Obama Economic Appointment Highlights Old Trade Dispute

The first dust-up between Obama the Democratic nominee and his party faithful occurred recently when several labor sympathizers criticized the selection of free trader Jason Furman as the nominee's top economic advisor. Furman had once said that efforts to get Wal-Mart to raise its wages and benefits are creating "collateral damage" that is "enormous and damaging to working people and the economy." In criticizing Furman's appointment, AFL-CIO President John Sweeney said, "The fact that our country's economic policies have become so dominated by the Wall Street agenda — and that it is causing working families real pain — is a top issue we will be raising with Senator Obama." Some observers insist that this was no cause for worry. At BeyondChron.org, Randy Shaw wrote that Obama's selection of Furman "was using a purely symbolic act to send a message to the Establishment that he would not ignore their expertise." Others are not so sure.

Much of the fight within the Democratic Party over economic issues is being portrayed as a battle between "Free Trade" and "Fair Trade." Most news accounts would have you believe that the Free Traders are realists who understand that we live in a globalized world. They cite statistics from the dismal science to show that free trade lifts all boats. When they want to put a progressive gloss on their argument, they trot out stories like that of the small farmer in Mexico who is being lifted out of poverty because NAFTA makes it easier to ship his fruit to the United States. The Free Traders say that the Fair Traders, mainly supporters of labor and environmental causes, are Luddites trying to hold back the hands of time.

But there is no totally free trade or totally fair trade. In fact, Congressional Fair Traders have recently introduced legislation in Congress that they claim challenges the pro-business and anti-worker/anti-consumer bias in existing and proposed US trade agreements. "The special interests who pushed our current trade pacts claimed that opponents of NAFTA and WTO were anti-trade, which was never true," said Lori Wallach of Public Citizen. Wallach said her goal is building "a new American consensus in favor of trade."

The real issue is who should benefit from trade. Trade regulations are part of a rapid reshaping of the global economic system in favor of capitalist, American-style business relationships. The complex interplay of technological advancements and trade pacts that has come to be known as "globalization" is not an inexorable system as observers like Thomas Friedman would have us believe, but simply a method that the world's plutocrats have engineered to advance their interests. Sure, technology is making communication easier throughout the world. In that sense, the world is shrinking with fascinating ramifications. But does that mean that US patents on life-saving drugs have to be enforced in Africa, with the result that those who can most benefit from the drugs cannot get them? This kind of globalization is a choice, not a natural phenomenon, and it is important to be clear about this.

The "Free Traders" claim that trade agreements sweep away artificial barriers that impede democratic economic advancement. But, trade agreements are full of regulation — patent extensions that jack up drug prices, subsidies for off-shoring production and more. What they are really saying is "regulation on you, but no regulation on me." No restrictions on the movement of capital and the ability to make profits, but restrictions on the rights of labor and the ability of people to protect their culture and environment. The pending Free Trade Agreement for Colombia, which is sure to be an issue in the presidential race, includes "investor rights" that each country must agree to, similar to those in other recent trade deals. Companies and moneymen can bring cases in closed trade tribunals to privately protect their profit margins against land­-use decisions, environmental safety initiatives, and public health policies. These are outside the purview of US courts.

Even some within the New World Order realize this reality, as seen in a recent dispute at the World Bank. In early June, the bank, one of the main enforcers of the neo-liberal world order, held its annual Reformers' Club investor seminar and awards dinner, which celebrates "individuals from top reformer countries who have been instrumental in initiating and implementing business environment reform." The reforms for which you get awards include strengthening the rights of large property owners over others in society and doing away with workplace protections, such as those regulating employee layoffs. Egypt was the proud winner. Columbia, China, and Saudi Arabia were in the top ten. But just a week later, an in-house bank watchdog group criticized the underlying assumptions of the so-called Reformers' Club. First, the report found no statistically significant relationship between the survey's indicators and national growth rates. Secondly, there was no way tell whether the top-ranked countries were dismantling archaic regulations or truly effective ones. Which do you think is the case with Egypt, Colombia, China, and Saudi Arabia?

Trade between countries is good. And trade causes dislocations — always has, and always will. However, citizens need to be able to understand what is truly at stake in these deals. A good place to start is with honesty about the true aims of each side.