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Rethinking Trade - Season 1 Episode 14: Did You Buy PPE Made by Uyghur Forced Labor in China?

China has 1.8 million Uyghurs and other Muslim ethnic-minorities locked up in concentration camps in western China. Others are being shipped all over the country as forced-laborers to a network of factories supplying Nike and a slew of other U.S. companies, including those producing PPE. You may be buying these products thanks to loopholes in U.S. trade laws that are supposed to ban the sale of forced labor goods.

On this episode we discuss efforts currently underway to end the exploitation of China’s Muslim political prisoners, the latest from the Xinjiang Uyghur Autonomous Region, and how good trade policies rooted in human and labor rights could prevent such nightmare scenarios in the first place. Learn more about the campaign at enduyghurforcedlabour.org.

Transcribed by Kaley Joss

Ryan: 

Welcome back to Rethinking Trade, where we don't just talk about trade policy, we fight to change it. I'm Ryan, and I'm joined once again by our in-house trade expert Lori Wallach. 

So Lori, Public Citizen is part of a campaign that was announced last week calling on brands and retailers to stop doing business in the Xinjiang Uyghur Autonomous Region (XUAR) of China. For those who don't know much about the situation, what exactly is going on there and why have 190 organizations across the world signed on to this call?

Lori:

So while a lot of the world is very focused, understandably, on the COVID crisis, an enormous human rights crisis is underway in the western part of China. The Chinese government operating out of Beijing has rounded up almost two million Muslims, many of them Uyghurs, a turkic ethnic group in the western part of China, and locked them up in concentration camps under the ostensible claim that they're ‘countering Islamic extremism.’

But the reality, just like the government in Beijing has attacked Tibetans, has attacked any group that has any notion of autonomy of its own culture, it is really a genocide against the culture and perhaps literally people are being killed. There is torture. These are concentration camps. And there's a lot of forced labor. People are being shipped across China from the camps, but even inside the camps there is forced labor, and horrifically a bunch of it is PPE. The New York Times had an exposé on that just this week. There were five plants in Xinjiang that produced PPE a year ago. There are now 51 plants making face masks, 17 of which officially are part of the forced labor operation. 

Ryan: 

For those of us in the United States, this is especially relevant also because a number of U.S. companies are actually benefiting from this system of forced labor. That is sadly not a new thing. When it comes to the Chinese government's labor abuses, they've often come as a result of collaboration between state and U.S. and other international firms, especially since China's entry into the World Trade Organization, right?

Lori:
Yes, that is unfortunately true. So just to put into perspective what's going on, there was another New York Times exposé in the beginning of March, March 1, that showed how many of these forced labor Uyghur workers are in a plant making Nike shoes. So throughout the supply chain of goods that can come into the U.S., thanks to China's entry into the WTO, without any conditions or any special human rights surveillance and with low tariffs, are goods that are being made by literally millions of political prisoners. 

And this is a crisis of such a scale that the U.S. Holocaust Museum Center for the Prevention of Genocide has recently determined there's a reasonable basis to believe that crimes against humanity are being committed there. Yet many U.S. companies are using this forced labor. The U.S. consumer to a large degree is either unaware, or if aware, has really no way to see that these products are kept out, or are distinguished under the current law since under WTO,  you can't really distinguish a good based on what's happening on a human rights basis, for instance. Now, there is legislation called the Uyghur Forced Labor Prevention Act, that's bipartisan, that is in the House and the Senate, that would just simply assume any goods coming from the Xinjiang part of China, the western part of China,  are likely to have forced labor content. It has a presumption, that can be rebutted, that any such goods from that region cannot come in because they're forced labor products. The company that wants to bring it in has to prove by clear and convincing evidence standard that the entire supply chain, not just their factory, is clean of forced labor. 

Ryan:

So, you kind of answered this but aside from the obvious fact that there's goods being produced in the Uyghur region and then sold elsewhere, what does this all have to do with trade policy and how have trade policies made the situation possible? But also, is this even legal under current trade rules? 

Lori: 

So, there is a chance that that law could get challenged at the WTO. But thank goodness the WTO enforcement system is basically not functioning at the moment because the U.S. is objected to the way it is not very fair or transparent.

So, the back story is that since the 1930s there has been law in the Tariff Act of 1930 that prohibits the import to the United States of goods “mined, produced or manufactured wholly or in part” by convict, forced or indentured labor. And obviously that's a very broad prohibition. The hitch was that the law had an exception called the Consumptive Demand, which basically allowed goods and services even if they were made by forced labor, if the good was not made in the U.S. in a sufficient supply to meet domestic demand, which basically guts the law. In 2016, President Obama signed a piece of legislation that closed that loophole. And as a result, ostensibly, it is now U.S. law that forced labor groups have to be kept out. And that change was actually motivated by child labor in the cocoa industry, in seafood, but also about what was going on in cotton, as well as what was not as extreme repression against Uyghur people, but already was some pretty dire circumstances in China and also in sub-Saharan Africa relating to cotton. So the Customs and Border Patrol has taken a few actions since that law

changed in the beginning of 2016, and it's certainly a lot better. I mean, there are like 40 actions in the 90 years of the original law with the exception and now there have been 15, 20 actions since. But the problem is, you under the law basically have to prove that there is forced labor. What the Uyghur Forced Labor Prevention Act would do is just simply presume— it would flip the burden of proof, so that Customs doesn't have to prove that a particular good, one by one, is made with forced labor and therefore meets the Trade Act of 1930 ban. But rather the presumption becomes, if it is coming from the basically Uyghur Autonomous Region, sometimes called the XUAR, then you presume it is forced labor, and the company has the burden of proving it's not. Which is to say, all that stuff will be stopped until a company can show it is clean. That would really put teeth into the existing law, because if customs had to prove product by product, you would not be able to make much of a dent. But if the Uyghur Forced Labor Prevention Act went into effect, that would just shut down the imports from the area with very few exceptions, and that would send a very strong signal to China, which is the least the U.S. can do, given the horrific circumstances that right now the government in Beijing is largely getting away with.

Ryan: And to close this out maybe, this sounds like policies that are designed to kind of put out fires after they've started. What would be some trade rules and enforcement mechanisms that would prevent these types of things from happening in the first place? You know, it shouldn't take a situation of this magnitude to take action on something as obviously wrong as, you know, forced prison labor. 

Lori:

It is a sad state of affairs that you need two million people in concentration camps being tortured, murdered, forced into labor, indoctrinated, stripped from their homes, young women bundled up onto planes and buses and shipped all over China where they don't actually speak the language of where they've been settled, they’re not allowed to go home. You would assume none of that would have to happen to have some rules of decency in the global economy. But unfortunately the way that the WTO and most of our free trade agreements work, there really is no floor of decency. There's no standard that says, “you can't have the benefits of this trade agreement unless you do X Y or Z.” 

