Lori Wallach: Deals with the Devil?June 24, 2011
In 2008, Barack Obama promised to renegotiate NAFTA, the bedrock of our trading system. He hasn’t. Instead, he’s accelerated the negotiations of new deals that operate along those same lines. This podcast is with Lori Wallach, the head of Public Citizen and the scourge of free trade fundamentalists everywhere. She walks us through three deals coming up: Panama, Columbia, and South Korea.
Panama has the strongest bank secrecy laws in the world, stronger than Switzerland, so this deal will open up a new set of havens for US corporations to shelter taxes.
Columbia is known for having its union leaders routinely murdered, a clear violation of, well, labor standards. Also, murder is bad in general, and murder to break unions so as to lower global wages is bad with a cherry on top.
Finally, we get to South Korea. This deal is a weird one, because there are apparently provisions in there that allow the use of North Korean labor to make products and ship them our way, and then use the hard currency generated to help their nuclear program.
Lori has been director of Public Citizen’s Global Trade Watch since 1995. Wallach is an expert on the operations and outcomes of trade policies such as NAFTA, WTO, CAFTA and more. She is steeped in the domestic and international politics of current trade negotiations and disputes.
Dylan: Welcome to another episode of Radio Free Dylan. Joining us today, Lori Wallach, who is the Director of the Global Trade Watch at Public Citizen. She has been the Director of Public Citizen’s Global Trade Watch going back to ’95. She is an expert on the operations and outcomes of trade policies going back to NAFTA, all the WTO agreements, and a string of others. She’s also steeped in domestic and international politics, current trade negotiations, including the current deals with the likes of South Korea, also maybe North Korea, Panama, and Colombia, and more broadly is probably over-informed to her own psychological detriment I suspect as to the bastardization of the concept of free trade and the utilization of that phony labeling as a mechanism for the use of slave labor, as a mechanism for the extraction of wealth from America, as a mechanism for the exporting of Chinese unemployment to the American unemployment markets, and the ongoing use of the free trade, the sort of macho language of “we’re all going to do this and we’re all our own man,” as we allow special interests in America ranging from General Electric to Caterpillar to basically bribe our politicians who perpetuate rigged trade deals with foreign countries that are profitable for those corporations and destructive to America. And what that said, Lori, it’s a pleasure to welcome you. Before we get into the specific trade deals, give us your sense of how it is that we’ve been able to allow the creation of the pseudo rhetoric of free trade that is supposedly this sort of reciprocal growth environment that is in fact a rigged marketplace for the benefit of American corporations.
Lori: Well, it’s been a huge sales job. I mean it’s like a branding job. There are a handful of very powerful special interests who benefited from the off-shoring of the five million jobs, one out of every six manufacturing job that’s gone since NAFTA, the pharmaceutical companies who have been able to jack up medicine prices because of the special protection that are in these trade agreements, the oil and mining firms have used these agreements to rip up other countries. Those firms have hired a platoon of PR guys, lobbyists, messengers, and they have this sales job where their corporate-managed trade, their race to the bottom for the rest of us, their NAFTA shafted packaged as, “Woo-hoo, free trade, good for all.”
Dylan: Freedom, yeah. It’s all wrapped in freedom. If you look at what somebody like myself or others who again follow voices in the media like myself that are very aggressive and calling out and seeking to unmask the fraud that these types of trade agreements are, to expose them for basically bribes paid to American corporations in exchange for the selling out of our country. What can people as they continue to get education on the specifics of this sort of pseudo free marketism do?
Lori: Well, here’s the only good news—the Constitution gives exclusive authority over trade to Congress, and it has to go and get approved by the House, the folks who have to face us for election every two years, so what we need to do, basically, is when we have a President break our hearts, who’s going over a cliff in a crazy car about trade, which is about how I describe this three-part NAFTA expansion Obama has taken ownership of Bush’s lunatic NAFTA-style agreements with Korea, Colombia, and Panama, so what we have to do, basically, is everybody needs to talk to their specific member of the House of Representatives. It’s your maximum leverage because they’re up every two years. The polling shows one of the few issues that unites Americans across the political spectrum is opposition to more NAFTAs. So you cannot underestimate how effective actually calling a member of Congress is. And this is a number I keep on my fridge with a sticky note for all uses. It’s the Capitol switchboard, 202-225-3121. You don’t even need to know the guy’s or gal’s name; you just give them your zip code and they will patch you through. And tell them you want in writing a response, you’re a constituent, about why the member is going to oppose these job-killing, NAFTA-style agreements, and if he’s not or she’s not, why the hell not.
Dylan: Let’s get a little deeper into this as folks contemplate how they feel. So let’s help people get a little better informed as they try to figure out what they feel like they should do by specifically looking at the three Obama led agreements that are on the table for this year—one being North Korea, two being Panama, and three being Colombia. They’re distinctly different deals with distinctly different poison inside of them. Let’s start with the South Korean free trade deal—what do we need to know about that deal that we probably don’t?
