WASHINGTON—So-called “free trade” pacts, past, present and proposed, trash U.S. workers – and not just factory workers – and cost them jobs and pay in a variety of ways, while benefiting only the corporate class that virtually wrote them.
That was the message union officials, plus Thea Lee of the Economic Policy Institute, carried to Congress on March 26, as lawmakers opened hearings on the state of U.S. trade.
The issue is relevant: GOP President Donald Trump is pushing the latest “free trade” pact, the U.S.-Mexico-Canada Agreement, and can submit legislation implementing it to lawmakers at any time. Congress must consider and vote on Trump’s measure, not the USMCA itself. Lawmakers can’t amend or rewrite it, and their decision is by a simple majority.
That makes public pressure on lawmakers against the USMCA even more important. Corporate interests wrote much of it, through their allies in the GOP Trump administration and are already campaigning for early approval. The pact, successor to NAFTA, has worker rights written into its text, unlike past trade pacts. But the bar for meeting those standards is low: Obeying International Labour Organization norms.
As a result, AFL-CIO President Richard Trumka has already announced the federation will oppose fast-tracking the USMCA bill through the House and the Senate, and that it will campaign against it without major changes to rewrite it so that it favors workers, not the corporate class that helped write it behind closed doors (see separate story).
But it’s not just NAFTA or the USMCA, the union officials told the House Trade Subcommittee. It’s the whole panoply of corporate-driven details in the “free trade” regime and its subsequent agreements – and the elitist philosophy and class behind them.
“Our trade policies over the last several decades generally undermined the creation of good jobs in the U.S.,” Lee said. Those policies are “accelerating and rewarding outsourcing rather than exports and prioritizing corporate profits over good jobs and strong communities.”
In trade and economics, the U.S. “has not been intentional about how to preserve our scope for democratic decision-making” in a global economy. Instead, not controlling trade and economics produced hidden, “back-door deregulatory pressures” on workers, the environment and public health, Lee stated.
“These flawed trade policies that enhance corporate mobility and bargaining power at the expense of workers and local governments have contributed to the growing income and wage inequality in the U.S.”
“We can do better going forward, but we need an entirely new approach.”
That’s what the union officials advocated in their testimony, as did Trumka in his April 1 telephone press conference. The union leaders added specifics about past harms that must be solved:
- Filing unfair trade cases with the U.S. government is fine, and so are pro-worker rulings, but they come after the fact. That was the message of Holly Hart, longtime Steelworkers Legislative Director.
“Growth in global supply chains and foreign manufacturing at the expense of domestic producers has forced” USW and employers it deals with in steel, aluminum, glass, paper, and other industries “to defend ourselves from a raft of illegal trade practices that have become an all too common theme in globalization and subsidized global overproduction,” she pointed out.
USW alone “participated in or filed over 90 antidumping and countervailing trade cases since 2000.” Though Hart did not say so, that’s more cases than anyone else.
Each filing and each win represent “a lost job, a lost standard of living and a devastated community resulting from illegal subsidies or dumped products impacting domestic manufacturers’ market share, their profitability, and most importantly workers’ jobs.”
“But by the time relief can be obtained, significant injury will have already have been inflicted. Our laws operate prospectively so our competitors repeatedly target our market, resulting in the continuous ratcheting down of production and employment and undermining our nation’s interests and economic diversity.”
Even when the federal government defends firms and workers, “the industry rarely is able to recover their market share and bring employment back to the level it was when the unfair trade began.”
- It’s not just factory workers who lose jobs to unfair trade. Now, it’s service workers, too, Communications Workers Legislative Director Shane Larson pointed out.
“Improvements in technology mean a wide range of service sector jobs, including call center customer service representative jobs, can now easily be done outside the U.S. As a result, CWA members have increasingly seen their jobs offshored, generally to countries where workers are denied their fundamental human rights and are not paid a decent day’s pay for a decent day’s work,” he said.
