Democrats' New Trade Plan: What's in It for the Americas?
Friday, April 6, 2007; 12:00 AM
WASHINGTON -- House Democrats have unveiled their plan to reshape future trade deals. As expected, their "New Trade Policy for America" reads like a direct response to the anxiety over globalization and trade that helped the Democrats take back Congress in November.
The proposal seeks to hit back at China and Japan for unfair trade practices, and further pry open South Korean markets. It also appeals to U.S. workers with promises of job training, health care, pension benefits and income support in order to cushion the blow of globalization.
For Latin America, certain elements of this plan couldn't come at a better time. Free trade has been a hard sell there lately. Most countries that do not have an agreement with the United States are now run by left-of-center leaders who either refuse to sign trade deals or who contend that trade agreements without some modifications would leave too many of their constituents extremely vulnerable.
According to a summary of the 15-page Democratic proposal submitted to the White House as part of ongoing negotiations to get the Bush trade agenda passed by Congress, those countries signing trade deals with the United States should be required "to adopt, maintain and enforce basic international labor standards." These standards, defined by the U.N. International Labor Organization, ban forced and child labor and guarantee workers' rights to organize.
Latin American leaders such as Brazil's Luiz Inacio Lula da Silva and Bolivia's Evo Morales will welcome such requirements in principle, having both begun their political careers as labor leaders. Peru, whose free trade agreement with the United States awaits U.S. congressional approval, added 100 new labor inspectors just weeks ago to ensure that international labor standards are being met. Peruvian President Alan Garcia himself is author of a book on globalization with social justice.
Democrats also propose to "re-establish a fair balance between promoting access to medicines and protecting pharmaceutical innovation in developing countries." Presumably this would quash provisions in recently negotiated free trade deals that favor pharmaceutical companies by extending patent protections for five years beyond their expiration.
The Democratic proposal has elements that are welcome and attractive, including a commitment to boost trade and increase aid to poor nations. One can only hope that such aid represents at least a significant fraction of the estimated $20 billion that Democrats want to spend annually to create a safety net for U.S. workers hurt by globalization.
Yet it is not very clear that the Democrats are committed to the fundamental aspect of trade that benefits poorer nations -- free and fair access to the U.S. market. The Democratic proposal also lacks any mention of ending protections for U.S. producers, particularly the multibillion-dollar agricultural subsidies that have historically obtained congressional passage with broad Democratic support.
Such subsidies help maintain a distorted advantage for U.S. producers while hurting poor farmers in developing countries. In a 2004 decision, for instance, international arbiters ruled in favor of Brazil on its claim that the $12.5 billion paid in subsidies by the U.S. government had depressed world market prices of cotton, thus making it impossible for cotton growers around the world to compete.
It also bears asking what the Democrats had in mind with their request to play a bigger role in the World Trade Organization's Doha round of negotiations. The round -- named after the city in Qatar where the talks were begun in 2001 -- is center stage to the global subsidy debate. If the Democrats are to use their larger role there to retain U.S. subsidies, the biggest potential for Latin Americans to benefit from expanded free trade will be undermined.
Most Latin American leaders believe that the Democrats' new trade policy is a good faith effort that recognizes, as they have, that their best way to address popular anxiety concerning free trade is not by turning inward and protectionist, but by making an effort to ensure that trade can be fairer and more balanced.
So far, that has been precisely what House Ways and Means Committee Chairman Charles Rangel, the key proponent of the new policy, appears to have been insisting on when he says that his key goal is to re-establish a "bipartisan foundation on trade policy" that finds a broad middle ground and does not need to appeal to the extremes.
Marcela Sanchez's e-mail address is email@example.com.