate NAFTA on
American terms - or else. It has done this presumably to pander to much-needed
union votes."
Since most leading pundits are based in Washington, DC, they miss the daily
experience of driving past empty factories, boarded-up storefronts, and
foreclosed homes that millions of Americans attribute to the outsourcing of
jobs encouraged by NAFTA and other examples of "free trade".
Witnessing deindustrialization and community decay has persuaded most Americans
that "free trade" is a formula for lost jobs, falling wages, economic
insecurity, and shattered lives as suicides, abuse, family breakups,
criminality, and alcohol and drug abuse follow in the wake of shuttered plants.
"Free trade" with Mexico (NAFTA's estimated US job loss: over one million) and
China (nearly 2.2 million jobs lost, according to economist Robert E Scott at
the Economic Policy Institute) in particular has established repressive,
low-wage platforms from which US corporations export products back into the
United States while laying waste to blue-collar neighborhoods and industrial
communities across America.
The export of US jobs to China is so intense that China is about to overtake
the United States in manufacturing. Yet the opinions of the vast majority of
pundits and editorialists remain fundamentally fixed and impervious to nearly
15 years of experience with NAFTA and a similar period of intensified trade
with China.
A New York Times editorial presents the dominant yet simple-minded, almost
cult-like belief in corporate globalization's inevitably beneficial effects:
"[T]rade is good for the economy, providing cheap imports ... and raising
living standards." With rigid uniformity, the punditocracy repeats as if by
rote this "trade is good" mantra again and again, leaving them too entranced to
comprehend that that "cheap imports" are premised on perpetuating repressive,
low-wage sweatshop conditions.
Intra-firm transfers
Moreover, a substantial portion of this international commerce hardly qualifies
as "trade," since it is composed of "intra-firm transfers" within the same
corporation. This term refers to US-based firms exporting machinery for new
factories and parts for final assembly to their very own subsidiaries outside
the United States, and then re-importing through finished products produced by
low-wage workers.
In the case of Mexico, as a New York Times news article revealed, US-owned
assembly plants located just inside Mexico produced US$78 billion in exports in
2002, but nearly two-thirds of that sum came from American parts assembled in
Mexico and then re-exported to the United States. Looking at China, fully 60%
of "Chinese" imports into the US market originate from US-owned firms taking
advantage of China's extremely low wages and repression of labor rights.
Each element of the free-trade faith shatters when it collides with
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