05/14/2007 09:23 am ET Updated May 25, 2011

The Secret Deal - Day 4: Fair Trade Populists Go On the Offensive

UPDATE: I have been invited to appear on Lou Dobbs Tonight at 6:45pm EST to discuss the secret trade deal. As always, because of the potential for breaking news, you never know 100% if these things will happen - but I wanted to let folks know.

This is the fourth in a series of posts following the announcement of a secret free trade deal this past week between a handful of senior Democrats and the Bush administration. It has now been four days since the deal was announced, and the specific legislative language of the deal remains secret.

With the opening of the new week, fair trade Democrats are going on the offensive in response to the secret free trade "deal" worked out between a handful of senior Democratic congressional leaders and the Bush administration. It is now a full four days since the press conference announcing the deal, and the dealmakers still have yet to release the legislative language of the trade policies in question, instead simply sending out their own press releases and triumphant statements from K Street lobbying groups. Coincidentally (or maybe not so coincidentally) this secretive behavior is happening at precisely the same time the Associated Press reports that "Democrats are suddenly balking at the tough lobbying reforms they touted to voters last fall" with many wanting "to keep the big campaign donations and lavish parties that lobbyists put together for them."

The stonewalling, and the declaration by the Bush-connected U.S. Chamber of Commerce that it has been given "assurances that the labor provisions [in the deal] cannot be read to require compliance" has created a full-on backlash on Capitol Hill and in the heartland. Though some say the specific legislative language of the deal hasn't been written yet, that explanation seems suspect considering the unity and enthusiasm with which top K Street icons have endorsed the deal and the claims of "assurances" corporate lobbyists say they have been given about the unenforceability of the labor standards. Here's the latest news.


THE HILL NEWSPAPER CONFIRMS EMANUEL STYMIED DEMOCRATIC MEETING ON TRADE: The Hill newspaper reports that "six House Democrats had sought to get House Speaker Nancy Pelosi (D-Calif.) to put off the announcement of a deal until after the caucus reviewed it, but were rebuffed." As reported on this website last week, a May 10th letter to Democratic Caucus Chairman Rahm Emanuel (D-IL) was ignored in advance of the press conference. Emanuel, not surprisingly, was the Clinton administration official who helped ram NAFTA through Congress. According to John D. MacArthur's groundbreaking book The Selling of Free Trade, Emanuel's specific responsibility at the time was convening weekly meetings with K Street lobbyists to plot about how to put pressure on Democrats to support the deal. Similarly, as an investment banker, he published a Wall Street Journal op-ed on the eve of the China free trade deal demanding Democrats support the agreement, which has resulted in the loss of thousands of good-paying U.S. jobs and further domestic wage deterioriation. In 2004, House Democrats nonetheless rewarded Emanuel by giving him a coveted slot on the Ways and Means Committee - the panel that oversees trade policy.

NAM HEAD ECHOES CLAIM THAT SECRET LEGISLATIVE LANGUAGE WILL MAKE LABOR STANDARDS UNENFORCEABLE: The Hill newspaper reports that former Michigan Republican Gov. John Engler, now head of the National Association of Manufactuers, "said the secret deal would not bind the U.S. to more detailed ILO convention" standards. This claim about the central tenet of the much-touted deal echoes a similar claim by the U.S. Chamber of Commerce's Tom Donohue.

AP - DEAL DESIGNED TO "PAVE WAY FOR FAST TRACK": The Associated Press reports that proponents of the deal believe it "could pave the way for an extension or renewal of Bush's "fast-track" authority, which allows him to present completed trade deals to Congress for an expedited vote." Earlier reports have indicated that this is one of the major motivations for the dealmakers. As just one example, Ways and Means Committee Chairman Rep. Charlie Rangel (D-NY) said after the deal that he now supports fast track reauthorization. Rangel's congressional counterpart, Finance Committee Chairman Sen. Max Baucus (D-MT), has not said where he stands on fast track. Most recently, Baucus refused to answer a direct question about his position at the recent International Economic Summit in Butte (audio of the interchange can be heard here). The question followed a Montana State Senate resolution demanding Baucus use his chairmanship to stop fast track reauthorization.


L.A. TIMES - FAIR TRADERS WILL BE HEARD ON TUESDAY: The Los Angeles Times reports that with a potential revolt on their hands, Democratic leaders added trade "to the caucus agenda [for Tuesday] through a petition letter filed Thursday by six House members concerned about the new policy, including Rep. Linda T. Sanchez (D-Lakewood), a former labor lawyer."

FRESHMAN DEM - MAJORITY OF DEMS OPPOSE THEIR OWN LEADERSHIP: Confirming a New York Times report last week, The Times reports that "Rep. Betty Sutton (D-Ohio), a labor lawyer who campaigned on a 'fair trade' platform and became one of the freshman class leaders, said a majority of the caucus, including many freshmen, opposes the new policy and is demanding more details." These rank-and-file lawmakers "complained that Pelosi compromised too much but also that her announcement of the deal Thursday took them by surprise, included few details and angered key constituents."

PELOSI TOUTS DEAL'S DETAILS, YET REFUSES TO RELEASE DEAL'S DETAILS: In the Times story, House Speaker Nancy Pelosi's spokesman said of fair trade critics: "Once they see the details [of the deal], I think people will be supportive." However, Pelosi's office has not yet released the legislative language of the trade pacts at the core of the secret deal.

FAIR TRADE PRESSURE PUTS BREAKS ON COLOMBIA AND SOUTH KOREA PACTS: In light of growing opposition to the secret deal and thanks to intensifying pressure by populist lawmakers on Capitol Hill, The Hill newspaper reports that "more economically significant deals with Colombia and South Korea, while covered by the deal, still face an uncertain future." United States Trade Representative (USTR) officials and business lobbyists acknowledged there is no guarantee those accords will come up for votes anytime soon.

KRUGMAN - FAIR TRADERS CRITICISM GROUNDED IN FACT: Writing in The New York Times, longtime free trade economist Paul Krugman acknowledges that "fears that low-wage competition is driving down U.S. wages have a real basis in both theory and fact." He acknowledges that in the 1990s he and other economists "concluded that the depressing effects of imports on the wages of less-educated Americans were modest" but "that may have changed." Though he does not take a position on the deal, his piece was an important benchmark for such a widely respected economist.