Upcoming NAFTA-style
trade deals may be DOA
By DON McINTOSH
Associate Editor
The long march of NAFTA-style
trade agreements may be nearing an
end.
Starting in January, the new Demo-
cratic majority in both houses of Con-
gress will make it harder for the Bush
Administration to win approval for
trade agreements that don’t do any-
thing to improve the labor and environ-
mental standards of trading partners.
And even before the new Congress
is sworn in, resistance to several al-
ready-negotiated trade treaties may
prevent their passage during the re-
mainder of the “lame-duck” session of
Congress.
On Nov. 13, the Republican House
leadership failed to pass a bill the presi-
dent wanted that would have normal-
ized trade relations with Vietnam. The
vote was 228-161 in favor, but that was
short of the two-thirds majority needed
to pass the bill without debate. The bill
may come up again when Congress re-
convenes Dec. 4. Congress is expected
to meet for one to two weeks before fi-
nal adjournment.
Trade watchers earlier expected a
trade agreement with Peru to also get a
vote during the lame duck session.
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Now, says AFL-CIO global economic
policy specialist Jeff Vogt, it doesn’t
look likely to be scheduled for a vote.
And a treaty with Colombia faces
even longer odds; Vogt sees no chance
it will come up before the end of the
year, because it’s too controversial.
Critics of the so-called “free trade”
agreements think Congress’ mood is
changing because of growing concern
among voters that the agreements are
worsening the U.S. trade deficit and
trade-related job losses.
Democrats, especially, are increas-
ingly critical of the trade agreements,
in part because the Bush Administra-
tion has taken a hard line, refusing to
address the concerns of key Democra-
tic constituencies like unions and envi-
ronmental groups. NAFTA-style trade
treaties eliminate tariffs and other bar-
riers to trade; guarantee foreign corpo-
rations get treated the same as domes-
tic corporations; and commit to enforce
patent, copyright and trademark mo-
nopolies. If countries fail to live up to
these commitments, the treaties contain
enforcement mechanisms including
fines and punitive tariffs. Unions and
environmental groups want what they
call “fair trade” treaties — treaties that
would also guarantee labor and envi-
ronmental protections in the same way.
But so far, none of the treaties negoti-
ated by the Bush administration con-
tain more than non-binding promises
to enforce whatever labor and environ-
mental laws the countries already have.
That’s not enough, union leaders
say, especially when the workers in
those countries lack basic rights, like
the right to join a union.
The Central America Free Trade
Agreement (CAFTA) passed by two
votes in July 2005. Just 15 of the 202
(Turn to Page 10)
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Think Again •
Minimum wage: A triumph of
common sense over conservative ideology
L
ast month’s election did more
than send a lot of new Democ-
rats to Congress and state legisla-
tures. It also delivered a resounding
affirmation of a values-based eco-
nomic justice agenda.
This year’s “values voters” af-
firmed the principle that people who
work full time shouldn’t have to live
in poverty. In six states, these voters
approved ballot initiatives to raise
the minimum wage. In other states,
legislatures raised the minimum
wage to keep such initiatives off the
ballot.
By next month, when most of
these new laws and initiatives deliver
their first pay increases, states repre-
senting a majority of the nation’s
workers will have higher wage
floors than the federal minimum
wage. Stuck at $5.15 per hour for the
past 10 years, the federal minimum
has become a poverty wage for more
than 10 million adult workers with
seven million children — and an af-
front to Americans who think
“working” should mean no less than
“working for a living.”
As this election proved, when you
ask voters whether they are willing
to allow poverty wages in their
states, you get a resounding ‘No.’
But that’s not why I think we may
be at a tipping point for a progres-
sive agenda that values work and de-
mands fairness for working families.
The more important development is
this: States with higher minimum
wages are proving that minimum
wage increases deliver what their
proponents promise — higher in-
comes, and not what their opponents
predict — fewer jobs.
This victory of common sense
over conservative economics was
fought and won during the past 10
years at the intersection of reality
and ideology, where people’s lives
are directly affected by the contest of
political ideas. And, this is a contest
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that progressives have won.
Before I take this point further, I
want to call out the pioneers of this
successful movement, which started
in the Northwest. Activists in Wash-
ington were the first in the country to
use the initiative process to raise the
minimum wage in 1988. Their coun-
terparts in Oregon and California
followed suit in 1996.
Since then, initiatives to raise the
minimum wage appeared on the bal-
lot in 10 states, including a second
round of increases in Washington in
1998 and Oregon in 2002 that added
annual cost-of-living adjustments to
their wage floors. All 10 of these
minimum wage initiatives were ap-
proved by the voters; not a single
one failed — despite some high-
spending opposition campaigns that
featured a message from the
Almighty urging a ‘No’ vote in TV
ads run in Colorado this year.
Most importantly, these cam-
paigns helped to prove that wage
laws forged in the crucible of the
New Deal are still relevant to a
global economy 70 years later.
States that raised their minimum
wages above the federal level and
communities that adopted living
wage ordinances in recent years pro-
vided real-world laboratories to test
the conventional thinking dominant
in right-wing think tanks, preached
by university economics depart-
ments and used like a cudgel by
business lobbies — namely, that
minimum wage increases hurt more
workers than they help.
The results of these tests have
been summarized in a new paper by
Liana Fox, entitled “Minimum Wage
Trends: Understanding Past and
Contemporary Research,” published
by the Economic Policy Institute
(www.epinet.org.) And they were
convincing enough to change minds,
at least in academia.
Alan Blinder, the former vice-
chairman of the Federal Reserve,
wrote this year: “My thinking on this
has changed dramatically. The evi-
dence appears to be against the sim-
ple-minded theory that a modest in-
crease in the minimum wage causes
substantial job losses.” Blinder even
rewrote his economics textbook to
debunk that “simple-minded theory.”
As Fox concludes in her overview
of the new studies, “The positive ef-
fects of the minimum wage are diffi-
cult to dispute. The minimum wage
sets a floor for the value of work and
lifts the living standards of low-wage
workers.”
So what should progressives do
now?
If studies like these had validated
the positive effects of school vouch-
ers or consumer-driven health plans,
you can bet that conservatives would
wave their findings like battle flags.
Progressives should do the same
with a living wage agenda.
In Oregon, the Legislature should
repeal the prohibition on local living
wage laws, which was passed in
2000 at the behest of the Oregon
Restaurant Association, and let com-
munities decide if they wish to es-
tablish higher wage floors.
In Congress, Democrats should
move quickly to raise the federal
minimum wage to an amount that
takes it above the poverty level and
boost the shameful “tip credit” wage
of $2.13 per hour as well.
Progressives should learn from
their success in states like Ohio,
Montana and Arizona that the mini-
mum wage can serve as the cutting
edge of a new values-based eco-
nomic agenda to unite blue states
and red.
After all, the minimum wage has
something going for it that the con-
servative agenda doesn’t. It works.
Tim Nesbitt is a former president of
the Oregon AFL-CIO.
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PAGE 9