Bangor Daily News

Global trade will become more of an economic force in this century than ever before. But the United States, the dominant player in global trade, must improve the way it formalizes trade with other countries. Depending on the details of agreements, trade can create prosperity or poverty in developing nations, and it can limit or expand manufacturing here.

Rep. Mike Michaud introduced a bill beginning to gain support in Congress that would revise the terms by which the U.S. trades with developing nations. Rep. Michaud has been an outspoken opponent of the North American Free Trade Agreement, arguing it has hurt more than helped American and Maine businesses. But his TRADE bill — the Trade Reform, Accountability, Development and Employment Act — is a third way. Rather than oppose or support global trade, the bill creates a better framework for renegotiating existing agreements and sets standards for new ones.

The TRADE bill, which has 108 co-sponsors, would require the Government Accountability Office to review existing agreements such as NAFTA and CAFTA and the trade-promoting World Trade Organization, of which the U.S. is a member. The review would assess economic outcomes in the U.S. and abroad, as well as consider human rights, security, and environmental and social effects. The review would have to be completed before any new trade agreements are signed. Currently, trade deals with Panama, Colombia and South Korea are pending, so those would be on hold if the Michaud bill passes.

Under the bill, new trade deals could not ban “buy American” provisions or anti-sweat shop policies, but would ban tax breaks for businesses that outsource U.S. jobs.

Rep. Michaud’s bill also would end the fast-track system where Congress can only approve or reject, not revise, trade agreements. Rather than have the White House negotiate deals and allow only yes or no votes in Congress, the bill creates a new mechanism to include Congress in the process by which trade agreements are drafted.

In 2004, President Bush’s treasury secretary, John Snow, said the outsourcing of American jobs was good for the domestic economy. Democrats seized on the statement, and Mr. Snow had to do some backpedaling, but what he said was essentially true. Through trade, the economies of developing nations can rise to the point where their businesses and residents are then buying American products.

At the same time, the argument made in the early 1990s was that through global trade, the U.S. economy would emerge as specialized in producing higher-value goods. That has been the result, but most agree the loss of manufacturing along the way has not been good for the U.S. A recent example comes in the importation of wind turbine parts for Maine projects, some of which are manufactured in Vietnam.

Too often, trade agreements have allowed U.S. or multinational firms to relocate manufacturing to developing nations where they can dump waste in the river, pay employees poorly, make them work in terrible conditions and squelch any efforts to organize unions. This must end, for moral and economic reasons. The TRADE bill achieves these goals.

Snowe May Co-Sponsor Bill That Would Overhaul U.S. Trade Policy

Sen. Olympia Snowe (R-ME) is considering co-sponsoring legislation introduced by Sen. Sherrod Brown (D-OH) last year that would require an extensive review of existing U.S. free trade agreements and would place new conditions on future trade negotiations.

If, upon review, existing trade agreements did not meet certain criteria on a range of topics including job losses and access to medicines, the bill would obligate the U.S. government to renegotiate those agreements, according to the text of the Trade Reform, Accountability, Development and Employment (TRADE) Act as introduced last year.

Snowe has not made any final decisions on the legislation, and is currently reviewing it to ensure that no "unintended consequences" would result from endorsing the bill, according to a Senate aide. However, Snowe is not at this point demanding that certain changes be made as a condition for signing on, the aide said, although the bill will likely not be identical to the version introduced last year.

Endorsement by Snowe could be a major coup for supporters of the bill, which is backed by unions and consumer groups. Not only is Snowe a member of the Senate Finance Committee, but she also wields influence in Congress due to the fact that she is a moderate Republican willing to vote with Democrats on certain key issues.

When Snowe supported the economic stimulus package earlier this year, she was one of only three Republicans to do so. At the time, observers highlighted her importance to Senate Democrats and may give her more influence on trade issues (Inside U.S. Trade, Jan. 30).

One supporter of the legislation said that endorsement by Snowe would also help highlight the fact that dissatisfaction with the current model of U.S. trade policy as manifested in trade deals with Panama, Colombia and South Korea is widespread and not limited to a small number of Democrats.

This source also said that her endorsement could signal that Snowe will oppose the trade deals with those three countries, as they represent the Bush administration trade policy that the bill intends to reform.

In the House, similar legislation last year was sponsored by Rep. Michael Michaud (D-ME), who is currently in the process of gathering signatures for co-sponsors and hopes to introduce the bill soon, sources said

Michaud is hoping to gather 100 co-sponsors for the legislation in order to highlight the depth of opposition to the current trade model, and has already amassed roughly 80 co-sponsors, sources said this week. By contrast, the bill had 52 co-sponsors when introduced last year.

