Monday, June 16, 2008

Obama talks about fair trade

Obama addressed more than 1,000 people at Flint's Kettering University today. Christine from Blogging for Michigan attended and took some pictures that you can check out, and I helped do some live blogging and posted my comments there too.

Obama's speech was: "Renewing American Competitiveness." How appropriate for Flint and Michigan in general. Manufacturing jobs have been leaving here for years and being sent to places like Mexico and China, and along with those jobs went pensions and health care. Workers are ready for change because, as Obama noted, we've "lost confidence in that fundamental American promise that our children will have a better life than we do."

Click the link above to read his speech. There's something in there for everyone. Obama touches on health care (he states he will push for universal coverage), green jobs and energy policy, broadband access, education (college education must not be a privilege of the few – it should be a birthright of every single American), jobs, trade and more. Because trade is responsible for decimating manufacturing jobs here in Michigan, I pulled out that part of his speech for you to read.
But even as we welcome competition, we need to remember that our economic policies must be supported by strong and smart trade policies. I have said before, and will say again – I believe in free trade. It can save money for our consumers, generate business for U.S. exporters, and expand global wealth. But unlike George Bush and John McCain, I do not think that any trade agreement is a good trade agreement. I don't think an agreement that allows South Korea to import hundreds of thousands of cars into the U.S., but continues to restrict U.S. car exports into South Korea to a few thousand, is a smart deal. I don't think that trade agreements without labor or environmental agreements are in our long term interests

If we continue to let our trade policy be dictated by special interests, then American workers will continue to be undermined, and public support for robust trade will continue to erode. That might make sense to the Washington lobbyists who run Senator McCain's campaign, but it won't help our nation compete. Allowing subsidized and unfairly traded products to flood our markets is not free trade and it's not fair to the people of Michigan. We cannot stand by while countries manipulate currencies to promote exports, creating huge imbalances in the global economy. We cannot let foreign regulatory policies exclude American products. We cannot let enforcement of existing trade agreements take a backseat to the negotiation of new ones. Put simply, we need tougher negotiators on our side of the table – to strike bargains that are good not just for Wall Street, but also for Main Street.
I think that last sentence makes an important point. It's too late to put the genie back in the bottle and rescind NAFTA and other trade agreements, but there's no reason we can't change those agreements so that labor gets their fair share of the pie too.

This is how the system works now according to Ezra Klein:
Put broadly, opening ourselves up to trade is really good for people who buy things, and less good for people who make things. Now, a lot of folks both buy and make things, so the story is complicated. But one reason the elite classes are so hegemonically enamored with trade is that they don't really make anything at all, and so experience none of the downsides of trade. As Dean Baker likes to point out, we've structured our trade deals such that unskilled manufacturers face a lot of international competition while reporters, say, face almost none.
If we really value all work in this country, then tweaking these trade agreements is the only right thing to do.


abi said...

Giving labor its fair share of the pie defeats one of the main goals of trade agreements like NAFTA - downward pressure on the wages of American workers.

My inclination is to tweak NAFTA right out of existence. But you're right - a well balanced trade agreement can be good for both countries.

Kathy said...

Abi, my inclination is to tweak it out of existence too, but I don't think that's possible without disrupting the lives of people whose livelihoods depend on these agreements.

On the other hand, if we could tweak those enormous CEO and executive salaries down to minimum wage, I'd be happy. As they say, payback is a bitch. ;-)

Thomas Gagne said...

Hmm. Not until now did I realize how similar Democratic presidential candidate Barack Obama and former Republican presidential candidate Pat Buchanan are--particular where it relates to their dislike of free trade.

Suicide by Free Trade

Again, Americans have it within their power to tilt the trade (im)balance back in the US' favor by changing where they shop and what they buy. Much has already been written about America's love/hate relationship with Wal-mart. We love the low prices but rue their footprints and putting boutique stores out of business.

Well, if you want the boutique businesses to survive then you can choose to shop there rather than Wal-mart.

A year without "Made in China"

But for many people, it's better for others to make sacrifices than for them to sacrifice. It's better for the government to raise tariffs and other import restrictions than it is to change our own spending habits. It's better the government to raise CAFE standards than for Americans to simply buy more fuel-efficient cars, or move closer to work, or live in higher-density neighborhoods. It's better to tax "the rich" than to tax ourselves so we may share the bite of an expanding and seemingly unlimited welfare state.

Kathy said...

Thomas, I think you've misunderstood Obama's position on trade. He doesn't dislike it, but he thinks we need to strengthen enforcement of the agreements in the areas that undermine our economy and workers. Click here to go to his website and read his ideas.

Obama supports free trade more than I'm comfortable with, but I don't think its realistic to tear the agreement up. There's no reason we can't tweak and enforce some of the rules though.

By the way, I found some interesting links about NAFTA if you're interested.

Click here and here.