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  • Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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« March 2017 | Main

April 25, 2017

New Report Reveals Trump Is Not Punishing Corporations that Offshore American Jobs, but Awarding Them New Government Contracts

56 Percent of Top U.S. Government Contractors Offshored Jobs

WASHINGTON, DC – Despite President Donald Trump’s campaign promises to punish firms that offshore American jobs, the flow of federal contract awards to major offshorers has continued unabated since Trump’s inauguration, according to a new report released today by Good Jobs Nation and Public Citizen’s Global Trade Watch. The report, titled “Trump’s First 100 Days: Federal Contracting with Corporate Offshorers Continues,” reveals that a majority of the largest U.S. government contractors ship jobs overseas. Even after United Technology decided to offshore 1200 of its 2000 Indiana Carrier jobs to Mexico despite Trump’s interventions, the firm has obtained 15 new federal government contracts since Inauguration Day.

Key findings of the study include:

  • 56 percent of the top 50 federal contractors in FY 2016 were certified under just one narrow U.S. government program as having engaged in offshoring, and 41 percent of the top 100 FY 2016 contractors were certified as having offshored jobs.
  • The top federal contractors certified as having offshored jobs received $176 billion in contracts in 2016, which accounts for more than a third of total contract spending for that year.
  • Since Trump’s inauguration, the flow of federal contract awards to major offshorers has continued, with United Technologies, for instance, receiving 15 new awards and General Electric obtaining scores more. 

Read the full report here.   

“Our analysis proves that Donald Trump is not fulfilling his signature campaign promises to stop offshoring and bring back American jobs.  Even though he’s signed over 60 executive orders during his first 100 days, he has yet to use the power of the pen to stop corporations that receive taxpayer dollars from shipping American jobs overseas,” said Joseph Geevarghese, director of Good Jobs Nation.    

“After pledging to punish companies that offshore American jobs, Trump has not even used his expansive unilateral authority to ban offshorers from being awarded lucrative government contracts.  Instead of delivering on his promises to end offshoring and create American jobs, Trump is rewarding companies that offshore with big contracts paid by our tax dollars. He has not introduced the End Offshoring Act or launched the NAFTA renegotiations he promised for his first 100 days, and he caved on taking tough actions to reduce our huge job-killing China trade deficit,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. 

“It's disgusting that companies like T-Mobile get taxpayer money at the same time they’re sending thousands of jobs abroad,” said Jamone Ross, a former call center worker for T-Mobile in Texas, who lost his job  in 2012 along with 500 co-workers when T-Mobile shifted their work to Asia and Honduras.  “When I lost my job I’d just gotten married and bought a house. Thanks to T-Mobile, I spent the first year of my marriage taking out loans to keep up my mortgage payments, and the next year digging myself out of debt.  Friends of mine lost their cars and their apartments. If Trump really cares about American workers, like he says, he should stop this, right now.”

U.S. presidents have broad executive authority to enact “policies and directives” for federal contracting. Trump has failed to exercise this authority to cut off firms that offshore from obtaining lucrative government contracts paid with taxpayers funds.

The report highlights that Trump appeared willing to flex his muscle as “purchaser-in-chief” right after the 2016 election with his high-profile interventions to try to prevent United Technologies, a major defense contractor, from shipping its Carrier subsidiary’s operations to Mexico.  However, the study finds that since then Trump not only has failed to take promised actions, such as introducing and “fight[ing] for passage within the first 100 days of my Administration” of a Stop Offshoring Act in his first 100 days, but his administration has approved lucrative contracts with some of the nation’s most notorious chronic offshoring corporations.

 

April 19, 2017

Trump’s Trade Agency Attacks Other Countries’ Efforts to Promote and Protect Breastfeeding in New Report

On March 31, the Office of the United States Trade Representative (USTR) released the National Trade Estimate report. This is a statutorily-required annual review of U.S. trade partners’ “significant trade barriers” that the U.S. government seeks to have eliminated.

The 492-page report provides excellent insight into the growing global backlash against our current “trade” policies. While President Donald Trump has flip-flopped on his pledges to reverse the gigantic job-killing trade deficit with China, this U.S. government report labels as illegal trade barriers an array of public interest policies, including – shamefully – other governments’ policies to promote breastfeeding.

Despite substantial progress in reducing infant mortality around the world in recent decades, nearly seven million children under the age of five still die each year – about half of them newborns. Studies show that breastfeeding has the potential to save 800,000 children under the age of five every single year.

According to the United Nations Children’s Fund (UNICEF), “breastfeeding is the foundation of good nutrition and protects children against disease.” But only 43 percent of infants (0-5 months) in the world are exclusively breastfed, and this number is even lower in parts of Latin America, Africa and Europe.

For decades, infant formula manufacturers have been accused of aggressive marketing campaigns in developing countries to discourage breastfeeding and instead, to push new mothers into purchasing formula.  The famous boycott of Nestlé in the 1970s led to the development and adoption by nations worldwide of the UNICEF/World Health Organization (WHO) International Code of Marketing of Breastmilk Substitutes (The Code) in 1981. The Code sets guidelines and restrictions on the marketing of breastmilk substitutes, and reaffirms governments’ sovereign rights to take the actions necessary to implement and monitor these guidelines.