Rather, they're written where, instead of having a floor, there's a ceiling. You can't distinguish between goods based on the human rights of the workers; you can't distinguish with the goods based on how much they're paid; you can't distinguish between the goods, as long as they're physically the same, according to their environmental impacts in the production process. That is a ‘bass-ackwards’ way of thinking about it. So, both for human decency and morality stopping forced labor, but frankly as well for the climate crisis that we face, we need to turn the rules the other way around, where we're seeing the standards for which every company and every country must comply in order to get the benefits of the trade rules and the labor standards in the news.

The labor standards in the new NAFTA make some attempt to do that in a very narrow way. And we will see, as an experiment, it's a baby step. It's certainly a step in the right direction, but it doesn't fix the problem. We will see how effective that approach is. But yeah, you just need to basically condition access into countries on meeting human standards for labor rights, human rights and the environment and safety.

 

And the thing is, those rules exist. It's not a matter of saying “Hey, you can't sell anything here unless you do everything the same way as U.S. law requires.” No, all of the countries that are also partners in trade agreements, are, as sovereign nations, signatories to things like the International Labor Organization's conventions that guarantee basic labor rights. They're all signatories, China included, to the United Nations’s two major human rights treaties, one on economic rights and one on political rights. It basically is going to take changing the rules, to give the human rules the priority over the commercial rules, because right now it's the other way around. And in fact, if the Uyghur Forced Labor Prevention Act were passed and the WTO were working, China probably could have declared an illegal trade barrier. So that makes it pretty clear as well as doing things like passing this emergency ban on these goods, we need to redo the rules of the global economy. 

Ryan:

Thanks so much Lori. If you're listening to this, take a look at the links in the description of this episode. There is a link to the campaign to end Uyghur Forced Labor in China. There's also a link to the house bill, the Uyghur Forced Labor Prevention Act.


Rethinking Trade is produced by Public Citizen’s Global Trade Watch. I would encourage you to visit rethinktrade.org as well as tradewatch.org to educate yourself and find out how you can get involved in the work we are doing to fight for fairer and more equitable trade policies.

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Hyperglobalization Undermines Response to COVID-19 Crisis

Latest Data Reveal Growing U.S. Trade Deficits in Ventilators, Masks and Other Coronavirus-Related Gear as Shortages Reemerge, Reflecting U.S. Overreliance on Imported Goods to Battle Pandemic

Public Citizen's Global Trade Watch released an updated series of trade flow and country-of-origin data infographics on medical goods used to battle COVID-19 ahead of tomorrow’s U.S. House Ways & Means Committee hearing on critical supply chains, trade and manufacturing.

The newest feature is:

In addition, the web feature includes updated data showing:

Decades of hyperglobalization have undermined our resilience against the COVID-19 crisis. Even into summer 2020, the U.S. still cannot make or get critical goods people need with shortages again emerging of personal protective equipment (PPE) as infection rates rise. More than 40,000 U.S. manufacturing facilities have been lost to 25 years of corporate-rigged trade policies that made it easier and less risky to move production overseas to pay workers less and trash the environment.

Having the world’s largest trade deficit year after year means the U.S. is extremely reliant on other countries to provide essential goods. As the COVID-19 crisis emerged in early 2020, U.S. government officials urged U.S. firms to expand exports to China of the limited U.S. domestic production of key medical goods instead of considering U.S. residents’ needs. Effective implementation of the Defense Production Act (DPA) to purchase and domestically allocate PPE, ventilators and more would have preempted the export frenzy we see in the data. Unfortunately, Americans are still in the dark about the extent to which these critical emergency powers have been used to control exports of critical supplies.

After decades of outsourcing and corporations buying up competitors to consolidate control of production sectors and shuttering “redundant” production facilities, many critical goods are now mainly made in one or two countries. When workers there fall ill or governments prioritize their own peoples’ needs before exporting goods away, a worldwide shortage of masks, gloves, medicine and more can quickly develop.

And, under current practices and policies, it’s hard to quickly increase production. Long, thin globalized supply chains mean parts needed to make any one product may come from dozens of countries. If one link in the chain breaks because it is difficult to source inputs and components from a specific country or region, it becomes impossible to scale up domestic production during a crisis. And, monopoly patent protections in many trade agreements expose countries to sanctions if they produce medicine, ventilators and more without approval by and payment to pharmaceutical and other firms.

With policymakers and the public distracted, corporate lobbyists are pushing for more of the same trade policies that hatched the unreliable supply chains now failing us all. Instead, we must fundamentally Rethink Trade. The goals should be healthy, resilient communities and economic well-being for more people – not the current priority of maximizing corporate profits.

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Rethinking Trade - Season 1 Episode 13: Trade-Related Job Losses Have Continued Under Trump

Despite Donald Trump’s 2016 campaign promises to “bring back jobs,” trade-related job losses have continued under the Trump administration. Under the Labor Department’s narrow Trade Adjustment Assistance program alone, 176,982 workers have been certified as losing jobs to trade since 2017. Trade-related job losses have been especially high in California, Michigan, Ohio, Michigan, Virginia, and Washington state.

On this episode we break down these figures and discuss Public Citizen’s Trade Adjustment Assistance Database, the online portal where you can search by zip code, state, company name and more for trade-related job losses across the United States. 

Transcribed by Mariana Lopez and Sarah Grace Spurgin

Ryan: 

Welcoming back to Rethinking Trade, where we don’t just talk about trade policy, we fight to change it. We are joined once again by our in-house trade expert, Lori Wallach. Despite promises to bring back jobs, trade-related jobs have continued under the Trump administration. Public Citizen just released some data about this, and I wanted to discuss that with you today, Lori, as well as the system through which we obtain this kind of data. Let’s start with the numbers. What’s in this new report?

Lori: 

What we found is that almost 180,000 workers were certified by the U.S. government as having lost their jobs to trade since the beginning of the Trump administration, just through the middle of 2019 (so it’s not even current data). That data is part of what’s called Trade Adjustment Assistance (TAA). It’s really a big undercount relative to what the total job loss to trade has typically been, because it only applies to certain kinds of jobs, and workers have to know to apply, and then you have to fill out a quite detailed form that proves your job loss is trade-related. So just under that TAA program, 167,982 have been certified under the Department of Labor as lost jobs to trade since the 2017 start of the Trump administration. And some states have gotten particularly walloped. The largest by far by number of job losses is California, but Michigan, Pennsylvania, Ohio are in the top five. And Virginia and Washington state are up in the top ones too. 

Ryan: 

These numbers look pretty similar to numbers from past administrations, but Trump of course is running around talking about how he’s bringing the jobs back and keeping jobs here to begin with. Shocking. But why are we still losing just as many jobs as before?

