September 10, 1997 in Nation/World

Business Backs Nafta Sequel U.S. Industry Has A Lot Invested In Clinton Getting ‘Fast-Track’ Trade Authority For Latin America Deals

Josh Goldstein Philadelphia Inquirer
 

Remember the fight over NAFTA? Get ready for Round 2.

U.S. multinational corporations are building a war chest for a media and lobbying blitz to get “fast-track” trading authority for the president. And labor and environmental groups, worried about job losses, are gearing up to oppose it.

President Clinton wants to expand NAFTA-type trade agreements beyond Mexico and Canada to Chile and other Latin American countries. To do so, he says, he needs legislation requiring Congress to quickly accept or reject trade deals, without amendment. He plans to propose the legislation today.

The stakes are huge for the business community, organized labor and environmental groups. The terms that Congress established in a fast-track law would define the rules of global trade into the 21st century.

Both sides already are using all the tools of a modern political campaign to shape the fast-track legislation, which Clinton will introduce this month. That means campaign contributions, TV ads, grass-roots actions, and expensive Washington lobbyists.

In a July 24 letter, the chief executive officers of six U.S. multinational corporations pledged $100,000 each in an effort to raise “a minimum of $3 million in order to ensure that the voice of the business community is heard.” The letter, signed by the heads of Boeing Co., Caterpillar Inc., Chrysler Corp., General Motors Corp., Procter & Gamble Co. and TRW Inc., solicited like amounts from executives of about 35 companies.

Although Clinton has avoided referring to the North American Free Trade Agreement in calling for fast-track authority, the executives did not.

“Without this congressionally granted authority, there can be no expansion of NAFTA to include Chile or other Central and South American countries. There can be no Free Trade Agreement of the Americas,” the six CEOs wrote.

With that $3 million, the executives said, they will fight “this campaign on three fronts: direct lobbying in Washington, a 50-state grass-roots campaign, and a media program of advertising and public relations directed at key, targeted congressional districts.”

Ironically, Clinton’s opponents on the issue most likely will include groups such as the AFL-CIO that spent millions of dollars to ensure his re-election, while business groups that usually back the GOP will support the president.

Labor and environmental groups have indicated that they will oppose fast track unless Clinton makes labor and environmental standards an integral part of any new trade agreements the administration negotiates.

Thea Lee, assistant director of the AFL-CIO’s public policy department, said: “We are not against trade - we’re not against trade with Mexico or Canada or Chile or Latin America. But we don’t think current trade agreements have served the interest of workers in the United States or our trading partners very well.”

Labor groups contend that free-trade agreements allow American companies to move jobs to low-wage countries and to use the threat of moving to hold down wages here. Environmentalists are concerned that companies can avoid strong U.S. pollution laws by relocating in countries with minimal standards and weak enforcement.

NAFTA exemplifies their concerns. America’s balance of trade with Mexico went from a surplus of $1.7 billion in 1993, the year before NAFTA went into effect, to a deficit of $16.2 billion in 1996. The U.S. trade deficit with Canada more than doubled over the same period, from $10.7 billion in 1993 to $23.9 billion in 1996.

Now comes Chile. Last year, the United States had a $1.9 billion trade surplus with Chile. Will that trade surplus - and American jobs - disappear?

“What’s at stake with this fast-track vote, and the reason it has become such a big deal, is that it is a proxy for much bigger issues,” said Lori Wallach of Global Trade Watch, a group affiliated with Ralph Nader’s Public Citizen.

The primary issue, say fast-track opponents, is American jobs at livable wages.

The Department of Labor has certified that at least 136,000 people have lost jobs because of NAFTA, which took effect in 1994. Those are conservative numbers, based on people who have applied for help under the Labor Department’s Trade Adjustment Assistance program.

NAFTA’s detractors also argue that the agreement has caused wages to decline 4 percent nationwide despite the booming economy.

Job losses attributed to NAFTA, however, are not reflected in the overall economy, in which unemployment is at the lowest level in 23 years.

But NAFTA certainly has been profitable for corporate America. And companies that have done well under NAFTA are using their money and political clout to support the president on fast track.

The six CEOs who signed the solicitation letter, their companies, and their political action committees contributed $3 million in the 1996 elections to national candidates and political parties. So far this year, they have given $740,000, not counting the $600,000 pledged for fast track.

By the end of August, the umbrella group that these CEOs created - America Leads on Trade (ALOT) - had recruited 400 members.

Federal Election Commission records show that ALOT’s member companies and trade groups gave at least $23.6 million to candidates and political parties during the 1995-96 election cycle.

Even so, opponents of fast track say they will be able to defeat it in Congress.

“In this case, when it comes down to a high-profile issue that people care about, it’s more important to count the votes than the dollars,” said Wallach of Global Trade Watch.

“Up to now, the administration has done nothing to prove that there is anything besides this paramount interest in commercial affairs driving our foreign policy,” said Jeff Ballinger, who runs a nonprofit group called Press for Change, in Alpine, N.J., that focuses on problems at Nike’s factories in Indonesia.

Another issue is whether fast track violates the constitutional division of powers between Congress and the president. For some, it’s an issue of representative democracy.

“Fast track deprives us, or the representative we elect, of the ability to make a choice,” by handing all the power to craft trade agreements to the president, said Martin Berger of Haverford Township, who works with retirees of the Union of Needle Trades Industrial and Textile Employees.

While American exports to Mexico have increased, U.S. imports have increased much faster, resulting in the growing trade deficit.

“Mexico has demonstrated high productivity and quality, but at wages that remain at a tenth of U.S. wages in comparable industries,” said Harley Shaiken, a professor specializing in labor relations and the global economy at the University of California at Berkeley. “It puts a severe downward pressure on (U.S.) wages.

“This is not a debate between free-traders and protectionists,” Shaiken said. “Everyone in this debate is for one form of trade or another.

“The issue is: Do we have expanded trade that protects corporate profits alone, or should the environment and labor rights have comparable importance with business interests?”

xxxx ON THE FAST TRACK Once an arcane rule known only to Capitol Hill aides, “fast track” gained notoriety during the divisive 1993 debate over NAFTA, which merged the United States, Canada and Mexico into a common market. Congress, which has granted the authority to every president since 1974, let it lapse in 1994, after NAFTA took effect. By law, fast track allows a president to negotiate foreign trade deals, which are then subject to a yes or no vote from Congress, without amendment. Administration officials say it is essential that their negotiating partners know an accord will not be subject to endless tinkering by U.S. lawmakers. But, with NAFTA as controversial today as it was at its birth, Congress is suspicious of allowing Clinton to strike any new trade deals. And many predict the president will be hard-pressed to re-create the coalition of Republicans and breakaway Democrats who narrowly approved NAFTA. - Knight-Ridder


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