While President Obama's speech on national security today is getting most of the attention, another important foreign policy issue awaits, which Obama has so far been untested on as president. On the campaign trail, Obama's statements on the North American Free Trade Agreement (NAFTA) were inconsistent, to say the least. He spoke against it in battleground states like Ohio, but he also reportedly sent an aide to reassure the Canadians that when Obama said he would "renegotiate NAFTA," he really didn't mean it. So it's always been somewhat of an open question what Obama would do on free trade issues as president. We may be about to find out.

Because Congress now has before them the Panama Free Trade Agreement (which I am christening PaFTA, in the hopes that others will start using the term... mostly because it's easier to type). Today, a coalition of 55 Democratic House members sent a letter to Speaker Nancy Pelosi urging that PaFTA be renegotiated, since it was put together under the Bush administration (the full text of this letter is below, with the full list of signatories). Among this group of representatives are members of the Populist Caucus, the Progressive Caucus, and the House Trade Working Group -- led by Populist Caucus Chairman Bruce Braley of Iowa, House Trade Working Group Chairman Michael Michaud of Maine, and Progressive Caucus Co-Chairs Lynn Woolsey from California and Raul Grijalva from Arizona. House Rules Committee Chairwoman Louise Slaughter and Judiciary Committee Chairman John Conyers also signed the letter.

Here is some of what they had to say about PaFTA:

"Too many recent free trade agreements have been great for companies and bad for American workers. This recycled Panama FTA was written by the Bush Administration and it's my hope that the new administration would not take the easy route but would sit down and renegotiate the whole package in good faith, with an eye toward creating a deal that respects the environment, labor rights and domestic workers. The Rules Committee is not going to be a rubber stamp for bad deals."
-- Rules Committee Chairwoman Louise Slaughter

"The Panama agreement reflects the trade model pursued by the Bush administration, not the change President Obama campaigned on. In these tough economic times, we need to reopen this trade agreement to ensure it will help create American jobs, protect workers rights, and uphold environmental standards. With the Panama Free Trade Agreement, we have the opportunity to chart a new course for trade or simply endorse more-of-the-same."
-- Populist Caucus Chairman Bruce Braley

"At a time of severe economic downturn and when the government is asking the U.S. taxpayer to foot the bill for Wall Street's mess, the last thing we need to do is pass a free trade agreement that promotes offshoring, tax dodging, and special privileges for foreign investors. The Panama Free Trade Agreement takes us in the wrong direction at a time when our energies should be devoted to getting our economy moving forward again."
-- House Trade Working Group Chairman Michael Michaud

In the Democratic Party, support for free trade is seen as a key to being a "centrist." Bill Clinton was a big free trade advocate, and signed the original NAFTA bill. But since then, a large slice of the party has soured on the promises of free trade -- especially those representing districts where the devastation of our manufacturing base means their constituents don't have jobs anymore, because the local factory moved to China.

This has led to the talking point which almost all Democratic politicians are careful to insert somewhere in their speeches, about supporting "fair trade" -- where environmental and labor concerns are addressed -- instead of straight-up-no-chaser "free trade" agreements.

PaFTA will be the first test of how (or "if") this is going to actually happen. We don't have George Bush to kick around any more (so to speak), but it seems we've got one of his free trade agreements still in the pipeline.

President Obama can either adopt the attitude he did with earmarks in the budget -- "this is a holdover from Bush, let's just hold our noses and pass it, but next time we'll do better, promise" -- or he can dive right in to crafting the dream of a "fair trade agreement" which actually does address Democratic concerns about foreign labor and environmental practices. But whether Obama punts on PaFTA or not, he's going to have to address it sooner or later. What such a "fair trade agreement" will look like is still to be determined, since the calls for such started when Republicans were still running the show in Washington.

In other words, it is "put up or shut up" time for Democrats on trade. With almost unlimited control of the levers of government, the time has come to see what the convenient "fair trade" campaign soundbite actually means. President Obama should be leading this effort, or at least supporting those who are calling for the effort to begin.

-- Chris Weigant

May 21, 2009

Honorable Nancy Pelosi
Speaker, United States House of Representatives
H-232, United States Capitol
Washington, D.C. 20515

Dear Speaker Pelosi,

As representatives of the Populist Caucus, House Trade Working Group, Progressive Caucus and other Members of the House Democratic Caucus, we believe this is a historic opportunity to push forward a new trade model that will benefit workers and businesses. We seek your support to work with the Administration to establish a new approach to trade.

We believe the Panama Free Trade Agreement (FTA) is not a new model on trade and does not represent the kind of change the American people are seeking. After eight years of a failed Bush free trade agenda, the current demise of our economy, and an ensuing massive increase in unemployment, it is difficult to justify to our constituents the passage of another badly flawed trade agreement. We fear passage of this agreement will set us back down the misguided course of past trade deals.

As you know all too well, the current recession has hammered the American family. Unemployment, now at 8.9%, is expected to rise even more. Since the recession began in December 2007, 5.1 million jobs have been lost. It is noteworthy that the Panama FTA negotiations were completed in 2006, a full year before the recession began. Given the rapid demise of our economy, we are concerned that the FTAs negotiated under the prior Administration and in a different economic outlook, are out of step with the needs of an economic recovery. This disconnect between the Panama FTA and the current needs to restore our economy will make any vote on this FTA difficult to justify. Indeed, it appears to be the opposite of the "change" theme Americans voted for in the last two elections.

We believe trade agreements must meet basic standards protecting labor rights, environmental standards, food safety regulations, financial regulations, and taxation transparency. We are disturbed by Panama's tax haven status and the use of this tax haven by U.S. financial institutions like AIG and Citibank. The U.S. is currently contemplating stricter financial regulations to protect our economy, but the Panama FTA will likely weaken any such effort. We believe the Panama FTA should be renegotiated in order to address these outstanding issues.

President Obama campaigned effectively on changing the trade model and his message resonated with the American people. We believe the Panama FTA falls far short of that commitment and it is not in the best interests of the American worker, our economy, or our country. We share your commitment to fighting for working families and believe you can be an effective advocate for our cause.

In light of the recession, we believe it is in the best interest of the United States for the President to work with Congress to chart a new course for trade. There should be a public discussion involving not just the United States Trade Representative but also Members of Congress about how to achieve a balanced trade agenda in difficult economic times. We ask for an open, honest dialogue and a new trade model and would welcome the opportunity to meet with you to discuss these issues further.

Sincerely,

Mike Arcuri
Tammy Baldwin
John Boccieri
Rick Boucher
Bruce Braley
Steve Cohen
John Conyers
Kathy Dahlkemper
Peter DeFazio
Rosa DeLauro
Mike Doyle
Donna Edwards
Keith Ellison
Bob Filner
Marcia Fudge
Gene Green
Raul Grijalva
Phil Hare
Alcee Hastings
Maurice Hinchey
Hank Johnson
Walter B. Jones
Steve Kagen
Marcy Kaptur
Dale Kildee
Mary Jo Kilroy
Dennis Kucinich
Barbara Lee
Dan Lipinski
David Loebsack
Stephen Lynch
Jim Marshall
Eric Massa
James McGovern
Mike Michaud
Grace Napolitano
John Olver
Frank Pallone
Tom Perriello
Chellie Pingree
Tim Ryan
Jan Schakowsky
Mark Schauer
Carol Shea-Porter
Brad Sherman
Heath Shuler
Louise Slaughter
Bart Stupak
Betty Sutton
Gene Taylor
Paul Tonko
Pete Visclosky
Maxine Waters
Charlie Wilson
Lynn Woolsey