Lori: 

Well I think there are two different things. One is the trade policies themselves. So the new NAFTA, which Trump signed in 2018, was such a disaster—it wouldn’t have stopped job outsourcing and it would have locked in high medicine prices (there were new goodies for pharma)—that the renegotiation had to be renegotiated. So it was much delayed and only went into effect just now, July 1st. So we had, despite the promise of a quick new NAFTA, the old NAFTA in effect. There have been various trade sanctions against China and our trade deficit with China did decline, but unfortunately because of the big systematic problems, like currency cheating (the thing Trump promised to fix on day one of his presidency), well nothing has been done. So as a result, even though the trade deficit with China has gone down, it was kind of like squeezing a balloon. The deficit just moved over to Vietnam and other countries as compared to actually overall us having a smaller deficit and less jobs being lost to trade. So that’s number one on the trade front. 

Number two is that the President promised that they would stop giving government contracts to companies that were outsourcing jobs. And that would have been a huge incentive for a bunch of companies that are notorious job outsources to knock it off. But instead there was a lot of rhetoric about Buy American, hire American, but in reality, the campaign promises by Trump about no more government contracts to outsourcers has totally been ignored. So billions in government contracts have been awarded to Boeing, General Electric, United Technologies, and other firms that have been certified under that narrow database as outsourcing. So Given we know the TAA only covers the tip of the iceberg, it is pretty scary that even under that limited assessment, we seeing Boeing’s outsourced almost 6,000 jobs during the Trump administration (53 billion dollars in contracts), GE outsourced more than 1,000 jobs (6 billion dollars in contracts), United Technologies—that’s the company that Trump made such a big fuss about (“they’re not going to be allowed to outsource”)—1,000 jobs gone. They got 9 billion dollars in contracts. So both on the trade front and on the Buy American front, not a lot has actually changed. 

Ryan: 

Something significant to me in this story, and you just touched on it with the federal contractors that are still receiving federal contracts while continuing to outsource, is the role of Trump donors, meaning companies that have donated to Trump while also outsourcing jobs. Maybe you can talk about some of that stuff. And aren’t there rules against federal contractors outsourcing jobs? 

Lori: 

Well Trump promised there would be new rules that banned companies that got federal contracts from outsourcing jobs, but that’s not what happened actually. So there were things the administration could have done. For instance, Trump didn’t use—he failed to use the authority he already has under existing law to basically stop the throwing away of Buy American for corporations in countries that we have free trade agreements with or that are WTO procurement partners. And he also could have taken administrative action to basically condition, make one of the review topics for getting a government contract, the history of the company with outsourcing. But none of that was done. The result basically is, by not using authority under the Procurement Act of 1949 or the Trade Agreements Act of 1979, Trump didn’t use the authority he had with respect to those procurement outsources. And as a result these companies that, yes may have given him campaign contributions but for sure were outsourcing during his presidency, still got these very lucrative contracts. And that’s part of why you don’t see the numbers changing. 

Ryan:

Can we go back to talking about some of the specific data here? You’ve described the TAA database, you know, you’ve described this as being something as the tip of the iceberg. So there’s probably more, but maybe you could describe again some of the data and how significant it is?

Lori:

You bet. So this program, Trade Adjustment Assistance, if you apply for it and you get accepted, you get an extended unemployment benefits period, you can get retraining money, once it’s been proved you lost your job to trade. You can be trained for a new job. 

And the problem is there is about a two year lag, maybe a year-and-a-half lag when things are quick, so we don’t have the data for any of 2020. And we don't have all of 2019, we have about half of it. But even so, between 2017 and the beginning of 2019, 176,000 workers were certified by the Department of Labor as losing jobs to trade. And again, the reason it’s an undercount is number 1) it only covers certain kinds of jobs. So depending on what role you had in a factory or what sector you were in, but number 2) workers need to know to file, so either if they had a union or the company did it, but it’s kind of a pain in the butt, because there’s a lot of information. 

Now it’s a good program, I suggest people try and file with their State Department of Labor, but you have to provide a certain amount of data to be able prove your case that you’re trade related loss. Yet, even with only really the 2017-2018 data, we see almost 180,000 jobs, but for instance you see 16,000 of those came out of California, but then almost 10,000 from Michigan. Almost 10,000 from Virginia, Washington state 9,000. Pennsylvania almost 9,000. Ohio 8,000+. Illinois 8,000+. Georgia and Texas both around 8,000. And it is North Carolina, 6,000, if that’s the tip of the iceberg of the ongoing job loss to trade under Trump, the prospect of what we’re going to see through 2020, much less just even the full damage of his first 2 years, is a lot bigger.

And that is not what was promised up when Trump said he was going to quickly get rid of the trade deficit and quickly bring back lots of jobs and stop outsourcing. 

Ryan:

That’s a lot of jobs. And it sounds like a lot of data. Maybe you could tell folks how they can access this data? And also I know there's an interesting story of public interest legal success in the fact that we even have access to this data. Maybe you could talk about that for a little bit as well.

Lori:

So the Trade Adjustment Assistance data, anyone can look at. Go to our website, tradewatch.org, go to the Trade Data Center, and you will see a box to click on to get to the TAA database. 

We have gotten the raw data from the Department of Labor under a standing FOIA settlement- Freedom of Information Act settlement, so that we make it searchable. So up until the last couple of years, the data was only available literally on PDFs, scanned in paper copies of often handwritten applications. And so it was impossible to search. You couldn’t aggregate the numbers, you couldn't break it up by state, it was just useless. 

So back in basically 1996 or 1997 we settled the FOIA lawsuit with the Department of Labor trying to get the raw data so we could actually search it, and try and tabulate the trends, and so every quarter since then we’ve received the raw data from the Department of Labor and we hired someone to build a searchable database. So that people can put in your zip code, you can put in your Congressional district, you can put in your town’s name and your state, you can put in the name of a company, you can put in a sector, the economic sector, it’s searchable in lots of different ways. You can do it by map and drag out an area, a town or state where you want to see what happened. You can get all the data mapped, but you can also download, anyone can get an Excel file so you can actually search. That’s how we can basically quickly keep tabs on everything. 

Now again, it’s a year-and-a-half to two years behind when the job loss happens before it goes through the process and gets certified. So if you’re looking and you know in your hometown, ‘I remember that outrageous outsourcing to Mexico that happened right around Christmas 2019-- why isn’t that in there?’ like the Carrier case, the United Technologies case, that Trump made such a big deal about and the jobs went anyway, that’s not in there because it’s such a lag.

So you know if you can remember something that really pissed you off about job outsourcing in 2018, type in the name of the company, type in your town, and you find it. Anyone can use it, it’s free to use, and yes because we basically sued under the Freedom of Information Act, Public Citizen's lawyers were able to make this data not just available but searchable, so useful to everybody. And it basically puts the truth to many president’s, including this one, claims of how these agreements would create jobs, not lose jobs, and you can actually look at the data of what happened and you can look at X town and 100,000 jobs in a state over the period of NAFTA. 

