NAFTA — the North American Free Trade Agreement — is as unpopular in Maine as Yankee fans and ice storms. And with good reason. The manufacturing sector that once undergirded Maine’s economy has drifted offshore in the decades since NAFTA was approved. But that trend had begun much earlier, so at worst, NAFTA may only have accelerated a global trend.
A more vigorous global trade has the potential to transform the world. Eventually, so goes the theory, consumer economies will boost producer economies. And eventually, those developing nations will become consumers themselves, buying products that previously had not been a part of their everyday lives.
But if so-called free trade is not done right — if businesses based in developing nations have easy access to the lucrative U.S. consumer market without having to live up to labor, human rights and environmental standards — the only winners are corporations without borders. The losers are the people who live and work in those developing nations and the American blue-collar workers who see jobs leave the States.
For four years, three new trade agreements — with South Korea, Colombia and Panama — have languished in Congress. There is good reason for that fate. All were modeled on NAFTA and CAFTA (the Central American Free Trade Agreement).
The three pending agreements were negotiated by the Bush administration, but have not seen enthusiastic support from Congress. Among the reasons for the lack of support is that Congress is frozen out of making changes to the agreements.
In addition to protecting human and worker rights and the environment, better trade deals should eliminate the rights of investors to intervene with other nations. Under the NAFTA and CAFTA model, a company can sue sovereign nations that are signatories to recoup lost revenue. A company called Pacific Rim Mining has filed suit against El Salvador through CAFTA, seeking $800 million in lost profits, arguing that a previous regime in that country had promised it mining permits. The matter is heard before the World Bank Tribunal.
There is a better way to do trade. It is outlined in Rep. Mike Michaud’s TRADE Act (the acronym stands for Trade Reform, Accountability, Development and Employment). The law seeks to establish a better framework for renegotiating existing agreements and sets standards for new ones.
It would require Congress to consider human rights, security and environmental and social effects as it evaluates trade deals. It also would end the fast-track approval nature of trade agreements in Congress. New trade deals could not ban “buy American” provisions or anti-sweatshop policies, but tax breaks for businesses that outsource U.S. jobs would be banned.
There is a good reason that both Maine tea party groups and organized labor oppose the South Korea, Panama and Colombia trade agreements. After defeating them, Congress must create a better way to promote global trade.