Iowans Think John Edwards Is Right On Trade

Forget what the pundits and some of the elements of the Democratic corporate establishment think: John Edwards is reflecting the sentiment of Iowans when he points out the dangerous effects of globalization.

Today's Wall Street Journal tells us this:

At a John Deere plant here, bright green tractors bound for Brazil, Russia and China roll off assembly lines. Global demand for tractors is good, and that's been good for Waterloo.

Yet over the last couple of years, workers and voters in this blue-collar manufacturing outpost -- and throughout Iowa -- have grown decidedly downbeat about globalization. Trade has become such a hot subject that Democratic presidential candidates seeking support in Iowa's influential Jan. 3 caucuses are turning into trade skeptics, and the issue is splitting traditionally free-trade Republicans.

Iowa's ambivalence is all the more remarkable because the state is on the whole a big winner from global trade. "Iowa, as much as any other state, is on the plus side of the ledger," says James Leach, a 30-year Republican congressman from Iowa who now runs Harvard University's Institute of Politics. "It would be highly ironic if pro-protectionist candidates prevailed in the Iowa caucuses." Trade wasn't always such a high priority: In the 2004 Iowa caucus, Richard Gephardt, the most outspoken Democrat on the issue, attracted so few votes he subsequently pulled out of the race.

The story gets at a point many of us have been making for some time:

While the farm economy eventually improved, Deere's employment never rebounded to its previous levels and workers began to see threats from overseas. Tractors made in Waterloo are no longer fully American-made and are instead outfitted with parts from Mexico and Italy. Deere recently completed the acquisition of China's Ningbo Benye Tractor & Automobile Manufacture Co., which makes low-horsepower tractors.

And Deere has pressured the United Auto Workers, which represents Deere's hourly workers, to cut wage and benefit costs. In 1997, the UAW agreed to a two-tiered compensation structure under which new hires would be paid at a lower rate and get less-generous benefits. Today workers start at $12.01 an hour, about $4 an hour less than the previous entry-level wage.

That is, that this isn't about the question of globalization in the abstract. It's about THE RULES OF GLOBALIZATION. Too many people think that globalization is just a slogan to mouth without looking at the rules that are governing trade. The fact is: globalization is nothing new. We've traded ever since humans walked on the earth. We need to stop being enthralled by the slogan "globalization" and think about how we set up rules that govern those trading relationships.

That Iowans are worried about trade is not really a surprise. Even Republicans are rejecting so-called "free trade."

Actually, what worries me are dumb remarks from so-called "liberals." Take this one in the story from former Labor Secretary Robert Reich, who was one of NAFTa's big proponents and helped Bill Clinton push that deal through:

"It's unfortunate that the Democrats are willing to describe trade as part of the problem," says Robert Reich, President Clinton's labor secretary. He worries the current crop of Democratic contenders will undo Mr. Clinton's progress and potentially enact policies that hurt economic growth. "It's pandering to a misconception in the public. The truth is that trade is good for the U.S. but that some people are burdened by it far more than others. We've got to make them all winners, but you don't make them winners by attacking trade," he says.

With all due respect to Reich, he is full of shit. It is the very framework that Bill Clinton encouraged that is the problem--not the Democrats who are trying to undo that framework.

If anything can come from John Edwards bid for the presidency, however it turns out, it would be a great victory for all working people if we could change the debate on trade from the idiotic notion that people who are opposed to so-called "free trade" are not interested in trading relationships TO the debate over creating trade that isn't based on lowering wages.

Comments

[mdtaichi]

Trade is the strikingly clear policy issue that demonstrates the difference between John Edwards and the corporate Democrats. As he has always been a consistent champion for working families, Edwards is now their advocate for fundamental "smart trade" changes that address imbalances and unfairness in the present system. The American middle class has been squeezed downward a full level due to stagnant wages and an extreme disparity of income. Despite all-time high productivity, working people have not received their fair share under the present trade regime. The rules benefit multinational corporations and the economic elite but not American working families.
"Americans need new trade policies that put workers, wages and families first. Most families are working harder and struggling to get by. Our economy is growing and the productivity of our workers is at an all-time high, but workers' wages have failed to keep up with the costs of health care, education and retirement. Globalization, technological change and outdated labor and workplace laws have fundamentally changed our economy and redistributed the benefits of economic growth upwards. Equally fundamental change is needed to ensure our economy once again rewards work." - John Edwards /

[PeaceCzar]

Smart Trade. Fair Trade.