For instance, things you wouldn't expect, El Paso, Texas is the number one NAFTA job loss impact location. You’d expect it to be Detroit. Nope, actually, in small geographic area El Paso has more concentrated job loss. Or you can do it by sector. You can do it by time. So if you know from your town that’s been clobbered by these race-to-the-bottom corporate-rigged trade agreements, you want to go see your member of Congress who has been a little shady on whether or not we should replace our failed trade model, you can run your zip code, you can run your Congressional district, and you can have the list. And the list will say the date, the company, the address. 1,000 jobs, 800 jobs. 5 jobs. 4,000 jobs. And it lets you actually know the real people who were affected by these failed trade agreements and why we have to fight to replace them.

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House Trade Subcommittee Chair Blumenauer Shines Light on Consumer, Environmental, Animal Welfare Threats in U.S.-UK Pact

By Melanie Foley

The June 17, 2020 House Ways and Means Committee of the U.S. House of Representatives hearing with U.S. Trade Representative (USTR) Robert Lighthizer featured a very important exchange on trade pacts and regulatory standards. Ways and Means Trade Subcommittee Chair Earl Blumenauer (D-Ore) said to the USTR:

 

Currently, the United States spends too much money subsidizing large corporations and doesn’t adequately help the majority of small and mid-size farmers. And it subsidizes manufactured food at the expense of fresh, healthy food. We’ve entered into phase two of our agreements with the United Kingdom. I hope that our negotiators can focus on tearing down protections and barriers to trade, like quotas and price control measures, and spend less political capital on areas where our countries may have reasonable policy differences.

I think too often we hide behind requiring “science-based” justifications for other nations’ sanitary or phytosanitary measures without allowing flexibility on values and public inquiry. Many large agricultural interest folks point to scientific studies on pathogen rinses for poultry. You know, maybe we should be asking about our production process that requires us to wash chickens in chlorine in the first place. Can’t reasonable people have concerns about slaughterhouses in the United States? Anybody who has watched the news recently understands that the United States policy on slaughterhouses needs a much closer review.

With pesticides, our regulations do not set a high enough standard to determine their effects on our environment, and how those environmental effects impact our health. Should we really export our weak standards to another country, who has legitimate public policy concerns and may provide better protection? For genetically modified wheat or meat, altered by growth hormones, is it possible in a democracy where consumers have input might choose to restrict these practices other than interfering with American commerce?

As with all negotiations, there are some priorities that we will push harder than others, but I would hope you will focus your attention and that of your team on protectionist hurdles for our farmers, rather than areas of legitimate policy differences. American families need national and international agricultural policies that address our common welfare and allow for targeted regulations that promote health, address climate change, and put people ahead of corporate interests. I would hope that you and your staff would be willing to help us explore these differences to determine where there are legitimate policy differences, rather than simply protectionist impacts. Would it be possible for us to work with your team to explore this?

Rep. Blumenauer described in detail how this FTA could lock in lax U.S. food safety standards — on massive agribusiness subsidies, pesticides, slaughterhouses, chlorinated chicken and more — and export these to the United Kingdom.

This position reflects decades of trade policy that preceded the World Trade Organization (WTO). Namely, if a domestic regulatory policy does not discriminate against foreign goods – by providing less favorable treatment to imports relative to domestic goods – why should trade agreements meddle with that domestic standard?

To put it another way, if citizens in a democratic process decide that they want laying hens or livestock treated humanely or want genetically-modified and non-GMO goods separated and labeled so consumers can choose, why should trade agreements label such policies illegal and require their elimination in the face of trade sanctions?

Lighthizer’s response was unfortunate:

On this issue of agriculture, I’ll repeat what I’ve said before. Number one, agricultural policy is set by the United States Congress, not by the U.S. trade representative. So, the issues you raised I know are difficult issues and are being fought out in Congress. And Congress will come to some conclusion and I’ll be guided by what Congress says. For right now, the reality is that for what we want and what we insist from our trading partners is equal access, fair access based on science. The difference between big and small corporate farmers, I don’t know much about that. I would say that the United States has the best agriculture in the world. It has the safest, highest standards. We shouldn’t confuse science with consumer preference. If consumers have a preference for one thing or another, they should certainly exercise their preference, but it is not the role of the U.S. trade representative to change agriculture policy. I am dictated that by the agriculture department, but mostly by the United States Congress. So, what I’m going to do is try to insist on science-based restrictions and to the extent there are restrictions that are not science-based we will object.

At a Senate Finance Committee hearing later that same day, Lighthizer doubled down on his commitment for so-called “science-based” standards, saying:

They now, in terms of some maximum [pesticide] residue levels, they actually have: if there’s any detection at all, the product is unacceptable. To me, that is just plain protectionism. And making every regulation science-based is the equivalent of getting rid of protectionism. It’s the equivalent of getting rid of any other non-tariff trade barrier, and it's something I’d wish, if anything, I would say Europe is going in the wrong direction, not in the right direction. They’re being controlled by protectionist interests, and well, let me just leave it at that. Protectionist interests.

In my judgement, we have to insist on science-based standards, for our farmers, and I would say this, this standards thing is not just an ag issue, right. I mean they’re using standards in industry too. It’s a higher art in ag, but they use it in industry too. We have to insist on it, and to the extent people deny us access, we shouldn’t give them a trade agreement, and if we don’t have a trade agreement, in my judgment, we ought to be taking trade actions against them. And I’m looking right now at whether or not right now some of these actions, I want to consult with you and your staff, whether or not right now we shouldn’t be looking at a 301 on some of these things. It’s getting so far out of control where they say, literally, if there’s any detectable residue, the product is unacceptable. That’s just nothing to do with science…

One of the things, on the UK, you know on this rinse on poultry, this so-called chlorinated chicken, that these people have, it’s going to be a huge problem. And I’ve made it clear that this is not going to be an agreement, that I’m bringing back an agreement to the United States Congress that excludes our agricultural products on a nonscientific basis.”

Lighthizer’s perspective represents U.S. agribusiness. Blumenauer’s perspective has a much larger base of support – not just his constituents in Oregon, but many U.S. and UK consumers.

In a recent joint letter, dozens of U.S. and UK labor, environmental and other organizations expressed their concerns that an FTA could pose risks food safety, digital privacy, animal welfare, financial regulation and much more.

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USTR Says No ISDS in US-UK Free Trade Agreement

By Melanie Foley

At a June 17, 2020 hearing of the Ways and Means Committee of the U.S. House of Representatives, Rep. Lloyd Doggett (D-Texas) asked the U.S. Trade Representative Robert Lighthizer an important question. Doggett, one of Congress’ leading critics of the controversial Investor-State Dispute Settlement (ISDS) regime, inquired: 

Do you envision in the agreements that you're currently negotiating to maintain the progress that we made in the USMCA with regard to dispute resolution so that when we're dealing with a developed country like the United Kingdom, we rely on a mature legal system rather than a closed dispute resolution system following the precedent that you set in Canada and which is applied successfully in Australia?

