You are hereHuffington Post: Free Trade Deals: Lobbying Fever Foreshadows Winners, Losers

Huffington Post: Free Trade Deals: Lobbying Fever Foreshadows Winners, Losers

-By Dan Froomkin

July 25, 2011- WASHINGTON -- The three major free trade agreements Congress will soon consider are being promoted as a big win for American workers. But take a good look at who's lobbying for them most enthusiastically, and it becomes evident that the biggest winners will be giant multinational corporations -- and the countries on the other end of the deals.

The agreements would knock down any number of barriers and regulations currently limiting the unfettered flow of capital and goods between the U.S. and three countries: Korea, Colombia and Panama.

The agreements would ideally bring greater trade and wealth to all four economies; they would offer U.S. financial services huge new opportunities, while lowering costs for the nation's mega-retailers.

And they could potentially send hundreds of thousands more American jobs overseas.

With so much attention being paid to the debt-ceiling hijinks, the major lobbying effort for the three trade bills has been taking place almost entirely outside public view. But many of the biggest American companies have been engaged in a massive, months-long effort to get the bills passed.

The Panama deal is considered relatively minor, attracting attention mostly because of the country's checkered history as an off-shore tax haven. The deal with Colombia is somewhat bigger and more controversial, particularly because of Colombia's well-documented tolerance of the murder of trade unionists.

But it's the Korea agreement that is literally the big deal. Korea has the 14th-largest economy in the world, and is already the United States' seventh-largest trading partner.

Ground zero for the free-trade lobby is the U.S.-Korea FTA Business Coalition, a group convened by the U.S. Chamber of Commerce and led by the top lobbyists for Boeing, Chevron, Pfizer, Goldman Sachs and Citigroup. The group's central lobbying argument is that the deal will "create new American jobs and opportunities for economic growth by immediately removing barriers to U.S. goods and services in Korea."

The biggest of the big-business coalitions -- the National Association of Manufacturers, the Business Roundtable, the Financial Services Roundtable, the American Farm Bureau, Big Pharma and the Retail Industry Leadership Association -- are all lobbying hard as well, along with a slew of individual mega-corporations.


Combined, the pro-trade agreement forces spend literally tens of millions of dollars a month on lobbying.

"We're not unused to feeling outgunned," said Cass Johnson, president of the National Council of Textile Organizations, which represents factory owners. "But when the National Association of Manufacturers, the Business Roundtable and the Chamber of Commerce say 'We'll spend whatever it takes,' and they're spending millions of dollars, well, there's just no comparison to what the small domestic groups can do to counter that."

"There are dozens of lobbyists from those groups knocking on doors on Capitol Hill every single day," Johnson said.

"It's not a fair fight," agreed Michael Stumo, president of the Coalition for a Prosperous America, which counts among its members the owners of companies that produce brass, chemicals and machine tools. "It's the transnationals versus the domestic producers and domestic manufacturers," he said.

The deep-pocketed lobbying effort also extends to funding massive "grassroots" campaigns in select congressional districts -- mailings, robocalls, fundraising events and more.

Trade deals are attractive to multinationals for obvious reasons. Huge retailers see the potential for cheaper goods, major financial institutions see benefits in access to new markets and the free flow of capital, pharmaceutical companies get extended patent protection and perhaps most important, multinational companies with huge amounts of capital see opportunities to shift their global supply chains to maximize their bottom lines. More often than not, that means moving more American jobs offshore.

Small, domestic companies, by contrast, get the short end of the free trade stick. Unable to seize the same opportunities available to multinationals, they risk losing market share and having to cut production -- and jobs.

Indeed, the bottom line for the average American is that these agreements are job killers.

"There is no argument to be made from the 17 past trade agreements that this will be a net trade benefit or a net jobs benefit for America," said Stumo. "Past agreements have failed the test."

Most notably, the liberal Economic Policy Institute (EPI) estimates that the North American Free Trade Act (NAFTA) exacerbated the trade deficit with Mexico and that 682,900 U.S. jobs were "lost or displaced" as a result, as imports decreased labor demand in manufacturing.

The group also estimates that the tremendous surge in China's exports to the United States after its inclusion in the World Trade Organization in 2001 caused the loss or displacement of 2.3 million U.S. jobs.

A U.S. International Trade Commission report in 2007 concluded that the proposed Korean agreement would slightly decrease the trade deficit with Korea -- but would slightly increase the overall U.S. trade deficit, thereby presumably costing some jobs.

But EPI, noting that official estimates of the impact of trade agreements have often turned out to be unduly optimistic, concluded that the U.S. trade deficit with Korea would actually go up by about $16.7 billion and displace about 159,000 American jobs in its first seven years.

To its critics, what's particularly troubling about the Korean deal is that it would allow products with as little as 35 percent of their content produced in the treaty nation to be exempt from tariffs. That means 65 percent of the product could be sourced from, say, China -- but it could still be brought into the U.S. duty-free. Current tariffs on Chinese textiles, for example, are about 15 percent.

"It's a dream treaty for multinationals, but for domestic manufacturers -- and particularly the textile industry -- it's a nightmare," said Johnson.

"It's basically a trade agreement with China, without any concessions by China," said Stumo.



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