05/12/2007 08:48 am ET Updated May 25, 2011

Secret Trade Deal Battle: K Street vs. Middle America

This is the second in a series of posts following the announcement of a secret free trade deal between a handful of senior Democrats and the Bush administration.

Another long day as the reverberations continue to intensify after yesterday"s press conference announcing a secret "free" trade deal between a handful of senior Democrats and the Bush administration. In the interest of brevity, I have compiled the major news of the day, including new revelations about who is supporting the deal and who is opposing it, though remember - it is difficult to make any hard and fast conclusions because Democratic leaders and the White House continue to keep the details of the deal completely secret. That said, a look at who is supporting the deal and who is opposing it provides some key insights into what this deal is really all about. Already, the New York Times has reported that at least half of all House Democrats may immediately oppose the deal because it seems to fly in the face of the Election 2006 mandate against lobbyist-written trade policy. And now, a day after the announcement, the battle lines are being drawn.

For reference, Public Citizen is calling for the public immediately contact Congress asking lawmakers to reject the deal, on the basis of what we already know about it. The organization has created a website for this purpose here.


DEAL MAKES SURE TO PREVENT UNIONS FROM HAVING SAME RIGHTS AS CORPORATIONS: Reuters reports that the deal includes "a provision that would only allow national governments" - not unions - "to file a labor complaint under the pact," meaning Democrats complicit in the deal are effectively proposing that America rely on the Bush administration to make sure workers and the environment are protected. This provision in the deal creates a clear double standard that prioritizes corporate rights over worker rights. Specifically, the provision stands in contrast to provisions already in America's current trade pacts that allow domestic and foreign corporations to file complaints against sovereign governments (including U.S. local, state and federal governments) when those governments pass environmental/consumer protection laws. These complaints have resulted in U.S. taxpayers alone being forced to pay roughly $1.8 billion in "damages" in international courts because of its own laws.

DEAL PREVENTS DEMANDS FOR U.S. TO RESPECT INTERNATIONAL LABOR STANDARDS AT HOME: Bloomberg News reports that the deal appears to ensure that unions and other countries cannot demand enforcement of International Labor Organization standards in the United States. Specifically, "federal trade officials said they are confident that the wording protects against any possible litigation." This report is consistent with a statement from the U.S. Chamber of Commerce, which yesterday said key players in the deal have given K Street "assurances that the labor provisions cannot be read to require compliance with ILO Conventions."

NAM - ANTI-UNION BEHAVIOR IN U.S. WILL BE PROTECTED UNDER THE DEAL: Reuters additionally reports that the National Association of Manufacturers is assuring its members that anti-worker behavior cannot be challenged under the deal. "Our state right-to-work laws and other state laws and constitutional provisions relating to labor are completely exempted from any challenges," said NAM president John Engler.

EXPERTS SAY DEAL DELIBERATELY IGNORES MOST IMPORTANT ISSUES: In a memo sent to Capitol Hill, internationally reknowned trade experts at Public Citizen report that the deal does nothing to eliminate/reform "the outrageous ban on domestic anti-off-shoring policy and Buy America policies contained in the agreements' procurement chapters"; Does nothing about "the NAFTA Chapter 11-style foreign investor rights that expose our most basic environmental, health, zoning and other laws to attack in foreign trade tribunals": Does nothing about "the serious threat the pacts' rules pose to our prevailing wage laws for government contracts and recycled content and renewable energy policies"; Does nothing about "the food safety limits that require us to import meat not meeting our safety standards -- even as we face a new crisis of unsafe imported food"; and does not include provisions "to fix the Peru FTA provisions that would allow Citibank, or other U.S. investors, to sue Peruvian taxpayers if Peru tries to reverse its failed Social Security privatization."


REUTERS - BIG BUSINESS OVERJOYED: Reuters reports that most of the corporate lobbying community in Washington, D.C. is praising the deal.

DLC APPLAUDS DEAL AS FIRST STEP TO GIVING BUSH FAST TRACK: The Democratic Leadership Council - the corporate-funded group that has long supported NAFTA and other similar pacts - issued a statement praising the deal, and saying it is "good news" that the agreement is a step towards Democrats passing President Bush's request for reauthorization of "fast track" trade authority.

SENATE DEM POLICY COMMITTEE PASSES OUT K STREET PRESS RELEASES: The U.S. Senate Democratic Policy Committee blasted out a triumphant email alert to Capitol Hill staff touting press releases praising the secret Democratic-Bush trade deal from the National Association of Manufacturers, the Financial Services Forum, Microsoft and the Emergency Committee on Trade - the corporate front group pushing this deal.


