While President Barack Obama is weighing in against new trade protectionism in one bill, the trade-skeptic bloc in Congress has decided they want more protectionism in another.
Last Friday, over 100 House Democrats including nine committee chairmen signed on to new draftlegislation that would require President Obama to submit a plan to Congress to renegotiate the North American Free Trade Agreement (NAFTA) and other trade deals.
The Trade Reform, Accountability, Development and Employment (TRADE) Act of 2009, tabledon June 26, calls on the president to create a plan that would address, through renegotiations, gaps between existing deals, as well as benchmarks Congress would set on core labour and environmental standards. (“Core labour standards” are defined as minimum wage, hours of work and occupational health and safety standards.) The U.S. trading partner would adopt and maintain these core standards in return for access to the U.S. marketplace. And the bill would require that any existing trade agreements (such as Nafta) be reworked to reflect these principles.
Which, of course, is going to be interesting, given Canadian labour and environmental standards mirror and in some cases exceed U.S. ones.
As with Waxman-Markey, it’s important to stress that it remains doubtful whether this bill will actually get so far as becoming law. Right now, it is draft legislation only. But given the mood in Congress these days, all bets are off. And if TRADE ’09 does make it into some form of law, it strikes me Canada should seize the opportunity to do a bit of renegotiating of its own, once we have a leader whose idea of a foreign and trade policy involves a bit more than simply following the Americans, as they make 180 degree turns on everything from energy to market access.
A congressional super committee, to be chaired by the House Ways and Means and Senate Finance committees, would formulate the plan. It also calls for a new fast-track law that would require Congress to vote in favor of a new trade agreement before the president offers his signature.
According to a report in TheHill.com, primary sponsor Rep. Mike Michaud(D-Maine), described it as consistent with what the president said he would do before he was elected.
Oops. Guess this is what happens when politicians use fiery election rhetoric without considering the consequences.
The new trade legislation is similar to a 2008 bill, but that measure attracted only 74 co-sponsors and did not make it out of committee. The rising number of co-sponsors on the legislation reflects both the larger Democratic majority in the House and increasing skepticism about trade amid a global recession.
Among the bill’s less obvious opponents, curiously, is the Washington, D.C.-based National Association of Manufacturers, a manufacturing lobby group.
On Friday June 26, National Association of Manufacturers (NAM) Vice President for International Economic Affairs Frank Vargoissued the following statement:
The anti-trade legislation introduced in the House on Wednesday would subvert our nations historic commitment to international commerce and wreak havoc in major parts of our economy at a time when we should be doing everything we can to encourage growth and job creation. The architects of this extremely unwise proposal would do well to remember that the U.S. exports about $80 billion in manufactured goods each month and that millions of American jobs depend on those exports.
We have had time enough to review the impact of free trade agreements, and the verdict is unequivocal: we have a trade surplus in manufactured goods with free trade nations. The sum effect of free trade agreements is to give U.S. exports the same access to foreign markets that their manufacturers have to our domestic market. Approval of the pending free trade agreements would lead directly to more U.S. exports to those countries, and hence more jobs in the U.S. One can reasonably ask why the sponsors of this legislation are opposed to creating jobs in the U.S.
Good question. More to follow…