If the WTO and NAFTA were earthquakes, the Chile and Singapore Free Trade Agreements would be tiny aftershocks capable of limited damage, which is why we knew from Day One that they would pass Congress even though their terms are retrograde. What is interesting about these “non-controversial” trade votes is that they obtained even less Democratic support than the 2001 China Permanent Normal Trade Relations vote and more GOP opposition than the 2001 Fast Track vote.
The last bilateral agreement with a small nation was the U.S.-Jordan Free Trade Agreement, which contained vital labor and environmental provisions and thus passed Congress unanimously on a voice vote. Given the small size of the countries and their relative levels of development, the fact that the Singapore and Chile pacts faced any opposition indicates the serious problems with the terms contained within these pacts.
Although these pacts did not garner the 300-plus votes that business and the GOP predicted, the administration may still attempt to argue that today’s votes demonstrate the revival of a bipartisan consensus on trade that will result in easy passage for future pacts, such as the Central American Free Trade Agreement (CAFTA) and the Free Trade Area of the Americas (FTAA). In fact, the opposite is true.
In reality, a review of the votes on these two small trade deals shows the depth of political trouble facing the two major trade agreements, CAFTA and FTAA, which are coming next. The draft FTAA text includes offensive terms on labor, environment, investment, access to medicine and immigration that also are being tabled in the CAFTA talks. As a result, a vast array of Democrats and a significant number of Republicans have realized that they will need to oppose both of the pacts and thus decided to vote for these two small pacts for political insulation. For the corporate interests celebrating passage, consideration of what getting so many votes from those who do not support the merits of these deals means for the important agreements coming down the pike will be the cause of tomorrow’s political hangover.
While the Chile and Singapore pacts’ effects will be minimal because of the relatively small size of the countries involved, they represent a terrible model for trade and globalization policy because they repeat NAFTA’s most damaging provisions, rewrite swaths of U.S. immigration policy, permit high-tech products made in China and other nations to enter the United States duty-free by passing through Singapore, and forbid countries from using short-term capital controls during economic crises. These pacts also include NAFTA-like terms allowing foreign corporations to sue signatory governments for cash compensation in trade tribunals for the costs of complying with non-discriminatory domestic regulations. Further, the pacts lack vital labor and environmental terms, and include patent rules that limit consumers’ access to affordable medicines. If these rules were applied to large blocs of countries as the administration proposes, the result would be disastrous.