BREAKING: Facing Progressive Pressure, Obama Backs Off Panama Free Trade Agreement

by: David Sirota

Thu May 21, 2009 at 17:18

This is huge news for the Make Him Do It Dynamic:

May 21 (Bloomberg) -- A U.S. trade accord with Panama, which is opposed by labor unions, won't be submitted to Congress for approval until President Barack Obama offers a new "framework" for trade, an administration official said.

The decision, announced by Assistant U.S. Trade Representative Everett Eissenstat at a Senate Finance Committee hearing today, is a reversal from statements in March that the U.S. wanted to pass the accord soon...

Eissenstat's comments follow remarks by John Sweeney, the head of the AFL-CIO labor federation, that unions would oppose a rush to ratify the deal. Also today, 55 House Democrats told House Speaker Nancy Pelosi to reject the Panama accord unless it is renegotiated.

If you regularly read OpenLeft, you know we've been tracking this story, including the AFL-CIO announcement and the announcement today by the Populist Caucus to put major pressure on the White House to stop this NAFTA-style agreement. Indeed, as someone who has been working on this issue for a decade, I never thought I'd actually see the day where we, the progressive movement, could actually make a president back off (even temporarily) the NAFTA trade model.

Hilariously, Sen. Max Baucus (D-MT), the K Street trade lobbyist dressed up as a U.S. Senator, has been relegated to desperation, insisting that we must pass the Panama Free Trade Agreement immediately despite the loophole-riddled pact and despite the country's status as a tax haven because "The Panamanians may back out." Yes, that's right - Congress must pass this because it is supposed to take orders from the Panamanian government. What a joke.

Where this all goes from here is anyone's guess - it might just be a temporary delay with no change, but it might be something much bigger. Either way, as I've said before, what we're seeing is very real evidence of the potential for major change. You've got a White House retreating, you've got the Congress's chief trade whore making laughably absurd arguments, you've got progressive institutions making demands, and you've got rank-and-file Democratic lawmakers insisting on reforms.

As I said, this is what the Make Him Do It Dynamic looks like.

David Sirota :: BREAKING: Facing Progressive Pressure, Obama Backs Off Panama Free Trade Agreement

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very encouraging (0.00 / 0)
I think your take here is right on.  

New Jersey politics at Blue Jersey.

this is very heartening. nt. (0.00 / 0)

I'll believe it when I see it. (4.00 / 5)
The Geithner plan to save the autos is eliminate the American part and increase imports from Korea, China and Mexico.  

good progress! (4.00 / 1)
This is very good news, although a long, long way to go.  Maybe all of this typing isn't for nothing.  

The Economic Populist

HAHA - Yeah, Panama's gonna back out (0.00 / 0)
So let me get this straight - Panama will back out of a deal that'll give them near unrestricted access to the largest consumer market in the world, because we're taking our time with it?  I mean, the entire concept of "free trade with the world's largest economy" is a major win for them, even if there are a few catches that we write in.  Forget the "taking orders from Panama" aspect, this is the idea that this treaty is the Panamanians deigning to trade with us.  If Panama walks, our multinationals will lose like 1/500th of their market.  Not even that.  If Panama walks, we're back to the status quo, which is semi-restricted trade with that 1/500th of the world market.

this would have negative effects in panama too... (4.00 / 1)
i'm not saying their government officials are likely to back out of the deal, but 'panama' as a whole does not stand to majorly benefit from this deal.  

[ Parent ]
96% of imports from Panama already enter the U.S. duty free (4.00 / 4)
At the sectoral level, the USITC finds that the "main effect" of the FTA would likely be to increase U.S. exports, while causing little growth in U.S. imports from Panama. In general, the estimates are in line with general expectations based on (1) the small amount of goods imported from Panama, (2) the small production capacity of Panama, and (3) the fact that most imports from Panama (96% by value) already enter the United States duty free through either normal trade relations (NTR) or preferences provided by the Caribbean Basin Initiative (CBI) programs or the Generalized System of Preferences (GSP).

Specific estimates suggest that when fully implemented, the largest growth potentially will accrue to U.S. exports of rice (145%), pork (96%), beef (94%), and passenger vehicles (43%). Again, these would amount to a very small dollar value increase given that, with the exception of rice, the U.S. exports of these goods to Panama represent less than two-tenths of one percent (0.2%) of U.S. exports to the world and even a smaller portion of U.S. production.

Thus, U.S. businesses would gain little from the agreement, but Panamanians would gain even less.

I'm glad President Obama is going to develop a new trade framework, but lets try to get the facts straight.

"Never separate the life you live from the words you speak" -Paul Wellstone

[ Parent ]
well ... (0.00 / 0)
... would the US exports be competing with Panamanian-produced goods or goods currently being imported from other countries?  I know part of the argument for the Peru FTA was that it was about time our wheat got to compete with that being shipped to Peru from Canada and Argentina.

[ Parent ]
isn't this just like what they said about Gitmo, military tribunals, financial regs, & so many other things? (0.00 / 0)
they're "reworking" and "studying" and "reforming" and "examining" and "developing new frameworks/systems for our modern world", bla bla bla ... ?

don't count this as any kind of victory -- the pattern is already wholy on the side of the status quo being the end result.

and given that they had never submitted it, & were only talking "fast-track", (0.00 / 0)
and that their reasons for talking about fast-tracking all these in the first place were obviously to make corporations happy -- and they knew Unions and others would fight it the minute they did submit it -- and EFCA was already going on too....

this isn't a backing off at all really -- would Congress have actually put on this session's calendar if it was submitted in March -- or now ? i don't think so.

i think the talk to begin with was only bec of the stimulus - "protectionist", "buy american", etc -- stuff (0.00 / 0)
Obama was being attacked and corps were very unhappy about all the (ultimately killed) restrictions on the money, no?

And he went out of his way to say how he wasn't protectionist and that the stimulus shouldn't be, etc.... no?

[ Parent ]
Yer such a buzzkill ;^) (4.00 / 1)
I was all set to enjoy the one bit of "good news" we've seen in some time and you went and harshed on my bliss.

Good points though and DFLer as well.

But at least they aren't pushing the Fast Track at the moment.  

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other, to total extinction. Let us pray we have the wisdom to choose correctly." -Woody Allen, My Speech to the Graduates

[ Parent ]
i've seen this movie before -- we all have, repeatedly -- (4.00 / 2)
they sent Kirk out to talk up their fast-tracking of all the trade deals -- but didn't actually fast-track them at all or send them to Congress.

now they're pushing the story that they're withdrawing, delaying, and creating new "frameworks" -- and blogs and what passes for liberals everywhere are cheering it as some kind of  victory.

we see this over and over and over and over -- it's like charlie brown and the football.

[ Parent ]
also--they've absolutely said they won't redo NAFTA, so what kind of new "framework" (0.00 / 0)
would not include and change NAFTA and all other existing ones -- let alone new ones?

[ Parent ]
I posted the full text of the letter and list of signers (4.00 / 2)
at Bleeding Heartland.

Note: the 55 House members who signed this letter include 17 of the 23 founding members of the House Populist Caucus--all except for Leonard Boswell (IA-03); Joe Courtney (CT-02); Mazie Hirono (HI-02); Linda Sanchez (CA-39); Peter Welch (VT-AL); and John Yarmuth (KY-03).

Join the Iowa progressive community at Bleeding Heartland.


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