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Jan. 30, 2007

Replace Fast Track So Congress Can Change the Direction of U.S. Trade Policy to Benefit the Majority, Public Citizen Tells Lawmakers

Outdated Nixon-Era Fast Track Must Be Retired to Rebuild National Consensus on Trade

WASHINGTON, D.C. – Congress should replace presidential Fast Track trade authority with a modern trade negotiating system that better addresses widespread public concerns, Public Citizen said today as President Bush gave a trade policy speech in Illinois.

In written testimony submitted to the House Committee on Ways and Means for today’s hearing on trade and globalization, Lori Wallach, director of Public Citizen’s Global Trade Watch program, described how trade deals negotiated under Fast Track have led to the loss of U.S. manufacturing jobs, a ballooning trade deficit, declining living standards for American workers and increased income inequality worldwide. The 2006 midterm elections, with the net addition of 37 fair trade proponents to Congress, was a signal that voters want to change the failed, status-quo trade policy.

“To rebuild a national consensus on trade, we need a new mechanism for negotiating trade agreements that puts a steering wheel – and when necessary, brakes – on our trade negotiators, so that Congress and the public are back in the driver’s seat and can take a new course on trade that might harness trade’s benefits for the majority,” Wallach said in her testimony. 

Since Fast Track was first hatched in 1974 by then-President Richard Nixon to grab Congress’ constitutional trade authority, many of the worst U.S. trade agreements – including the North American Free Trade Agreement (NAFTA) and the Uruguay Round of the General Agreement on Tariffs and Trade, which established the World Trade Organization (WTO) – have been negotiated. Before Fast Track, the United States had balanced trade and rising living standards, but since then, the U.S. trade deficit has exploded as imports have surged.

“Fast Track, like eight-track tapes, belongs in a Smithsonian display of outdated technology,” said Wallach. “This Congress can replace Fast Track with a new procedure that opens up the process, enhances Congress’ role in trade policy-making and is adequate to meet the realities of today’s expansive international commercial agreements.”

In 1973, the United States had a trade surplus, as it had nearly every year since World War II. But in every year under Fast Track save one, the United States has run a trade deficit. In addition, the average American worker makes only a nickel more per hour in inflation-adjusted terms than in 1973, the year before Fast Track went into effect. Were it not for trade agreements that pit U.S. workers in a race-to-the-bottom with poverty-wage workers worldwide, U.S. workers’ wages would better track productivity increases, and workers in developing countries could also fight to raise their wages.

“The ballooning trade deficit is directly correlated with manufacturing job loss, while haphazard trade liberalization accounts for much of the stagnation in wages and more than a third of the rise in income inequality in America,” said Wallach. “Notably, Illinois – the site of President Bush’s policy address today – has lost one in four manufacturing jobs during the NAFTA-WTO decade.”

To read Wallach’s testimony and learn more about harmful economic outcomes in the Fast Track era, click here.


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