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House Passes Bill to Catch Dangerous Imported Products

Public Citizen Supports Increased Import Safety Inspections, Lauds Passage of the “Consumer Product Safety Inspection Enhancement Act”

WASHINGTON, D.C. – The U.S. House of Representatives today passed H.R. 8134, the Consumer Product Safety Inspection Enhancement Act, which will enhance Consumer Product Safety Commission (CPSC) inspection of the more than one million-per-day e-commerce shipments that currently enter the U.S. under “de minimis” rules that skirt normal Customs procedures, including safety inspections. More information about this problem is available in Public Citizen’s congressional testimony here. Lori Wallach, director of Public Citizen’s Global Trade Watch released the following statement:

“Right now, American consumers shopping online are being exposed to a flood of counterfeit and dangerous products with none of the more than one million packages a day coming in from China alone getting inspected thanks to a de minimis rule that lets such shipments skirt normal Customs procedures. This legislation will require safety inspectors be posted at the ports of entry where now hundreds of millions of uninspected packages enter and head to U.S. consumers who ordered goods online. 

Public Citizen thanks U.S. Rep. Jan Schakowsky (D-Ill.) for her leadership on this issue and calls on U.S. Senate Majority Leader Mitch McConnell (R-Ky.) to bring this bill protecting American consumers to the Senate floor for a vote.”

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Rethinking Trade - Season 1 Episode 19: Kenya and the Environment

The changes needed to support living-wage jobs, to combat the climate crisis, to make medicines accessible for all...
Much of it won’t be possible unless we overhaul our corporate-rigged trade system. Trade Expert Lori Wallach and Activist Ryan Harvey explore ways to make our progressive trade vision a reality. Rethink Trade is an initiative of Public Citizen's Global Trade Watch.

Transcribed by Garrett O’Brien

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.

Ryan:

Lori, a lot of our listeners may have seen the New York Times piece a few weeks back entitled Big Oil Is in Trouble, Its Plan: Flood Africa with Plastic. What it reveals is that chemical and oil and gas companies, who are facing growing opposition to plastic bags and other plastic goods that create a waste problem (including China cutting them off from plastic waste imports), they want to use Africa as a dumping ground. Their plan is to use Kenya as a lever to undermine African countries’ plastic laws protecting against plastic waste and they are using the US-Kenya trade deal negotiations to do this. This is sort of a classic example of how trade deals can chip away at, or get rid of, a country’s domestic environmental regulations, and that’s what we’re going to be talking about today. Can you give us all a bit of an introduction to this specific case, and also how and why trade rules have this type of authority?

 

Lori:

I’m going to take the second question first, because the predicate to understanding the situation with Kenya, and the US Free Trade Agreement that is being negotiated, is to be aware that a lot of the contents of so-called “trade agreements” have nothing to do with trade. But rather that impose new limits on government regulatory authority on behind-the-border issues like whether you can ban plastics waste or say, no more use of single-use plastic bags, or that create new rights or privileges for corporations, monopoly protections for pharmaceutical firms to charge high prices for medicines or rights for foreign investors to operate without meeting local laws. So those rules typically are enforced through a provision that is in most trade agreements that says “the signatory country shall conform domestic laws, regulations, and administrative procedures to the terms of the agreement,” that’s the language in the WTO version. 

What that boils down to is you can have a country like Kenya, because here’s the situation there, that has signed onto an actual multilateral environmental agreement called the Basel Convention that recently designated plastic waste as a hazardous waste that can be banned under that international agreement you can ban the shipment across borders of that good as an environmental priority, and Kenya is a country that’s a leader throughout sub-Saharan Africa in establishing strong plastics wastes laws so they don’t allow single use bags like a lot of US states and cities but also they have other policies. You could have that as your domestic national law, but then if in your trade agreement stuck into some chapter like the one where this would probably be is something called “technical barriers to trade.” It’s just to set the standards that the big companies get wedged into trade agreements that get designated as a “illegal trade barrier.” So suddenly your domestic law is in violation with a so-called trade agreement and your domestic law has nothing to do with trade but you can face trade barriers, actual sanctions, against your real trade, against your exports as a developing country, you can have tariffs, taxes put on it, for not changing you domestic law on something like an environmental protection and that is what is at the heart of that New York Times exposé. 

When word got out that the US negotiators had been lobbied by some interest in oil and gas and the chemical industry to use the Kenya agreement to try and set a policy that would make Kenya reverse its toxics pollution rules with respect to plastics and therefore become open as a dumping ground for these companies’ waste, but also for the sale of petroleum based products like single-use plastic bags. So that’s how something totally unrelated to trade that is a totally reasonable domestic environmental law can get sacked through closed-door trade negotiations.

Ryan:

And in Kenya’s case, I mean you touched on this a bit, were talking about pressure being applied before the ink touches the paper-- there’s also plenty of ways companies can attack environmental regulations after a deal is signed, particularly through, no discussion about trade deals and environmental regulations could be complete without bringing up, Investor State Dispute Settlement System (ISDS). How do these tactics work and how have they been used to attack environmental protections? Maybe you could just give us a little introduction to that.

Lori:

There are three ways that these trade agreements rules end up undermining domestic laws. One is just good old pressure. So, in the negotiations like this you have, behind closed doors, an industry lobbyist who is an official US trade advisor. There are 500 official US trade advisors with ties to corporations there are a handful of unions and even smaller handful of environmental groups; very few interests to counter to corporate interests pushing for deregulatory, pro-polluter policies in trade agreements, and they just pressure the countries as they’re negotiations, “you better change blah blah law or we won’t do this trade agreement” or “we’ll cut off your access to the US” so that’s one way it works. The second way it works is that you actually do the negotiation, you jam in these kind of non-trade rules. A classic is for instance, bad rules that got slipped into the revised NAFTA that create more obstacles for Mexico and Canada having good laws in Genetically Modified Organisms (GMOs). So, unrelated to trade per se but consumer, environmental protections. And then once they’re in the agreement they can be challenged from one country attacking another in tribunals in where, if you don’t get rid of that law, you face trade sanctions, border taxes on your actual trade, your export, until you do. 

