John Edwards -- On Trade, Leading The Way Again

A couple of weeks ago, I noted how the Wall Street Journal had acknowledged that John Edwards was dictating the debate in the Democratic Party. Today, he's doing it again. This time on global trade, the issue that I believe defines the future for workers throughout the globe.

Today, Edwards is unveiling a comprehensive position on trade at IBEW Local 405 in Cedar Rapids, Iowa. Trade is going to be the focus of his campaign the entire week, including, I assume, at the presidential debate sponsored by the AFL-CIO tomorrow night (yours truly will be there). Here are the basics on his trade agenda as provided to me by the campaign, with some analysis on each major point.

Be a Tough Negotiator, Unafraid to Reject Bad Deals: The American position in trade negotiations has been formulated behind closed doors with help from corporate lobbyists. Under the "fast track" procedure, Congress could not amend the resulting deals. Not surprisingly, trade deals include special privileges for American multinational corporations but not protections for worker rights. For example, while the core NAFTA agreement failed to include any labor standards, its Chapter 11 gave corporations sweeping rights to challenge national laws in secretive tribunals, putting investor profits ahead of American sovereignty and protections for health and the environment.

This is very important. If I had my way, I hope Edwards will more specifically say that there is no such thing as "free trade" -- every trade agreement is about the rules, not marketing phrases like "free trade" or "protectionism." But he comes pretty close by making it clear that trade deals have been cut between elites and corporate lobbyists, who structured deals that benefited corporations but not workers -- here and abroad.

And Edwards is taking a huge swing at the corporate lobbyists by singling out the NAFTA-like Chapter 11 rights. Let me explain briefly (Public Citizen has a detailed explanation). Let's say a company doing business in a country that has a party to one of these so-called "free trade" agreements believes a law violates rights or protections the company has under the trade deal. The company can take its case before a trade tribunal, which can, then, rule that a law -- say an environmental law or labor -- is illegal under the so-called "free trade" regime and award tax-payer dollars to corporations. And this tribunal operates behind closed doors, with no public input or scrutiny and none of the basic due process or transparency one would expect in open courts.

This is really huge. These Chapter 11 rights is one of the most odious provisions of so-called "free trade" deals. They allow companies to undercut our democracy -- laws that are passed by the people we elect can be overridden by an unaccountable, unelected tribunal. Edwards is standing up and, effectively, saying he will not sign trade deals with these undemocratic provisions.

Insist on Benefits for Regular Families: Edwards believes that the true test of a trade deal is not its reception on Wall Street or contribution to the gross domestic product. Instead, his primary criterion for new trade deals will be simple: considering its impact on jobs, wages and prices, will it make most families better off? He rejects President Bush's use of trade agreements to encourage countries to support his foreign policy, rather than to strengthen our economy.

This is also an important principle. Until now, so-called "free trade" deals have basically been structured with corporate rights in mind. As an after thought, labor and environmental provisions are tacked on. Edwards is clearly saying: from now on, we will start with the question how do trade deals benefit workers?

He also makes reference to the question of trade and foreign policy. I hope he takes this one step further in the coming week and down the road by tying the question of immigration to trade policy. Virtually no candidate makes what to me is an obvious point: if you want to solve the immigration issue, the best thing you could do is stop promoting economic policies (like so-called "free trade") that impoverish millions of people, forcing them to leave their families and flee their countries in order to find work. NAFTA sent millions of people deeper into poverty, triggering a wave of economic refugees who could not survive in their own country.

Demand Strong Labor Laws: Many overseas workers work 12 to 16 hours a day in dangerous conditions for poverty wages, without the right to form an independent union. Requiring our trade partners to adopt and enforce basic workers' rights will prevent a global race to the bottom and help build a global middle class. Edwards believes that all of our trade partners should be required to enforce at least the core labor rights defined by the International Labor Organization: the right to organize and bargain collectively and prohibitions against forced labor, child labor, and discrimination. Edwards will pursue these goals through linkage to U.S. trade preference programs, any new bilateral trade agreements, and future World Trade Organization negotiations.

Obviously, this is huge. It's a big deal that Edwards, as one of his first main point in the list, underscores the rights of foreign workers. Underlying this point is the correct observation that right now so-called "free trade" is based on one thing and one thing only (are you paying attention, Tom Friedman?): the driving down of wages to the lowest common denominator. Until there are basic standards globally to protect workers, that won't change. Of course, we also need the real basic right to form a union here, too--which, if I was another country, I'd point out...but, as we know, Edwards has been the strongest proponent of bolstering the right to organize in the U.S.

Eliminate Tax Incentives to Move Offshore: The U.S. tax code encourages multinational corporations to invest overseas by allowing them to indefinitely defer taxation on their foreign profits. A recent $90 billion "tax holiday" for multinational corporations failed to create jobs, as President Bush promised, and many of these companies laid off employees instead. The effective tax rate on foreign non-financial income is less than 5 percent, which is well below the U.S. statutory rate of 35 percent. In some cases corporations actually receive subsidies to invest overseas through a "negative tax." Edwards will eliminate the benefit of deferral in low-tax countries, ensuring that American companies' profits are taxed when earned at either the U.S. rate or by a foreign country at a comparable rate.

I don't know of other campaigns that have made this a key point but this is crucial. Tax breaks for multi-national corporations investing abroad have been pushed by both parties. As Democrats, we should be ashamed of these provisions and eliminating these rip-offs should be a part of our platform and a position that every candidate should take.

There are other important details in Edwards' plan. I assume this will be on the website soon. But, it's a big step forward and it will hopefully shape the debate on trade in the coming months.