The reply from Lighthizer, the administration’s top trade official, was one word: “Yes.”

In layman’s terms, this exchange confirms that ISDS will NOT be part of the U.S.-United Kingdom Free Trade Agreement (FTA) that is currently being negotiated!

ISDS grants rights to multinational corporations to sue governments before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits, on claims that a nation’s policy violates their rights. Their decisions cannot be appealed.

With ISDS included in many trade and investment agreements, more than 1,000 ISDS attacks have been launched against climate, financial, mining, medicine, energy, pollution, water, labor, toxins, development and other non-trade domestic policies. Taxpayers have shelled out millions or even billions of taxpayer dollars to corporations in individuals ISDS awards. Some countries have revoked democratically enacted policies in order to reduce their payouts or settle a case. 

ISDS being off the table in U.S.-UK trade talks is a major victory for the vast, international movement that has been fighting ISDS for decades. It reinforces that the U.S. rollback of ISDS in the revised North American Free Trade Agreement (NAFTA) represents a new U.S. policy that will carry forward. ISDS was largely eliminated in the new NAFTA. (The original 1995 NAFTA was the first trade pact to include ISDS.)

The United States has historically been a leading proponent of this system and forced it on its trading partners.

But public outrage over ISDS has been growing for years and was a significant reason why the Trans-Pacific Partnership (TPP) could not get close to majority support to pass the U.S. Congress. The unusually large, bipartisan votes in the House and Senate for the new NAFTA set a new standard that to be politically viable, U.S. trade pacts can no longer include extreme ISDS terms.

One important part of Doggett’s question was that he specifically mentioned the ISDS provisions of the new NAFTA with respect to Canada. The new NAFTA totally eliminates ISDS between the United States and Canada, a change that goes into effect on July 1, 2023, three years after the new NAFTA went into effect. Between the United States and Mexico, ISDS is significantly scaled back. The revised pact eliminates the extreme investor rights relied on for almost all payouts, but allows a small group of U.S. oil and gas companies that have contracts with a specific Mexican government agency to still make claims related to those contracts using the most dangerous ISDS rights. Doggett clarified, and Lighthizer confirmed, that this will not be the approach with the United Kingdom.

Lighthizer did not comment on whether ISDS would be a part of ongoing trade negotiations with less developed countries. This is of note because Kenya started FTA talks with the United States just last week. Nearly 7,500 public comments were submitted to the U.S. government urging an approach to Kenya trade talks that puts people and the planet first, including by excluding ISDS.

And, the ISDS threats still looms large because there are thousands of existing agreements that include the corporate-favoring tribunals. Indeed, countries around the world are under a potentially devastating new ISDS threat. The law firms that profit enormously from the ISDS system have been advertising to multinational corporations about the lucrative opportunities to use ISDS to attack government actions to address the COVID-19 pandemic.

The law firms have specifically targeted pandemic policies such as restrictions on business activities to limit the spread of the virus and protect workers, requirements for manufacturers to produce ventilators, mandatory relief from mortgage payments or rent for households and businesses, measures to ensure access to clean water for hand washing and sanitation, and more.

Specialist law journals have speculated that “the past few weeks may mark the beginning of a boom” of ISDS cases.

That’s why more than 600 labor, consumer, environmental, development and other civil society organizations from around the world are sounding the alarm. These groups sent a letter in July to heads of government worldwide urging action to avoid this new ISDS threat. They outlined an array of practical steps governments could take to immediately suspend the use of ISDS over pandemic response measures, as well as to put an end to the risks of all ISDS cases forever.

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Rethinking Trade - Season 1 Episode 12: The New NAFTA: Only Improvements on Paper or Real Change?

Last week we discussed the new North American Free Trade Agreement and some of the key improvements we won after years of organized public pressure. The new NAFTA took effect on July 1st. The text requires significant new labor rights and includes strong enforcement. But corporations paying Mexican workers starvation wages are conspiring with right wing Mexican state officials to thwart any real change. The Mexican national government is not stepping up, and the new Mexican labor law is pinned down under a barrage of legal attacks.

In this episode, we breakdown some of these hurdles and discuss how political pressure, grassroots campaigning, and civil society monitoring efforts are needed to translate the new NAFTA’s improvements on paper to real material differences in workers’ lives.

Transcribed by Kaley Joss

Ryan:

You're listening to rethinking trade with Lori Wallach. Welcome back to Rethinking Trade, where we don't just talk about trade policy, we fight to change it. I'm Ryan, and I'm joined once again by our in-house trade expert Lori Wallach. 

So, Lori, last week, we discussed the new North American Free Trade Agreement, the USMCA, and talked about the campaign to improve it. Anyone who follows the campaign knows that there's a lot that still needs to be done to make some of the deal’s improvements real, especially on the labor front. So, for starters, maybe you could just give us an overview of what some of those changes are, and then we'll get into how they might happen. Lori:

So the new NAFTA can be looked at as having two sets of changes: bad things that were in there that got whacked, like investor-state dispute settlement, and then potentially useful things that got added, like the new labor standards and perhaps most importantly their enforcement through a system called the “rapid response enforcement mechanism” on paper.

Those new labor standards and enforcement mechanisms are definitely an improvement over the old NAFTA, which had non-binding labor-side agreements that, even if they were ever used properly, couldn't result in any real enforcement. The trick is going to be the enormous amount of pressure, campaigning and monitoring that will be necessary to translate these improvements on paper into real improvements for workers' lives in Mexico or in the U.S..

So you know, the first thing to think about is what actually has to be done to set up this new mechanism and whether it's on track. Then second of all, what are the cases? How are we actually going to see things change on the ground? 

Ryan:

So while we're on the topic of things on the ground, let's talk about two of the elephants in the room—that's the case of Susana Prieto Terrazas and also the onslaught of lawsuits challenging Mexico's labor law reforms that are now moving. 

Lori:

So, you know the way these things work together is that the new NAFTA required certain changes in Mexico's domestic labor law that basically implemented changes made to Mexico's constitution in 2017. Among those things were guaranteed reviews of all existing contracts made by unions, because of existing, corrupt employer-protection unions who are hired to protect the boss. They've registered contracts that lock in low wages and bad working conditions. So, under the new Mexican labor law that the new NAFTA requires in four years, every one of these old contracts has to be reviewed, and either voted by the workers in a secret ballot vote to be continued or replaced by a real contract that represents workers interests. And, the new labor law requires the right to see the contract before there's a vote, which was not the case in the previous law. Now, the workers who are going to live under the contract take it to approve it, which was not the case before. A lot of these old protection contracts are completed before the first workers are even hired. And then finally, the ability to have accountability over the union officials that workers are represented by with respect to budgets of the Unions, etc.. The thing that's very worrisome is there are now over 600 challenges in the Mexican court system against implementation of that new labor law. And they're almost all filed by these corrupt protection unions, who cynically, disgustingly are claiming it violates basic workers rights and the ILO (International Labour Organization) conventions to make these reforms efforts effect fully the ILO conventions. The cases have been working their way up towards the Supreme Court of Mexico. At a certain point a few months ago, a body that is part of the federal judiciary system in Mexico concentrated all the cases in particular courts. The Supreme Court, who knows when though, but they will decide in the interim. The law is kind of on hold. It definitely doesn't apply to a bunch of the fake contracts that have effective injunctions against them, but it could be all thrown out as unconstitutional.

