The European Economic Community seemed like a good idea to integrate the economies of Western Europe after World War II. But there has been a longtime resistance in Britain to being considered part of Europe and following the dictates of bureaucrats from Brussels.
After the breakup of the Soviet Bloc in 1990, European leaders moved to create the more comprehensive European Union with the Treaty of Maastricht in 1992. Nations that have joined the EU since then include Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania, Slovakia and Slovenia, for a total of 28 member states,. Eastern Europeans then could move freely to western Europe, including Britain. Nineteen member states have adopted the euro as a common currency since 2002, but many of the smaller nations have found their inability to control their currencies has made them dependent on the dictates of the Frankfurt-based European Central Bank. Britain never gave up its sovereign currency, the pound.
Since Britain is heavily dependent on trade with the EU, economist Dean Baker noted in a column for PBS NewsHour, the Europeans could impose trade barriers with real costs on the British economy. But trade barriers would also impose costs on the EU, particularly those countries that have the most trade with Britain. And the real threat to the EU is its leaders’ devotion toward austerity since 2010. “Rather than using fiscal policy to steer economies toward full employment and address needs in infrastructure, clean energy, education and health care, the EU leadership demanded that governments move toward balanced budgets,” Baker noted. “This meant cutbacks in spending and tax increases that worsened and prolonged the downturn.”
Baker concluded, “The proper response to the Brexit vote would be for the EU leadership to finally embrace reality and adopt an economic policy that will push the continent toward stronger growth and full employment. If it goes this path, the rest of the EU will not be anxious to follow the UK’s lead.
“If the EU leadership instead goes the route of tit for tat and tries to punish Britain, Brexit will be the first round of a very unhappy story.”
Britain’s departure from the EU should have little impact on the US. If anything, it should draw Britain closer to the US economic orbit. London will continue to be an international banking center because money flows over national borders. Swiss bankers have not been hampered by their separation from the EU. The European Central Bank remains in Frankfurt. And Britain’s withdrawal from the EU might be a boon for Ireland, which remains in the UE as a well-educated English-speaking nation where US-based multinational corporations can relocate their European offices.
The closest parallel to Brexit for the US would be if we had a national referendum on whether to remain in the North American Free Trade Agreement. We’re confident that the American people would vote to leave NAFTA and the World Trade Organization, whose unelected magistrates have the authority to overrule regulations that bother multinational corporations. That is why Congress would never call for such a referendum.
An agreement to reduce trade barriers between the US and Canada made sense because the two nations have similar economies and standards of living. Lowering trade barriers with Mexico made no sense for American workers and manufacturers who are not interested in moving factories south of the border in pursuit of cheap labor — and NAFTA doesn’t even offer Mexican workers the ability to move freely over the border to take American jobs, as the EU allows Eastern European workers to move into Britain.
US voters have a chance to discourage adoption of another “free trade” bill that would put more American workers at risk and give multinational corporations greater opportunities to override state, local and federal regulations with the Trans-Pacific Partnership, which was negotiated among 12 Pacific Rim nations by the Obama administration largely without the input of organized labor or other public-interest groups. The bill is likely to come up in the “lame duck” session after the election, and opponents hope right-wing teabaggers will join with pro-labor lefties to stop it in the House.
Bernie Sanders’ opposition to the TPP is one reason he performed so well in the Democratic primaries, particularly in the Midwest. Clinton, who helped negotiate the TPP as secretary of state, now says she is opposed to the agreement that was finalized after she left office. But when Sanders supporters on the committee drafting the platform that will come before the Democratic National Convention proposed language rejecting the trade deal, Clinton-allied delegates blocked it and instead approved language hammered out by pro-Clinton labor groups that was critical of “trade agreements that do not support good American jobs,” but stopped short of condemning TPP because it is being pushed by President Obama.
The issue probably will be revisited at the Democratic convention in Philadelphia. In the meantime let your member of Congress know that if he or she votes for the TPP, they will be leaving Congress at the next opportunity.
Donald Trump hopes to capitalize on the job losses among white working-class voters to put states like Michigan, Ohio, Pennsylvania and Wisconsin in play. But American workers should not believe that Trump will do anything to interfere with “free trade,” despite his campaign promise to back out of NAFTA and other trade deals that hurt American workers, including the TPP. The cynical presumptive Republican nominee has taken advantage of “free trade” laws in the past to outsource apparel production to Mexico and China and his business record reveals a trail of broken promises and bad faith to workers, businesses and consumers with whom he has dealt.
You can trust Hillary Clinton to renegotiate NAFTA and fight enactment of the TPP at least as much as you can trust Trump on this or any other policy statement that he has made. And Clinton actually has the support of trade unions hurt most by “free trade.”
Sanders Pushes Dems LeftDespite the fight over the TPP, Sen. Bernie Sanders has had a lot of success pushing the Democrats to frame a more progressive platform than the party has had in years. Among other things, the draft platform that was approved for presentation to the convention calls for:
• A minimum wage of at least $15 an hour and the right to form or join a union;
• National paid family and medical leave;
• Guaranteeing Social Security benefits for generations to come by removing the $118,500 cap on taxable earnings;
• Passing an updated and modernized version of the Glass-Stegall Act, to reinstate a firewall between their regular commercial banking activities and riskier investment and insurance activities;
• Carbon pricing, which would tax carbon to recognize its impact on the environment;
• Marijuana legalization;
• Making it easier to vote by restoring the Voting Rights Act to its full power, expanding early voting and vote-by-mail, ending gerrymandering and restoring the voting rights of ex-cons.
Clinton also has proposed a Medicare buy-in for adults 55 and older, insurance access for undocumented Americans and measures to lower out-of-pocket medical costs. Clinton also would give community health centers $40 billion in new funding over a decade.
Sanders, whose team had negotiated the plan with the Clinton campaign, called the health care agenda released July 9 a “significant step forward” in guaranteeing health care access for Americans. But Sanders will need to keep building a progressive movement to change Congress and get the progressive platform enacted. — JMC
From The Progressive Populist, August 1, 2016
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