Lawmakers Call for Wide-Ranging Reforms to Trade Policies
At least 35 members of Congress have apparently signed a letter to President Obama urging him to take a number of specific steps to reform U.S. trade policy. The letter indicates that the lawmakers do not want to shut the U.S. off from the rest of the world, asserting that they want to “ensure that Americans enjoy the benefits of expanded trade.” A the same time, the letter adds, there is now a “unique opportunity … to remedy the negative consequences on the American economy, environment, and public health and safety that have resulted from aspects of the current trade and globalization model.” A total of 71 “new fair-trade reformers” were elected to the House and Senate in 2006 and 2008, the letter states, and this “unprecedented election focus on trade and globalization reform reflects the public opinion that America’s trade and globalization model needs a major overhaul.”
China. The “pervasive China currency manipulation problem” should be a top priority because “our immense trade imbalance with China is gutting the U.S. manufacturing base and has serious economic and security implications.” In addition, negotiations to establish a new U.S-China Bilateral Investment Treaty should be halted. Not only do BITs “provide new protections to assist U.S. firms’ relocation of investment and jobs offshore,” but “a BIT based on the existing U.S. model would allow … Chinese firms to skirt U.S. courts and use foreign tribunals to challenge U.S. regulation of Chinese firms operating here.”
Import Safety. “Ensuring that Americans are not exposed to serious and unnecessary risks from imported goods will require improvements to our existing trade agreements,” the letter stated, “which limit the safety standards and inspection rates applied to imports, and to our domestic imported product and food safety regimes and their funding.”
Existing Free Trade Agreements. The letter pledged support for an inclusive process to review and renegotiate “NAFTA and the NAFTA-model FTAs,” calling this “a long-overdue opportunity for a much-needed debate about what policies U.S. trade pacts must and must not include.” To allow time for the development of “a new model before considering future agreements,” the U.S. should “reverse the Bush Administration’s unilateral September 2008 declaration that the United States will join in negotiations for a Trans-Pacific Strategic Economic Partnership” with Brunei, Chile, New Zealand and Singapore.
(In related news, Inside US Trade is reporting that the U.S. has asked for the next scheduled round of the TPP talks to be postponed because many of the Obama administration trade officials expected to participate have not yet been installed.)
Pending FTAs. The letter suggests that the pending FTAs with Colombia, Panama and Korea could eventually meet congressional approval if they are renegotiated in accordance with a new trade agreement model to be developed by Congress and the White House. This new model would include improvements with respect to labor and environmental standards, foreign investor rights that promote off-shoring, restrictions on import inspections, and rules that forbid Buy America policies and allow challenges to federal and state procurement policies regarding renewable energy, recycled content and similar standards.
There are country-specific conditions that must be met as well. The lawmakers want to see “a sustained period” of human rights improvement in Colombia before the FTA is allowed to proceed. Panama “is not an appropriate U.S. FTA partner” at this time because of its “resistance to international norms in combating tax evasion and money laundering.” Concerns regarding the Korea FTA include “lopsided auto provisions” and the fact that it “includes major financial service sector deregulation and liberalization provisions which contradict global and domestic congressional efforts to re-regulate this volatile sector.”
Doha Round. The letter argues that the Doha Round negotiations would “expand the damage the WTO has already wrought here and abroad” by weakening domestic trade laws, requiring the U.S. to guarantee new visas for foreign workers and further deregulating the financial services and energy sectors. Instead, the U.S. should promote a new World Trade Organization negotiating agenda that addresses “the critical issues of our time,” including economic justice, poverty alleviation, healthy communities, human rights and a sound environment.