Feb 1 2012

The Trade Debate That Wasn’t Reported

Critics of deals outnumbered more than 4-to-1 in NYT, WSJ

Photo Credit: Public Citizen

Photo Credit: Public Citizen

In the 16 months leading up to the congressional vote on a set of trade deals with Korea, Colombia and Panama in mid-October, news reporting on the agreements scarcely mentioned that critics existed; when they were acknowledged, their objections were frequently mischaracterized. With media doing little to evaluate misleading claims made by the trade pacts’ proponents, all three were approved by Congress by considerable margins.

There were two major points that opponents of the trio of deals—including labor, environmental, consumer and even Tea Party groups—consistently emphasized in reports, press releases, letters and direct outreach to reporters.

First, these trade deals were modeled on the controversial North American Free Trade Agreement (NAFTA), a pact whose actual content reporters have historically paid little attention to (Extra!, 11-12/97). The combined text of the three new deals was nearly 4,000 pages; as with NAFTA, the bulk of the provisions were not related to “trade” issues per se, but rather restrict how the U.S. and the other nations might regulate their domestic economies. For instance, corporations are given new rights to challenge environmental and other regulations outside of national court systems, and demand that taxpayers compensate them for regulations’ potential impact on profits.

Second, unlike earlier trade deals, even the government’s own projections showed that the pacts would increase the U.S. trade deficit (Extra!, 10/11). The projections were produced by the independent U.S. International Trade Commission (ITC), which typically produces overly rosy estimates of trade deals’ impacts.

But at two of the country’s most prominent papers, the New York Times and the Wall Street Journal, such criticisms were almost entirely absent.

Not long ago, there was a reporter at the New York Times whose beat largely consisted of trade policy and politics. The paper now combines trade with broader economic and international beats, and no single reporter consistently covers the topic. That assignment choice affects the quantity of coverage: From July 8, 2010, to October 13, 2011, there were only 23 Times stories on the deals, even though the pacts were among the only policies moving in Washington since the 2010 election.

What’s more, by Extra!’s count, 84 percent of the 122 sources cited in these stories favored the deals. None of the stories mentioned the reasons, outlined above, that skeptics themselves gave for their opposition to the deals; instead, when stories gave any indication why the deals might be opposed, they primarily cited congressional trade committee leaders who were generally supportive of NAFTA-style deals but wanted to see more beef or auto market access.

This skew towards trade deal proponents is even more pronounced than when FAIR studied New York Times coverage of NAFTA in 1993 (Extra! Update, 10/93). Then, 66 percent of Times sources took pro-trade deal positions, while 24 percent were opposed.

Seventeen Times stories contained projections of the job and economic impact of the agreements. Nearly half of these contained solely positive projections, mostly taken from mischaracterizations of the ITC study (Extra!, 10/11). Of the remaining nine, four presented skeptics’ views as speculation, not grounded by any projection. Stories on November 10 and November 11 stated that opponents claimed that “in the short term [the Korea deal] could cost more jobs than it would create.” In fact, the ITC study on which these projections relied estimated the effects once the deal was fully phased in—that is, over the long term.

Four stories focused on the potential downsides of the deal. But even these stories showed a clear pro-pact bias. One story by Sewell Chan (9/15/10) reported on a Public Citizen study (9/10) showing that export growth is actually lower to those countries the U.S. has trade deals with. However, the story concluded that “exports to the 17 countries with which the United States has free-trade agreements grew at a slightly slower pace than exports to other countries”; the report actually noted that they grew only 70 percent as quickly (1998-2008), or 36 percent as quickly if data from the recession is included (1998-2009)—a very generous definition of “slightly.” Moreover, there were four sources quoted attacking the then-unreleased report, with no quoted sources from the other side.

A story by Binyamin Appelbaum (10/12/11) painted the opposition to the deal as coming solely from dying industries like textiles, while failing to mention that the net impact for the trade balance as a whole was projected to be negative. Only a separate story by Chan (12/8/10) actually mentioned that key fact, in a story that nevertheless quoted six proponents and zero opponents of the deal.

The Times ran 16 editorials and op-ed pieces on the topic in the period studied. All were in favor of the trade deals, with the exception of one piece (7/24/11) that opposed the deals—for not going far enough.

Unlike the New York Times, the Wall Street Journal has a dedicated trade and regulation reporter—Elizabeth Williamson, who put out 38 major reports on the deals in the 16 months leading up to the congressional vote, along with 26 smaller pieces that were blurbs or shorter online news updates. She cited 205 sources, 82 percent of whom were in favor of the agreement.

