The defeat of fast-track
Levinson, Mark
THIS FALL President Clinton made "fast-track" negotiating authority— whereby Congress must vote yes or no on trade agreements presented by the president, with no amendments allowed—his...
...The way to start is by incorporating workers' rights and environmental standards into all trade and investment agreements...
...The problem with NAFTA is not that it reduces tariffs, but that it protects the interests of capital while ignoring the rights of labor...
...When workers attempted to organize a union and the Labor Department began to enforce overtime and minimum wage laws, Guess started moving its production to Mexico...
...MARK LEVINSON is the chief economist at the Union of Needletrades, Industrial, and Textile Employees (UNITE...
...NAFTA is not simply a trade agreement...
...Violations are subject to drastic penalties...
...The result is lower standards throughout the world...
...This is one reason why, despite a sevenyear economic recovery, wages for most workers are lower than at the last peak of the business cycle in 1989...
...8 DISSENT / Winter 1998 labor laws, and if American workers exercise their right to form a union, companies will flee, leaving thousands of workers jobless, countless others afraid to ask too much from their employers, and government agencies wondering whether or not to enforce our laws aggressively...
...Even a majority of the so-called New Democrats affiliated with the Democratic Leadership Council—which raised corporate money to support fast-track—voted against it...
...This explanation misses the significance of the vote...
...Despite the defeat of fast-track, the integration of the global economy will proceed...
...Every major newspaper supported it...
...NAFTA shifts the balance of power between employers and workers...
...Since the passage of NAFTA, real manufacturing wages have fallen 25 percent in Mexico...
...it is a trade and investment agreement...
...Most embarrassing for the president was that more than 80 percent of Democrats in the House of Representatives opposed him...
...DISSENT / Winter 1998 9...
...NAFTA protects investors by prohibiting restrictions on business activities, such as local content requirements for manufactured goods, transfer of technology agreements, and laws specifying the nationality of senior management—all of which had been characteristic of Mexican policy before NAFTA...
...Timothy Roemer (D-Ind...
...The message is clear...
...The scare tactics and claims by fast-track proponents that "other countries won't trade with us unless we agree to fast-track" and "Europe and Japan will beat us to the punch in South America" were easily refuted...
...Never before in this century has a president been rejected by his own party in such large numbers...
...The president argued that fast-track was vital to American leadership (a vacuous phrase...
...Yet in a stunning setback for the president, fast-track was defeated...
...By nearly two to one the public opposed fast-track...
...Four years ago, supporters of the North American Free Trade Agreement promised economic benefits, which have not materialized for the majority of people...
...THIS FALL President Clinton made "fast-track" negotiating authority— whereby Congress must vote yes or no on trade agreements presented by the president, with no amendments allowed—his top legislative priority...
...It has cost the jobs of hundreds of thousands of workers and undermined the job security of millions more...
...The focus on labor's political contributions shifts attention away from the real reason for the defeat—widespread public dissatisfaction with a failed trade policy...
...He posed the choice as one between free trade and protectionism, between opening new markets and building walls...
...that core labor standards —such as the right to free association and collective bargaining—and environmental standards should have the same status in trade agreements as protections for investors...
...government takes steps to enforce U.S...
...The procedures for enforcement of the labor and environmental agreements are so ill defined and convoluted as to render them ineffective...
...To anyone who was listening—which, based on most press reports, doesn't appear to include the media—the labor movement's message was clear: the issue was not whether to trade, but how to trade...
...They tend to avoid the issue...
...NAFTA defends Bill Gates's right to enjoy royalties on his software but does not defend the rights of the women and men who manufacture it...
...If the U.S...
...But if political contributions determined the outcome, fast-track would have passed easily...
...Corporate political contributions outpace labor's by a ratio of eleven to one, and the disparity is growing...
...Most press reports tied the defeat of fasttrack to the importance of union political contributions to Democrats in the House of Representatives...
...it protected corporate interests—though rules and strong enforcement mechanisms defending investors and intellectual property rights—while ignoring workers' rights and environmental concerns...
...The alternative to the NAFTA model is to raise standards by creating a new virtuous circle: workers' rights leading to higher wages, which translate into more sales, new investment, and job growth...
...Almost three-quarters of all Americans thought that trade agreements should aim to lift labor standards for workers in other countries and protect the environment...
...Fast-track was defeated because the president proposed a version of it that had the same problems as NAFTA...
...NAFTA also required Mexico to change its law governing intellectual property rights to something approximating American standards...
...Now, however, there is an opening for a longoverdue debate on how this should occur...
...The NAFTA model of integration allows multinational corporations to profit from a country's policy of suppressing free trade unions in order to gain competitive advantage in attracting foreign investment...
...the president was at the peak of his popularity...
...the business community lobbied for it...
...Without fast-track authority, U.S...
...In contrast, provisions governing workers' rights and environmental standards were relegated to side agreements...
...I'm a free-trader, but I insist on fair trade...
...It is true that many Democrats are dependent on labor for campaign funds...
...Our trade with non-NAFTA countries in South America has exploded in recent years...
...As Rep...
...Guess, Inc...
...Supporters of fast-track have a hard time explaining why labor rights should not be included in trade agreements...
...and he pledged to work with the Republican majority in Congress in order to pass it...
...pOLLS SHOWED that Americans overwhelmingly rejected extending this kind of trade agreement...
...provides a startling example of the pressures at work...
...NAFTA has not been the answer to Mexico's problems either...
...Rank-and-file Republicans opposed it in greater numbers than Democrats did...
...But the public didn't buy it...
...The labor movement was not advocating protectionism, it was arguing that global rules of trade should protect people as well as property...
...In fact, NAFTA contributed to one of the worst economic crises in Mexico's history...
...The prospects for passage looked good...
...a leader of the New Democrats, put it, "We have low unemployment in Indiana, but thousands of people are hanging on by their fingernails to $6- and $7-an-hour jobs, and they could be the first ones displaced...
...WITH ITS strong protections for investors and weak side agreements on workers' rights and the environment, NAFTA creates incentives for companies to abandon workers here and move jobs across the border...
...exports to Chile grew almost twice as fast as the European Union's exports to Chile between 1990 and 1996...
Vol. 45 • January 1998 • No. 1