You know a really ugly example of that is the US took a case on behalf of Big Ag, agribusiness, to attack the European ban on artificial growth hormones in meat, they went to one of those tribunals this one at the World Trade Organization, the rules are so slanted and the tribunals are so unfair that the WTO tribunal said, “Sorry Europe you banned these growth hormones which are associated with various cancers so that your farmers can’t use them but it's beyond what is allowed under the food standards of the WTO, so you can’t keep the stuff out. And if you continue to do so, you have to pay.” And the US imposed over 200 million dollars of sanctions on the European Union’s exports to the US of other stuff unrelated to meat, and did so for over a decade because they were trying to force the European Union to back down. 

Now, most countries back down right away. The US did it so a variety of countries, Mexico and Canada, attacked our labeling of meat with respect to where it's grown, harvested, and slaughtered, the so-called Country of Origin laws, in the face of a billion dollars of potential future trade sanctions we just caved and gutted the law. So that’s one way. The other way is the investor-state tribunals, and that is when a private interest, not just a government trying to enforce another government’s commitments in a trade agreement, but a private entity can try to challenge a government, elevated like it’s its own government, and extract cash for not meeting trade agreement rules.

 The bottom line of all of this is in Kenya they’re doing the right things on plastic pollution and the US should be cooperating with Kenya to promote those kind of environmental and health initiatives, not use a trade agreement to create a basically booby-trap that is going to blow up laws unrelated to trade because some corporations get those provisions jammed into a trade agreement.

Ryan:

So, I guess that would bring us to our final question which is one that I’m sure listeners are asking as well, which is how can we reverse course? How can trade rules be written that not only prevent these attacks from happening in the first place but enforce rules that protect environmental regulations and standards from the get-go and are there any examples right now of those types of rules in action?

Lori:

So, we have to think about this on two levels. The first is the Kenya agreement itself. The plastics issue is just one example of why the US negotiating anything like our like our past trade agreements with the country of Kenya, under any circums­­­tance, but particularly right now, is a ridiculous idea. And there is no upside for development, for the environment or if you look at it just nationally, for US jobs, for US exports, but if you look at it on the flipside for what’s going to happen in Kenya, its counterproductive if were trying to have this agreement either help workers or the environment in either country or for that matter build our foreign relations and reputation. If you see your member of Congress or even better next time you are near a computer send him an email, make a call, to make sure they know that you don’t want this US-Kenya agreement going forward. It’s just not the right thing to be doing probably at all, certainly not now.

 And the second thing is the model. Now could there be a US-Kenya agreement that includes trade that could be for people and promoting, improving health standards, environmental protection, human rights protections? Of course. The problem is that that is not the model we have. So with the renegotiation of the NAFTA we took an agreement that was like 20 rungs below Hell and we brought it up to the crust. But that ain’t no agreement that is a good agreement, it’s one that hopefully means, the new agreement means, that there will be less harm done by a NAFTA.

 If you want to actually have a good agreement, you need to actually start with what the goals are, which is how do you actually improve people’s livelihoods? How do you use the agreements to set standards that companies have to meet in order to get the benefits of the agreement? Versus today’s agreements which put handcuffs on countries and tell them all the things they have to do for corporations. And that is a bigger discussion that is probably starting and will start perhaps after the election. But for right now, I think the best thing to do is to make sure your members of Congress know, no US-Kenya agreement under these circumstances, and then go to tradewatch.org and also rethinktrade.org and become part of the discussion of what a good trade agreement could look like because there is a way to do this right and the only way we’re going to get there is if we’re all informed and fighting for it.

Ryan:

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 work we are doing in the fight for fairer and more equitable trade policies.

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Since 2017, Hundreds of Thousands of American Jobs Were Offshored, Trade Deficit Is Up 18%

Since 2017, hundreds of thousands of additional U.S. jobs have been offshored and the trade deficit has grown, according to U.S. Department of Labor and Census Bureau data:

300,000 More American Jobs Lost to Trade

  • More than 300,000 American jobs have been lost to offshoring and trade during Trump’s presidency, as certified by the Labor Department. The Economic Policy Institute said total trade job loss is much higher — estimating 700,000 jobs lost to China alone in Trump’s first two years.
  • Nationwide, 311,427 American jobs have been government-certified as lost to trade since 2017, with 202,543 explicitly listed as offshored, but the total number is higher. These numbers represent only the workers that the Labor Department approved for Trade Adjustment Assistance (TAA), a voluntary program that workers must know about apply for and thenprove that trade caused their job loss in order to receive assistance. And, the TAA numbers do not include all 2019 or most 2020 because of processing lags.
  • Since 2017, General Motors closed U.S. plants and moved popular vehicle lines to Mexico; Ford announced its new Mustang electric SUV will be made in Mexico; Boeing offshored 5,800 jobs, General Electric offshored 2,046, and United Technologies offshored 1,572 jobs. The Machinists and Steelworkers have lost dozens of facilities to offshoring during this period.
  • Although then-president-elect Donald Trump promised to stop Carrier workers’ jobs from being offshored, almost 600 of the union workers at Carrier’s Indianapolis plant lost their jobs and all 700 of Carrier’s Huntington Indiana jobs were offshored to Mexico. Carrier parent firm United Technologies offshored at least 1,572 jobs according to Trade Adjustment Assistance
  • Michigan’s trade-related job loss has more than doubled over the last three years. Michigan has hemorrhaged jobs to offshoring with a 211% increase in trade-related job loss. (From 2017-2019 TAA-certified job loss was 15,675 compared to 7,428 for 2014-2016.) It’s getting worse: Michigan suffered a 308% increase in trade-related job loss in 2019 over 2018.

