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Obama’s Free-Trade Victory Threatens 2012 Prospects

by Roger Bybee

By orchestrating the passage of three NAFTA-style investor-rights agreements with South Korea, Colombia, and Panama, which passed Congress last week, President Barack Obama is promoting the loss of more U.S. jobs to low-wage sites overseas. He's also protecting Panama’s status as a tax haven for U.S. corporations and money-laundering center for drug traffickers, leaving untouched the Colombian elite’s murderous war against unionists and opening up U.S. laws and regulations to challenges from foreign corporations.

Since the enactment of the North American Free Trade Agreement in 1994, the federal government’s adoption of “free trade” plans has produced 4.9 million job losses and the closure of some 43,000 factories, according to Global Trade Watch. Despite this, Obama has put his full weight behind the deals with help from Republican House members, including so-called 'populist'-fueled Tea Party members. Moreover, by successfully pushing for the free-trade deals, President Obama further reinforced the belief of many voters that Democratic leaders cannot be trusted in the fight to protect America’s productive base against the forces of corporate globalization. He says he's focused on combating the flow of U.S. jobs to low-wage, high-repression nations, but the president's reversal in backing the three agreements follows the path trod by previous Democratic presidential candidates Bill Clinton and John Kerry, who both condemned free-trade policies on the campaigns trails and then supported them in practice.

Candidate Obama in 2008 was able to win the Democratic nomination and then the presidency only by waging a ferocious attack on the economic and social devastation caused by “free trade.” In a typical speech, Obama thundered that

decades of trade deals like NAFTA and China have been signed with plenty of protections for corporations and their profits, but none for our environment or our workers who've seen factories shut their doors and millions of jobs disappear; workers whose right to organize and unionize has been under assault for the last eight years.

Such rhetoric enabled Obama to carry crucial industrial states against John McCain in 2008. But following in the footsteps of Democratic President Bill Clinton, who promised tough “side agreements” to NAFTA to protect labor rigthts and environmental conditions in Mexico and 2004 Democratic presidential candidate John Kerry, who memorably railed against “Benedict Arnold CEOs” who moved jobs abroad, Obama has reversed course and embraced the agenda of Corporate America.

Clinton’s much-touted “side agreements” turned out to be virtually toothless, but he never even dared to invoke these provisions in the face of incessant violations within Mexico. In 2004, candidate Kerry dropped the anti-“Benedict Arnold CEO” rhetoric once his nomination was assured. He has since returned to his embrace of “free trade.” 

Obama has furthered this pattern of betrayal by forcefully pushing for the three new “free trade” agreements. Aware of the anti-globalization sentiments of their economically-squeezed constituents, “More Democratic congresspeople voted against President Obama’s position than on any other issue,” notes Todd Tucker, research director for Global Trade Watch.  

Over 82 percent of Democrats voted against the Colombia FTA, more than two-thirds stood against the Korea FTA and just over 64 percent opposed the Panama FTA. “Clearly, congresspeople understood what the right position was and where their core constituencies were on these agreements,” Tucker says.

ANXIETIES GROW AS 'FREE TRADE' RESULT BECOME CLEARER

Since the enactment of the North American Free Trade Agreement in 1994, the federal government’s adoption of “free trade” plans has produced 4.9 million job losses and the closure of some 43,000 factories, according to Global Trade Watch. 

Public alarm about “free trade” and the loss of American jobs was heightened when the Wall Street Journal reported April 2 that major U.S. firms had destroyed 2.9 million jobs at home and increased employment outside the U.S. by 2.4 million jobs since 2000. 

Anxiety about the impact of job relocation to foreign sites is widespread among all political persuasions and income groups, with a fall 2010 Wall Street Journal/NBC poll showing that 86 percent of Americans “agreed  that outsourcing of manufacturing to foreign countries with lower wages was a reason the U.S. economy was struggling and more people weren't being hired; no other factor was so often cited for current economic ills." 

But Obama sidestepped this issue while campaigning for Democratic candidates in 2010 and thus forfeited the potential for credibly handing corporations a large share of the blame for persistent unemployment and widespread misery. With Obama rejecting the advice of Democratic advisors urging that the “offshoring" of U.S. jobs be highlighted, the 2010 mid-term elections produced an unprecedented loss of 63 Democratic House seats and 6 among Senate Democrats.

Reflecting the public hostility toward “free trade,” the current class of Democrats overwhelmingly rejected Obama’s appeal to join him in backing the three deals. The New York Times quoted U.S. Rep. Michaud of Maine:  “What I am seeing firsthand is devastation that these free trade agreements can do to our communities.” 

RELYING ON VOTES OF ANTI-WORKER REPUBLICANS

In the House, the White House had to rely heavily on the votes of Republicans. Democrats like Michaud and many others expressed their fury at more trade agreements that will cost American jobs at a time of massive unemployment and undermine global standards for democracy and environmental protections. 

The hoped-for alliance of progressive Democrats and non-Wall Street Republicans critical of corporate globalization largely evaporated into thin air. Tea Party-connected Republicans, although often portrayed in the mainstream media as “populists” angered both by Wall Street machinations and government “intrusion,”  have clearly shown their allegience to Corporate America.