Lori: Top four problems—number one, even the official government study by the U.S. International Trade Commission, the fine folks who are so overly optimistic in their studies on trade, that they projected NAFTA would increase our trade surplus. Those guys using that same fairytale model are project officially that the Korea free trade agreement will cause a greater U.S. trade deficit. They’re admitting it will cause trade deficit, i.e., it will kill jobs. That’s the official prediction and we can know it in advance. Number two, using those numbers, the projection of about 160,000 net jobs lost in the U.S. in the first seven years of this agreement can be derived. There are seven losing industrial sectors, including many of those jobs of the future we’re supposed to enjoy, like high-speed trains, computers, solar. You can go to our…
Lori: …website, TradeWatch.org, and you can look for your congressional district which jobs are at risk in each sector. And the third thing is, as you’ve hinted, this agreement opens a backdoor to allow North Korea to benefit, get more money to build more nukes.
Dylan: I’m going to go through the rest of these deals and try not to let my head pop, and then I’m going to come back and try to get some rationale from you on what in the hell the President and Democratic leadership are thinking, which, by the way, I probably should give that up having watched what they did with the banking system and what they’re doing with so many other – with the war in Afghanistan, but I can’t help but continue to ask the question. So with South Korea, just to summarize very quickly, it’s they’re explicitly announcing they expected the trade deficit to go worse, not better, which directly goes to job elimination, along with the exploitation of North Korean slave labor and further capitalization of North Korea to fund their nuclear program, and, obviously, the continued lack of availability or investment in any of the 21st century that we’ve talked about. What’s the big deal with Panama?
Lori: Well, the Panama agreement has a feature that is also in Korea and Colombia but it’s the most dangerous in Panama, and that is all three of those agreement limits financial regulation. Yup, written before the financial crisis—maybe Bush wouldn’t have done this anyway. They explicitly forbid some of the things that are in their relatively weak financial [inaudible 08:09] here. So, just for example, all three agreements simply forbid countries from banning risky products or financial services. And both Korea and the U.S. have gone about banning certain things that are proved very dangerous—violation of the agreement. Similarly, Korea’s capital controls our limits on size of firms. As weak as they are, probably are in violation now. When you take that in combination with Panama, the world’s prominent tax haven, 300,000 corporations deal in who are not Panamanian are incorporated there to dodge their taxes. So combine having generally a trade agreement that undermines financial regulation and then to have off-shore most of Americas banks, and then add to it the right in these free trade agreement for a foreign bank, including a U.S. subsidiary in another country, to skip around the U.S. court system and attack our domestic regulations in World Bank and U.N. tribunals, too, demand compensation from the U.S. Treasury, i.e., us taxpayers, for any regulation that’s “undermines or expected future profits”—could not make this stuff up. Yup, this is the trade agreement that could not just undo parts of re-regulation and let the “banksters” get 100% free reign, that could actually raid the Treasury, increase our national deficit, rip off your pocket because they get to get paid for being regulated under this agreement. That would be the Panama FTA.
Dylan: Is Panama a version of what Switzerland once was when it comes to banking and money?
Lori: Well, it’s Switzerland but much sleazier. The State Department lists Panama as the number one site of money laundering for the Colombia and Mexican drug cartels, it has got a lot of money sloshing around from arms trading, and there’s money laundering implications from several terrorist groups. Under the trade agreement, things like just freezing those assets would be a violation. The FTA bans limits on transfers. So in addition to the fact that the GNP of all of Panama is much smaller than most medium-sized US cities, i.e., there’s nothing to gain there. The only thing that could be gained is the Panama Canal work; it is explicitly excluded; we’ve been kept out of that by Panamanian agreement. There’s no upside and there’s huge downsides as far as financial crimes, more tax haven, more tax dodging. And yes, think of Switzerland but actually much more dangerous with guns.
Dylan: So why would – what is the thinking – why would President Obama advocate what you’re describing.
