Wisconsin Congressional delegation splits on Peru Free Trade Agreement

Defying appeals from labor leaders, environmentalists and foes of free-trade, nearly half the Democrats in the House joined with the Bush administration’ to support a trade liberalization agreement with Peru that the White House hopes will lead to the approval of future trade deals in Panama, Colombia and South Korea .

A New York Times article by Steven Weisman explained why so many Democrats, several of whom were elected because they opposed free trade deals that lacked labor and environmental protections, supported President Bush in passing the Peru Trade Bill:

"Democrats from the prosperous areas of the East and West Coast have become especially responsive, many Democrats say, to the desire of Wall Street and the high technology, health, pharmaceutical and entertainment industries to expand their sales overseas. These industries have also become major Democratic contributors."

So Speaker Nancy Pelosi's lieutenants "whipped" the party caucus energetically and did better than expected--109 Dems voting for the Peru trade bill, 116 Dems against- to please Wall Street and drug companies!

Wisconsin's Congressional representatives split their vote. Democrats Dave Obey, Steve Kagen and Tammy Baldwin voted against the bill. Democrat Ron Kind and Republicans Tom Petri, James Sensenbrenner and Paul Ryan voted yes. Milwaukee's Gwen Moore (D) missed the vote.

The economic consequences of the new trade agreement with Peru are relatively minor. It will cause some U.S. job loss because it contains incentives for U.S companies to relocate and it will hurt Peruvians by opening their agricultural market to exports.

Its impact will not compare to the North American Free Trade Agreement (NAFTA) which has led to significant job loss in Wisconsin and the nation.

Proponents of NAFTA promised that it would generate large numbers of net new good jobs. Instead, over a million jobs that would otherwise have been created in the US have been lost, and wages for workers without a college education have been fallen.

In Milwaukee we have seen Master Lock, Tower (A.O. Smith), Briggs and Stratton, Delphi and Johnson Controls among others move thousands of family supporting jobs to Mexico and use the threat of relocation to reduce their remaining Milwaukee employees' wages.

According to the Economic Policy Institute, Wisconsin lost 25,403 jobs because of NAFTA.

Nor has NAFTA helped Mexico. Real wages of Mexican manufacturing workers have fallen despite a decade of strong GDP growth and the agricultural sector has been devastated. There have been substantial increases in Mexico's informal sector work such as street vending and unpaid family work in stores and restaurants. One major study has concluded that "NAFTA has not helped the Mexican economy keep pace with the growing demand for jobs…The agricultural sector, where almost a fifth of Mexicans still work, has lost 1.3 million jobs"

While the Peru Free Trade Agreement will not be as bad as NAFTA, it will hurt workers in both countries.

In political terms, however, the Peru Free Trade Agreement delivers an ominous message - that when faced with a choice between money and their own rank-and-file, the Democratic leaders in the House chose the money. They chose the money even though it required them to pass legislation with Republican votes. Even when a majority of their own caucus were opposed. Even when it meant handing the shrinking president, George W. Bush, a rare legislative victory.

If the Democrats voted for this bill to prove they aren't anti-trade, the question is who do they think they need to prove that to?

If they voted to generate contributions from Wall Street and pharmaceutical companies, they may increase their campaign contributions, but lose votes!

The US economy is staggering. The housing market continues to free fall-foreclosures are skyrocketing and housing starts are at a four year low. Bankruptcies and homelessness are on the rise. There is a severe credit crunch, consumer confidence is plummeting, the auto industry is in trouble and job growth is anemic.

The cost of food, gasoline, health care, higher education and utilities are soaring at a time when millions of Americans are surviving by the grace of their credit cards. The resultant economic insecurity helped Democrats win control of both Houses of Congress in the last elections.

Despite the President's unpopularity, a Democratic victory in November 2008 is not assured. Congress's approval ratings are no higher.

If Democrats turn a deaf ear to the economic insecurities of the nation's working men and women as so many did on this vote, they may find these men and women staying home in November. That would be unfortunate indeed.