The trade deficit is 18% higher than in 2016

  • S. Census Bureau data show that the U.S. trade deficit in the first seven months of 2020 is 18% higher than it was during the same period in 2016. This is especially troubling because trade volumes crashed 15% due to the COVID-19 pandemic. (Inflation adjusted: $356 billion trade deficit January-July 2020 compared to $302 billion during the same period 2016.)
  • In July 2020, the U.S. had the largest monthly goods trade deficit ever recorded and the largest overall monthly trade deficit since July 2009 during the global financial crisis and recession.

The manufacturing sector expansion that began in 2016 flattened in 2018, with significant declines starting early in 2019

  • Trump didn’t “create” a manufacturing boom. The U.S. Institute for Supply Management’s Purchasing Managers Index (PMI), a gold standard measure for the sector’s status, shows manufacturing growth began in 2015 and continued into 2018. The PMI data show that the manufacturing upswing began to flatten in 2018 and began a decline in late 2018 that continued through 2019 – all well before the COVID-19 crisis.  

Chart 1

U.S. Institute for Supply Management Purchasing Managers Index

  • The U.S. has not experienced a “blue-collar job boom.” Annual average manufacturing job gains during the entire 2010-2019 recovery was 166,000, which accounts for the 500,000 gain in U.S. manufacturing jobs from 2016 to 2019. Since 2017, there has been no jump relative to prior years, and total gains account for a small fraction of the 4.5 million manufacturing jobs lost since 2000.
  • More workers filed for government aid for trade job loss through the Trade Adjustment Assistance program in 2019 than in 2017, per the 2019 annual report from the Labor Department. (There were 1235 TAA filings in 2019 versus 1091 TAA filings in 2017.) The number of workers who are certified as losing jobs to trade has remained high during Trump’s presidency: 88,000 in 2019; 77,499 in 2018; and 95,505 in 2017.)
  • Mishandling of the COVID-19 crisis has wiped out 750,000 American manufacturing jobs. See here for live version of the Economic Policy Institute graphic below that shows jobs per month.

Chart 2

U.S. has created new incentives to offshore jobs

  • The 2018 tax law created new incentives to offshore jobs, with a 21% corporate tax rate for income earned domestically, but a 10.5% tax rate for profits earned offshore.
  • The “Phase-One” Trump-China trade deal made it safer and easier for big corporations to offshore with new investor and intellectual property protections for firms that move production to China. But there’s nothing in the deal to end forced labor in China or require basic worker rights or environmental protections to stop the race to the bottom. The agreement also lacks disciplines against China’s massive subsidies, which make it impossible for U.S. firms to compete with Chinese products.

 

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ITC Hearing - Global Trade Watch's Lori Wallach Testimony

The United States International Trade Commission (USITC) Investigation on “COVID-19 Related Goods: The U.S. Industry, Market, Trade, and Supply Chain Challenges” Testimony of Lori Wallach, Public Citizen’s Global Trade Watch

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Rethinking Trade - Season 1 Episode 18: Trade Deficit

Candidate Trump pledged he would swiftly eliminate the huge job-killing U.S. trade deficit, end job outsourcing and rebuild manufacturing. Did he? The government collects data on each issue, and it’s been a triple fail.

Transcribed by Garrett O’Brien

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.

Amongst the daily diet of Trump lies, we hear a whole lot about his great trade achievements. Thankfully there’s actually data that tracks these outcomes and we’ve been tracking that data. What are the big numbers you see Lori, and what do they mean on the ground?

Lori:

So, Trump came up with a bunch of pledges that he would transform our trade policies. He said he would get rid of the trade deficit which is ginormous and is a drag on growth but also represents us importing things we used to make here instead of employing people to make the things we buy. He said that he would end job outsourcing meaning US companies relocating production to low wage countries to make things that they then ship back here to sell, that they used to make here, and he said he would do all of this quickly and he also said he would rebuild manufacturing and the government actually tracks every month what US trade balances and flows are. So, we have trade deficit data and it’s the same measure over time so we can compare it to before he was in office, same thing with the jobs data. So, the big top line I would say is that if you compare the trade deficit in Trump’s last year of this term in office and you got 7 months of data by the beginning of September, we had seven months of data for 2020, its almost 13% higher, the trade deficit, than when he entered office. So, not only didn’t he get rid of what he identified as a job-killing trade deficit but in fact the Trump trade deficit is bigger than say the same period in the last year of the Obama administration.

Ryan:

Another data point that we pulled out is that the July 2020 deficit is the largest monthly deficit since July of 2008.

Lori:

In the midst of the financial crisis. Yep. So, not only is that pretty stunning but also, the fact that the 340-billion-dollar trade deficit in the first 7 months of 2020 is larger than the already ginormous 300 billion dollar deficit during the same period during 2016, it’s also in the context of the COVID crisis having crashed trade volumes. So, we see that the actual overall flow in trade is down and as a result we see that if you compare 2020 to 2019 the deficit is down and despite there being a decrease overall in trade of 15%, COVID related, the trade deficit is up almost 13% relative to 2016. That is not what Trump promised. And it’s not what he’s saying. So, the data is his own government’s data and it’s equally compelling when it comes to the issue of outsourcing. Trump said he’d get rid of outsourcing. But the reality is, 300,000 plus more jobs have been certified by the department of labor under the Trump administration as having been lost to trade and that is just under one narrow program called Trade Adjustment Assistance. That’s not even the whole count of the loss because that Trade Adjustment Assistance is basically a system where you can get extended unemployment benefits and retraining money but you have to know about it You have to prove your job was lost to trade and so it is by proponents of our current trade rules considered maybe a 1 out of 10 count of the actual loss. 300,000 certified jobs. So, not the end of outsourcing that Trump promised.

