I've been in meetings this morning with various liberal groups, as well as on the Hill at a few member offices.  I learned very little that's actionable, but one thing that is happening is a big caucus meeting today on trade.  I've been able to look at a copy of the talking points handed out to members last Thursday, and there's very little there that we haven't seen.  I'm sure that a huge point of contention is going to be the discussion over side letters versus reopening the FTA agreements.  I think that the promise a few weeks ago was that the Peru and Panama agreements would have to be reopened, but that may not be the case.

We'll know more in a few hours, after the members are done with the meeting and start talking.  Passions are high on both all sides.  This is very painful for the New Democrats and Charlie Rangel, I don't think they expected this level of opposition and anger.  They thought they could just roll the single-issue groups and frankly, if it were up to those groups, they would have been correct.  What the neoliberals are encountering is internet politics and a kickass freshman class.

This is from Inside Trade and I got it from Lexis, so I can't provide a link.  But I'm beginning to think that the 'deal' announced on trade actually was just a press conference and a Rorschach Test mashup.  Here's what I mean.

Lawyers for the Office of the U.S. Trade Representative are exploring ways to make the new free trade agreement template "legally binding" without reopening the Peru and Colombia free trade agreements, according to House Ways and Means Committee Ranking Member Jim McCrery (R-LA).

He acknowledged that this would require convincing Democrats such as Ways and Means Trade Subcommittee Chairman Sander Levin (D-MI), who last week said the new template announced May 10 requires the reopening of already signed FTAs.

What was announced was an agreement to move forward on trade based on specific principles, and Sander Levin was a key figure bringing credibility from labor.  There was no legislative language because there was no legislation or new trade deals to vote on.  All this 'deal' consisted of was a set of principles around which negotiations would happen.  Apparently Sander Levin thought that this meant trade deals before Congress would be reopened, while business lobbyists and the Bush administration did not.  Each side saw what they wanted to see in the announcement, and now it appears that this disagreement wasn't resolved in the 'deal'.  So what exactly was this except for a press conference?

I'm not sure, but Rangel is really mad.

"I think there's a lot of misunderstanding with the agreement," House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, told PBS' Nightly Business Report. "I cannot see how anybody would be upset in the Democratic Party, except for one thing: they were not included when we had the press conference."

Well since the only thing that proponents really seemed to have in common was this press conference, I suppose that his perspective makes sense.  Or maybe this was his first bad day since.

I will say that Rangel would have a lot more credibility if he had actually managed to get the minimum wage increase through that the Democratic leadership promised.  That is a popular and obvious piece of legislation, as well as a campaign promise that Bush promised he'd sign.  The only thing holding it up is wrangling from Rangel, Baucus and Senate Republicans, who will crumple if forced to filibuster.  The minimum wage hike will happen, I'm sure, but it's clear that his priorities are out of whack since he's not actually expending enough effort to make it happen.  He's too busy cutting bipartisan trade deals that don't actually seem to be anything but press conferences.

During the NAFTA fight, pro-NAFTA forces were able to peel off just enough environmentalists and pro-labor members with a series of 'side agreements' that pledged to uphold labor and environmental standards.  The key point to remember in the 'deal' announced last week is that the 'deal' was more of a promise to rewrite the trade agreements between Peru and Panama.  Apparently, though, what may actually be going on is that free trade forces aren't going to rewrite the deals so much as they will add side agreements for environmental and labor standards.

To put this in context, for people who remember the NAFTA fight, this is like the Bush administration putting to Congress a resolution for the authorization of the use of military force in Iran and promising to do everything possible to avoid a military strike, including inspections for nuclear facilities.  So it shouldn't be a surprise that the Senators cut out of the process are livid.

Five Senators with strong ties to labor unions expressed outrage today about the side deals negotiated between Congressional leaders and the White House to include labor and environmental standards in a new trade policy proposal, and said that they want to be invited to the table.