NOT Free Trade.

[OhPlease2007]

When it comes to protecting future generations' interests in this debate over Free-Trade, it becomes all too clear that Iowans 'get-it' that this is NOT a football game election over, 'making history.' John Edwards is the only electable democratic candidate that is truly fighting for the interests of, 'American workers.' And at the end of the day, amongst the 1st tier candidates, John Edwards is THE most complete package when it comes to fresh ideas -AND- experience. I am voting for John Edwards.

[leftbehind2000]

We protected farmers in the past by imposing tariffs on the products we import. Why can't we protect the service sector in a similar manner by imposing some kind of tariff on services we "import" from other countries?

[cblcar]

NAFTA's disasterous policies do not just affect trade. By dumping cheap American corn into Mexico, we are driving Mexican corn farmers out of business. Then what do those workers do? They migrate here illegally contributing to the illegal immigration problem. Immigration, out-sourcing, lower wages, it's all tied together. Free trade is not free. We need fair trade policies. Both Obama and Clinton are supporting the Peru Trade Agreement which is just more of the same. Shame on them.

[cynara]

"the idiotic notion that people who are opposed to so-called "free trade" are not interested in trading relationships TO the debate over creating trade that isn't based on lowering wages."

Agreed. I, personally, don't see anything inherently wrong with the idea of trade. Trade creates efficiency - allowing for goods to be produced there is the lowest possible input costs to areas where they cannot be produced so easily. In the case of raw goods, mangos can be grown in Mexico (where they are suited to the climate ) and transported to California, where growing mangos would be more expensive. Cherries can be grown in Washington and transported to Mexico, where growing cherries would be a lot more expensive. Certain regions specialize in custom craft goods, their input costs are lower since they are already trained and have refined their craft, that they can distribute to the rest of us is a good thing. If trade models can be set up to eliminate needless tariffs and border waits, this enhanced the overall efficiency of the system.

The efficiency created by trade however, becomes a problem when it is applied to wages. To lower production cost a company will seek the lowest possible wage market.

In the case of NAFTA, the lowest wage market was Mexico. Other companies, in order to compete with the companies taking advantage of low Mexican wages, also move to Mexico, or lower their wages in Canada and the US, dragging down US wages. Mexican wages become farther depleted due to weak labor law enforcement and lobbying by multi-national corporations, profiting Mexican cheap labor, to keep wages low. Mexican average blue-collar wages are $4.50 - $8.00 per DAY. Since the Mexican wages are not enough to buy food (according to Mexico's own statistics), Mexican's feel forced immigrate to the US or Canada for better wages. Suddenly, we are faced with a flood of non-union immigrant workers willing to work for less than the prevailing wages in the US. US wages continue to drop, since cheaper labor is now available.

[cynara]

(continuation of previous comment)

The problem is, without changes to NAFTA (and the Mexican labor system), the Mexican real wage continues to drop below levels of inflation, and the cycle of illegal immigration and lower wages continent-wide continues. And who knows how badly further trade agreements will compound the problem.

NAFTA didn't have to be a bad thing. If there had been conditions in NAFTA, stating that the agreement could be suspended for industries in countries where widespread labor abuses were found by an independent commission, and if NAFTA had been conditional on mandatory minimum wage increases in Mexico, we would not be in the situation we are today.

By allowing an agreement with a neighbor with weak labor laws and poor wages, wages and labor laws for all countries in the alliance have suffered.

Just a note, Edwards has been very strong and clear on the need to reform NAFTA. But Joe Biden is the only candidate I have heard speak to the Mexican wage issue in the equation.

[outnow]

"That sucking sound you hear is NAFTA taking jobs across the border." Ross Perot. I love John Edwards for his stand against NAFTA. Capital flows unregulated but working people are confined inside of international borders. Cheaper foreign labor is pitted against domestic workers inside the United States but the playing field in not level for domestic workers. The cost of living here is much higher.

Are the profits passed along from Wall Street to Main Street? No, unless you want a cheaper IPod and no job. I'd take the job so I can afford the IPod. The manufacturing sector is gone overseas where there are no labor standards or environmental controls. There are fewer taxes abroad. No contributions are made to social security by those foreign workers.