GOP Struggles To Please Business Allies Without Giving Obama Win On Trade Deals
This piece is the first in a three-part collaboration with The Dylan Ratigan Show focused on trade issues, called Trading Our Future.
WASHINGTON -- Congress is widely expected to vote on a series of major trade deals with Panama, South Korea and Colombia at some point before its August recess. The agreements, negotiated by President George W. Bush in 2007 and tweaked by President Barack Obama late last year, would secure a host of long-desired rewards for multinational corporations.
But they would also amount to a series of setbacks for American workers and taxpayers, unions and public interest groups fear.
Nevertheless, congressional Democrats appear ready to sign-off on the basic contours of at least some of those deals. The main obstacle to passage on two of those deals is now resistance from House Republicans who don't want to hand Obama a political win on trade, even though the deals have strong support from GOP lobbying allies at the U.S. Chamber of Commerce and the National Association of Manufacturers, whose members hope to profit from the agreements, which make offshoring jobs easier and prevent the U.S. from taking action against secretive corporate tax havens.
"The multinational corporations see a profit opportunity and they're probably right," said Thea Lee, Deputy Chief of Staff for the AFL-CIO, the largest coalition of unions in the United States. "But our job is to represent the interests of American workers, so we have a very different perspective on the economic impact of this."
JOB GAINS, JOB LOSSES
Obama has recently defended the deals, saying the Korean agreement -- the biggest trade deal since the North American Free Trade Agreement -- will support thousands of U.S. jobs. And it will. But it will also send thousands more U.S. jobs abroad and expand the federal trade deficit, according to a 2007 report by the U.S. International Trade Commission. While Obama has improved those numbers since the report by partially cushioning the blow the deal would deliver to auto workers, the general numbers remain bleak.
"If you parse Obama's statements very carefully, they only talk about jobs created through exports," said Economist Robert Scott of the Economic Policy Institute, a liberal think tank.
Scott calculates that the Korea deal will lead to net U.S. job losses of 159,000. "They just ignore imports as though they don't exist," he said of the Obama administration.
Unlike South Korea's economy, the economies of Panama and Colombia are simply too small to have any serious impact on U.S. trade. But they could have a tremendous impact on human rights, international labor standards and the tax bills at U.S. corporations.
A 2008 report from the Government Accountability Office listed Panama as an offshore tax haven -- a country where wealthy Americans and corporations can stash money to avoid paying U.S. taxes. According to a 2010 report by the Organization for Economic Cooperation and Development, the small nation currently has over 400,000 corporations and private foundations, a tremendous number for a nation with an annual economic output of less than $25 billion.
Under the proposed agreement, if the U.S. tries to crack down on offshore tax haven abuse in Panama, corporations could actually sue the federal government for violating the deal.
LABOR RIGHTS IN COLOMBIA
While most U.S. labor unions hate these plans, their major D.C. lobbying shops have essentially rolled over on both the Korea and Panama deals, in part because of the prospect of a much more frightening agreement with Colombia. For unions, the Colombia deal isn't predominantly about jobs, wages or workplace standards: It's about murder.
More union leaders are assassinated each year in Colombia than in the rest of the world combined. Last year, the 51 people were killed -- which is more than in 2007 when Bush negotiated the treaty, according to statistics compiled by Escuela Nacional Sindical, a Colombian nonprofit, cited by the U.S. Labor Education in the Americas Project.
"We have a fundamental principled objection to entering into an agreement with a country with such a high level of violence against trade unionists," said the AFL-CIO's Lee. "If the government cannot or will not protect people who exercise their legal rights, it's hard to see how the labor standards are going to be enforced."
In early July, Service Employees International Union President Mary Kay Henry wrote a letter to Congress warning that a deal with Colombia could not be upheld under the violent status quo.
"Perhaps in the future, workers in Colombia will be able to exercise their basic rights without putting their lives in danger," she said. "That day is not here yet."
Unions have had some limited success trying to block the trade deal with Colombia. Rep. Sander Levin (D-Mich.), the top-ranking Democrat on the House Ways and Means Committee, has said he opposes the Colombia deal because Obama did not incorporate an "action plan" negotiated with the Colombian government to deal with the murders in the congressional proposal. Unions say the action plan would be inadequate, because it doesn't actually require the Colombian government to reduce the level of violence directed at workers and only mandate it set up institutions tasked with the official goal of reducing that violence.
"They've come up with this fake action plan on labor rights, which doesn't cover any of the major issues," said Lori Wallach, Director of Public Citizen's Global Trade Watch, a nonprofit consumer advocacy group. "Since the action plan was agreed to, there have been four more union assassinations."
With unions focusing on Colombia, Democrats have had the political cover to side with Republicans and multinational corporate titans in support of the Panama and Korea deals. The SEIU, for instance, has only officially announced opposition to the Colombia deal. Although the AFL-CIO formally opposes all three, its resistance to the Korea deal has been hampered by an internal split. While most unions in the AFL-CIO coalition oppose the deal, the United Autoworkers supports the pact, buoyed by Obama's work to slightly expand U.S. access to the Korean auto market.
ASSISTANCE FOR AMERICAN WORKERS?
The major sticking point between Republicans and Democrats on the deals is the Trade Adjustment Assistance program, which provides training and other benefits to workers whose jobs are outsourced by free trade deals. House Republicans want to kill the program, and House Speaker John Boehner (R-Ohio) is pushing to strip out the TAA provision from the remaining trade deals for a separate vote -- which Republicans could then kill.
"This year, frankly, the crazies in the Republican conference have made it this hot-button political issue," an aide to an influential House Democrat told HuffPost.
TAA has long enjoyed bipartisan support, and the program is not considered anywhere near as important to organized labor as the overall trade agreements.
"It's kind of bizarre," said AFL-CIO's Lee. "For us, it's not enough -- It doesn't balance out a bad trade deal"
"I think it's just the bad-faith political maneuverings on the Republican side. They don't have a serious objection to TAA, they're just making mischief," Lee added.
But Democrats are nevertheless balking at approving a deal to offshore jobs without at least throwing affected workers a bone. Although concerns over violence are holding up the Colombian deal, the TAA provision alone is currently blocking the Korea and Panama agreements.
For ordinary legislation, Congress could write and amend bills however they want, and with Republicans controlling the House, it would be easy to move a bill akin to Boehner's preferences. But trade deals are different. The Constitution grants the executive branch the power to make trade deals, so legislators can only approve a deal the president submits to Congress -- they can't amend the deal or tweak any provisions. As a result, legislators are making a host of demands to Obama before he presents both chambers with a final bill that Congress can either approve or reject.
The Obama administration said it does not know when it will present Congress the final trade bills. But regardless of what the final terms will be, unions aren't happy
"This is quite likely to exacerbate our trade imbalance ... and cost us jobs," said AFL-CIO's Lee. "As we are struggling to come out of the current recession with a 9.2 percent unemployment rate, we think it's ill-advised."
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First Posted: 07/19/11 05:21 PM ET Updated: 09/18/11 06:12 AM ET