Nation Topics - Economic Policy | The Nation

The article presents Ohio Representative Sherrod Brown's views on globalization and the policy's of the United States government. The conflict over the ratification of the Central American Free Trade Agreement (CAFTA) is discussed. The author reviews House Resolution 295, which calls for strong environmental and food-safety standards in trade agreements.

Presents letters to the editor in response to article and topics discussed in previous issues. "Beat the Devil," which discussed the support of Democrats for free-trade agreements; Reaction of several readers to the April 18 issue's cover art featuring a cartoon of the late Terri Schiavo.

The article offers a look at the actions of Democratic Party legislators in the United States Congress. Failure of Senate Democrats to oppose the nomination of Republican Representative Rob Portman as trade representative; Report that Democratic Senator Russ Feingold talked about how free trade policy is ravaging the Alabama region's economy.

Discusses the proposed Central American Free Trade Agreement, or CAFTA. Effort of former legislator Charlie Melancon to block CAFTA; Idea that CAFTA opens barriers to trade, but does not protect workers and the environment; The reason CAFTA is considered a "watershed pact"; Comments of Citizens Trade Campaign executive director Larry Weiss, Representative Kevin Brady, Representative Sherrod Brown, and others; What is needed for CAFTA to be implemented; Effort of fair-trade activists to organize.

The article discusses the failures of free trade. Professor Paul Samuelson's "Economics: An Introductory Analysis" has been the bestselling college economics textbook for more than fifty years. Now comes Samuelson to announce an important correction. In certain circumstances, when a very poor but ambitious nation is trading with a wealthy advanced economy, free trade can turn into a very ugly loser for the wealthy country--inflicting permanent economic loss, stagnant wages, greater inequality and other hurtful consequences. The professor's reasoning is expressed in the abstract language of orthodox economics, but he does name the two countries he has in mind--the United States and China. Free trade, the professor elaborates, will deliver real gains to both rich and poor nations in the initial stages, but this can change dramatically as the poorer nation begins to acquire the technological capabilities to innovate and improve its productivity--in other words, become more like the advanced economy. The abstracted models worked out by economic scholars, most notably Samuelson, leave out the complexities of human existence--politics, society, culture, history, irrational greed. If one wants to understand China's energetic rise in the global system, read the economic history of the United States.

The article focuses on opposition to the Central American Free Trade Agreement (CAFTA). Missouri Governor Bob Holden learned how volatile globalization issues have become when his Democratic primary challenger, Claire McCaskill, started banging away on him for offshoring the state's call center for food stamp and welfare recipients to India. The Missouri race provided the latest indication that the debate over trade and economic globalization issues is shifting to the states, as are debates on many issues once thought to be the exclusive province of federal officials. While Congress remains the primary battleground in fights over free-trade agreements and tax policies that benefit the "Benedict Arnold" corporations that John Kerry condemned for transferring jobs to countries with low wages and lax environmental regulations, state officials are often the first to feel the heat when factories close and service jobs are outsourced. Pennsylvania Governor Ed Rendell and Iowa Governor Tom Vilsack have emerged as key players in a revolt against federal trade policies that would deny state and local governments the authority to give preferences in contract awards to firms that create jobs where the tax dollars that pay for those contracts are collected. In an effort to reassert federal authority, the Administration's pointman on trade issues, Trade Representative Robert Zoellick, last year asked governors to make a "voluntary" commitment binding their states to comply with the government purchasing provisions of all new trade agreements, including the pending Central American Free Trade Agreement.

Presents letters to the editor commenting on the forum, "Toward a Progressive View of Outsourcing," which appeared in the March 22 issue.

The backstory for this election year lacks the urgency of war or of defeating George W. Bush but focuses on a most fateful question: When will this hemorrhaging debtor nation be compelled to pull back from profligate consumption and resign its role as" buyer of last resort" for the global economy? Despite ebbs and surges, the gap between US exports and imports has been steadily widening across three decades. For several decades, in fact, the federal government has tolerated and even encouraged the dispersal of American production overseas--first to secure allies during the cold war, later to advance the fortunes of US multinationals. No other major economy in the world accepts perennial trade deficits; some maintain huge surpluses. But American leaders and policy-makers are uniquely dedicated to a faith in "free market" globalization, and they have regularly promised Americans that despite the disruptions, this policy guarantees their long-term prosperity. Present facts make these long-held convictions look like gross illusion.Yet no one running for President has found the nerve to discuss these facts in a straightforward manner. Nor do the candidates have anything to say about how the country might avoid a potential calamity. Given our rapidly deteriorating condition, it is not too soon to begin considering how the nation might dig out, lest popular confusion and bitterness generate reactionary politics instead.

The author argues that the United States, as the only remaining global power, is attempting to subjugate--politically and economically--all other nations and peoples. New Imperialism is already upon us. It's a remodeled, streamlined version of what we once knew. For the first time in history, a single empire with an arsenal of weapons that could obliterate the world in an afternoon has complete, unipolar, economic and military hegemony. It uses different weapons to break open different markets. There isn't a country on God's earth that is not caught in the cross-hairs of the American cruise missile and the IMF checkbook. Argentina's the model if you want to be the poster boy of neoliberal capitalism, Iraq if you're the black sheep. Poor countries that are geopolitically of strategic value to Empire, or have a "market" of any size, or infrastructure that can be privatized, or, God forbid, natural resources of value-oil, gold, diamonds, cobalt, coal--must do as they're told or become military targets. Those with the greatest reserves of natural wealth are most at risk. Unless they surrender their resources willingly to the corporate machine, civil unrest will be fomented or war will be waged. Our resistance has to begin with a refusal to accept the legitimacy of the US occupation of Iraq. It means acting to make it materially impossible for Empire to achieve its aims.

This article discusses the current state of NAFTA ten years after it was implemented and focuses on it's future. Ten years ago, the North American Free Trade Agreement was sold to the people of the United States, Mexico and Canada as a simple treaty eliminating tariffs on goods crossing the three countries' borders. But NAFTA is much more: It is the constitution of an emerging continental economy that recognizes one citizen--the business corporation. The business-backed politicians who pushed the agreement through the three legislatures promised that NAFTA would generate prosperity that would more than compensate "ordinary" people for its lack of social protections. Foreign investors would make Mexico an economic tiger, turning its poor workers into middle-class consumers who would then buy US and Canadian goods, creating more jobs in the high-wage countries. Every day, more intracontinental connections in finance, marketing, production and other business networks are being hard-wired for a consolidated North American market Ford pickup trucks are assembled in Mexico with engines from Ontario and transmissions from Ohio and Michigan Canadian, Mexican and US investors have created a labyrinth of interconnected corporate assets. Indeed, given the influence of the United States in setting the rules for the global economy, a visible, sustained challenge to the NAFTA model here may be the most important contribution progressives on this continent can make to the building of a more just global economic system.