Sens. Byron Dorgan (D-N.D.), Debbie Stabenow (D-Mich.), Sherrod Brown (D-Ohio), Bernie Sanders (I-Vt.) and Bob Casey (D-Pa.) said at a press conference today that they want to push for new benchmarks in future trade agreements to measure their success and allow Congress to review any agreement in any five-year period.

"We would say to all of those who played a role in these negotiations that we intend to be a part of the negotiations and will be with respect to what we described: benchmarks and accountability," Dorgan said.

Last week, Treasury Secretary Henry Paulson and U.S. Trade Ambassador Susan Schwab reached an accord with Speaker Nancy Pelosi (D-Calif.) and House Ways and Means Chairman Charlie Rangel (D-N.Y.) to include environmental and worker protections in new trade deals with South Korea, Colombia, Panama and Peru.

However, Brown said in a statement that "if the plan is to offer side deals, then nothing new is on the table except a $5.00 Rolex."

I don't like sequels in general.  And this is surely a sequel: a slowing economy, a President named Bush, a decimated labor force, a neoliberal group in Congress, strong business coalitions, a Clinton running for the Democratic nomination promising to be on the side of the people while surrounding the campaign with corporate-allied operatives, a country looking for change, and a secretive trade deal on the table.

Sequels are always worse than the original.  This one is no different.

I just got this from a source.  Apparently Sirota's right that there's immense strife in the caucus around this trade deal.  The other side tends to tell me that they got the Republicans to cave on big demands, and that labor shouldn't be complaining that much.  The problem is that labor got pushed out of the room when the deal was negotiated, as did Fair Trade Democrats, and the New Dem Democrats don't have such a great record on trade.

It's becoming pretty clear that the politics here are too screwed up to move forward.  There's also the lobbying reform issue to tackle, and the budget.  Lots and lots of sticky stuff.

And a hot breakfast. They really want people at this meeting.

Update [2007-5-16 18:20:42 by Matt Stoller]: Rep Brad Miller calls me out in the comments.

There's a joint caucus and whip organization meeting every Thursday morning at 9:00 in HC-5, and a hot breakfast is always served. There may be ultimately be strife in the caucus about the trade deal, but that's kinda thin evidence of intra-caucus warfare.

I'll take Miller's word on this. Note to self: don't blog while hungry and thinking about breakfast. It's my favorite meal of the day by far.

Now that I've had a chance to go through the trade agreement and spoken to a few staffers (one pro and anti), a couple of things have become clearer.  One, this is not a formal agreement, it's a commitment to rewrite the Peru and Panama Free Trade Deals with new provisions in them.  The language for the new agreements is what's important, and that language hasn't been written yet.  It will be written in consultation with the Ways and Means staffer and the US Trade Representative.  So right now, we actually have little idea what this 'deal' means.  Two, this is an attempt to move other free trade agreements through the process by creating momentum.  Once you have a block of legislators saying 'hey this will create labor standards' it's easy to create a rationale for Fast Track and other trade agreements.  In other words, this is primarily a political document.

In terms of its substance, from what the smart commenters at MyDD can see, and from my reading of the agreement and some inquiries at Public Campaign, we got about 20% of what we need, and 80% what we don't.  Investors can still sue states, localities and other countries for having environmental regulations (this is the infamous Section 11 from NAFTA).  Labor unions, by contrast, can't sue governments for violating labor laws, but countries can sue other countries for breaking labor laws.  In other words, if you trust Bush to work on behalf of labor and believe that transnational corporations should have rights that no one else has to trample state and local sovereignty, then this agreement is fine.  Oh, and you must also be willing to believe that the Peru and Panama trade deals will be rewritten in good faith by Bush's US Trade Representative and Ways and Means neoliberals.

DemHillStaffer has diary on the issue at Dailykos with a very different interpretation of this (as well as a useful pro-deal letter from Alan Reuther, UAW's legislative director).  DemHillStaffer thinks that it's a great step forward, and has a useful perspective inasmuch as he is representing the conventional Capitol Hill perspective.  The supporters of this agreement I know are pscyhed because they think that business got screwed and Republicans are capitulating.

I don't think so.  