Second problem is that there is hands-on obstruction of these new rights, even when they are not under challenge, and that includes the case of Susanna Prieto. We've talked about the situation before she was arrested under trumped-up fake charges of causing a riot relating to her excellent work to try and actually file in the labor court, the certification of a new union that got rid of a fake old union. She's a lady who is very well known in Mexico, because she's the person who helped workers get real wage increases last year in the border maquiladora factories and Juarez, Matamoros. She also helped workers fight to get COVID protection safety in the workplace this year, and then she was swooped up in jail. She was denied bail punitively and repeatedly. It was not safe, obviously. Like in the U.S., Mexican jails have COVID issues. And then, her third bail hearing was July 1, the day the new NAFTA went into effect. And instead of having a bail hearing, the prosecutor said we have got a deal for you: We’ll let you out of jail, but only if you promise not to go back to the city where the workers you represent are and never go back to the labor Court. The labor court is where you would need to visit to file for workers’ rights and against this temporary suspension of her arrest. It's sort of like a plea bargain, how she is currently out of jail, but in a condition that is totally outrageous and undermines the ability for workers to have the basic labor rights, which are not just required in the new NAFTA, but provided for in Mexico's constitution and in their laws.

Ryan: 

And can these labor abuses, in the case of Susanna Prieto, could those become a case under the new NAFTA? 

Lori:

Well, it's worth understanding a little bit about how that rapid response system works, a little bit of nuts and bolts. The quick answer is yes, it probably could be, but the way this works under this system is that usually when you enforce a trade agreement, one country sues another country, it goes for tribunal and takes years to get to the end result. And then typically the enforcement is trade sanction tariffs against a country for violating a provision. The problem with that in the labor situation is that the actual companies who are doing the bad stuff are not feeling any pain directly. 

So, the rapid response system, basically, is set up so that if a country, say the U.S., files a complaint with Mexico saying “Hey, this situation with Susana Prieto is a violation of the following provisions of NAFTA,” and given a particular company has been involved, say there's a particular company for which she was trying to file this new Union, that company would be implicated. Then Mexico has a certain number of days to respond and they can either say “Hey, that's not what really happened” and try to make the U.S. back down, or they can cure it and fix the problem.

Then the U.S looks at the response and either says, “Okay, it's fixed” or, “I guess there's not a problem,” or the US can say, “No, not buying that” and file the next step (which is basically like a formal claim). It gets heard by a tribunal of Labor experts which is not the usual ‘trade lawyers make the decisions,’ which is good. It's much quicker—it's not quick, but it's much quicker than the normal years and years. And in the beginning this tribunal has the right to go to Mexico to investigate and interview in Mexico. The Mexican government's required to provide them access, and then this tribunal can order, in the first instance of a violation, that the company involved either directly be hit with trade sanctions or fines. And then if it's ongoing, they can have their products denied access into the U.S., just literally blocked on the border. So there is some real threat there. There are all kinds of curly cues of where things can go awry, and it’s not super speedy, but it's like a six-month process. So that could become one of the first tests of whether or not the new NAFTA’s labor standards and enforcement have teeth, outside of the sort of official response mechanisms and monitoring efforts. 

Ryan:

Maybe to close us out for this episode you could talk about some of the ways in which labor unions, civil society organizations and progressive groups here can play a role in making sure that some of these new standards and requirements are respected and enforced?

Lori:

Well to quote Frederick Douglass, “Power concedes nothing without demand.” So we are going to have to keep a really bright spotlight on the situation and have continuous pressure on both the U.S. government to take the necessary actions, but also, with our partners in Mexico, on the Mexican Government to implement all of these commitments. And you know, our counterparts in Mexico are going to be doing their best to help these cases and fight for their rights, but it is only going to really be a successful use of the gains in the new NAFTA if workers and activists and frankly members of Congress in all of North America are united together trying to improve standards for workers throughout the hemisphere, which first and foremost starts with workers in Mexico finally having real rights to form a union and fight for better conditions and higher wages. 

Ryan:

That's all for today. Thank you all for listening. Rethinking Trade is produced by Public Citizen’s Global Trade Watch, where we don’t just talk about trade, we fight to change it. Visit rethinktrade.org today to get involved in our campaigns and help us fight for global economic justice.

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Press Conference: Labor Activist Susan Prieto and U.S. Rep. Jesús “Chuy” García (D-Ill.)

Press Conference: Mexican labor activist Susana Prieto joined U.S. Rep. Jesús “Chuy” García to demand an end to ongoing labor abuses that undercut the U.S. and Mexican presidents’ celebration of the new NAFTA.


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Mexican Labor Activist Susana Prieto, on Eve of Possible Reimprisonment, and U.S. Rep. Chuy Garcia (D-Ill.) Call on Mexican President AMLO and President Trump to Remedy Ongoing Worker Abuses and Low Wages

Celebration of New NAFTA Premature: It Won’t Help Workers Absent Action to Translate the Labor Rights in the Text into Change on the Ground

 

WHAT:     On Weds., July 8th at 11 a.m. EDT/10 a.m. CDT, Mexican labor activist Susana Prieto will be joined by U.S. Rep. Jesús “Chuy” García (D-Ill.) to demand an end to ongoing labor abuses that undercut the U.S. and Mexican presidents’ celebration tomorrow of the new North American Free Trade Agreement (NAFTA). Prieto, a prominent labor lawyer representing exploited workers in Mexico-Texas border maquiladora factories, was released on July 1 after being held without bail for three weeks on trumped-up charges of “mutiny, threats and coercion” after trying to register an independent union to replace a corrupt “protection” union. Her case reflects myriad labor abuses throughout Mexico, where workers fighting for independent unions, better wages and COVID-19-safe workplaces face ongoing abuse and resistance. The conditions for Prieto’s release, including a 30-month internal exile, are designed to end her representation of Matamoros workers seeking independent unions and intimidate workers nationwide seeking to exercise their labor rights. She must end her Matamoros labor organizing, not leave Mexico, and relocate to the state of Chihuahua, where a prosecutor issued new warrants for her arrest. Prieto helped workers win higher wages last year while fighting for independent labor representation that the new NAFTA is supposed to promote. Recently she helped workers demand COVID-19 safety protections after many died from workplace coronavirus exposures. After decades of worker intimidation, Mexican manufacturing wages are now 40% lower than those in China. More background on Prieto is available, here.