Ryan:

We dig into the trade adjustment assistance numbers in a previous episode so folks should go back and give a listen if you want to get deep into that data.

With the deficit Lori, normally the reduction in trade would create a reduction in the deficit but that hasn’t been happening. Is that due to the inept way Trump has handled the pandemic or the lack of a way to deal with a health crisis of this magnitude or are there other things at first in that

Lori:

So, the economic impact of the COVID crisis certainly is related to our hyper globalization system implemented for the past 25 years agreements like the world trade organization and NAFTA where we have really concentrated supply chains so that we are so reliant on imports from just 1 or 2 countries for things we vitally need every day so that when you have people in the country get sick and the factories get sick so when the factories close down or the ports close down or a country like China where a lot of the personal protective equipment we use and medicine is made decide reasonably, the government decides that they the need the stuff for people in their own country, we end up with both huge worse health impacts we can’t get the things to be healthy and safe but also economic impacts in this over integrated hyper globalized economy. So, it is certainly the case that when we saw the fall off in trade it wasn’t a shock we saw that after the global financial crisis. What’s shocking is that when trade falls off 15% the US trade deficit doesn’t follow. And that is in part because of things that happened way before trump this whole hyper globalized regime of NAFTA and WTO, but it also reflects the things he didn’t do in the 3 and a half year plus he has been president. So, there was a lot of talk about how for instance on day one he would hold China accountable for manipulating currency. We are going to have a future podcast on how this currency manipulation business works. The difference is that if a country holds too many dollars it holds up the value it buys dollars in currency markets it holds up the valley of the dollar or if it basically intentionally takes actions to reduce the value of its currency both things mean that effectively you’re subsidizing exports from your country to the US and you’re making it too expensive for things made here to be sold in your country. Well, trump never dealt with that with China. So, the section 301 tariffs have reduced some imports from China but relative to systematic dealing with some of these structural imbalanced causes, he didn’t take action and he also never took action on the thing that you can do to improve demand in the us which is Buy American. He made a lot of executive orders and announcement and got a lot press about improving buy American but they never actually followed through so instead of having billions more of government purchases of us made stuff were still purchasing with our tax dollars basically outsourcing them to purchase stuff made elsewhere despite having a law if it was being enforced properly that Trump could have done that unilaterally without congress that would have reversed. So some of that dynamic is stuff that needed to get fixed that still needs to get fixed that has not gotten fixed.

Ryan:

Let’s talk more broadly about manufacturing and the purchasing managers index (PMI). Our research director asked me to ask about that and I said sure and then I was like I have no idea what that is. So maybe you can tell me and the listener what this is?

Lori:

PMI is basically an indicator of the health of the manufacturing sector in that it basically is forward orders for inputs for an equipment and so you can see it’s an index in a sense that it is looking forward to what activity is happening now that can project what will be happening in a month or two or six or a year after. So people looked at the PMI index so if its 50% or better its basically constant if it's higher than 50% growth in the sector if it's lower it contracting in a sector and the reality is that the manufacturing sector started to grow in the last couple of years of the Obama administration and that growth continued into the first two years of the Trump administration and you can see that whether you look at the bureau of labor statistics numbers of manufacturing jobs or if you look at the PMI there’s an upward trajectory over a four year period. So, if you start to look in 2019 well before the COVID crisis in the middle of the year you start to see the job numbers but also the PMI flattened then it actually starts to decline. So, the Trump administration likes to say that they were going gang-busters that they were creating so many manufacturing jobs, that they were doing something miraculous then COVID ruined it. Well, actually they were on the same trajectory as the previous administration for 2 years and then they flattened out, and then COVID happened. So, the notion that somehow the administration is the great champion of manufacturing jobs, it is true that a lot of manufacturing jobs were created in the first two years of the Trump administration just like they were in the last 2 years for the Obama administration but that sadly ended well before the time that the COVID crisis hit and in some states there are not net losses in manufacturing jobs it's generally fairly flat and because there’s been mass outsourcing still like in Michigan the rate of outsourcing has been related to trade-related job losses has been two times higher fast than it was in the three years previous to trump in some states the numbers are really not good.

Ryan:

These numbers and this data is all fairly depressing and I guess a bit not surprising do you think that Trump is getting away with selling one story and obviously living another?

Lori:

I think that we have the same problem on issue after issue which is people who want to believe trump has fixed a problem don’t want to hear that factual evidence to the contrary and shut it out and people who think Trump is a disaster are happy to season any evidence reinforcing that. And the big question to me practically is in states where manufacturing and trade really affect day to day the communities top to bottom are people's lived experiences what they’re thinking about. Did those jobs they were promised to happen? Did they stay? Is there still outsourcing? I suggest the big picture data how compelling it is doesn’t actually in most people’s lives have as much impact on what they actually seem. Just a guess. At least what they seem now we have all that data out in front of folks so it’s a pretty compelling and not a great picture

Ryan:

Where can fold find this data?

Lori:

So to make it more accessible we’ve actually taken the trade adjustment assistance database the Department of labor’s database and we have it at tradewatch.org you can go to our trade data center and what we’ve done is made it more accessible because we’ve geomapped is so you can put in your congressional district or your city or your zip code and you can get a list generated of the certified trade-related job loss near you which unfortunately is not a feature of the department of labor’s website or if there is a specific company you want to know what they’ve been up to you can put in a company name and search so that’s act tradewatch.org. as far as this trade data you can also go top tradewatch.org and look at our landing page every month have the new trade data and we basically crunch the numbers so you don’t have to so we do the inflation controlling and we compare it to the previous year to the previous period in the end of Obama administration so we basically do the math so you can see the chase points. So as far as the purchase managers index if you’re really into that you can actually just google PMI and you can see it over time on line but we also talk about the PMI in each of our monthly trade releases which you can once access at tradewatch.org, come one come all, our whole job is to make this information accessible to everyone can see what the actual facts are.

