Recipient of Karita Hummer's Silver Pen Award
Smart Trade & the Real Deal
Crossposted from John Edwards for 2008 Blog
user icon michael duby in Arguments & Analyses Feed of
11/16/2007 at 2:16 AM EST
John Edwards - The Real Deal
Trade is the strikingly clear policy issue that demonstrates the difference between John Edwards and the corporate Democrats. As he has always been a consistent champion for working families, Edwards is now their advocate for fundamental "smart trade" changes that address imbalances and unfairness in the present system. The American middle class has been squeezed downward a full level due to stagnant wages and an extreme disparity of income. Despite all-time high productivity, working people have not received their fair share under the present trade regime. The rules benefit multinational corporations and the economic elite but not American working families.
The comprehensive Smart Trade proposals of John Edwards provide Americans the opportunity to begin to believe again that their children will have a better life in the future rather than face a depressing decline. "Working together we must do everything we can to minimize the unfair offshoring of American jobs and do right by America's working families." - John Edwards
NAFTA (1994) and WTO (1995) agreements contain structural advantages for the corporations that provide them with extraordinary commercial rights and remedies. The existing system of "free trade" agreements contains provisions that provide means for the multinationals to bypass and challenge health laws and safety rules and environmental standards. For example, NAFTA's infamous Chapter 11 provides foreign investors rights that enable corporations to sue against U.S. labor and workplace standards as trade barriers. The result is that our country is adversely affected by the globalizing economy because the present system relies on disadvantageous, unbalanced and outdated laws against labor including rights to organize.
These consequences are increasingly dramatic. Income disparity is at an extreme unseen since 1928. 300,000 at the top make more income that the bottom 150 million of American's earning taxpayers. The Bush administration provided additional tax cuts for these super wealthy in an amount that would essentially pay for universal health care. Over the past 20 years, 40 percent of income growth has gone to the top one percent while wages for the bottom 90 percent have remained stagnant.
The recently passed Peru Free Trade Agreement does not meet the Edwards standard to put American workers and communities first. Once again, the multinational corporations have taken advantage of Washington's lobbyist-dominated system to the detriment of working families. Specific international labor standards were excluded (although the text of the agreement is 800 pages long). Senators Hillary Clinton and Barack Obama voted for the Peru FTA despite knowing the detrimental consequences to American economic interests, to its labor force and to their families. Once again, the special interests wrote the rules and Americans are expected to pay the price.
There is a positive and progressive alternative in the comprehensive Smart Trade proposals advocated by John Edwards. His proposals include universal health care, pro-worker provisions, enforceable guarantees of compliance by trading partners, investment in displaced workers, supports for adversely affected communities and safety standards for imports. Edwards will not give in to pressure from corporate lobbyists seeking special privileges or hidden provisions that harm American workers. These privileges are illustrated by NAFTA's Chapter 11 that enables corporations to justify profits over American sovereign rights to health and environmental protections. NAFTA did not include labor standards but did provide corporations with rights to challenge for their commercial interests outside U.S. judicial process in secret tribunals!
The Edwards standard of measurement for Smart Trade is direct and clear - American working families must benefit from the combined impact on jobs, wages and prices. Smart Trade proposals also include provisions to address the following:
- Edwards demands strong labor laws "requiring our trade partners to adopt and enforce basic workers' rights [to] prevent a global race to the bottom and help build a global middle class. Edwards believes that all of our trade partners should be required to enforce at least the core labor rights defined by the International Labor Organization [including] the right to organize and bargain collectively along with prohibitions against forced labor, child labor, and discrimination."
- Smart Trade requires strong environmental standards so that "multinational companies cannot profit by exploiting weak environmental laws and enforcement in some countries."
- Edwards insists that America fight currency manipulation with agreements containing strong, clear language on impermissible currency practices that put the U.S. at great disadvantage.
Smart Trade requires (and Edwards will demand) a level playing field for trade to "ensure that overseas markets are open and that American workers and companies can compete on fair terms."
- Edwards will prosecute violations of trade deals by assigning "top prosecutors at the U.S. Department of Justice to the job of enforcing trade laws." http://johnedwards.com/iowa/20071114-man ufacturing/ (quotes from "Rebuild The Middle Class Through 21st Century Manufacturing," John Edwards)
Notable will be the elimination of tax incentives for corporations to move offshore. "The U.S. tax code encourages multinational corporations to invest overseas by allowing them to indefinitely defer taxation on their foreign profits. A recent $90 billion `tax holiday' for multinational corporations failed to create jobs, as President Bush promised, and many of these companies laid off employees instead. The effective tax rate on foreign non-financial income is less than five percent, which is well below the U.S. statutory rate of 35 percent. In some cases corporations actually receive subsidies to invest overseas through a `negative tax.' Edwards will eliminate the benefit of deferral in low-tax countries, ensuring that American companies' profits are taxed when earned at either the U.S. rate or by a foreign country at a comparable rate." (Edwards Nov. 14 press release) [Sources: NY Times, 7/27/07, Grubert & Mutti, 2002; Altshuler & Grubert, 2001; U.S. Treasury, 2000]
The recent Economic Policy Institute report concludes that "between 25 and 30 million American jobs - about one in five American jobs - in states all across the nation are at risk for being offshored over the next decade." The report shows that "jobs requiring a four-year college degree are the most at risk" in this next wave of economic globalization. The Edwards Smart Trade proposals advocate assistance to displaced workers and disrupted communities. Specific programs include:
- Passage of universal health care legislation;
- Creation of new "Training Works" initiative tied to high-wage jobs;
- Assistance for communities recovering from mass layoffs;
- Strengthening of the safety net for workers who lose their jobs;
- Safeguards to ensure that imported food, drugs and toys are safe.
"Americans need new trade policies that put workers, wages and families first. Most families are working harder and struggling to get by. Our economy is growing and the productivity of our workers is at an all-time high, but workers' wages have failed to keep up with the costs of health care, education and retirement. Globalization, technological change and outdated labor and workplace laws have fundamentally changed our economy and redistributed the benefits of economic growth upwards. Equally fundamental change is needed to ensure our economy once again rewards work." - John Edwards /
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