As a Global Trade Watch release observed, “Countless House Tea Party candidates ran paid ads attacking job offshoring, helping them make key inroads among working class voters.” But while using this posture to gain votes,” ... virtually the entirety of the Tea Party backed candidates sided with the president for job-offshoring deals,” noted Global Trade Watch.

While the original Boston Tea Party of 1773 was a guerrilla action against the globalist East India Tea Company, as Thomas Hartmann points out in Unequal Protection, the Tea Partiers in Congress appear instead firmly lined with the global corporations. 

UNWILLING TO CHANGE FATAL FOOTNOTE

Democratic congressional dissent was particularly sharp on the deal with Colombia, where between 2,800 and 4,000 unionists have been killed since 1986. During the 2008 campaign, Obama had stated that he would oppose the Columbia deal “because the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.”

Yet according to Tucker, the Obama administration consciously decided to make labor protections meaningless and unenforceable. Tucker explained:

George W. Bush in 2007 changed these proposed trade agreement to include greater reference to international labor standards in the core text of agreements, “But then Bush eviscerated these standards with a footnote excluding reference to ILO [International Labor organization] labor standards [which would have been enforceable].

Labor organizations assumed that it would be easy task to get the Obama administration to delete the fatal footnote. But the administration refused, Tucker told In These Times.

Even with intensified scrutiny of government and closely-affiliated right-wing paramilitary groups, murders actually increased and barely any are prosecuted. “Ninety-seven percent of the past murders remain unprosecuted,” stated Llori Wallach, director of Public Citizen’s Global Trade Watch. “Last month, a group of six leading human and labor rights advocates in Congress submitted a document noting that the conditions in Colombia made considering any trade agreement unacceptable and setting forth some real benchmarks for improvement.

"Obviously, if the goal of this administration action was to actually address the conditions in Colombia—where the number of unionist assassinations has grown during the period of maximum congressional and public scrutiny, from 37 when the FTA was signed in 2007 to 51 in 2010—a very different approach would be undertaken," Wallach says.

SOUTH KOREA: OPENING FUNNEL TO REPRESSIVE REGIMES' PRODUCTION

The South Korea deal (known to Washington insiders as KORUS) figures to be the most momentous in terms of job loss. The Economic Policy Institute has projected job losses of 159,000 and an increase in the U.S. trade deficit with Korea. Further, unionists see the deal as opening the door to components produced under atrocious conditions in North Korea and China, as I reported in June:

“It is way worse than NAFTA,” declares Matt McKinnon, political director of the International Association of Machinists and Aerospace Workers. All but two major unions oppose KORUS, and the AFL-CIO as a whole has been forceful in fighting the deal. “KORUS will be setting up a funnel for the worst actors in the region to get their products into the US under the South Korean label," McKinnon argues. It “will essentially be a regional trade deal under which we won’t be able to exert any influence over the conditions in which the goods are produced.”

He explains that KORUS defines “South Korean-made” as any product that has at least 35% of its value created in South Korea. Under this rule, the origin of the remaining 65% does not matter. 

KORUS would potentially open up the United States to components produced under one of the world's most tightly-repressive nations. The rigid police state of North Korea has opened up a free-trade zone employing about 40,000 workers currently. South Korean firms operating factories in the zone typically pay the North Korean government just $3 to $4 per day per worker, of which the worker gets to keep just $1.

PANAMA: GREEN LIGHT TO TAX HAVEN AND MONEY-LAUNDERING CENTER

Turning to the Panama trade deal, the agreement will leave in place Panama’s ability to function as a center for tax evasion by U.S.-based corporations and wealthy citizens, as well as money laundering for narco-traffickers, said Global Trade Watch’s Tucker.

A Citizen Trade Campaign paper on Panama warned of another major danger to U.S. efforts to regulate Wall Street and conduct of US corporations: Panama is home to approximately 400,000 multinational subsidiaries, second in the world only to Hong Kong. Each one of those companies would be granted new powers under the new agreement’s investment provisions to challenge new Panamanian or American financial oversight measures adopted in the future.

Obama’s crucial support for the three “free trade” deals comes at a moment when a significant part of the potential Democratic base is literally marching in the opposite direction. The ongoing Occcupy Wall Street protests have the support of 54 percent of the American people, according to a recent poll.  

In many respects, the multi-constituency, multi-issue protests have descended from the anti-globalization movement. Noted author of the book Shock Doctrine Naomi Klein said in her speech at Occupy Wall Street, "Tthere is a direct connection between the messaging, energy and even many of the individuals involved in #OWS and the anti-globalization movement of the 1990s."

But Obama’s response, according to Wallach, was to display his pro-business credentials by continuing the push for three new trade agreeements. By upsetting much of the president's base, she argues, the prospects for Obama and Democratic House and Senate candidates in 2012 just grew dimmer:

once again the administration's response to a GOP/corporate hostage situation has been to betray its commitments and stomp its political base to comply with hostage takers whose goal is Democrats' defeat.

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