Ryan:

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 work we are doing in the fight for fairer and more equitable trade policies.

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Rethinking Trade - Season 1 Episode 17: Democrats on Trade

Many Americans are confused – does any U.S. political party stand for trade policy that puts working people first? Since the late 1980s, Democratic and Republican presidents alike have systematically sided with corporate elites in support of “free trade” deals like NAFTA. 

While most Congressional Democrats have sided with working people against them, a few have joined the overwhelming majority of Republicans who support and pass corporate-rigged trade deals. Trump railed against such deals, and then pushed new ones packed with giveaways for Big Pharma and Big Tech corporations.

In this episode, we untangle the confusing politics of trade. 

Rethinking Trade with Lori Wallach

Transcribed by Garrett O’Brien

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.

Lori, it’s not a secret to anyone that the 2016 presidential debate, and now the 2020 one, have made the trade issue politically confusing. Now, you’ve long been part of the movement for alternative trade rules that limit corporate power, protect workers, consumers, and the planet, but your adversaries have often been Democratic presidents like Bill Clinton and Barack Obama who presided over significant negotiations of some really bad trade deals. People like Donald Trump have preyed upon this fact and painted themselves as the alternative to the Democrat’s bad trade deals. At the same time, it’s often been Democrats in the House and Senate who’ve been the champions of the alternative trade rules people like you have advocated for — not to mention that all of these bad trade deals were also supported by most of the Republican party. Let’s talk a bit about the Democratic party’s complicated relationship with trade policy. Where do we start?

Lori: 

The story about trade politics is not so much partisan as it is one’s philosophy about the economy and who ought to be prioritized. And there has been a broad dichotomy historically between the presidential wing of the Democratic party, which has quite systematically sided with corporate elites, versus the congressional wing, which has quite systematically sided with working people. 

So you have a dynamic where Democratic and Rrpublican presidents alike have pushed the same corporate rigged trade agreements, trade policies, trade model, that see the rules of the global economy as an extension of privileges and powers for big companies, including a lot of things that are flat out protectionist. Starting with NAFTA, U.S. trade agreements had literally rent seeking monopoly protections, anti-free trade for Big Pharma. Why would you put a monopoly patent in a free trade agreement? Because it was for the corporations. And presidents of the Republican and Democratic variety sided with that, but the congressional situation has been quite different. 

Congressionally, the Democrats have led the opposition to these corporate rigged agreements and have promoted alternatives, whereas the Republicans in Congress have followed their presidential wings and have overwhelmingly supported agreements like NAFTA, the WTO, China’s entry into the WTO. So, if you look historically you’ve got this battle that is Democratic presidents pushing, along with Republican presidents pushing, the same kind of trade agreements for decades. You have Republicans in Congress voting for them overwhelmingly and you have Democrats in Congress voting overwhelmingly against them to the point where with a bunch of these agreements you literally have, you know, five Democrats, fifteen Democrats, when there are hundreds of Democrats in Congress and it is always the vast majority of Republicans in Congress voting for, but it might be a Democratic or Republican president pushing the same-old-same-old. And that split has led to a lot of political confusion when then Donald Trump comes on the scene, which by the way could have been Bernie Sanders on the scene or could have been Senator Warren on the scene as a president. It had to do with basically breaking that bipartisan presidential consensus in favor of the same-old-same-old.

Unfortunately, the way Trump did it was not to push the progressive alternatives that Democrats in Congress, and unions, and consumer groups like ours, and environmental groups have been pushing. He did break the old consensus but not necessarily in favor of people or the planet, it was a much more nationalist, corporatist view but a different take.

Ryan:

One of the things Trump did was he really utilized NAFTA, the North American Free Trade Agreement, in 2016 as an example of the “Democrats’ bad trade deals” and while it was signed by Bill Clinton it was introduced by Republican president George H.W. Bush wasn’t it? And didn’t a lot of Democrats oppose NAFTA at first?

Lori: 

So, the politics in NAFTA is the perfect example of why this is so jumbled and hard to understand. 

The concept of NAFTA came from Ronald Reagan. It and the negotiation of the WTO, the so-called GATT [General Agreement on Tariffs and Trade] Uruguay Round, were Reagan ideas of how, effectively, to get around an overwhelming Democratic majority in Congress that was systematically blocking his privatization and deregulation of the service sector and that was blocking the extension of patent giveaways for Big Pharma. The idea was to use this sort of Trojan Horse work-around of the trade agreements. So, the history of NAFTA is that Reagan came up with the idea and in fact Reagan initially started the precursor, the US-CAN [Canada] negotiations. Then George Bush the first [Senior] picks up the NAFTA negotiations, he doesn’t just introduce it, he signs it, it’s his deal. It was signed before he was out of office. He negotiated that deal and he signed it. But because of the dynamic I described where the Democratic presidential wings have often been indistinguishable from the Republicans on trade, then Bill Clinton picks up the old NAFTA as a sort of political maneuver and creates some meaningless unenforceable side agreements in the environment and labor and pushes the exact thing that Bush has signed, that Reagan has envisioned, through Congress. But the political dynamic was bloody because while almost every Republican in Congress voted for the NAFTA, the majority of Democrats fought their own Democratic president and voted against. 

