Trade Issues Are Not Just About NAFTA and the Rust Belt

In the lead-up to the Ohio Democratic primary, Sen. Barack Obama is missing no opportunity to remind voters of one of President Bill Clinton’s least popular legacies, the North American Free Trade Agreement. But the issue of trade concerns not only Ohio and NAFTA. It concerns all of us.

For 15 years, U.S. trade negotiators have focused on increasing the powers of large corporations to move their products, their facilities and their money more freely around the globe. The claim was that this would make companies more competitive and profitable and that these profits would trickle down to the rest of us in the form of higher wages and lower prices.

Instead, what we’ve got is a “Wal-Mart economy,” where corporations outsource production and drive down wages and benefits.

Yes, we can now buy a DVD player for $20 or a shirt for $10. But those low prices come at the expense of workers here and abroad.

While corporate profits have more than doubled since NAFTA went into effect in 1994, U.S. real wages have increased less than 10 percent.

If Obama really wanted to make his opponent squirm, he might point out that her husband did not ask the Chinese government to improve human and worker rights before approving its entry to the World Trade Organization in 2001. This move gave global corporations a virtual paradise for production and sourcing that offered low export barriers combined with a lack of basic labor rights.

Wal-Mart has even driven down wages within China by pitting suppliers there against each other, according to The Washington Post.

Wal-Mart and other U.S. corporations also tried to block small improvements in labor protections supported by the Chinese government. As Jeff Faux, author of “The Global Class War,” puts it, “It’s not the United States versus China. It’s all of us versus the China/ U.S. business partnership.”

The Obama-Clinton feud has drawn long-overdue attention to the problems with our trade policies. And despite all the vitriol, the candidates’ proposed solutions are quite similar.

Both call for new trade pacts to include stronger labor and environmental protections. Both propose cutting subsidies to companies that move jobs overseas, eliminating tax loopholes that encourage offshoring and increasing training and research to make the U.S. economy more globally competitive.

These changes would help soften the edges of the Wal-Mart economy.

However, they do not go far enough to correct the extreme imbalance in power between corporations on the one side, and ordinary people, the environment and communities on the other.

So let’s hope the debate goes on past the Ohio primary. More than Rust Belt rhetoric, we need a new president who is committed to shifting from a “Wal-Mart economy” to one built on dignified jobs and healthy communities for all.

Sarah Anderson directs the Global Economy project of the Institute for Policy Studies in Washington, DC.
John Cavanagh is the director of the Institute for Policy Studies, a member of the New Economy Working Group, and co-author of Development Redefined: How the Market Met its Match (Paradigm, 2008).