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Facing Progressive Pressure, Obama Backs Off Panama Free Trade Agreement

05.21.09

http://www.ourfuture.org/blog-entry/2009052121/breaking-facing-progressive-pressure-obama-backs-panama-free-trade-agreement

BREAKING: Facing Progressive Pressure, Obama Backs Off Panama Free Trade Agreement
By David Sirota

This is huge news for the Make Him Do It Dynamic:

May 21 (Bloomberg) ## A U.S. trade accord with Panama, which is opposed by labor unions, won’t be submitted to Congress for approval until President Barack Obama offers a new “framework” for trade, an administration official said.

The decision, announced by Assistant U.S. Trade Representative Everett Eissenstat at a Senate Finance Committee hearing today, is a reversal from statements in March that the U.S. wanted to pass the accord soon…

Eissenstat’s comments follow remarks by John Sweeney, the head of the AFL-CIO labor federation, that unions would oppose a rush to ratify the deal. Also today, 55 House Democrats told House Speaker Nancy Pelosi to reject the Panama accord unless it is renegotiated.

If you regularly read Ourfuture.org and OpenLeft, you know we have been tracking this story, including the AFL-CIO announcement and the announcement today by the Populist Caucus to put major pressure on the White House to stop this NAFTA-style agreement. Indeed, as someone who has been working on this issue for a decade, I never thought I’d actually see the day where we, the progressive movement, could actually make a president back off (even temporarily) the NAFTA trade model.

Hilariously, Sen. Max Baucus (D-MT), the K Street trade lobbyist dressed up as a U.S. Senator, has been relegated to desperation, insisting that we must pass the Panama Free Trade Agreement immediately despite the loophole-riddled pact and despite the country’s status as a tax haven because “The Panamanians may back out.” Yes, that’s right - Congress must pass this because it is supposed to take orders from the Panamanian government. What a joke.

Where this all goes from here is anyone’s guess - it might just be a temporary delay with no change, but it might be something much bigger. Either way, as I’ve said before, what we’re seeing is very real evidence of the potential for major change. You’ve got a White House retreating, you’ve got the Congress’s chief trade whore making laughably absurd arguments, you’ve got progressive institutions making demands, and you’ve got rank-and-file Democratic lawmakers insisting on reforms.

As I said, this is what the Make Him Do It Dynamic looks like.

G.M. and Union Reach Deal on Contract Changes

05.21.09

By NICK BUNKLEY
Published: May 21, 2009

http://www.nytimes.com/2009/05/22/business/22auto.html?_r=1

DETROIT — The United Automobile Workers union said Thursday that it had reached a tentative deal with General Motors and the Treasury Department that would help G.M. cut its labor costs and reduce its obligations to a new retiree health care fund by billions of dollars.

The U.A.W. did not release details of the deal, which is subject to ratification by G.M. workers. The agreement is expected to be similar to one reached last month with Chrysler, which allowed that automaker to substitute equity for up to half of the $10 billion owed to its retiree health care fund. G.M. owes about twice that amount to the fund for its workers.

The deal is one of the government’s requirements for G.M. to win more loans but is not enough in itself to keep the carmaker from having to file for bankruptcy protection on June 1, the government’s deadline. More important, G.M. needs to persuade nearly all of the bondholders who hold more than $27 billion of its debt to swap their claims for stock in the restructured company. Most analysts expect the offer to fail.

Two days ago, G.M. said in a filing with the Securities and Exchange Commission that it did not expect to reach an agreement with the U.A.W. before May 26, the deadline for bondholders to decide on the exchange offer.

But the U.A.W.’s president, Ron Gettelfinger, and G.M.’s chief executive, Fritz Henderson, have been involved in intense talks with Treasury officials in Washington since Monday.

G.M. has said it wanted to give the U.A.W. nearly 39 percent of the company, while bondholders would receive a 10 percent stake and existing shareholders would account for 1 percent. The Treasury, which has lent $15.4 billion to G.M. since December, would forgive half of that debt and receive a majority interest in G.M.

Earlier this month, Mr. Gettelfinger said he expected the union to reach an agreement with G.M. that contained nearly identical terms as the one with Chrysler. “I cannot believe that Treasury would mediate something better at G.M. to put Chrysler at a disadvantage,” he said on May 4. “The collective bargaining piece of it should pretty much be a template.”

Yet on Tuesday, he was quoted by reporters in Washington as saying that the parties had “a long way to go” to reach a deal.