By Emad Mekay
WASHINGTON, Mar 27 2007 (IPS)

Democrats in the U.S. Congress unveiled a new plan Tuesday that would require Washington to incorporate stronger labour and environmental standards as well as provisions for access to life-saving drugs in pending free trade agreements.

House Ways and Means Committee Chairman Charles Rangel and Trade Subcommittee Chairman Sander Levin, the two main sponsors of the plan, say their proposal is intended to break the current logjam in the U.S. Congress, where free trade agreements are debated and voted on.

Labour, environmental and humanitarian groups are urging Congress to block pending agreements put forward by the George W. Bush administration and similar accords now under negotiation for failing to protect labour rights or the environment and for pushing developing nations deeper into poverty.

The congressmen said that Tuesday’s announcement is the latest development in a series of discussions the Democrats, who seized majority power in Congress last November, are having with key administration officials, Republican lawmakers and business leaders.

The United States Trade Representative Susan Schwab said Tuesday that her talks in Congress and the new plan were part of an attempt to reach a consensus on the best way forward for U.S. trade policy, a signal that the administration may approve some aspects of the plan.

“This is another step in what has been a good faith effort in a continuing dialogue by all sides,” she said. “We have an historic opportunity to create a path forward at this critical point in U.S. trade policy and I remain committed to a bipartisan solution as soon as possible.”

U.S. lawmakers are considering trade deals with Colombia and Peru that include some of the most controversial aspects of the so-called “free trade” agreements.

Critics say the deals have regulations that place corporate privilege over human rights, while promoting exploitation of workers and the environment.

But proponents of the new plan say it addresses most of those concerns.

The proposal calls for other countries to enforce international labour standards in their domestic laws and practices and not just “enforce their own laws”, a major complaint for labour and rights groups.

In the case of the deal with Peru, the Democrats said they wanted to see Peru adopt tougher laws on logging mahogany. Peru is the world’s largest exporter of mahogany. Many critics say the species suffers rampant and unsustainable exploitation.

Lawmakers remained vague on the access to affordable medicines. Their plan calls for “a fair balance” between promoting access and promoting pharmaceutical innovation.

Drug companies have resisted such proposals in the past, saying that lower cost drugs would sap innovation and research funding.

The plan also said that trade deals shouldn’t grant foreign investors in the U.S. greater rights than U.S. businesses.

Developing world activists have long charged that trade deals in fact give U.S. companies greater rights than local businesses and consumers.

The Democrats also urged the administration to take action against Chinese subsidies to their own companies and measures on what they called “China and Japan’s currency manipulation”.

The congressmen also demanded that the USTR establish a U.S. Trade Enforcer position whose job would be to prepare cases against other countries before the World Trade Organisation (WTO). They invoked the record of former U.S. President Bill Clinton, who filed an average of 11 WTO cases a year when Bush has filed only three per year.

The plan takes note that other countries filed 47 cases against the U.S.

The proposals may find fans among anti-poverty groups and labour unions, but some analysts say that they could in fact penalise poor nations. Business groups also say that trade deals are good for the U.S. economy.

“Attempts to enforce labour and environmental standards through trade sanctions are not only unnecessary but also counterproductive,” argued Daniel Griswold, director of the Centre for Trade Policy Studies at the libertarian Washington-based think tank Cato Institute.

“If members of Congress want to encourage higher labour standards abroad, they should support policies that encourage free trade and investment flows so that less developed nations can grow more rapidly,” he said.

Griswold argued that requiring higher standards from poor nations strikes at the very export industries that typically pay the highest wages and follow the highest standards, forcing production and employment into less globalised sectors where wages and standards are almost always lower.

“The end result of sanctions is the very opposite of what their advocates claim to seek,” he said.

The National Association of Manufacturers (NAM), a business group, issued a statement after the disclosure of the plan saying that more free trade deals were needed for U.S. workers.

“One of the best things that can be done for American manufacturing is more trade agreements – which have helped lead to last year’s 14 percent growth in U.S. manufactured goods exports,” said Frank Vargo, NAM’s vice president of international economic affairs.

“Our free trade partners account for close to half of our exports, but only six percent of our manufactured goods deficit. While we want to help find a compromise that works for everyone, we can’t take our eye off the ball – we need to cut foreign barriers to our exports, and more trade agreements are the only way to do that.”

Excerpt: