WWD.com/business-news/government-trade/democrats-aim-for-balance-on-trade-1728207/
government-trade
government-trade

Democrats Aim for Balance on Trade

Industry groups split on Democratic platform.

View Slideshow

DENVER — Democrats aim to strike a balance between free and fair trade principles in their 2008 party platform that was set to be adopted Tuesday night at the convention — and while some industry and labor groups said the party accomplished that goal, others contended the plan was inadequate and a cause for concern, particularly on global trade.

This story first appeared in the August 27, 2008 issue of WWD.  Subscribe Today.

Delegates at the Pepsi Center here heard a full lineup of speakers Tuesday, focusing on the faltering economy, job losses and personal hardship stories.

The party’s platform indicated a Barack Obama administration might take a stronger stance than President Bush on China and its undervalued currency. Critics, including domestic manufacturing groups and many lawmakers on Capitol Hill, argue China undervalues its currency, the yuan, by as much as 40 percent, putting U.S. manufacturers at a competitive disadvantage because they can’t compete against lower-priced Chinese imports.

While the platform did not address China directly, the implication was clear.

“We will enforce trade laws and safeguard our workers, businesses and farmers from unfair trade practices, including currency manipulation, lax consumer standards, illegal subsidies and violations of workers’ rights and environmental standards,” it reads.

The fashion industry, which imported $95.6 billion in goods in the last year, has a lot at stake in trade with China, as does the U.S. textile industry, which has lost hundreds of thousands of jobs over the years, partially due to imports and global competition.

The platform also did not address an issue that has been a flash point for the industry — a three-year bilateral quota agreement with China that restricts 34 categories of apparel and textile imports and is set to expire at the end of the year. The textile industry has lobbied for an alternative to the quotas once they are removed and is enlisting the help of the House Textile Caucus to pressure the Bush administration to start monitoring Chinese imports for dumping, in addition to a program it already has for apparel imports from Vietnam.

But the platform reflects Obama’s pledge to scrutinize bilateral trade deals and ensure they contain enforceable environmental and labor standards.

“We need tougher negotiators on our side of the table to strike bargains that are good not just for Wall Street, but also for Main Street,” the platform reads. “We will negotiate bilateral trade agreements that open markets to U.S. exports and include enforceable international labor and environmental standards; we pledge to enforce those standards consistently and fairly.”

Where the attempt at balance in the platform comes into play is in the party’s support of the global round of trade talks, known as the Doha Round, named after the capital of Qatar where the talks were launched seven years ago. The talks recently collapsed because of differences between poor and rich nations over agricultural subsidies.

“The platform reflects the differing opinions within the party, it’s a compromise,” said Bruce Raynor, general president of UNITE HERE, the industry’s main labor union. “The platform is more of a statement of principle and what is more important is where a presidential candidate stands.”

Raynor said Obama, whom the union endorsed during the primary season, stands for “manufacturing in America,” pointing to his calls for renegotiating the North American Free Trade Agreement and being an “outspoken advocate of labor and environmental rights in trade treaties.”

The platform addressed NAFTA in a less aggressive tone than Obama’s position during the primaries, saying his administration would “work with” Canada and Mexico to amend the trade pact.

Raynor was also supportive of the platform’s commitment to fighting for passage of the Employee Free Choice Act, which would make it easier for employees to unionize. Labor groups recently filed a complaint with the Federal Election Commission, accusing Wal-Mart of violating federal election laws by allegedly warning employees to vote against Obama because he supports the legislation, which allows for workers to vote to join a union through a card-check system instead of only through a closed-ballot election.

For some textile groups, the platform falls short of setting the right tone in protecting U.S. business from unfair trade practices.

“I’m struck by the overall view that the adoption of this platform will sadly mean a continuation of a trade policy that is bound to result in lopsided trade deficits and more job losses from our perspective,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “The only point in there that signals some level of distinction is the mention of dealing with currency manipulation. But it doesn’t talk about specifics in how to deal with that.”

Tantillo said he was particularly disappointed by the commitment to complete the Doha Round, which he said “will grant countries like China and India much greater access to the U.S. market without requiring reciprocal market opening activities on their part.”

Erik Autor, vice president and international trade counsel for the National Retail Federation, said: “The tone of the message seems to be a tacit acknowledgment that some of the supposed bad effects of trade outweigh the good, although I recognize they are trying to thread a fine line here. What I would like to see in this document is more of an emphasis on a message that says, ‘We support a trade policy that will enhance the U.S. economy, productivity of American industry and workers, and an improved standard of living.”

Helga Ying, director of worldwide government affairs and public policy at Levi Strauss & Co., said the company agrees with many of the tenets of Obama’s trade platform.

Ying said his positions on strengthening labor provisions in trade policies, strengthening support of trade preference programs and expanding trade adjustment assistance are all in keeping with company priorities. She said the San Francisco-based firm also favors presumptive Republican presidential nominee Sen. John McCain’s emphasis on trade liberalization and opening markets.

“What Levi Strauss & Co. would like to do is synthesize the two candidates,” Ying said.

View Slideshow