Lori: Well, on top of that, think of Colombia, I mean, those two agreements – the two agreements I’ve described, you have to know the details. Colombia, just from a distance, that’s an agreement that just stinks to high heaven. Why would the United States have any agreement with a country that is the unionist murder capital of the world? We just saw the report for the number of unionist assassinated for their union and human rights activities last year—101 world-wide, 51 of them in one country—Colombia. It’s gotten worse still and since we signed the agreement – the year we signed the agreement, it was 37 unionists being assassinated for their union activities. Now, mind you, the population of Colombia, relatively speaking, is small; that’s a lot of people. And we’re going to sign up with a country that’s doing to say nothing. A forced displacement of hundreds of thousands of Afro-Colombians and indigenous people with the military complicit, with the elite complicit, with the government, the previous government, complicit, and this is the country we’re going to saddle up to with a permanent trade agreement? That one stinks the worst. What are they thinking? You know, there are at least two versions of it here in town—I’m in Washington—while I’m talking to you and some, basically, have come to just a very cynical infuriated position because President Obama, of course, who all remember, distinguish himself from candidate McCain by talking about how he not just never do another NAFTA, but actually renegotiate the old job-sucking NAFTA. And so some people just basically say, “Yep, he’s gotten here, basically sort of made a deal with the corporations, he decided to sort of move to the middle, he’s done it on every issue, the guy he thought he was isn’t the guy he is,” and they were going to deal this way. The alternative version of it is—and I think the second one is probably true—that there have been a long standing battle between the White House political folks who realize the country hates these agreements, they don’t even know necessarily the details of the policy, they just know the polling, we all have suffered from the results, we hate them. We can be Tea Party, we can be aggressive, we can be Democrats, we can be Republicans, it can be Independents; we all dislike them…
Dylan: Sounds kind of like people’s view on Afghanistan.
Lori: …with the Economics team, and the Economics team says, “Oh, we are the last unreconstructed NAFTA lovers in the Democratic party.” And those guys have been pushing these agreements since NAFTA. And right now, I think the Economic team has won a round and that’s why, back to what we can do, we can change this by getting loud, getting to our members of Congress and making sure they deny the political feasibility of this batch of more NAFTAs. If they can’t take this road is how we make them turn around and take a different road, and that’s going to have to be all of our jobs.
Dylan: And what is the number again as people continue to educate themselves and what other resources would you direct people to to read more about some of the things that you were just describing relative to these specific agreements?
Lori: Yes, the activist citizen tattoo for one’s arm is the Capitol switchboard, that would be 202-225-3121, 202-225-3121. When you get the operator, you just give them your zip code; ask for your House member, that’s where the decision will really count. And then for resources, please come to our website which is TradeWatch.org. You will see right when you open up the website on the right-hand side it says, “Help Stop the Three-Part NAFTA Expansion”. You click there and you get to a setup where you can go right to action and there are model letters, editorials you can send your newspapers, ways to contact Congress, action ideas, there are facts sheets so you bring it to work or to school or to church, there’s a whole set of materials so you can read in more detail yourself and you’re comfortable, and then there’s a whole set of all the other letters of opposition. So what folks should know is the faith groups, the human rights groups, the environmental groups, the family farm groups, the consumer groups, the labor unions, the small business groups, they’re all against this package, and so all of their letters and their comments and their testimony are there in one place so you can actually get yourself comfortable. And then there’s a place that says “How does it affect your home?” and you can go there, put in your zip code and you can pull up what the past trade loss numbers are for your congressional district, for your state, and in some instances right for your town, depending on the study, and you can also find out the jobs at risk from the Korea FTA specific to your area.
Dylan: Wonderful stuff, Lori. It’s a pleasure to make the acquaintance. I’m smelling a three-part series on this at some point on the TV show, probably sooner than later because it really feels like there’s an opportunity to effectively use some journalism here to get people up the curve to understand just how insane the current structure is. I compliment you, not only for your passion but for your clear commitment to addressing the issues that are extracting the American people, whether it is being done by accident or whether it is being done through malice—almost does not matter. And the number one more time, 202…
Lori: 225-3121. And, Dylan, you rock. You’ve covering these issues, you’re spot-on, and, frankly, except for all the “wantitude”, you don’t need me at all; you’ve got it straight out.
Dylan: Well, listen, I think we need you, me, and about a hundred million others to get this done, Lori, so it’s a pleasure, like I said, to know you and it’s a pleasure to have a chance to speak with you. I do hope to talk to you again soon.
Lori: I look forward to it.
Dylan: The reason this is so important is that it goes to the exact same thing we are experiencing with the corporations, the Democratic leadership under the rule of Barak Obama, Republican leadership under the rule of John Boehner and friends, where we are being sold a pseudo free market rhetoric that is being funded by American special interests who profit through the use of foreign slave labor, foreign corrupt marketplaces, and foreign bank secrecy and secrecy loss. The most important point I think that Lori Wallach just made is that 55% of the money that goes to North Korea from South Korea stays with the North Korean government. They’re paying these people $0.28 an hour, slave wages. The slaves only get 45% of the money that they’re getting paid, the money actually paid to the North Korean government. And in the process, we are refunding North Korea, directly counteracting the sanctions we put in place to defund them. With friends like President Barak Obama and his Economic team, America does not need enemies, and we must join together to fight them. Let me give you that number one more time. If you want to call Congress, 202-225-3121, give them your zip code, tell your friends this number, put it on your refrigerator, and use it on a regular basis. I appreciate you taking the time to spend some time with me and I hope you have a wonderful day.