And there was a block, I would say a larger block overtime, of 100 Democrats who voted with Clinton, their president- a lot of goodies were given away- but 160 Democrats voted against. What’s super interesting is that in short order by the time there’s a push for NAFTA extensions to other countries in Latin America, in 1998, and people had seen the effects of three years of NAFTA, the vote had totally shifted. 171 Democrats voted against, only 29 Democrats voted for their own democratic President Bill Clinton having the trade authority called Fast Track to extend NAFTA throughout the Americas because in those three years not only had everything that Democrats in Congress who voted against, and the opposition was led by the Democratic house leadership, Gephardt, the number one Democrat, Bonior, the number two Democrat in the House, they led the fight against NAFTA, against their own president, from the Capitol, from the leadership offices of the Congressional Democrats, not only had everything they had warned about come true, but an enormous number of worse things had happened. So, by the time the lived experience had caught up to the warnings of the Democratic congressional leadership to their rank in file members, Congress denied Bill Clinton having trade authority for the rest of his term because there weren’t enough Democrats to go along with the overwhelming number of Republicans who passed it, even by a narrow margin. So, from that point on President Clinton never had trade authority again.

Ryan: 

So, another big thing that happened I guess before that under the Clinton presidency and this is as NAFTA had begun taking its devastating effect on US factory workers and Mexican farmers and so many others, there was also the World Trade Organization. And the WTO is widely seen as a Clinton baby because he was president when it was signed, and he was also president when China was brought into it back in the year 2000. Maybe talk a little about how Congressional Democrats reacted to these developments at the time.

Lori:

The NAFTA fight helped the Democrats lose the House. The midterm elections 1994 had an enormous fall-off in turnout for union households and working people who just basically saw a Democratic president passing this agreement they knew was going to devastate them and in short order had started to lead to mass outsourcing in Wisconsin, in Michigan, and other states. Democratic base voters basically stayed home in 94 and the Democrats lost the House because of the NAFTA fight. 

And the dynamic of that politics had such damage that on the congressional wing, as well as the outcomes of these agreements, the opposition tightened up but Clinton continued to push the same bad framework, and the WTO is a perfect example of that as well as China’s entry into it and that would be the 2000 PNTR, Permanent Normal Trade Relations, vote. But also in 1999 the U.S. was the leader in trying to push a huge expansion for the WTO to include more corporate rights and powers and to basically impose more non-trade dictates against people on the planet into the WTO and the Democrats in Congress were out there in the front of these marches in Seattle in 1999 during the protest. I have a wonderful picture up in my office of David Bonior, then the number two Democrat, and three or four committee chairs, Maxine Waters and George Miller, all marching arm-in-arm with protesters in Seattle against the Democratic president’s attempt to expand the WTO. 

But again, Clinton’s role really taints the politics because people think of Democrats — Clinton — they don’t realize the Democrats in Congress were leading the fights against these very proposals. Nancy Pelosi as a member of Congress, not yet the Speaker, led the congressional fight in the house against China PNTR. It was run out of her congressional office to whip the votes to try and get a ‘no’ vote. And that is another example where more Democrats were induced by Clinton to support it, 73, where 150 voted against, so double were against, but an overwhelming number of the Republicans voted for it. And that was kind of the turning point. Because after that China PNTR vote in 2000, after more cases against important US public interest laws were being ruled against at the WTO, as more and more job outsourcing started under NAFTA and then once China was in the WTO in 2001, 2002, mass outsourcing to China which now had guaranteed access to the US at the very favorable US very low tariff rates established in the WTO, Democratic opposition in Congress really started to consolidate against the model. The lived experience of the wreckage both the attacks, and domestic, environment, consumer laws, and also the job loss. 

And from that point on there was nothing like the big chunks of votes for China PNTR, which, you know, 73 Democrats was a minority but it was not an insignificant number, same thing as the NAFTA minority of the party voted for it but not an insignificant number. From that point on it was super lopsided. So, for instance when the fast track came up in 2002 and now George Bush the second [Junior] was president, 190 Democrats voted against it, 21 voted for it. Or with CAFTA, 190 Democrats voted against it, 15 voted for CAFTA. And that shift has basically followed through to the current day where with a Democratic president in 2015, 160 Democrats voted against Fast Track for TPP for their own president and 28 only were willing, for their own president’s key priority of the entire congressional session, to vote for it. 

Ryan:

And that’s another thing Trump took a lot of credit for: stopping the TPP. Whereas you’re describing, it was actually dead on arrival when he took office.

Lori:

Yeah, you know, it’s a myth that he stopped TPP. To the extent that he had a role, it was burying the molding corpse that had been left out in the sun rotting dead for a year. So, the 2015 fight on Fast Track where originally, thanks to the Democrats in Congress, Obama lost that vote. He went back and made a deal with the Republican, threw out a trade assistance program for workers who lose jobs to pay off the Republicans to get them to switch and for more Republicans to vote for it, narrowly passed the trade authority that was then used to close the TPP deal. But the TPP deal gets closed and throughout all of 2016, it’s sitting there unable to get within 60 votes of passage in the House of Representatives which is a big honking deal because typically, if a trade agreement is stuck, it’s stuck by 10, 15, 20 votes and then the president basically buys those votes by promising a bridge here, or a package there, or a congressional special this-and-that from the president and this was such a wide margin because there was almost no Democratic support. Even the 28 Democrats who voted for trade authority two years earlier were not willing to say that they would vote for the TPP.   

So the agreement sat there for an entire year, couldn’t get through Congress… even the effort in the lame duck session after Trump has won, Democratic disaster, the Obama administration is still trying to pass TPP and at that point the Democrats in Congress just, you know, were smearing furious and doubled down in their “no” votes, Trump came in to an agreement that couldn’t get through Congress and then officially gave notice it wouldn’t be approved. That’s what he did. We didn’t actually withdraw; we gave notice that we would not be sending notice of approval and the other countries moved on without us.