One of the key problems is enforcement.  Here's Byron Dorgan:

Now, in the discussion this morning, I read of the celebration at the White House by Members of the House and the White House, making some sort of deal with respect to Panama, Peru, Colombia, I guess. They talked about labor standards, which I think is very important. In fact, the only trade agreement that has ever had labor standards is the Jordan agreement. The Clinton administration agreed that the free-trade agreement with Jordan would have labor standards.

Well, guess what. Last year there were findings of sweatshops operating underneath the umbrella of a free-trade agreement with supposedly strong labor standards is in Jordan. Laborers were brought over from Bangladesh to sweatshops in Jordan, to turn Chinese materials into garments for sale in the U.S. market. The workers were forced to endure 20-hour days; yes, 20-hour days in sweatshop conditions in a country with whom we have a trade agreement where there are labor standards. These standards mean virtually nothing unless you have enforcement. All of these are just words unless you have enforcement. And this Administration has certainly demonstrated that it has no interest in enforcing labor standards.

The Government of Jordan has taken some steps to try to fix some of these problems. Is that because our U.S. trade officials tried to enforce the labor provisions in the trade agreement? No. It's because a labor rights group called the National Labor Committee exposed these problems, and because the New York Times wrote a front page story about them. So it's not the labor standards in the trade agreement that got the Jordan government to start to do the right thing, because this Administration never tried to enforce those standards. It was the fact that these abuses were independently exposed and held to the light. These failed trade policies are undermining our country. This is pulling the rug out from under our country.

I'm really struck by the yawning gap in trust here.  Democratic leaders clearly think they have a lot of crediblity on the issue of trade.  I'm not quite sure why this is.  The process for rewriting the agreements will take months, which is ample time to organize and put penetrating questions to our leaders.  It's too early to say this is purely a bad deal.  It's mostly a small deal, in fact, as Panama and Peru aren't very important to our economy.  This is more a test-vote than anything else.

Someone from the Hill who asked not to be identified sent me the details on the trade accord.   Here's the outline and here is more specific language.  I don't think my earlier post on the deal being secret upon release was correct.  What happened is that the various press releases and materials sent out did not in fact include the details of the agreement, and the two public interest groups and few member offices I talked to didn't have the agreement language either.  The person who sent this to me in fact apologized for the muddled release of the details.  I can't tell if the announcing group was trying to hide the details or if they only sent out the talking points, assuming people wouldn't care about the details.  Regardless, I'm relieved that this process won't be cloaked in secrecy.

The one member I've talked to about this agreement says that he needs to educate himself about it.  That's where I am as well.  Please, grok the details and let me know what you think.

Update [2007-5-12 19:59:36 by Matt Stoller]:: I've now gotten two emails about this in the last five hours (on a Saturday). It's not clear to me when this stuff was released. It's possible it was in wide circulation on Thursday, or it's possible that someone got scared and said 'release the details or we'll look shady'. I don't know. See Sirota for more questions.

Update [2007-5-12 21:33:57 by Matt Stoller]:: Todd Tucker at Public Citizen informs us that this is basically a summary of a framework, and not what members will be voting on. The trade deals are what will be voted on, and the language for those has not been released. Rangel is saying he can pull 'more than 100 members' to his side. Fine. Then release the language for the trade deals.

The New York Times editorializes in favor of the deal. I've highlighted a key sentence.

A commitment to basic labor standards — including bans on child labor and forced labor and guarantees of the right to organize — will be written into pending and future trade agreements. Trading partners will be required to enforce their own environmental laws. The administration will be responsible for monitoring compliance.

They may want to read this.

For most of the 1990s, I was an ardent free trader.  I learned my economics from Marty Feldstein, Reagan's chief economic advisor, and I'm still someone who sees immense benefits in globalization.   We're going to need to figure out new models for trade, carbon tariffs, changes in currency trading systems, etc.  And our politics are dominated by trade, whether it's connecting the flood of illegal immigration to the effects of NAFTA or discussing the declining leverage of labor and the working poor.