To promote and protect the practice of breastfeeding, many countries have implemented policies that restrict corporate marketing strategies targeting mothers. These policies have led to increased breastfeeding in many countries even though greater progress is still needed.  

Rather than embracing these efforts to safeguard the world’s most vulnerable inhabitants, the Trump administration, in its March 31 report, indicted the policies as “trade barriers” that should be eliminated:  

  • Hong Kong: The Report criticizes a Hong Kong draft code, designed to “protect breastfeeding and contribute to the provision of safe and adequate nutrition for infants and young children.” USTR labels the policy as a technical barrier to trade due to its potential to reduce sales of “food products for infants and young children.”
  • Indonesia: USTR labels a draft regulation in Indonesia that would prohibit the “advertising or promotion of milk products for children up to two years of age” as a technical barrier to trade.
  • Malaysia: USTR questions Malaysia’s proposed revisions to “its existing Code of Ethics for the Marketing of Infant Foods and Related Products” that would restrict corporate marketing practices aimed at toddlers and young children.
  • Thailand: The report critiques Thailand for introducing a new regulation that would impose penalties on corporations that violate domestic laws restricting the “promotional, and marketing activities for modified milk for infants, follow-up formula for infants and young children, and supplemental foods for infants.”

Seriously? Why not also label popular public health policies aimed at reducing medicine prices as trade barriers too? Oh, actually, that is also a feature of the report.

April 17, 2017

Trump’s Trade Deficit “Fix”: Flip-flop on China Pledges and Attack Breastfeeding, Affordable Medicines and Anti-Obesity Policies

What’s a $437 billion dollar trade deficit between frenemies? Apparently not sufficient for President Donald Trump to keep his oft-repeated pledge to declare China a currency manipulator, the world learned last week.

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This reversal comes on the heels of last week’s study-not-action move on his promise to reduce the trade deficit. President Trump signed an Executive Order to create yet another study on foreign trade barriers –   oddly enough, on the same day that his administration released the government’s annual report that analyzes “significant foreign trade barriers” among U.S. trading partners. 

So what are these so-called “trade barriers”?

Well, sadly, they are an embarrassing list of attacks on other countries’ public health and environmental policies, financial regulations and even religious standards.

Japan’s programs that reduce the cost of medicines and New Zealand’s popular health programs that control medicine prices are on the hit list. (Yup, the list includes attacks on policies that promote competition from generic drugs to bring down prices for consumers, which ostensibly is what “free trade” is supposed to do.)

Also targeted is Vietnam – for strengthening its inspection processes for imported foods.  Mexico’s new energy efficiency standards for electronic and electrical equipment are smacked because they impose “burdensome and costly requirements on products exported to Mexico.”

Bad on Canada for having requirement that drug companies, um, demonstrate a medicine’s utility before firms can obtain monopoly patent rights. Somehow the European Union’s requirement that corporations “obtain parental consent to process the personal data of minors aged 16 years or younger” is a trade barrier because this forces corporations “to interrupt or curtail service to a large and active segment of their customer base.”

And then they go after the babies. Public interest policies aimed at promoting breastfeeding are “significant trade barriers.” That includes a draft Hong Kong code meant to “protect breastfeeding and contribute to the provision of safe and adequate nutrition for infants and young children.” The administration labels this to be a technical barrier to trade due to its potential to reduce sales of “food products for infants and young children.”

The report goes after Thailand for introducing a new regulation that would impose penalties on corporations that violate domestic laws restricting the “promotional, and marketing activities for modified milk for infants, follow-up formula for infants and young children, and supplemental foods for infants.” That would otherwise be known as Thailand’s implementation of the World Health Organization/United Nations Children Fund International Code of Marketing of Breast-Milk Substitutes.

Continuing with the attack on policies promoting children’s health, the report attacks several countries have introduced policies to reduce obesity among children and adolescents. In Chile, the government adopted a law that requires food products that exceed specified thresholds of sodium, sugar, energy (calories), and saturated fat “to bear a black octagonal ‘stop’ sign for each category with the words ‘High in’ salt, sugar, energy, or saturated fat.” The law prohibits corporations from advertising products that have at least one stop sign to children under the age of fourteen. The report explains this listing by claiming that this law has been costly for corporations.  (Odd, no mention of cost to the government or Chilean public of obesity-related childhood health problems.)

In Peru, a similar regulation “includes a mandatory front-of-pack warning statement on food labels for prepackaged foods that surpass an established threshold for sugar, sodium, and saturated fats, and for all food products that contain trans-fats. The Act also establishes restrictions on advertising and promoting such food products to children and adolescents.” The report labels this as a barrier to trade and asserts that it will continue to raise its concerns with Peru.

The report also gripes that it’s unfair that Malaysia – a predominately Muslim country – restricts the importation of alcohol, and that Brunei – another predominately Muslim country – requires that non-halal foods be sold in specially designated rooms.

Obviously, promoting bacon and booze sales in Muslim countries and sacking public health laws will solve our job-killing trade deficit. So why follow through on those “get tough on China trade cheating” pledges, or trade policy, or tackle the rules in our flawed trade deals that incentivize job-offshoring? Or, could it be that the Trump administration’s notion of “trade barriers” is coming from the same corporations that have shaped our past trade policies and, year after year, get the list of policies they dislike turned into the U.S. government’s list of other countries’ trade barriers requiring elimination?

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