Monday, October 20th, 2014

The Obameter

Include environmental and labor standards in trade agreements


"He will use trade agreements to spread good labor and environmental standards around the world"

Updates

Congress approves final agreements

Congress moved on Oct. 12, 2011, to approve three major trade deals supported by President Barack Obama, easing restrictions via new agreements with South Korea, Colombia and Panama.

During the campaign, Obama promised that new trade agreements would include protections for labor and the environment. We recently examined that promise in a previous update (see below for more details). We found that while the agreements do have some protections, they don't meet stricter standards that Obama talked about during the campaign.

The standards depend on some technical legal specifications for international trade, and the different trade agreements use the standards in different ways. The differences are not trivial, either.

For example, Rep. Sander Levin, D-Mich. and the ranking Democrat on the House Ways and Means Committee, favored the Korea and Panama agreements. But he opposed the Colombia agreement because he said there will be problems enforcing negotiated protections for labor.

Public Citizen, a consumer advocacy group that monitors trade, has opposed all three agreements, saying they do not match up with Obama's campaign promises. They produced a detailed comparison of what Obama promised and what the trade agreement with Korea contains. Public Citizen said the Korean government has used its laws to imprison labor leaders, and employers have used police to break up labor union activity. Those laws could continue to be used if the current agreements stay in place.

The group also opposes provisions that allow companies to dispute laws that hurt their businesses and to make those challenges in special tribunals outside of the host country's normal legal system, seeing them as a way for companies to skirt laws designed to protect workers and the environment.

Public Citizen issued a scathing statement after Congress gave its approval. "This represents a complete flip-flop for President Obama, who won crucial swing states by pledging to overhaul our flawed trade policies,” said Lori Wallach, director of Public Citizen's Global Trade Watch. "So it is no surprise that a sizeable majority of Democrats in Congress voted against these agreements, against Obama and for American jobs.”

The Obama administration, on the other hand, has said the trade agreements do include labor and environmental standards, and ones that are tougher than NAFTA. For example, the agreements included bipartisan standards hammered out during the Bush administration on May 10, 2007, and subsequently known as the May 10 standards.

The administration also pointed out that the Korea agreement has been endorsed by the United Auto Workers and the United Food and Commercial Workers.

Obama praised the agreements in a statement issued by the White House shortly after Congress approved them.  "Tonight's vote, with bipartisan support, will significantly boost exports that bear the proud label ‘Made in America," support tens of thousands of good-paying American jobs and protect labor rights, the environment and intellectual property," Obama said.

The agreements have now been finalized by Congress. While it's clear they do include some form of environmental and labor protections, it's also clear they fall short of the more specific promises Obama made during the campaign. We continue to rate this promise Compromise.

Sources:

New York Times, Congress Ends 5-Year Standoff on Trade Deals in Rare Accord, Oct. 13, 2011

U.S. House of Representatives, vote on Korea trade agreement, Oct. 12, 2011

U.S. House of Representatives, vote on Colombia trade agreement, Oct. 12, 2011

U.S. House of Representatives, vote on Panama trade agreement, Oct. 12, 2011

U.S. Senate, vote on Korea trade agreement,Oct. 12, 2011

U.S. Senate, vote on Colombia trade agreement, Oct. 12, 2011

U.S. Senate, vote on Panama trade agreement, Oct. 12, 2011

The White House, Statement by the President on the Passage of Trade Agreements and Trade Adjustment Assistance, Oct. 12, 2011

Public Citizen, Job-Killing Trade Deals Pass Congress Amidst Record Democratic Opposition, Oct. 12, 2011

Office of the U.S. Trade Representative, Free Trade Agreements

Public Citizen, Table of foreign investor-state cases and claims under NAFTA, CAFTA and Peru FTA, August 2011

Public Citizen, Bush's NAFTA-Style Korea Free Trade Agreement Would Undermine Obama's Campaign Trade Reform Commitments, Nov. 9, 2010

Public Citizen, Oregon Fair Trade Campaign: Candidate Questionnaire for Federal Office, May 9, 2008

Public Citizen and Sierra Club, Statement by Sierra Club Executive Director Michael Brune on the U.S.-South Korea Trade Agreement, Dec. 6, 2010

E-mail interview with Carol Guthrie of the Office of the U.S. Trade Representative

Interview with Lori Wallach of Public Citizen

Interview with Jeffrey Schott of the Peterson Institute

Interview with Josh Drobnyk of the U.S. House Ways and Means Committee - Democrats

The New York Times, U.S. Union Backing Boosts Korea Trade Pact, Dec. 8, 2010

U.S. House of Representatives, Ways and Means Committee - Democrats, fact sheet on the U.S.-South Korea trade agreement, accessed Sept. 14, 2011

U.S. House of Representatives, Ways and Means Committee - Democrats, Trade information

U.S. House of Representatives, Ways and Means Committee - Democrats, Levin: Colombia FTA Implementing Bill Fatally Flawed Without Worker Rights Action Plan, June 27, 2011

Bloomberg, Levin to Oppose Colombia Trade Deal on Labor Plan Exclusion, June 27, 2011

Some standards, yes, but not the ones promised

President Obama has been promoting trade agreements with Korea, Colombia and Panama, saying such agreements could help stoke job creation in the United States. But some advocacy groups say the agreements don't meet Obama's campaign promises to include labor and environmental standards.

