Trade Policy and the Democratic Party

One of the most perplexing issues that I often find myself thinking about being involved in leftist politics is that regarding trade policy. On the one hand, I find the traditional AFL-CIO protectionist position shortsighted at best and xenophobic at worst. On the other, I find non-labor lefty advocates blaming outsourcing on the UAW and other manufacturing unions because they "asked for too much" to be patently absurd. Then there is always the "unions don't matter any more" stance. Obviously, there are well-reasoned and not so inflammatory positions between these extremes. However, the question is perplexing in its complexity, especially given the new trade agreement compromise reached between Democrats and Bush.

Paul Krugman's latest column in the NYT (subscription required) argues essentially the same thing:

Nothing divides Democrats like international trade policy. That became clear last week, when the announcement of a deal on trade between Democratic leaders and the Bush administration caused many party activists to accuse the leadership of selling out.

The furor subsided a bit as details about the deal emerged: the Democrats got significant concessions from the Bushies, while effectively giving a go-ahead to only two minor free trade agreements (Peru and Panama). But the Democrats remain sharply divided between those who believe that globalization is driving down the wages of many U.S. workers, and those who believe that making and honoring international trade agreements is an essential part of governing responsibly.

What makes this divide so agonizing is that both sides are right.

Krugman sees the protectionist argument doing more harm than good in non-Western/developing nations such as Bangladesh and India while the pro-internationalist argument having a depressing effect on American worker's wages. Krugman sees no solution to this debate; rather, Krugman believes that Democrats, "if [they] really want to help American workers, they'll have to do it with a pro-labor policy that relies on better tools than trade policy. Universal health care, paid for by taxing the economy's winners, would be a good place to start."

This is in contrast to the editors of The Nation. In their editorial on the trade deal, the editors believe that the Democrats "Sold Out" over the issue. The solution to the problem, they argue, is:

The deeper problem facing the Democratic Party is that it does not have a coherent strategy on trade and globalization, aside from going along with the status quo. The goal of establishing international labor and environmental rights is heroic, but it can't succeed as long as the trading system itself is flawed. Furthermore, in the best of circumstances it will take a generation for the labor rights struggle to make a dent in global wage differentials. Can working people wait twenty years? Can the American economy?

In other words, these two pieces show the exact problem: Krugman believes that the problem is that we focus too much on trade policy per se while The Nation thinks that Democrats are not focusing enough on trade policy. I think that this incongruity becomes even clearer looking at The Nation's prescriptions to confront "global wage differentials":

First, cap the swollen US trade deficits--stop the bleeding--and develop a more balanced international trade regime. Second, use the tax code to get control of US multinationals and force them to align with the nation's economic interests. Third, force the reform of one-sided international institutions like the WTO and IMF so they will serve people and societies, not just capital and corporations. Fourth, continue the long-term struggle to enact trade rules for people of all nations--protecting labor, the environment, economic equity and other progressive values.

While Krugman is arguing that our focus should be domestic, fixing our broken healthcare system that costs employers and employees severely to the benefit of a single sector of the U.S. economy, The Nation argues that the solutions are essentially international, we need to fix our trade deficit and reform the WTO and IMF to not be an international agent of multinational corporations. Maybe this break over the trade issue is not really about trade at all, it is simply the greatest manifestation of a split between Democrats who prioritize domestic policies over ones who prioritize international policies. This is something that I had not really pondered, but which Matthew Yglesias has discussed. Essentially, among activists in the Democratic Party, there is the AFL-CIO (and now CtW) on one hand and internationalist-type activists on the other. And, among all of the solutions, I think that his analysis comes the closest to a real solution. The difference between the two "factions" is the AFL-CIO is more powerful and

Not that I begrudge the unions their influence, either. They won it fair and square -- with organizing, with money, with volunteers, with discipline, with clear requests, etc. As you see with any influential group, securing influence takes work. Sadly, there are virtually no institutions of any consequence organized around providing a progressive take on the substance -- as opposed to labor procedures -- of national security issues.

Ygelsias understands what the issue is and highlights it by emphasizing that it takes work (his emphasis). Although he is dismayed by the fact that international policy is not an issue around which there is great organization, being among the international-types himeslf, he does understand more than Krugman or The Nation what it would take to develop a real international policy.

While this diversion is certainly interesting, what does this have to do specifically with trade policy? I think that the division between domesticists and internationalists that Ygelsias sees is a very real one; the one quibble that I would have is that he fails to point out that these divisions are largely based on class. The more wealthy "netroots" is all about ending the war in Iraq and not inhibiting the free trade of goods and information provided that the trade itself does not outright exploit those who are doing the work itself. The more working-class labor unions on the other hand, fight to protect good jobs in the United States, even if this means focusing so narrowly on it that they forget that they exist in a larger world. The single issue where these two viewpoints are forced to confront each other is in trade policy; it is at the same time involved with the globalization of information and goods and the bread-and-butter job security of manufacturing (and, increasingly, service) employees.

I think that, in this light, both Krugman and The Nation skirt the issue by diverting attention. Krugman's focus on universal healthcare creates a national issue on which there is universal agreement among Dems, albeit with disproportionate passion from the domesticists. The Nation's focus on reforming the IMF and WTO diverts the issue to a singularly international arena on which there is universal agreement.

The other argument that I would make is that focusing simply on policy without politics (little "p") is not going to get very far. As the "mass accumulation" economy of the late industrial revolution has given way to the "flexible accumulation" economy in which we now exist, effective forms of organizing are not neatly tied to industry anymore than the shift from the economy of the early industrial revolution's focus on crafts assisted when the assembly-line arrived. As Ygelsias points out, organizing is the one strategy that gets results. International organizing, particularly if it is international organizing through unions, is potentially the only way to confront these challenges. And while this was one of Andy Stern's (forgotten) tenets in his "Changing to Win" agenda, it seems like both the CtW and AFL-CIO have been slow to pick this up. Luckily, not everyone has forgotten. Stephen Lerner, the director of Justice for Janitors lays out the beginnings of this kind of strategy in a May Day article in AlterNet and the Steelworkers have announced plans to investigate a merger with British unions Amicus and the Transport and General Workers Union to counter the internationalization of corporations. This will obviously also mean changing international laws to allow international strikes and labor action, a major flaw with current organizing and Harold Meyerson points out. Hopefully, however, these initial talks and coordination with emergent radical movements that are willing to aggressively fight these laws will lead to the kind of pressure that really will make this kind of international labor movement possible.