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Public Citizen’s Lori Wallach: Time to Force a New NAFTA

Aug. 11, 2018–Lori Wallach, the Director of Global Trade Watch, a division of Public Citizen, addressed a very attentive and engaged meeting of citizens from the District, Maryland, and Virginia at Cleveland Park Library on August 9.  Wallach was joined by macro-economist Alphecca Muttardy in the dialogue with approximately 35 citizen activists in the area.  The meeting was emceed by Rudy Arredondo, the President of the National Latino Farmers and Ranchers Trade Association, who is a well-known advocate for rural agriculturalists on Capitol Hill.

Public Citizen’s Lori Wallach

Mrs. Muttardy began the meeting with a powerful, in-depth presentation on the ongoing crisis in the United States economy, despite all the gibberish of “recovery”.  She highlighted the impact of the continued income inequality on living standards and the inability for the real productive economy to prosper.  She presented the current level of indebtedness of the government and financial system which is strangling any possible expansion.  Current federal debt is $21 trillion and headed for $30 trillion over the next number of years.  This is resulting in a staggering interest payment of the government.  Additionally, the impact of $15-$18 trillion in corporate debt and other debt bubbles is destroying any real output in the economy.

She concluded by calling for a restoration of the Franklin Roosevelt Glass-Steagall Act to break up the Wall Street banks, and relieve the real economy of the crushing bad debts of the Too Big to Fail/Jail banks.  In conclusion, she developed the potential for a “Hamiltonian” National Bank for Infrastructure and Industry  to direct trillions of dollars of new credit into the productive economy, as was done repeatedly over the history of the country.

NAFTA’s Rotten Results

Following Mrs. Muttardy was well-known trade expert Lori Wallach.  She delivered a searing 45-minute indictment of U.S. trade policy, centering on the negative impacts of free trade and especially the North American Free Trade Agreement (NAFTA).

Wallach deftly used a power-point presentation to highlight the inequities of NAFTA.  After tracing the history of the agreement and its origins, she presented numbers of items highlighting the rotten results.  NAFTA represents the corporatist takeover of trade, as the World Trade Organization, NAFTA, Central American Free Trade Agreement, and GATT exemplify.

Under NAFTA nearly 1 million U.S. jobs have been lost as industries relocated overseas to cheap labor and unregulated environments.  Sixty thousand U.S. manufacturing facilities have been shuttered in this time frame.  However, the simple outsourcing of jobs to lower wage areas has also served to tamp down the wages of the jobs remaining in the United States, including service jobs.  The result of this process, combined with the overall downsizing into menial jobs, has been the continuous stagnation of wages and benefits.  Now wages are actually falling once inflation is factored in.

Corporate giants like Archer Daniels Midland have been the beneficiaries of NAFTA.

Not only laborers, Wallach said, but farmers have been hurt as well.  The economy is now running a trade deficit in agricultural products, harming, among others, the beef and vegetable industries.  Mexico has also been hurt as the United States grain companies have relocated to Mexico or dumped U.S.-grown grains onto Mexico.  Corn was developed in Mexico, but Mexico is now a net importer of U.S. corn, and the U.S. is now importing all sorts of agricultural produce that used to be grown here, from Mexico.  The world has been turned upside down!

Wallach highlighted the nefarious role of the Investor State Dispute Settlement (ISDS) mechanism, which was enacted under NAFTA and lies at the center of the corporate takeover of U.S. trade policy.  Under ISDS, any corporation that wants to sue a sovereign government, because they feel “harmed” by laws passed in that nation, can do so.  The case is heard by a three-judge panel of corporate lawyers who can arbitrarily overturn a law, order compensation to a so-called “aggrieved” company, and make the decisions final.  ISDS prohibits appeals!

Already, numbers of cases have been heard and resolved inside the three NAFTA nations, to the detriment of the local or federal governments involved.  So much for national sovereignty, say the corporate moguls. (For more on Public Citizen’s view of NAFTA, click here.

An Ironic Opportunity to be Seized

Wallach stated that NAFTA is now in the process of being re written, and it is possible that a new NAFTA may emerge by the end of August.  This situation presents an ironic opportunity.  There is a faction in the Trump Administration, headed up by trade negotiator Robert Lighthizer, which is opposed to ISDS, and the policy of limiting United States’ sovereignty.  They are considering a rewrite of NAFTA that may be acceptable to progressives and other Democrats.  It may also open the door to renegotiate wages and working conditions in Mexico, features which have triggered the most opposition to the pact.

So Ms. Wallach proposed that in this unique moment, progressives, Trump blue-collar voters, and the pro-sovereignty factions in Republican circles band together and try to force a new NAFTA.

A lively discussion followed Wallach’s presentation.

Wallach is not anti-trade, just unfair trade, and wants a new agreement which cements a traditional approach that benefits the standard of living of all citizens, not a group of corporate vultures.  Trade is necessary, but must stop being exploitative.  One cannot wait for “the perfect time,” she said; we must act when opportunity presents itself.  This is a unique moment and the progressive and labor-oriented circles should intervene to try and force congress to act in a positive way. And they should work with Lighthizer to forge the best agreement possible.

One other wrinkle, among many, was also discussed.  Mexico recently concluded its elections and the new President, Manuel Lopez Obrador (AMLO),  will take office in December.  Mr. Obrador wants a NAFTA agreement that would be amenable to many of the aims of labor and progressives, while the current president, Enrique Peña Nieto, is less malleable.  Thus, Mr. Trump may go for an agreement now, which might still be reasonable, or there may be no new policy and a delay until winter.  Either way, Ms. Wallach encouraged the participants to mobilize their congresspersons to get on the right side of the issue.

Her tour de force speech provoked a flurry of non-stop questions and comments that carried to the appointed end time of the forum.  Frankly, had the library not been closing, the meeting would have gone on into the night.  People grabbed up handouts from both presentations, and many committed themselves to intervene and try to change the trade and economic policy.  Everybody wanted to further educate themselves on the issues, and nearly a third of the audience ordered the power point that was presented by Lori Wallach.

 

 

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