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Questions the Democratic Presidential Candidates Need to Answer on Trade & Globalization

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The Wisconsin primary featured the first-ever presidential campaign competition of who opposes the North American Free Trade Agreement (NAFTA) the most.

The candidates sparred on a daily basis to distance themselves from NAFTA and the United States' soaring trade deficits, loss of more than 3 million manufacturing jobs and flat median wages that have occurred since it and the World Trade Organization (WTO) took effect. Sen. Barack Obama has already sent a massive mailing throughout Ohio attacking Sen. Hillary Clinton's connections to her husband's passage of NAFTA and launched a large Ohio television ad buy on jobs that have been sent offshore. Clinton repeatedly bashed NAFTA, reiterating her pledge to take a time-out on new trade agreements. Both candidates made an array of commitments in a questionnaire fielded by the Wisconsin Fair Trade Coalition.

As America's anxiety grows, the economy not only is becoming a preeminent issue of the election, but the presidential candidates are responding to public anxiety about the current model of globalization. The Democratic candidates are reflecting back the public criticism of the status quo, but so far, they have avoided stating how an aspiring future president would restore the economic security of the American middle class in this era of globalization.

Among the questions the candidates would probably rather not answer:

1. How will they change existing trade agreements such as NAFTA, CAFTA and the WTO to counter job offshoring and labor arbitrage that have reduced U.S. wages? Both Democratic presidential candidates have committed to review NAFTA and to add labor and environmental standards. Obama has committed to doing the same to all existing U.S. trade agreements, including the WTO. Strong labor standards are necessary, but they are not sufficient to alter trade agreements' damaging economic outcomes for Americans. Labor rights requirements in trade pacts will provide workers in trade partner countries with essential tools to organize for improved wages and conditions over many decades as part of creating a social contract that may take a century to establish, as it did in the United States. However, a future president has a duty to secure tangible gains for Americans who are losing their jobs and seeing their wages stagnate today, and who fear for their children's futures in the coming decades. That requires changing the status quo trade model by eliminating provisions that promote immediate offshoring of U.S. production and jobs. The foreign investor protections included in these agreements directly incentivize offshoring by removing the risks normally associated with relocating to low-wage developing countries. Will the candidates commit to renegotiate the existing trade agreements' foreign investor protections that directly promote offshoring?

2. How will a future president remedy the China trade imbalance? In November 2007, the U.S. reached a new record annual trade deficit with China -- without December's figures even being calculated. Ohio has lost more than 200,000 manufacturing jobs since 2000. Ohio manufacturers are unable to compete when China grants enormous subsidies to foreign investors and misaligns its currency, which Federal Reserve Chair Ben Bernanke calls "an effective subsidy." What specific actions will each candidate take in his or her first year to address the U.S.-China trade debacle?

3. How will they deliver on their promises to ensure imported food and product safety? Both Democratic presidential candidates have stated that as president, he or she would take urgent action to remedy the current flood of unsafe imported products and food into the U.S. market. However, to do so they must commit to renegotiate current U.S. trade agreements to remove the limits on such domestic consumer protections. Will the candidates commit to renegotiating the limits on imported product and food safety standards and on border inspection rates now included in WTO and NAFTA and change the WTO rules that require us to accept imports that do not meet U.S. safety standards?

4. How will proposals to create jobs by rebuilding America's infrastructure work in the face of trade agreement bans on "Buy America" and other domestic preference policies? The procurement provisions included in the WTO, NAFTA and the various Free Trade Agreements now in effect undermine the ability of federal and state governments to use tax dollars to create and maintain good jobs by banning "Buy America" and similar preferences. They also include provisions that limit the ability of federal and state governments to use procurement policy to achieve other important social goals, including safeguarding prevailing wages and increasing renewable energy and recycled content. Will the candidates renegotiate existing trade agreements to remove the limits on domestic procurement policies that could impact their existing proposals to create jobs, rebuild our crumbling infrastructure and increase energy efficiency?

Most Americans still have no idea how NAFTA and the WTO hijacked the good name of trade to lavish market-distorting protections and subsidies on the corporations that helped write those deals and to impose limits on import safety standards and inspection. But increasingly, the candidates' advisors are delving into that question. Consider the speech recently given by Obama's top economic advisor -- avowed free market economics professor at the University of Chicago, Austan Goolsbee -- at a New America Foundation event titled, "As the Economy Screams: Perspectives and Proposals from the Presidential Campaigns":

"I do believe there's no one more in favor of open markets than me," Goolsbee said, "and that said, if you look at these 900-page [trade]agreements, they're two pages of what every economists says 'yeah, that's great' -- opening tariffs -- and then 898 pages of loopholes. It looks just like the tax code -- protect this company and make sure they're getting their money and these investor protections."

The relatively few interests benefiting from status quo globalization and trade policies have been hard at work spinning a line about how John Edwards' departure from the Democratic nomination race would mean the end for the trade issue in this presidential election cycle. The intensifying focus on the issue in Wisconsin and in Ohio puts an end to that line. Indeed, given that a majority of GOP voters now agree with the Democrats' more consistent critique of the current trade regime, during the general election, trade and offshoring may well become a priority wedge issue regardless of who wins each party's nomination.

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