Whither Obama's Trade Agenda?

Early indicators from the new Obama Administration on how far it will go in pushing for new rules for the global economy that would protect the rights of workers, consumers, farmers, and the environment have been mixed, offering both hope and concerns.   The Administration’s approach, culled from testimony, news articles, and the release of The President’s Trade Policy Agenda, appears to consist of:

• Moving forward sooner or later on pending trade agreements    negotiated by the Bush Administration (“soon” on Panama, “later” on Colombia and South Korea);

• “Revisiting” the North American Free Trade Agreement (NAFTA);

• Renewing and reforming trade preference programs, and, most importantly over the longer run,

• Improving labor (and environmental) protections in future trade agreements.

President Obama’s cabinet also represents diverse positions, including strong opponents of the free trade model (e.g. Secretary of Labor Hilda Solis) and those who have been supporters (e.g. U.S. Trade Representative Ron Kirk).  The President’s own track record is mixed, having opposed CAFTA but supported the Peru FTA when he was in the U.S. Senate.

Pending Free Trade Agreements FTAs:

Panama: Yes

The Administration has made clear that it will seek to move forward soon on a pending Free Trade Agreement (FTA) with Panama.   Opponents of the free trade model, including the Citizens Trade Campaign and Global Trade Watch, are gearing up for a fight against the Panama agreement.  Nevertheless, it is considered likely to pass given the Administration’s support.  

Colombia: Not Yet

President Obama does not plan to move quickly on the highly controversial Colombia agreement despite pressure not only from Republicans, the Colombian government and businesses, but also from some members of his own party. The Administration says it will set “benchmarks” before asking for a vote on the Colombia FTA, suggesting that it will be late in the year at the earliest before congressional consideration of the Colombia FTA.   Rep. Sander Levin, D-MI, chair of the House subcommittee that handles trade issues, is advocating that the benchmarks be enforceable under the terms of the agreement. 

The issue of benchmarks (not to be confused with earmarks) is thorny.  While the benchmarks are expected to include steps to reduce violence against trade unionists and continuing impunity, steps that USLEAP supports, this issue is only one of many labor as well as non-labor concerns that need to be addressed before considering a trade agreement with Colombia.  The trade union movement and worker rights advocates as well as environmental, health, consumer and farm groups are urging fundamental changes in the trade model upon which the pending FTAs are based.   

A February 6 letter to Congress signed by over 345 organizations, including USLEAP, also urged members to "replace the failed trade policies of the past with those that deliver broadly shared benefits."  A February 26 letter organized by Rep. Mike Michaud (D-ME) and signed by 54 members of the House of Representatives also urges President Obama to completely revise the current trade model. 

USLEAP and other worker rights advocates believe that progress on impunity and violence are necessary, but certainly not sufficient conditions for considering any trade agreement with Colombia.  Even on the relatively straight-forward issue of violence and impunity, however, Colombia has a long ways to go, with more trade unionists murdered in Colombia in 2008 than in 2007.

NAFTA Revisited?  CAFTA?

The Administration says it wants to revisit the North American Free Trade Agreement (NAFTA) to “improve” it “without having an adverse affect on trade.”  During the campaign, Mr. Obama indicated that he would renegotiate NAFTA, but the Agenda document does not call for renegotiation, raising questions about how far the Administration intends to go to address NAFTA’s useless worker rights protections.   It is also troubling that the Policy Agenda makes no specific mention of revisiting or renegotiating the Central American Free Trade Agreement (CAFTA), which Mr. Obama opposed as a senator.

Trade Preference Programs

The Agenda also states that the Administration will “renew and reform” existing trade preference programs (e.g. the Andean Trade Preference Act) that unilaterally provide duty-free trade benefits to countries who are not yet subject to a free trade agreement. 

Principles

More broadly, the Agenda commits the Administration to “working with our trading partners to improve the status, conditions, and protections of workers” and to ensure that “competitiveness is not based on the exploitation of workers.”  Yet the document lacks specifics about how far the Administration plans to go to adopt new protections, stating that it will “build on the successful examples of labor provisions in some of our existing agreements,” a troubling statement since such “successful” examples are rare. 

USTR also states that the Obama Administration will ask for renewed trade negotiating authority only after an extensive consultation process.   Authority to negotiate fast track trade agreements expired in 2007.

New, Improved Rules?

The potentially much bigger issue of what rules and protections will be incorporated in future trade agreements has been lost in some of the focus on what to do with pending FTAs and whether to reopen FTAs already in effect (e.g. NAFTA).  The labor conditions of the last four trade agreements negotiated by the Bush Administration (Peru, Panama, Colombia, and South Korea) are based on a May 10, 2007 “template” that represented a compromise necessary to obtain congressional consideration of any of the agreements once the Democrats took control of Congress after the 2006 elections. Worker rights advocates agree that the labor standards in the May 10 agreement are a significant advance over those contained in prior trade agreements, e.g. NAFTA and CAFTA, but that they do not go far enough.   Labor standards in the proposed agreements remain untested: the only one of the four agreements that has been passed and implemented is the Peru agreement, which was just implemented on Feb. 1, 2009.

In his testimony, Mr. Kirk stated that the Obama administration wanted to improve upon the May 10 agreement, but didn’t offer specifics other than to put a critical qualifier that the Administration will not push for agreements that would require changes in U.S. domestic labor law. This is a sign that it will not push for agreements that require compliance with the International Labor Organization (ILO) conventions, most of which have not been ratified by the U.S.   Compliance with ILO conventions is a central tenant of the international trade union movement.

The battles over current pending agreements, particularly Colombia, are important, but the underlying rules governing worker rights enforcement in the global economy will be defined in the next generation of trade agreements negotiated by the Obama administration.  While it is a positive development that Mr. Kirk and the Obama Administration have said that the new, improved standards reflected in the pending agreements do not go far enough, it is unfortunate that the Administration appears to be stopping short of international conventions, the majority of which have been adopted by most governments (except the U.S).