A Country that Trades Us Down: We Deserve Better

Killer candy from Mexico and toxic toys from Chinese factories should be part of a B grade horror film. Instead, recalls involving 20 million toys and 143 million pounds of beef are becoming part of our nation's every day reality. But when it comes to product safety, the U.S. Consumer Safety Commission says it doesn't need any more resources. It has exactly one toy inspector named Bob--and he just retired. Maybe a USDA inspector should retire too because he or she missed 143m lbs of suspect beef going to our kids schools

Meanwhile, the U.S. trade deficit with China set another record at $256 billion in 2007. Many of us have been working through the China Currency Coalition, calling on Congress to take action on China's persistent efforts to keep its currency artificially low so it can boost exports and discourage imports--running up the U.S. trade deficit and costing good American jobs. Yet Treasury Secretary Henry Paulson calls our efforts for trade reform and currency legislation, "Silly."

Food safety, toxic trade, credit bubbles, mortgage scandals and economic insecurity--the nation under Bush has reached such a crisis point, even pundits and the press can't ignore what's going on.

The fact is that our economy was failing working families long before now. These crises are the direct result of imbalances in our economy that already existed, propelled by neo-liberal economic policies that have been grinding down working families for the past 30 years. Today's economic situation is the result of a shift in power from workers to employers, from domestic manufacturers to transnational corporations and giant retailers.

We work more hours than workers in any other developed country--but massive job losses have created widespread economic insecurity. The U.S. economy generates more than $13 trillion a year in income--but health care and retirement benefits are vanishing.

At the same time, CEOs and other corporate insiders have used productivity increases to boost profits and returns to shareholders--and dramatically increase their own pay. The average CEO earns more on the first day of January than the average worker earns all year.

The silver lining? This situation gives us a rare opportunity to do something about it by building a movement to change our country's economic policies and build an economy that works for all. One place to start is with changing the policies that make U.S. trade agreements work against the middle class and all working families.

The free market ideologues tell us the market--free trade, for example--is the answer to everything. If you challenge their ideology they immediately brand you a socialist or a protectionist. It is "free market competition," as they define it.

But the past 15 years of trade liberalization have had less to do with opening markets for U.S. exports than with securing protections for U.S. foreign investment that encourages companies to send productive capacity offshore to send products back to the world's largest consumer market.

In this way, the so-called free trade agenda allows companies to avoid an entire range of domestic laws and regulations--affecting clean air and water, the minimum wage, the abolition of child labor, the freedom to form unions and bargain collectively, a safe and healthy workplace, safe consumer products and safe food.

Trade policy is our link to the world economy. But the lack of rules overseas and the failure of our government to enforce our existing trade laws is used as leverage against American workers and businesses. Only by implementing a trade policy based on fairness, transparency and democratic principles can the United States begin to reclaim a leadership position in the world.

U.S. trade policies have a direct impact on workers and the environment. Since 2001, the Bush administration has failed to seek meaningful protections for workers' rights and environmental standards in free trade agreement negotiations with more than a dozen countries and at the World Trade Organization (WTO) in multilateral talks. It took Congress to force any changes in 2007 and even those fall short.

U.S. trade policies affect the food we eat. Today, more than 15 percent of the food entering the U.S. marketplace is from foreign producers. We need to support the strongest food safety provisions for this nation. That means a Department of Agriculture and a Department of Labor committed to assuring that safe and healthy products are produced in a safe and healthy work environment.

U.S. trade polices are skewed against us because of our international tax policy is a disgrace. Our international tax treatment under border adjustment taxes gives our competitors an advantage. We no longer can afford to allow competitors to subsidize their exports to us while imposing taxes on our exports to them.

U.S. trade policies reward firms for going offshore. A company closing a plant in the United States so it can move operations overseas can deduct the cost of the plant closing receives a tax benefit worth as much as 35 percent of the closing costs--even though deferral may permit it to avoid tax on the income from the overseas operations.
Now is the time to hold off on any new trade deals and conduct a strategic review of all trade agreements. Each agreement must be assessed by its impact on employment, living standards and communities. Such a review also must include recommendations on how to address problems in existing agreements.

Further, Congress--which currently has no part in choosing trade partners--must have a role. Congress needs to lay out "readiness criteria" to assess any potential partner, such as economic opportunities available for U.S. workers and business. Only countries that meet these readiness criteria should be eligible for negotiations. With these rules, we would not have negotiated a trade agreement with Colombia, whose government is responsible, by act or omission, for the deaths of thousands of trade unionists.

Fashioning new approaches to trade agreements and policies will involve a lot of fresh thinking.

First, we need global trade rules that link market access to strengthening protection for workers' fundamental human rights, as laid out 60 years ago in the United Nations Declaration on Human Rights: the freedom of association and the right to organize and bargain collectively, and prohibitions on child labor, forced labor and discrimination in employment. Last year, the International Human Rights Commission cited the United States for egregious and repeated violations of the rights of workers to organize. Like food safety, we need to live by the best standards if we expect others to follow them.

These must be enforceable requirements, subject to the same binding dispute settlement and enforcement mechanisms as commercial provisions. The same is true for environmental standards. Expanded trade must not result in unsafe products ending up on our kitchen tables or anywhere else. Goods made by sweatshop labor must be barred from entering our markets.

Next, U.S. tax policy must be revamped. The first step is to abolish the current system of deferrals, tax credits and accounting rules that encourage outsourcing. Next, establish new tax policies that ensure investments made with public funds and through tax credits result in domestic manufacturing employment.

Congress also must act on China's currency manipulation. China is an export-based economy and 35 percent of those exports are to the U.S. Their export strategy is aided by a yuan undervalued by 40 percent or more. It is no surprise that American multinational firms and retailers are our biggest foes in Congress. They profit directly from the worker abuse, cheap yuan and terrible environmental conditions. They wrote the trade rules and have the gall to say it's simply the free market at work. We are urging the House Ways and Means Committee to move the Ryan-Hunter currency legislation, H.R. 2942, and other trade reform measures now.

We must make trade an election inssue in 2008 and we will be asking presidential and Congressional candidates how they plan to make U.S. trade work for working families.