WHEN:    11 a.m. EDT/10 a.m. CDT/9 a.m. Juarez time, Weds., July 8

 

WHO:       Susana Prieto Terrazas, Mexican labor lawyer

U.S. Rep. Jesús “Chuy” García (D-Ill.)

Lori Wallach, director, Public Citizen’s Global Trade Watch (moderator)

 

WHERE:  To register for the press conference: https://cutt.ly/koN4s49

                  (You must register in advance to get the zoom link for the event)

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Law Firms Are Recruiting Corporations to Attack COVID-19 Policies in ISDS ‘Corporate Courts,’ Warn 600-Plus Civil Society Groups From 90 Nations

Corporations Could Claim Billions From Taxpayers in ISDS Cases Against Pandemic Protections

The threat of Investor-State Dispute Settlement (ISDS) claims from multinational corporations for compensation from taxpayers for governments’ COVID-19 responses is dire, warned more than 600 labor, consumer, environmental, development and other civil society organizations today in a letter to heads of government worldwide.

In the letter, the groups revealed that numerous law firms specializing in ISDS lawsuits attacks are trolling for multinational corporations to attack government actions, such as restrictions on business activities to limit the spread of the virus and protect workers, requirements for manufacturers to produce ventilators, mandatory relief from mortgage payments or rent for households and businesses, measures to ensure access to clean water for hand-washing and sanitation, and more.

Specialist law journals have speculated that “the past few weeks may mark the beginning of a boom” of ISDS cases. As governments are taking urgent actions to stem the COVID-19 pandemic, save lives, protect jobs, counter economic disaster and ensure people’s basic needs are met, some law firms are advertising about the opportunities to use ISDS to profit from these necessary government actions.


The controversial ISDS mechanism is written into many trade and investment agreements and grants rights to multinational corporations to sue governments before a panel of three corporate lawyers. These lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits, on claims that a nation’s policy violates their rights. Their decisions cannot be appealed.


The 630 organizations are calling on governments to take practical steps that would immediately suspend the use of ISDS over pandemic response measures, as well as to put an end to the risks of all ISDS cases forever. Organizations signing the open letter include:

  • Major U.S. labor and civil society groups, including the AFL-CIO, Sierra Club, Public Citizen, United Auto Workers (UAW), NRDC, United Brotherhood of Carpenters, Communications Workers of America (CWA), Methodist Board of Church and Society and the Presbyterian Church USA;
  • International and regional union confederations including the International Trade Union Confederation, Public Services International, IndustriALL, the Trade Union Confederation of the Americas, and the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF);
  • International environmental and development groups such as Oxfam, Greenpeace, Friends of the Earth International, Action Aid, Third World Network, the European Environmental Bureau, the Asian Peoples’ Movement on Debt and Development and the Arab NGO Network for Development; and
  • Global health networks such as the Médecins Sans Frontières (Doctors Without Borders), Peoples’ Health Movement, Access Campaign and the International Treatment Preparedness Coalition.

View the letter and the full list of signatures.

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As Mexican President Comes to D.C., Abuse of Mexican Labor Activist Susana Prieto Escalates, Casting Pall on New NAFTA

Prieto’s July 1 Prison Release Conditioned on 30 Month Internal Exile, End of Her Matamoros Labor Organizing, Not Leaving Mexico and Relocation to Chihuahua Where Prosecutor Has Issue New Warrants for Her Arrest

The extreme conditions imposed in exchange for Mexican labor lawyer Susana Prieto Terrazas’ July 1 release from jail after three weeks of imprisonment on trumped-up charges undermine the labor rights guaranteed by the new North American Free Trade Agreement.

Prieto revealed the conditions imposed on her for the next two and a half years:

  • Banishment to the state of Chihuahua, meaning the end of her labor activism in Matamoros, which is in Tamaulipas;
  • A ban on visiting the Labor Court where independent unions would be certified;
  • A ban on leaving Mexico; and
  • Payment of “reparations” for emotional suffering by government officials who were present when workers protested outside the Labor Court.

Additionally, on July 4, Prieto announced that two arrest warrants had been issued for her by a prosecutor in Chihuahua, where her release order required her to relocate on July 5. “Confirmado. Tengo dos ordenes de aprehension en Chihuahua. La Carcel que me impone ilegalmente la jueza de Tamaloupis,” she posted on Facebook. [Confirmed. I have two arrest warrants in Chihuahua. The prison that the judge of Tamaloupis illegally imposes on me.]

The legal process that resulted in her release – called a suspensión provisional del proceso (provisional suspension of the process) – has never been used in Mexico in the context of labor rights or human rights advocates. Its use in this context sets an extremely dangerous precedent for labor rights and human rights in Mexico. The process is akin to a plea bargain, and in the past has been used to suspend criminal charges pending completion of probationary terms and payment of restitution.

Prieto , a key advocate for exploited workers in border maquiladora factories in Matamoros and Juárez, was held without bail for three weeks on trumped-up charges of “mutiny, threats and coercion” after trying to register an independent union to replace a corrupt “protection” union in Matamoros. Growing outrage about a jailed Mexican labor activist, bogged-down labor reforms and threats to Mexican workers pressured to return to factories plagued by COVID-19 was not the scenario the U.S., Mexican or Canadian governments imagined for July 1, the date the revised North American Free Trade Agreement (NAFTA) went into effect.

U.S. fair trade activists delivered the letter to Mexican consulates nationwide on July 1. After decades of worker intimidation, Mexican manufacturing wages are now 40% lower than those in China.

Prieto became well-known in Mexico for helping maquiladora workers win higher wages in factories along the Texas border last year as part of a growing independent labor movement. Recently, she supported workers demanding COVID-19 safety measures after dozens of maquiladora workers died from workplace coronavirus exposure. Wildcat strikes and mass protests have grown throughout the border region as U.S. companies and officials push for plants to reopen without safety measures. At June 17 hearings, members of Congress raised concerns about Prieto’s arrest with the U.S. Trade Representative, who confirmed he was closely following her case and found it a “bad indicator” of compliance with NAFTA’s revised labor standards. Prieto livestreamed her arrest as she tried to register the Independent Union of Industrial and Service Workers “Movimiento 20/32,” chosen by workers to replace a “protection” union. Last week, Prieto’s daughter delivered a letter from U.S. unions and civil society groups to the Mexican National Human Rights Commission seeking help on Prieto’s release.

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Launch of New NAFTA Marred by Detainment of Mexican Labor Activist, Hundreds of Court Challenges Against New Labor Law

Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch

Note: The revised North American Free Trade Agreement (NAFTA) goes into effect today, July 1. The U.S. Senate passed the new NAFTA in January 2020 by a margin of 89 to 10 after the U.S. House of Representatives voted by a margin of 385 to 41 in December 2019.