The legislation "serves the important function of shifting the debate towards what we are for with respect to a new model for trade and globalization rules that can deliver the benefits of expanded trade while avoiding the damage caused by the status quo NAFTA-WTO model," according to a dear colleague letter Michaud sent in an effort to increase support for the bill.

Last year, the House bill counted five committee chairmen among its co-sponsors, although Ways and Means Committee Chairman Charles Rangel (D-NY) was not a co-sponsor (Inside U.S. Trade, June 6, 2008).

Sponsoring the bill were Agriculture Committee Chairman Collin Peterson (D-MN), Judiciary Committee Chairman John Conyers (D-MI), Natural Resources Committee Chairman Nick Rahall (D-WV), Veterans Affairs Chairman Bob Filner (D-CA) and Administration Committee Chairman Robert Brady (D-PA).

Sources said both the Senate and House versions, when they are introduced, will likely contain some changes from the versions as introduced last year, although the essential elements of the bill will remain the same.

Video of Lori Wallach (director of Global Trade Watch) speaking at Maine Democratic State Convention: http://youtube.com/watch?v=ZTeymUcv2KQ

Video of the MFTC Press Conference- Collins: Stop DUCKing the Issue of the Colombia FTA!  http://www.roundpointmovies.org/roundpointmovies/MVAN.html

Michaud hits McCain on free trade stance

By Eric Russell Saturday, June 21, 2008 - Bangor Daily News

http://bangornews.com/news/t/news.aspx?articleid=166072&zoneid=500

U.S. Rep. Michael Michaud of Maine criticized presumptive Republican presidential nominee John McCain on Friday for his stance on free trade while touting his own economic alternative, a bill that is gathering momentum in the House.

"We believe that we have to have trade, but we need to change the model," the 2nd District Democrat said Friday afternoon on a conference call shortly after Sen. McCain delivered a speech in Ottawa solidifying his support of the North American Free Trade Agreement. "An issue that really concerns me is: What will the next president do?"

Michaud already has pledged support for Sen. Barack Obama, the likely Democratic presidential candidate, who has been critical of NAFTA. Earlier this month, Michaud and Sen. Sherrod Brown, D-Ohio, announced legislation known as the TRADE Act, which would review all existing trade agreements, including NAFTA, and create a process to renegotiate them. So far, more than 50 members of Congress have pledged support of the bill.

On Friday, Michaud referenced a recent Rasmussen Reports poll that revealed 56 percent of Americans would like to see NAFTA renegotiated while only 16 percent favor the agreement. The remaining 28 percent were undecided on the issue.

"It’s clear people want something different and Sen. McCain is the same old same old when it comes to trade," Michaud said.

Maine, which has lost 34,000 manufacturing jobs since NAFTA was signed in 1994, has felt the effects more than most states, according to Maine AFL-CIO President Ed Gorham, who also participated in the conference call.

"Congressman Michaud knows about unfair trade deals, many of which have impacted the 2nd District, and it’s great that he is pushing this bill," Gorham said.

Daphne Loring, representing the Maine Fair Trade Campaign, pledged support for Michaud’s alternative.

"The current model has really forced a race to the bottom in terms of labor and environmental standards," she said. "We have to move forward. We are for trade, but it needs to be the right way."

Speaking in Ottawa at the Economic Club of Canada, McCain chastised Obama’s opposition to NAFTA as "nothing more than retreating behind protectionist walls."

The free trade agreement is supported by most businesses, opposed by many unions and has already emerged as a wedge issue in the presidential race.

"Since NAFTA was concluded, it has contributed to strong job growth and flourishing trade," McCain said. "Since the agreement was signed, the United States has added 25 million jobs and Canada more than 4 million."

Michaud argued that the Arizona senator is simply out of touch on this issue, which the Maine congressman said will be key during the general election.

"States like Pennsylvania, Ohio, Michigan, these are areas that trade has affected dramatically," he said, referring to battleground states crucial to both Obama and McCain. "We hope [the TRADE Act] will force the candidates to talk about trade."

While McCain renewed his support for NAFTA on Friday, he also conceded that improvements are needed.

"There is still more work to do. Complying with NAFTA’s rules of origin can be cumbersome and costly. Border delays can pose a serious impediment to trade, the equivalent of a tariff," he said.

The Associated Press contributed to this story.