Williamson consistently reported the administration’s export and job claims as fact (a pitfall the Times largely avoided by simply attributing such claims to the deals’ proponents). Thus, even though the trade pacts are projected to actually reduce net exports, Williamson wrote that the deals were “central” (2/14/11), “critical” (3/1/11), “backbone” (5/28/11), “cornerstone” (6/10/11) and “key” (8/1/11) contributions to the president’s goal of doubling exports. More than a third of her stories (15) cited the ITC’s bilateral export projection numbers, but none included even a passing mention of the corresponding import projections. Even taking the bilateral export numbers of $10 billion-$13 billion at face value, this would boost gross U.S. exports less than 1 percent over a 20-year time period—not an accomplishment commensurate to the stated goal.

In fact, only nine stories included any negative projections about the deals, and all were presented as unsubstantiated speculation. In most stories, the opponents of the deals were completely missing, while proponents like Caterpillar CEO Doug Oberhelman (1/7/11) were quoted without challenge, saying things like, “There’s no downside to any of these agreements for American workers.” When opponents’ points of view were mentioned, they were not substantively explored. Much more typical was a reference to unelaborated “concerns” (2/14/11) or “public skepticism and political roadblocks” (5/28/11).

Williamson did make more mentions than her Times colleagues of the services and investment terms of the trade deals. One story (12/10/10) mentioned that the AFL-CIO felt that the investment provisions could send jobs offshore, while two stories (5/28/11, 6/29/11) stated as fact that the Korea deal will “afford U.S. financial services firms the same legal status as Korean firms.”

However, lacking context or opposing points of view, these assertions were not informative to the reader. The financial services chapter of these agreements goes far beyond requiring equal legal status for foreign firms. In fact, a central accomplishment is a ban on policy tools, like capital controls, that Korea has successfully used in the past to avoid and mitigate financial crises. If the country attempted to use them again, Citigroup or other Wall Street banks could use the trade pact to undermine them.

It’s not just revenue constraints and downsized, overworked staffs that have contributed to this massive media failure; some reporters also take on a symbiotic relationship with corporate and government sources, and their perspective shrinks along with their Rolodex.

The last 20 years of trade laws have not closed—and indeed have likely widened—the huge hole in our economy represented by the U.S. trade deficit. These trade deals are also setting up parallel judicial institutions where corporations can skirt domestic courts and laws and attack government environmental and other policies in foreign tribunals to privately enforce new trade pact privileges. Such structures will transform justice systems in our lifetime, yet since they first appeared in NAFTA, roughly five major newspaper stories have appeared discussing them (New York Times, 3/11/01, 4/18/04, 6/25/11; Chicago Tribune, 7/5/01; L.A. Times, 2/6/02).

While such tribunals heard only about 50 disputes from 1972 to 2000 (an average of less than two a year), 173 cases were resolved and an additional 128 filed after 2000 (ICSID case listings, accessed 7/9/11)—nearly 30 a year. Nonetheless, during the five-year debate on the three most recent trade agreements, only one major national story was published that mentioned these investor-state rules (New York Times, 6/25/11), and it failed to note that Congress was then considering expanding these rules in the three new deals with Korea, Panama and Colombia.

The total absence of honest public debate shields the continuation of trade policies that do not serve most Americans and fosters a public misunderstanding that our current policies are the only way to trade. This in turn builds the public opposition to trade that polling now shows is a majority view among Democrats, independents and Republicans alike.


Missing a Major Party Realignment

Corporate media’s lack of attention to opponents of the 2011 trade deals meant that they missed a big political story: a major party realignment on trade.

Since 1973, according to Public Citizen’s tabulations, just under half of House Democrats have on average voted the “fair trade” position, which often meant voting against trade pacts. Fast forward to 2011, and opposition jumped to over 70 percent on the three Obama pacts. This is higher than the average Democratic votes against trade initiatives by either Democratic or Republican presidents, and is the highest level of opposition encountered by President Obama from his own party on any issue thus far.

How these deals played out in the GOP was also news. Historically, 25 percent of Republicans have voted against a Democratic president’s trade deals; under a Republican president, that number drops to 10 percent. But this time around, only 5 percent of Republicans opposed Obama on the trade pact. In other words, the virulently anti-Obama Republican Party—which won in swing states by campaigning against job-offshoring and for protecting U.S. sovereignty—was even more supportive of the president’s trade agenda than it was under Bush.

The morning-after congressional vote coverage in both the New York Times and Wall Street Journal missed this story. Appelbaum and Jennifer Steinhauer merely reported in the Times (10/13/11) that “many Democrats voted against the president.” The Journal (10/13/11) was even less informative, not mentioning levels of Democratic opposition at all, while saying that “some Republicans opposed the pacts because their states could be hurt by them.” The record low level of GOP opposition was the newsworthy element, not the fact that a relative handful voted the way that many of their trade-skeptical Tea Party constituents wanted them to vote.

Todd Tucker is research director with Public Citizen’s Global Trade Watch.