TWO LEADING FAIR TRADE SENATORS RAISE MAJOR CONCERNS: The two leading fair-trade lawmakers in Congress - Sens. Sherrod Brown (D-OH) and Bernie Sanders (I-VT) - both issued statements raising serious questions about the deal. Brown said "I have significant concerns about the enforceability" of the proposal - likely a reference to the U.S. Chamber of Commerce's statement saying the key players in the deal have given K Street "assurances that the labor provisions cannot be read to require compliance with ILO Conventions." (for reference, the AP reported in 2004 that the Chamber "urged American companies to send jobs overseas" by "exporting high-paid tech jobs to low-cost countries" and attacked state legislators proposing "bills that would limit or ban offshoring of government contracts"). Sanders, meanwhile, said "it is very disappointing that these negotiations took place behind closed doors" and that he intend to see that a real "discussion takes place, and that the needs of ordinary Americans are put ahead of the needs of CEOs of large corporations."

CHANGE TO WIN PLEDGES TO FIGHT THE DEAL: The Change to Win Coalition - the group of unions representing 6 million workers that left the AFL-CIO - released a statement saying "we are disappointed that House Democratic leaders joined with the Bush Administration yesterday to announce a trade deal that is more free than fair." Specifically, Change to Win said the deal "fails to address how to protect U.S. jobs or create new ones, undermines our prevailing wage and Buy America laws, and hands foreign firms operating here more privileges over U.S. companies." The unions conclude that the deal "opens the door for subsequent harmful trade policies that resemble NAFTA/CAFTA."

AFL-CIO SAYS DEAL FAILS TO ADDRESS MAJOR PROBLEMS: The AFL-CIO issued a statement praising Pelosi and Rangel for making some "progress on workers' rights and the environment" but said "we remain concerned that the agreement fails to adequately address issues related to the outsourcing of U.S. jobs and the ability of foreign corporations to challenge U.S. laws, among others." The AFL-CIO said "we reserve final judgment until we have reviewed the agreements in their entirety." The specifics of the deal still remain secret, more than 24 hours after the major press conference to announce it. The AFL-CIO also made clear that no deal "clear[s] the way for other flawed agreements, and we will vigorously oppose the Colombia and South Korea agreements and renewal of Fast Track trade authority." Republicans have been telling reporters that this deal is the first coordinated step in a process to secure congressional reauthorization of President Bush's "fast track" trade authority - the authority that has allowed him to eliminate labor, human rights and environmental protections from deals like CAFTA. Rangel yesterday also said he will be supporting some form of fast track reauthorization.

STEELWORKERS DEMAND TO KNOW WHY DEMS ARE KEEPING DEAL SECRET: The Steelworkers issued a statement slamming Democratic leaders for deliberately keeping unions in the dark about the deal. "We are deeply disappointed that neither the Democratic caucus nor the Labor Movement were fully briefed about the details of the proposed agreement before those who negotiated it were publicly proclaiming its virtues," the union said. "We will withhold judgment on how much progress, if any, has actually been achieved. But, from what we have learned so far, unlike protections provided for corporations and intellectual property, the enforcement of labor and environmental standards would be left to the devices of the Bush administration [meaning] we will be hard pressed to support this agreement."

TEAMSTERS SAY THEY WILL "FIGHT LIKE HELL" AGAINST THE DEAL: Teamsters President James Hoffa released a statement saying "Democratic leaders in Congress joined with the Bush administration yesterday to announce a trade 'deal' that sells out American workers" and that the Teamsters "will fight like hell to oppose this shortsighted agreement." Particularly interest was Hoffa's declaration that "I am baffled as to why there is such eagerness to give this president - who is unwilling to enforce current labor and trade laws -- a victory" and his inquiry about "why there was so much urgency to have a 'deal'" in the first place. Put another way, trade is the one area where if Democrats don't do anything at all, they could create the strategic pause in bilateral trade deals called on by leading economists like EPI"s Jeff Faux and leading presidential candidates like Hillary Clinton. Why, then, would they instead move forward with a deal - especially one that has them embrace one of the most unpopular presidents in contemporary American history? Is K Street cash really that powerful?

DOMESTIC MID-SIZED MANUFACTURERS SAY DEAL IS "A SELL OUT": The U.S. Business and Industry Council - the group that represents mid-sized domestic manufacturers - released a statement condemning the deal. "The 'New Trade Policy' compromise announced yesterday by House Democratic leaders, House Republicans, and the Bush administration will become a simple sell-out of U.S. producer and worker interests if not quickly accompanied by more fundamental changes in America's global trade strategy," the group said.

PUBLIC CITIZEN ASKS PUBLIC TO MAKE ITS VOICE HEARD IN OPPOSITION: Public Citizen's Global Trade Watch sent out an urgent email alert calling on the progressive movement to contact Members of Congress demanding they reject the deal. You can find the alert here. Public Citizen said the deal specifically refuses to "de-NAFTA-fyi trade agreements by removing the bans on anti-off-shoring and Buy America policies, or the outrageous foreign investor rights that facilitate off-shoring and attacks on our health and environmental laws" adding that this is "a scenario where some truly tasty icing has been spread over a deeply rotten cake." The group confirmed that "Unions, environmental groups, small businesses, and (most outrageously) most members of the U.S. Congress were excluded from the negotiations, had NO access to the various documents and texts and had no say -- and in fact no notice -- on the deal."