But, unfortunately, because Clinton is the guy who is seen as pushing WTO expansion in Seattle, Clinton was the guy who pushed the NAFTA through Congress, the WTO through Congress, China into the WTO, and then President Obama pushed TPP, it’s super confusing for a lot people who aren’t paying attention to the nitty gritty of the Congressional votes. So someone like Trump can exploit that and make it seem like Democrats, writ large, are for these policies when in fact every single time a president has been derailed from doing more harm: Clinton when he lost his trade authority thanks to Democrats in 1998, Bush when he was not able to get new trade authority after his 2002 authority ran out, Obama when TPP was stopped, that’s all Democrats in Congress saving all of our bacon. 

Ryan:

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 work we are doing in the fight for fairer and more equitable trade policies.

 

 

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Rethinking Trade - Season 1 Episode 16: Online Retail Giants Sneak Attack by Trade Pact

Online retail giants like Amazon have been quietly stuffing trade agreements with terms that handcuff governments from protecting consumers or breaking up the online behemoths. What these corporations and their government co-conspirators call “digital trade” rules are in fact designed to forbid governments from protecting our privacy, holding the online giants accountable for dangerous or fake products they sell us, and empowering us to control our personal data. 

“Digital trade” rules being pushed in U.S. trade deals give some of the world’s largest corporations further control over our personal data and the online-retail market.

Transcribed by Garrett O’Brien

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.

Lori, it’s not a secret to anyone that the 2016 presidential debate, and now the 2020 one, have made the trade issue politically confusing. Now, you’ve long been part of the movement for alternative trade rules that limit corporate power, protect workers, consumers, and the planet but your adversaries have often been Democratic presidents like Bill Clinton and Barack Obama who presided over significant negotiations of some really bad trade deals. People like Donald Trump have preyed upon this fact and painted themselves as the alternative to the Democrat’s bad trade deals. At the same time, it’s often been Democrats in the House and Senate who’ve been the champions of the alternative trade rules people like you have advocated for — not to mention that all of these bad trade deals were also supported by most of the Republican party. Let’s talk a bit about the Democratic party’s complicated relationship with trade policy. Where do we start?

Lori: 

The story about trade politics is not so much partisan as it is one’s philosophy about the economy and who ought to be prioritized. And there has been a broad dichotomy historically between the presidential wing of the Democratic party, which has quite systematically sided with corporate elites, versus the Congressional wing, which has quite systematically sided with working people. 

So you have a dynamic where Democratic and Republican presidents alike have pushed the same corporate rigged trade agreements, trade policies, trade model, that see the rules of the global economy as an extension of privileges and powers for big companies, including a lot of things that are flat out protectionist. Starting with NAFTA, US trade agreements had literally rent-seeking monopoly protections, anti-free trade for Big Pharma. Why would you put a monopoly patent in a free trade agreement? Because it was for the corporations. And presidents of the Republican and Democratic variety sided with that, but the Congressional situation has been quite different. 

Congressionally, the Democrats have led the opposition to these corporate rigged agreements and have promoted alternatives, whereas the Republicans in Congress have followed their presidential wings and have overwhelmingly supported agreements like NAFTA, the WTO, China’s entry into the WTO. So, if you look historically you’ve got this battle that is Democratic presidents pushing, along with Republican presidents pushing, the same kind of trade agreements for decades. You have Republicans in Congress voting for them overwhelmingly and you have Democrats in Congress voting overwhelmingly against them to the point where with a bunch of these agreements you literally have, you know, five Democrats, fifteen Democrats, when there are hundreds of Democrats in congress and it is always the vast majority of Republicans in Congress voting for, but it might be a Democratic or Republican president pushing the same-old-same-old and that split has led to a lot of political confusion when then Donald Trump comes on the scene, which by the way could have been Bernie Sanders on the scene or could have been Senator Warren on the scene as a president. It had to do with basically breaking that bipartisan presidential consensus in favor of the same-old-same-old.

Unfortunately, the way Trump did it was not to push the progressive alternatives that Democrats in Congress, and unions, and consumer groups like ours, and environmental groups, have been pushing. He did break the old consensus but not necessarily in favor of people or the planet, it was a much more nationalist, corporatist view but a different take.

Ryan:

One of the things Trump did was he really utilized NAFTA, the North American Free Trade Agreement, in 2016 as an example of the “Democrats’ bad trade deals” and while it was signed by Bill Clinton it was introduced by Republican president George HW Bush wasn’t it? And didn’t a lot of Congressional Democrats oppose NAFTA at first?

Lori: 

So, the politics in NAFTA is the perfect example of why this is so jumbled and hard to understand. The concept of NAFTA came from Ronald Reagan. It and the negotiation of the WTO, the so-called GATT Uruguay Round, were Reagan's ideas of how effectively to get around an overwhelming Democratic majority in Congress that was systematically blocking his privatization and deregulation of the service sector and that was blocking the extension of patent giveaways for Big Pharma. The idea was to use this sort of Trojan Horse work-around of the Trade Agreements. So, the history of NAFTA is that Reagan came up with the idea and in fact Reagan initially started the precursor, the US-CAN negations. Then George Bush the first picks up the NAFTA negotiations, he doesn’t just introduce it, he signs it, it’s his deal. It was signed before he was out of office. He negotiated that deal and he signed it. But because of the dynamic I described where the Democratic presidential wings have often been indistinguishable from the Republicans on trade, then Bill Clinton picks up the old NAFTA as a sort of political maneuver and creates some meaningless unenforceable side agreements in the environment and labor and pushes the exact thing that Bush has signed, that Reagan has envisioned, through Congress. But the political dynamic was bloody because while almost every Republican in Congress voted for the NAFTA, the majority of Democrats fought their own Democratic president and voted against. And there was a block, I would say a larger block overtime, of 100 Democrats who voted with Clinton, their president, a lot of goodies were given away, but 160 Democrats voted against. What’s super interesting is that in short order by the time there’s a push for NAFTA extensions to other countries in Latin America, in 1998, and people had seen the effects of three years of NAFTA, the vote had totally shifted. 171 Democrats voted against, only 29 Democrats voted for their own democratic President Bill Clinton having the trade authority called Fast Track to extend NAFTA throughout the Americas because in those three years not only had everything that Democrats in Congress who voted against, and the opposition was led by the Democratic house leadership, Gephardt, the number one Democrat, Bonior, the number two Democrat in the House, they led the fight against NAFTA, against their own president, from the Capital, from the leadership offices of the Congressional Democrats, not only had everything they had warned but an enormous number of worse things had happened. So, by the time the lived experience had caught up to the warnings of the Democratic Congressional leadership to their rank in file members, Congress denied Bill Clinton having trade authority for the rest of his term because there weren’t enough Democrats to go along with the overwhelming number of Republicans who passed it even by a narrow margin. So, from that point on President Clinton never had trade authority again.

