Rangel Proposal Won't Pacify the 'Seattle Democrats'

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Has Charlie Rangel, the personable chairman of the House Ways and Means Committee, pulled it off? After unveiling "A New Trade Policy for America"–which would attach tougher labor and environmental standards, among other provisions, to U.S. trade agreements–the New York Democrat optimistically stated: "We are on the brink of restoring bipartisanship to American trade policy. The policies we've outlined today should send a clear message that this Congress wants trade, but we want trade that works for all Americans."

Well, maybe he has done it. Treasury Secretary Hank Paulson has been directly involved with recent negotiations with congressional Democrats, and after the blueprint was unveiled, U.S. Trade Representative Susan Schwab reportedly welcomed the Democratic proposal as "a good-faith effort in a continuing dialogue."

John Podesta, President Clinton's final chief of staff and now head of the Center for American Progress think tank, told me in a chat yesterday that he was "surprised" that Schwab was so positive and thinks Rangel's blueprint may indeed form the basis of a consensus that can draw votes from both sides of the aisle. "Maybe now we can all come out of our trenches and find some common ground," he said.

(As an aside, one close observer of these trade machinations wondered to me whether the White House "even told Sue Schwab that Paulson was doing it, or if the press inquiry was the first she'd heard of it? The administration has [undercut] her six ways from Sunday since they decided that Paulson was smarter and more credible.")

The Rangel proposal may lead to congressional approval of free-trade treaties already negotiated with Colombia, Panama, and Peru, as well as the one nearing completion with South Korea. As Joanne Thornton, trade maven at the Stanford Group in Washington, D.C., explained to me:

"I think the Rangel proposal represents a familiar Democratic "wish list" of trade policy principles, not a final bipartisan consensus. Certain elements draw considerable GOP support–like the call for strong enforcement of trade commitments and trade remedy laws and for more robust trade adjustment assistance. But agreement on the details of labor, environmental, pharmaceutical, investment, and other provisions clearly requires further negotiation.
The measured GOP and White House response to yesterday's proposal, and the involvement of Treasury Secretary Hank Paulson alongside USTR Sue Schwab, leaves me optimistic that a modus vivendi can be worked out that will allow for enactment of the trade agreements with Latin American countries under current "fast track" procedures, and one with Korea, assuming U.S. and Korean negotiators can clinch a deal this week."

But despite her generally upbeat take, Thornton doesn't expect Congress to renew the president's "fast track" trade authority, which expires this summer. Probably a pretty smart prediction.

Left out of all this sudden optimism about trade is the reality of the part of the Democratic Party that I have termed the "Seattle Democrats" in honor of the 1999 antiglobalization protests in Seattle. These Democrats–such as Sens. Jim Webb of Virginia and Sherrod Brown of Ohio, as well as "netroots" activists of the blogosphere who revolve around the Daily Kos website–see free trade as the mechanism though which globalization is lowering wages, destroying unions, unraveling communities, increasing income inequality, hollowing out U.S. manufacturing, and transforming America into a sort of corporatist state where the motto is "What's good for globalization is good for America."

They also think that too much of the Democratic Party is beholden to Wall Street–its campaign cash in particular–which has a free-trade agenda.

Here is what Dave Sirota, a veteran Democratic campaign operative, megapopular blogger, and free-trade critic, had to say about the Rangel deal in an E-mail to me:

"While labor and environmental concessions on the Colombia and Peru and South Korea deals are very important, they are in no way a substitute for stopping fast-track reauthorization. These imminent bilateral deals are important but small when compared to fast track because fast track is used as a tool to strip out labor, environmental, and human-rights provisions in ALL trade deals–bilateral, multilateral, big, small, whatever.
I might add one other important point: The concept that some Democrats like Rangel are floating about there being a reformed, "good" fast track that is better than the current "bad" fast track is absurd. The whole point of fast track is to allow presidents to solidify protections for corporate profits in these deals (intellectual property, etc.) while killing similar protections for regular human beings. You can't "reform" that fundamental problem because the fundamental problem is the lack of congressional input."

I then got another E-mail from Sirota, telling me how a coalition of some 700 labor, environmental, farm, and other organizations will vigorously oppose any new grant of trade authority to Bush despite the Rangel plan. Sirota and other Seattle Democrats are what you might call pretax Democrats, meaning that they want to alter the trade environment–reopen NAFTA, for instance–so it produces few losers, even at the risk of less global trade.

Others in the party, such as former Clinton Treasury Secretary Robert Rubin and former Clinton economic adviser Alan Blinder, are "after-tax Democrats," meaning that they want to deal with any negative trade effects after they happen, such as through an expanded social insurance program that might include wage insurance for displaced workers.

Where will the 2008 Democratic candidates come down? John Edwards seems to be a pure pretax Seattle Democrat. As for Barack Obama and Hillary Clinton? As one longtime Democrat told me, "I don't think that describes them at all."

international trade
Rangel, Charles
Paulson, Henry
Democratic Party