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EconomicPolicyInstitute November 21, 2008

For the past four months, members of EPI’s Global Policy Network (GPN) have asked themselves: What would a people-friendly trade model look like? In four regions, North America, Central America, the Andean region, and the Southern Cone, unions, non-profits, and legislators have come together to create an alternative model to the North American Free Trade Agreement (NAFTA) and Central American Free Trade Agreement (CAFTA), whose benefits and protections would extend beyond corporations and investors to include working people and the environment.

(panelists)On Monday, GPN coordinator Tony Avirgan moderated a panel discussion at EPI on the process and challenges of this project. Speakers included former Costa Rican presidential candidate Ottón Solís, Thea Lee, who coordinates trade policy for the AFL-CIO, Bill Holland of Global Trade Watch, and Congressman Mike Michaud of Maine. The speakers offered blistering critiques of CAFTA but were optimistic that a new trade model could become the norm. They noted that President-elect Barack Obama was critical of NAFTA and favored a renegotiation during the campaign. Solís said he hoped CAFTA would also be reconsidered.

Along with efforts to renegotiate NAFTA and CAFTA, Avirgan is also pushing Congress to not make things worse. In a recent policy memo, he urged legislators to vote against the Colombia Free Trade Agreement. The agreement, which opens free trade between the United States and Colombia, ignores the terrible labor practices in Colombia. “Congress should not reward a regime in Colombia that continues to permit a reign of terror against union leaders, social activists, and workers,” writes Avirgan.

The effort to create a new trade model has garnered front-page headlines in Central American newspapers and has been endorsed by many legislators, including former Costa Rican Presidents Luis Alberto Monge and Rodrigo Carazo Odio and Nobel Peace Prize winner Rigoberta Menchú of Guatemala. GPN is creating a multi-lingual online forum that will ease communication between participants and offer a forum for comments.

Everybody Wins, Except for Most of UsWhat economics teaches about globalization
The story of international trade for the American economy is not win-win, but rather good news, bad news. The good news is that some Americans will reap large rewards, and these rewards will actually be so large as to raise the average income of the entire American economy. The bad news is that many more Americans will lose ground. In a new book, Everybody Wins, Except for Most of Us, EPI economist Josh Bivens explains the simple economic theory easily found in almost any textbook that predicts how trade will have an upside and a downside. The book makes amply clear that it is time for the United States to begin its first serious political discussion about how to cut the majority in on the gains from international trade.

Extend unemployment benefits
Over 1.2 million people are projected to exhaust their unemployment insurance by the end of the year, reports EPI economic analyst Kai Filion in this week’s Snapshot. The chart offers a compelling argument for extending unemployment benefits. Without it, the Congressional Budget Office predicts that half of the long-term unemployed will fall below the poverty line. Filion proposes a seven-week extension in all states and an additional 20 weeks in states with unemployment over 6%. Previous Snapshots have documented that unemployment is spreading across states and extending unemployment insurance is a good stimulus move.

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