On paper the new NAFTA –with improved labor terms added and extreme Big Pharma monopolies and ISDS investor rights removed – is better than the original, but it won’t benefit people unless it’s effectively enforced.

It’s a terrible start that on Day One of a deal Trump said would transform trade, a leading Mexican labor lawyer has spent weeks in jail on trumped up charges for helping workers use USMCA’s labor rights and Mexico’s new USMCA-compliant labor law is bogged down by hundreds of lawsuits aimed at derailing it.

Maybe Trump hoped to distract from myriad failures by spotlighting the new NAFTA on July 1, but it’s also the date that 100 of the 600 legal challenges against the pact’s labor rights rise to Mexico’s Supreme Court and Susana Prieto, a famous Mexican labor lawyer detained for weeks for helping workers organize a union, has a high visibility hearing.

Meanwhile, Trump’s claims that the new NAFTA will restore hundreds of thousands of manufacturing jobs have proved baseless as U.S. auto firms announced plans to increase production in Mexico from Ford’s Mustang electric SUV to GM closing U.S. plants and moving popular vehicle lines to Mexico. But the U.S. Department of Labor has certified more than 175,000 Americans as losing jobs to trade during the Trump administration’s first years while the NAFTA trade deficit jumped 88% under Trump.

The new NAFTA’s greatest impact may be that it began a long overdue rethink of the U.S. trade-pact model. The unusually large, bipartisan congressional votes on the new NAFTA showed that to be viable today, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopolies for Big Pharma and must have enforceable labor and environmental standards. The 2016 Trans-Pacific Partnership, which failed these tests, never got close to majority congressional support.

Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as crafting a good trade deal that creates jobs, raises wages and protects the environment and public health. The new NAFTA is not a template, but rather sets the floor from which we will fight for trade policies that put working people and the planet first. Any new trade deals must include climate standards, stronger rules to stop race-to-the-bottom outsourcing of jobs and pollution, and enforceable rules against currency misvaluation and not limit protections needed to ensure our food and products are safe, our privacy is protected and big banks do not crash the economy.

BACKGROUND INFO

Susana Prieto Terrazas, a well-known Mexican labor lawyer, has been locked up since June 8 for trying to use the core labor right guaranteed by the revised NAFTA and Mexico’s new labor law; a July 1 hearing is scheduled after several punitive bail denials. Prieto, a key advocate for exploited workers in border maquiladora factories in Matamoros and Juárez, has been held without bail for three weeks on trumped-up charges of “mutiny, threats and coercion” after trying to register an independent union to replace a corrupt “protection” union in Matamoros. Prieto became well-known in Mexico for helping maquiladora workers win higher wages in factories along the Texas border last year. Recently, she supported workers demanding COVID-19 safety measures after dozens of maquiladora workers died from workplace coronavirus exposure. Wildcat strikes and mass protests have grown throughout the border region as U.S. companies and officials push for plants to reopen without safety measures. Dozens of members of the U.S. House of Representatives sent a letter yesterday demanding Prieto’s release. At June 17 hearings, members of Congress raised concerns about Prieto’s arrest with the U.S. Trade Representative, who confirmed he was closely following her case and found it a “bad indicator” of compliance with NAFTA’s revised labor standards. Prieto livestreamed her arrest as she tried to register the Independent Union of Industrial and Service Workers “Movimiento 20/32,” chosen by workers to replace a “protection” union. Last week, Prieto’s daughter delivered a letter from U.S. unions and civil society groups to the Mexican National Human Rights Commission seeking help on Prieto’s release. U.S. fair trade activists will deliver the letter to Mexican consulates nationwide on July 1. After decades of worker intimidation, Mexican manufacturing wages are now 40% lower than those in China. The Department of Labor has certified more than one million U.S. jobs (1,015,948) as lost to NAFTA just under one narrow retraining program called Trade Adjustment Assistance, which represents a significant undercount of total jobs lost.*

The first 100 of 600 challenges to Mexico’s new labor law will hit Mexico’s Supreme Court on its July 1 reopening. The new NAFTA requires that “protection” contracts signed by unions not elected by workers all be reviewed and that contracts be approved directly by workers within four years after the revised NAFTA goes into effect. This requirement is at the heart of the reforms to Mexico’s labor laws enacted on May 1, 2019. Under the new labor law, workers in Mexico could finally have legal protections to fight to raise abysmally low wages. This would also reduce incentives to outsource U.S. jobs to Mexico, benefiting U.S. workers. Within weeks of the new law’s enactment, hundreds of corrupt local “protection” unions and other interests opposed to reform began to file what are now more than 600 lawsuits, which both try to block the law’s application to specific union contracts and workplaces and to gut the law altogether on grounds that it is  unconstitutional. Mexico’s judiciary has been out of session since mid-March for COVID-19 precautions. On July 1, the court system goes back into operation, with the first 100 challenges hitting Mexico’s Supreme Court. If the court rules against the challenged terms, Mexico will be in violation of NAFTA labor obligations that are essential if the new deal is to slow U.S. job outsourcing. This memo has the latest updates on the cases

The Department of Labor has certified 176,982 trade-related job losses during Trump’s presidency, and the manufacturing sector is hurting. Under the narrow Trade Adjustment Assistance worker training program alone, 176,982 workers have been certified as losing jobs to trade since the 2017 start of the Trump administration. The data mainly covers 2017-2018, as there is typically a 12-18 month gap between layoff dates and certification. Whether the new NAFTA can slow ongoing job outsourcing or the 88% increase in the overall NAFTA trade deficit during the Trump administration remains to be seen over time. What is clear now is that the U.S. manufacturing sector has been severely harmed by the ongoing COVID-19 pandemic, with 1.1 million manufacturing jobs lost in May 2020 compared with the same month last year.

*Data Note: The trade data is sourced from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. We present deficit figures adjusted for inflation to the base month of May 2020. The overall percentage change in the U.S.-NAFTA trade deficit under Donald Trump represent the change in total goods and services trade deficit since 2016, Barack Obama’s last year, and 2019, the last full year of data available during the Trump administration. Manufacturing job data is sourced from the U.S. Bureau of Labor Statistics. The government-certified job loss data is sourced from Public Citizen’s Trade Adjustment Assistance (TAA) Database. The U.S. Department of Labor certified trade-impacted workplaces under its TAA program. This program provides a list of trade-related job losses and job retraining and extended unemployment benefits to workers who lose jobs to trade. TAA is a narrow program, covering only a subset of workers who lose jobs to trade. It does not provide a comprehensive list of facilities or jobs that have been offshored or lost to import competition. Although the TAA data represent a significant undercount of trade-related job losses, TAA is the only government program that provides information about job losses officially certified by the U.S. government to be trade-related. Public Citizen provides an easily searchable version of the TAA database. Please review our guide on how to interpret the data here and the technical documentation here.

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