After doing some calling around on this new trade deal announced on Thursday, there is one specific thing that gives me great pause.  It's not that the deal was negotiated in secret without the input of fair traders, or that the public voted against corporate trade deals with the 2006 elections.  I expect there will be some labor and environmental standards in this deal, there's no way that Rangel or Pelosi would have cut a deal that didn't offer at least a fig leaf.  And it's not that the Teamsters are against the deal, or Public Citizen, or that corporate interests are heralding the lack of enforceability on these various provisions.  Frankly, I have no idea if the deal is good or not.  I know good people that still want to educate themselves about the details of the deal, and that's a prudent strategy.  Sherrod Brown and the AFL-CIO are kind of in this boat, concerned about the details of the deal but not immediately dismissive.  

Here's what concerns me.  There was a big press conference on Thursday designed to create a certain type of message around the trade pact.  The Democrats won labor and environmental standards, but corporate America is happy as well.  You can see the reporting coming out with this messaging.  The problem is that the details of the deal are still secret.  I have talked to Congressman Michaud's office, to the USBIC, and to various trade groups, and none of them have seen the specifics of the deal.  

This is extremely problematic and dishonest of the people negotiating and announcing the details.  Pelosi, Rangel, Baucus, Bush, and the New Democrats knew that they could generate a huge raft of headlines on the trade deal without actually revealing the meat of the deal, so they did so.  This is pretty much how the war in Iraq was sold, how the Bankruptcy bill was sold, and  how NAFTA was sold.  

In fact, we have only three pieces of real information about the deal.  One, we know that it was negotiated by New Democrats, Pelosi, Baucus, and Bush, and that labor unions and fair traders were excluded.  And two, we know that the announcement was made to generate headlines without giving us the details to actually know whether the proponents of the deal were telling the truth.

And we know the deal is still secret.  The question is, why?

Oh dear.  Tom Donahue of the US Chamber of Commerce and Frank Vargo of the National Association of Manufacturer's have just given their blessing to the trade deal because of its weak labor language. Update: Now the Business Roundtable is adding its praise.

The US Chamber of Commerce welcomed the bipartisan deal, saying it would secure support for Congressional approval of the four pending bilateral trade agreements.

"It is our hope that this deal can pave the way for a solid majority of members to vote in favor of renewing trade promotion authority and passage of bilateral agreements with Peru, Colombia, Panama, and Korea," said Tom Donohue, president and chief executive of the world's largest business federation.

"Over the course of these negotiations, legitimate concerns have been expressed about how addressing labor issues in trade agreements could affect US federal and state labor laws," he said.

"However, we are encouraged by assurances that the labor provisions cannot be read to require compliance with ILO Conventions."

Frank Vargo, vice president of international economic affairs at the National Association of Manufacturers, cautiously welcomed the agreement.

"We are encouraged by the progress announced today, but reserve comment on the final package until we have had an opportunity to examine the details," he said.

Donahue and Vargo are representatives of the infamous 'Gang of Six' business lobbies that are aggressively right-wing, paranoid and extreme.  This is really really bad.  

Sirota has more.

Update [2007-5-10 20:50:58 by Matt Stoller]:: Here's the key deal-breaker from Donahue: "However, we are encouraged by assurances that the labor provisions cannot be read to require compliance with ILO Conventions."

The whole point of this deal is that it includes ILO standards. Baucus and Rangel look like fools.

Update [2007-5-10 21:9:43 by Matt Stoller]:: Ok, it keeps getting worse.

But a half-dozen House Democrats with strong labor ties, watching the news conference from the back of the room, later expressed strong dissatisfaction with the process.

"The strongest voices for workers and the environment were not included" in the negotiations and were not informed of the deal, said Rep. Marcy Kaptur, D-Ohio.

"I'm very disappointed that Speaker Pelosi held a press conference before meeting with the caucus," said Rep. Michael Michaud, D-Maine. "In a democratic process Democrats ought to know."

This is literally a repeat of NAFTA. Kaptur is one of the good ones.