The election of US president-elect Barack Obama has delivered a decisive victory to “fair traders,” mainly Democrats and their allies who for years have contended that the free-trade policies of past administrations were a recipe for US job losses and environmental degradation.
Obama’s win marks the first time in modern US history “that a candidate advocating a shift in our trade policies in a decisively pro-worker, pro-consumer, pro-environment direction has been elected president,” Public Citizen’s Global Trade Watch, an advocacy group that is critical of free trade agreements, said in a report.
On the other side, Dan Griswold, director of the Center for Trade Policies at the pro-trade Cato Institute, was equally stark in his assessment: “We are going to see the US retreat from its longstanding leadership in the global economy.”
Obama has taken a generally mainstream Democratic position on trade. He supports expanding trade but says trade agreements must support US manufacturing jobs and include enforceable labor and environmental standards.
He has promised a tougher stance against China, telling the National Council of Textile Organizations: “I will use all diplomatic means at my disposal” to induce China to change its foreign exchange and export policies that have led to huge trade imbalances.
During the primary season, Obama and other Democratic hopefuls called for a renegotiation of the 1994 North American Free Trade Agreement (NAFTA) with Canada and Mexico, although that was less of an issue in the general campaign.
The Global Trade Watch report said the election produced a net gain of 32 fair traders — five in the Senate and 27 in the House.
With that, said the organization’s director Lori Wallach, “we suspect a shrinking number of members of Congress will dare to pledge fair trade at home and vote for NAFTA expansions in DC.”
Among two Republican incumbents in the House of Representatives ousted by Democrats campaigning on fair trade issues were Phil English of Pennsylvania and Robin Hayes of North Carolina, lawmakers who cast decisive votes in 2005 when the House passed the Central America Free Trade Agreement (CAFTA) by a two-vote margin.
“Free trade has been devastating to our district,” said Democratic representative-elect Larry Kissell, a former textile worker who defeated Hayes. “We have called for a free trade moratorium until we see good jobs coming back to this district,” he said in a teleconference arranged by Global Trade Watch.
A moratorium could effectively sideline three bilateral free trade agreements, with Colombia, South Korea and Panama, that have been negotiated but await congressional approval.
The administration of US President George W. Bush has been particularly strong in advocating the Colombia accord, which it says would open up that country to US exports while rewarding the Bogota government for its pro-US, pro-democracy policies.
But suggestions that Congress vote on the Colombia deal, possibly as part of an economic stimulus package during a lame-duck session, have garnered little interest among Democrats who say the Colombian government has not done enough to curb violence against union organizers and members.
Democrats and their labor advocates also say the South Korean accord does not adequately address the issue of South Korea selling some 770,000 vehicles in the US last year while buying only about 6,200 US vehicles.
The only bilateral agreement with a chance of getting congressional approval may be the one with Panama because its products do not upset US constituencies, Cato’s Griswold said.
“Obama has made it clear he understands the benefits of trade,” Griswold said, “but he has made it even more clear he will not cross important constituencies in his party such as organized labor.”
Christopher Wenk, senior director of international policy at the US Chamber of Commerce, was somewhat more optimistic, saying Democrats might be more willing to go along if it is an Obama trade agenda rather than a Bush trade agenda.
That agenda would necessarily focus more on environmental and labor protections, but he said the business community already supports an agreement reached between the Bush administration and House Democrats in May last year, requiring that environmental safeguards and worker rights be core parts of future trade deals.
That agreement set the stage for congressional approval of a free trade accord with Peru late last year. Congress previously gave grudging consent to Bush-negotiated trade agreements with Oman, Bahrain, Australia, Morocco, Singapore, Chile and the six Latin American countries of CAFTA. But last year it also refused to extend “fast track” authority, which gives the president the right to negotiate trade deals that Congress can approve or reject but cannot amend.
“If you look at history, we’ve had pro-trade presidents since FDR [former president Franklin D. Roosevelt],” the Chamber’s Wenk said. “There’s absolutely no reason why we should become inward and protectionist and isolationist right now.”
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