Let's Make A Trade Deal

Lori Wallach

June 21, 2005

Lori Wallach is director of Public Citizen's Global Trade Watch .

The making of U.S. trade policy is always distasteful to watch. Large corporate interests insert wage-crushing, Pharma-favoring, environment-killing, food-tainting policies that could not face the sunlight of normal congressional consideration. If you’re not already queasy over the Bush administration’s proposed NAFTA expansion—the Central America Free Trade Agreement—its time to get your Pepto Bismol. With poll numbers plummeting, other major initiatives stalled and the administration’s efforts to sell CAFTA on its merits failing, the increasingly desperate White House is beginning to deal. Specifically, the White House is handing out offers to Members of Congress to buy CAFTA votes.

This time it’s unclear how well the tactic will work. If lawmakers consider the record of the White House—and previous White Houses—on keeping promises, they may want to reconsider making any deals on CAFTA. Public Citizen’s Global Trade Watch has put a new report into the hands of all representatives that documents the systematic failure of GOP and Democratic administrations to deliver on promises they exchanged for 'yes' votes on trade deals. Of 93 promises made since NAFTA, just 16 were kept. 

Many representatives have learned a hard lesson: the political ire generated by bad trade votes lingers and, indeed, festers over time with each plant closing, overseas relocation and offshoring or trade deficit news story. However, even on the rare occasion that a promise is initially funded, the funding is either terminated or the promised policy ruled illegal under the WTO and eliminated. Or the program failed to counter the feared damage. When the initial hoopla of the deal’s announcement fades, the trade pact’s damage accrues leaving Representatives defenseless against their constituents’ ire.

CAFTA was signed more than a year ago, but because of the compelling evidence of the NAFTA model’s failure, a wide gap exists in congressional support for CAFTA. More than 100 Democrats supported NAFTA in 1993. Now perhaps 10 of the 202 House Democrats would support CAFTA, and 40 House Republicans are also opposed.

Public Citizen’s new report, Trade Wars—Revenge of the Myth: When Trade Vote Deals Go Bad, documents 64 policy promises—deals to establish programs to ameliorate trade pacts’ feared consequences. Of those,  89 percent were broken. We also identified 29 pork barrel deals, of which two-thirds never came to fruition. Many of these promises were memorialized in the trade agreements’ implementing legislation. Often representatives obtained promised, but not forthcoming, funds on their own through the normal appropriations process. Yet still the promised programs and projects never materialized.

CAFTA is a losing proposition. Look at what 11 years of NAFTA produced. NAFTA has contributed to a $660 billion U.S. trade deficit, the loss of one in six U.S. manufacturing jobs and downward pressure on U.S. wages. The high-tech and service sector jobs promised to replace lost manufacturing work are increasingly vulnerable to offshoring as a result of current trade rules promoting a global race to the bottom.

Our advice to Congress is, of course, to oppose deals like CAFTA based merely on the fact that they’re bad policy. CAFTA requires signatory countries to implement new patent rules that will increase medicine prices and undermine access of poor farmers to seeds; provides new protection to foreign investors that undercut governments’ ability to implement basic economic development, public interest environment and health protections; and would create a slippery slope toward permanent privatization and deregulation of essential public services.

But for those considering a deal, the only way to avoid future political exposure is to insist that multiple years of promised funding is appropriated—not only authorized—and is sequestered in an untouchable account and a domestic policy change is implemented or an amendment made to the actual trade pact text before the vote.

In the current debate over CAFTA, the experience of former Rep. Esteban Torres should be a lesson to other legislators seduced by White House offers. The story of California Democrat Torres epitomizes the betrayals associated with NAFTA and other past trade agreements. In 1993, Torres, then-chair of the Congressional Hispanic Caucus, worked to pass NAFTA after President Clinton promised to establish and fund agencies to fulfill one of Torres’ longtime goals: the building of basic water and sanitation infrastructure and the cleanup of existing environmental and health disasters along the U.S.-Mexico border. Torres also obtained a promise to fund development programs for communities in the United States and Mexico impacted by NAFTA. 

For several years after NAFTA, the funding was not authorized, nor were communities certified as possible recipients of project funds. The border cleanup agencies flopped miserably—with less than one percent of projecting loans being disbursed (according to the latest numbers from the U.S. Treasury)—while environmental and health conditions along the border deteriorated. Torres has become vocal in warning current members of Congress to reject deals from the Bush administration to support CAFTA, an agreement that Torres notes can be foreseen to cause serious harm, given NAFTA’s record.

With a bad product to sell, expect the administration to play “Let’s Make a Deal.” Wise members of Congress would remember former Rep. Torres and sit that game out.