The trade agreements are also caught up in a separate legislative battle: Obama wants Congress to approve the agreements in tandem with funding for a jobs retraining program, known as Trade Adjustment Assistance. Republicans have opposed that funding, on the grounds of fiscal austerity. So Obama has not yet submitted the trade agreements to Congress for approval.

Still, the text of the agreements are public. Do they include the promised environmental and labor standards?

Public Citizen, a consumer advocacy group that monitors trade, says no. They've produced a detailed comparison of what Obama promised and what the trade agreement with Korea actually contains. Public Citizen says the Korean government has used its laws to imprison labor leaders, and employers have used police to break up labor union activity. Those laws could continue to be used if the current agreements stay in place.

The group is also concerned about provisions that allow companies to dispute laws that hurt their business and to make those challenges in special tribunals outside of the host country's normal legal system. These provisions were part of NAFTA and are replicated in the new agreement, Public Citizen said, and they're a way for companies to skirt laws designed to protect workers and the environment.

Finally, Public Citizen pointed out that Obama made a specific campaign promise to include International Labor Organization conventions (as opposed to the more lenient ILO principles) in trade agreements. But the new agreements don't include the conventions.

The Obama administration, on the other hand, says that the trade agreements do include labor and environmental standards, and ones that are tougher than NAFTA. For example, the agreements include bipartisan standards hammered out during the Bush administration on May 10, 2007, and subsequently known as the May 10 standards.

The administration said it would not be appropriate to include the ILO conventions as a standard, because those conventions haven't been fully ratified by the U.S. Senate. 

The administration also points out that the Korea agreement has been endorsed by the United Auto Workers and the United Food and Commercial Workers.

Finally, we should note that the standards depend on some very technical legal specifications for international trade, and different trade agreements use the standards in different ways. The differences are not trivial, either.

For example, Rep. Sander Levin, D-Mich. and the ranking Democrat on the House Ways and Means Committee, favors the Korea and Panama agreements. But he opposes the Colombia agreement because he believes there will be problems enforcing negotiated protections for labor. 

As we noted before, the agreements have not yet been submitted. Having said all that, it's clear the agreements do include some form of environmental and labor protections. But it's also  clear they fall short of some of the morespecific promises Obama made during the campaign. We rate this promise Compromise. 

Sources:

Office of the U.S. Trade Representative, Free Trade Agreements




E-mail interview with Carol Guthrie of the Office of the U.S. Trade Representative

Interview with Lori Wallach of Public Citizen

Interview with Jeffrey Schott of the Peterson Institute

Interview with Josh Drobnyk of the U.S. House Ways and Means Committee - Democrats

The New York Times, U.S. Union Backing Boosts Korea Trade Pact, Dec. 8, 2010

U.S. House of Representatives, Ways and Means Committee - Democrats, fact sheet on the U.S.-South Korea trade agreement, accessed Sept. 14, 2011

U.S. House of Representatives, Ways and Means Committee - Democrats, Trade information

U.S. House of Representatives, Ways and Means Committee - Democrats, Levin: Colombia FTA Implementing Bill Fatally Flawed Without Worker Rights Action Plan, June 27, 2011

Pursuing new trade policies

In an effort to appeal to labor unions and environmentalists during the campaign, Barack Obama promised that he  "will use trade agreements to spread good labor and environmental standards around the world."

Obama has a chance to address the promise with pending trade agreements with Colombia, Panama and South Korea. All three were drawn up and signed under President George W. Bush, but Congress has yet to ratify any of them.

Obama and other Democrats have opposed the Colombia and South Korea trade agreements because of Colombia's record in dealing with labor leaders and their belief that South Korea hasn't done enough to open up its market to American cars.

The Obama administration appears to be moving toward eventually passing the pacts, but is still addressing those concerns. Ron Kirk, the U.S. trade representative in the Obama administration, hinted in a recent speech that he and his negotiating team are close to removing the obstacles that stand in the way of passing the Panama trade agreement. Labor and environmental standards are the focus of these negotiations.

Some other examples of the administration's focus on Obama's promise:

*The administration's 2009 Trade Policy Agenda, released in February, calls for a trade agenda that will "reflect our respect for ... our environment ... and the rights of workers."

* Kirk has emphasized on several occasions that he and his negotiating team are waiting for labor rights reforms to become permanent in countries such as Colombia and Panama before the United States signs trade agreements with them.

* In late October, the U.S. ambassador to Canada, David Jacobson, said that Obama won't open the North American Free Trade Agreement, or NAFTA, for renegotiation, but the administration is still pushing for inclusion of more stringent environmental and labor standards into the treaty.

* In September, the United States held talks with Jordanian officials about the U.S.-Jordan Free Trade Agreement. Lewis Karesh, who led the team, said "the meetings in Jordan are an important example of the United States' increased engagement on labor issues."

We'll wait and see if Obama succeeds, but in the meantime, we rate this promise In The Works.

Sources:

Global Atlanta, U.S. Trade Rep: No Timeline for Votes on FTAs , Oct. 9, 2009

Reuters, Lawmakers see trade deal chance after healthcare , Oct. 29, 2009

Canadian Press, U.S. envoy says 'side letters' on labour and environment may benefit NAFTA , Oct. 21, 2009

Office of the United States Trade Representative, Press Release , Sept. 30, 2009

Reuters, USTR Kirk sets speech on long-delayed Korea pact , Oct. 30, 2009