In 2000, there were few “centers in Tijuana,” the Mexican city just south of San Diego, “but there are now over 50, employing over 10,000 workers. Overall, there are now 689,000 business processing workers in Mexico, largely concentrated in call centers. Much of this work serves the U.S. market. For example, one TeleTech call center in Mexico City handles customer service and technical-assistance calls exclusively for U.S. companies including Time Warner, Dish TV, and Best Buy.”
“Meanwhile, two company-owned AT&T call centers in Mexico City and Guadalajara employ 2,475 employees today and continue to grow. These customer service representatives are being trained to do
the same support for small businesses and bilingual customers that AT&T workers in the U.S. do — even as AT&T has eliminated 12,000 jobs in the U.S. since the start of 2018.” Many, if not most, were in call centers, Larson said.
- The middle class is in danger – and so is democracy. While all the pro-worker witnesses stressed how so-called “free trade” pacts rob workers of jobs and their living standards – along with their right to organize and bargain – Auto Workers Legislative Director Josh Nassar added danger to democracy and badly tilted taxes to the mix.
“We need Congress to advance equitable tax policies that uplift working families and not reward billionaire CEOs with massive tax breaks while incentivizing businesses to outsource jobs overseas. A comprehensive approach will improve living standards, reduce poverty, help our environment, and vastly improve quality of life. It has been demonstrated time and time again that a vibrant middle class is needed in order to have a strong economy and democracy,” he testified.
- There are spinoff negative impacts even in job sectors not involved in trade, Steve Catanese, president of Service Employees Local 668, a statewide Pennsylvania local of social service workers, told lawmakers.
“As an example, consider unemployment compensation,” which Is supposed to tide workers over until they find new jobs. “Most states have supplemental funds to support the operation of unemployment compensation systems due to declining federal funding. When one such federal funding stream dried up in 2012, the Philadelphia Unemployment Compensation Service Center was permanently closed,” said Catanese, a social worker.
“So as Philadelphia struggled with systemic and structural employment challenges, in part due to a declining manufacturing sector,” from “free trade” pacts, “one of the main supports for underemployed and unemployed workers was eliminated, forcing more people into unemployment or lower-paying jobs.”
One former Local 668 member, holder of two graduate degrees, “saw her finances destroyed” when Philly shut. To survive, Catanese said, she had to start drawing Social Security early, “and lost out on full benefits. Today, she can barely afford her medication costs.”
But administrations of both parties have turned a deaf ear to the negative impact of “free trade” on workers and to unions’ recommendations to solve the problem, said AFL-CIO Trade Specialist Celeste Drake. The federal government “substitutes policies preferred by global corporations for policies that would promote the shared interests of businesses large and small and working people both here and abroad. Our criticism is not against trade per se. It is about the rules governing trade.”
Rep. Earl Blumenauer, D-Ore., the panel’s new chairman, welcomed the testimony, He said unions and workers’ views on trade pacts were generally ignored over the last eight years of GOP House control.
“Our serial failure to adequately enforce trade agreements in the past weakened confidence in the promises” of those pacts, he added. “Our agreements should strive to improve standards, not be a race to the bottom.”
And when the U.S. finally brought one trade case against another country – Guatemala – under CAFTA, one of the successor pacts to NAFTA, it failed, Blumenauer noted.
The only reason the U.S. pushed it, he admitted, was because unions raised a ruckus about the Central American nation’s horrible worker rights record, and had, due to congressional pressure years ago, leverage to do so.
“Unions should not have to use their limited resources to make the case for entering into dispute settlement with another country. It shouldn’t take years to bring a case against a country that allows for the intimidation, harassment, and murder of labor leaders. After the U.S. finally brought a case, the three-arbitrator panel ruled against us.”
“How will the ‘New NAFTA’ agreement be different? Is the labor chapter strong enough? Should we have confidence in the enforcement provisions? I doubt we get complete answers to these questions today, but this is a long overdue conversation that we must begin now,” he concluded.
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