What’s Lurking Behind the TRADE Act?

Are the Democrats making a radical turn to the left?  This is the conclusion many have come to after learning about the TRADE Act (Trade Reform, Accountability, Development and Employment Act).  A broad array of organizations – including trade unions, fair trade, and environmental groups – are uniting around the Democratic bill that aspires to “renegotiate NAFTA” and possibly revisit and revise many free-trade agreements the U.S. has signed with various countries.

The bill’s appeal is at first sight far-reaching.  Many who have recently left the Democratic Party in disgust – because of its role in the Iraq war, NAFTA, erosion of democratic rights, etc. – are being brought back into its orbit, while those who claim that it’s possible to “pressure the progressive Democrats” have used this piece of “landmark legislation” as proof of their theory.

While the bill appears to address the growing outrage over outsourcing, “corporate flight,” and globalization in general, a deeper look into the details reveals not only extremely empty rhetoric, but outright reactionary intentions.

The TRADE Act’s greatest selling point is that it will insert, through renewed negotiations, a hodge-podge of different requirements into existing trade pacts, to be applied to all future agreements.  Those organizations promoting the bill like to focus on the progressive requirements that include labor and environmental standards, as well as anti-privatization and anti-trust wording.

Ignored are the openly pro-business requirements that contradict the above-mentioned provisions, including: a review of how free-trade agreements have affected the “competitiveness” of U.S. corporations; “protecting intellectual property rights”; the “right to hold clear title to property”; and wording that strives to guarantee transnational corporations and investors in general against “expropriation.”

This language reflects the different and sometimes contradictory interests of the U.S. ruling class. One section represents those U.S. corporations that have been out-competed by foreign firms, and therefore seek protectionist trade measures.  There are also those who want to protect intellectual property rights. This includes a variety of giant corporations that intend to maintain their monopolies and super-profits on pharmaceuticals, entertainment, software, etc.  Those who seek protection against “expropriation” are those billionaire overseas investors who profit off the backward conditions and low wages of poor countries.

How could such seemingly conflicting elements be in the same bill?  The answer lies in the political philosophy of the U.S. labor unions that helped write the bill.  Instead of advancing a class-independent political agenda, the unions continue to ally themselves with the “other” party of Big Business, the Democrats. This is a strategy that reflects the approach of worker / owner “cooperation.”  The results of this approach reach the height of absurdity: unions use workers’ dues money to elect Democratic politicians that then attack workers’ living standards. At the contract bargaining table, union organizers sit opposite corporate lawyers  – yet both vote Democrat.

The TRADE Act is simply an attempt to legally codify this irrational relationship. For the pro-“partnership” union bureaucrats, it seems reasonable to support the efforts of U.S. corporations to enact protectionist measures against foreign competition. After all, for the sake of corporate “competitiveness,” these same union leaders have already agreed to lower workers’ wages and benefits.

But shouldn’t the bill be supported on the basis of its progressive aspects alone?  Scratching the surface reveals that these progressive requirements are fine statements, but void of content.  For example, the TRADE Act claims that the U.S. will sign free-trade agreements with countries that have democratic governments, respect human rights, adhere to the labor standards of the UN’s International Labor Organization, etc.  This sounds very nice, but something doesn’t add up.

In practice, U.S. imperialism – which represents the interests of U.S. banks and corporations – operates in the exact opposite manner.   U.S. corporations have invested billions in China precisely because of its lax labor standards and lack of democracy, both of which tend to boost profits.  The military coups that the U.S. frequently backs around the world – to “promote democracy” – create puppet dictatorships that operate in similar fashion: labor leaders are killed, unions are destroyed, and profits soar.  The free-trade “partners” of the U.S. are more often than not mere lackeys of U.S. foreign policy, and use extremely brutal methods to keep their foreign investors happy.

If the TRADE Act were to pass, the working class of the affected countries would notice that nothing had actually changed.  The bill would most likely function in the same manner as the UN’s International Labor Organization: strict labor requirements are written, violations are investigated, solutions are proposed, but absolutely nothing is ever accomplished.  The ILO in fact acts as a fig-leaf for the horrible abuses of capitalism around the world, something the TRADE Act aims to accomplish on a smaller level.  No congressional bill, no matter how finely worded, can change the natural, predatory habits of a system based on profit making.

Although the working class will gain nothing in practice from the TRADE, the class that owns the banks and corporations stands to benefit substantially.  Those U.S. corporations who are bad competitors on the global market are striving to protect themselves from foreign imports.  The TRADE Act will serve to further the protectionist tendencies of U.S. corporation, while accomplishing another sinister goal. 

The employing class in the U.S. is striving to channel the disgruntlement and frustration of its workers into safe political channels: as prices rise and wages drop, while factories close and unemployment sky-rockets, someone must be blamed.  The first step of the blame game requires that the workers have their attention diverted away from our economic system in general, and toward the much narrower topic of trade (they’d rather you never question capitalism itself).

Once this is done, foreign countries that export to the U.S. more than they import – such as China – are put in the spotlight and denounced. Free-trade is demagogically transformed into a scapegoat to explain the ailing economy, the “remedy” of trade barriers is proposed.  Again, the strategy serves two purposes: U.S. corporations are protected from foreign competition while workers are fooled into thinking that something “progressive” is being done. 

This attempt to give the TRADE Act a “left” cover has been quite successful, as many people refer to it as the “Fair Trade Act.”  In reality, the term “fair-trade” and the trade policy of protectionism have become intimately linked for deceptive purposes; so much so that an openly protectionist bill recently proposed by Congress is named the Fair [!] Currency Act, and intends to punish China with trade barriers if its currency is not revalued against the dollar (Barack Obama and Hillary Clinton are both co-sponsors).

Trade barriers are no answer for the working-class.  Protectionism increases prices (inflation) and can deepen recessions; it is used by the ruling class to blind workers and to incite war. A capitalist economy needs free-trade like the body needs oxygen, but we do not need capitalism.  Socialism  – an economy that produces for social needs and not a blind and greedy market – is the only alternative for ordinary people, a proposal that only seems too radical to those who benefit from the status-quo.