Ryan: 

So, another big thing that happened I guess before that under the Clinton presidency and this is as NAFTA had begun taking its devastating effect on US factory workers and Mexican farmers and so many others, there was also the World Trade Organization. And the WTO is widely seen as a Clinton baby because he was president when it was signed, and he was also president when China was brought into it back in the year 2000. Maybe talk a little about how congressional Democrats reacted to these developments at the time.

Lori:

The NAFTA fight helped the Democrats lose the House. The midterm elections 1994 had an enormous fall-off in turnout for union households and working people who just basically saw a Democratic president passing this agreement they knew was going to devastate them and in short order had started to lead to mass outsourcing in Wisconsin, in Michigan, and other states. Democratic base voters basically stayed home in 94 and the Democrats lost the House because of the NAFTA fight and the dynamic of that politics had such damage that on the Congressional wing, as well as the outcomes of these agreements, the opposition tightened up but Clinton continued to push the same bad framework, and the WTO is a perfect example of that as well as China’s entry into it and that would be the 2000 PNTR, Permanent Normal Trade Relations vote, but also in 1999 the US was the leader in trying to push a huge expansion for the WTO to include more corporate rights and powers and to basically impose more non-trade dictates against people on the planet into the WTO and the Democrats in Congress were out there in the front of these marches in Seattle in 1999 during the protest. I have a wonderful picture up in my office of David Bonior, then the number two Democrat, and three or four committee chairs, Maxine Waters and George Miller, all marching arm-in-arm with protesters in Seattle against the Democratic president’s attempt to expand the WTO, but again Clinton’s role really taints the politics because people think of Democrats — Clinton — they don’t realize the Democrats in Congress were leading the fights against these very proposals. Nancy Pelosi as a member of Congress, not yet the Speaker, led the Congressional fight in the house against China PNTR. It was run out of her congressional office to whip the votes to try and get a no vote. And that is another example where more Democrats were induced by Clinton to support it, 73, where 150 voted against, so double were against, but an overwhelming number of the Republicans voted for it. And that was kind of the turning point. Because after that China PNTR vote in 2000, after more cases against important US public interest laws were being ruled against at the WTO, as more and more job outsourcing started under NAFTA and then once China was in the WTO in 2001, 2002, mass outsourcing to China which now had guaranteed access to the US at the very favorable US very low tariff rates established in the WTO, Democratic opposition in Congress really started to consolidate against the model. 

The lived experience of the wreckage both the attacks, and domestic, environment, consumer laws, and also the job loss, and from that point on there was nothing like the big chunks of votes for China PNTR, which, you know, 73 Democrats was a minority but it was not an insignificant number, same thing as the NAFTA minority of the party voted for it but not an insignificant number. From that point on it was super lopsided. So, for instance, when the fast track came up in 2002 and now George Bush the second was president, 190 Democrats voted against it, 21 voted for it. Or with CAFTA, 190 Democrats voted against it, 15 voted for CAFTA. And that shift has basically followed through to the current day where with a Democratic president in 2015, 160 Democrats voted against Fast Track for TPP for their own president and 28 only were willing, for their own president’s key priority of the entire congressional session, to vote for it. But, unfortunately, because Clinton is the guy who is seen as pushing WTO expansion in Seattle, Clinton was the guy who pushed the NAFTA through congress, the WTO through congress, China into the WTO, and then President Obama pushed TPP, it’s super confusing for a lot people who aren’t paying attention to the nitty gritty of the congressional votes. So someone like Trump can exploit that and make it seem like Democrats writ large are for these policies when in fact every single time a president has been derailed from doing more harm: Clinton when he lost his trade authority thanks to Democrats in 1998, Bush when he was not able to get new trade authority after his 2002 authority ran out, Obama when TPP was stopped, that’s all Democrats in congress saving all of our bacon. 

Ryan:

And that’s another thing Trump took a lot of credit for: stopping the TPP. Whereas you’re describing, it was actually dead on arrival when he took office.

Lori:

Yeah, you know, it’s a myth that he stopped TPP. To the extent that he had a role, it was burying the molding corpse that had been left out in the sun rotting dead for a year. So, the 2015 fight on Fast Track where originally, thanks to the Democrats in Congress, Obama lost that vote, he went back and made a deal with the Republicans in Congress threw out a trade assistance program for workers who lose jobs to pay off the Republicans to get them to switch and for more Republicans to vote for it narrowly passed the trade authority that was then used to close the TPP deal. But the TPP deal gets closed and throughout all of 2016, it’s sitting there unable to get within 60 votes of passage in the House of Representatives which is a honking deal because typically, if a trade agreement is stuck, it’s stuck by 10, 15, 20 votes and then the president basically buys those votes by promising a bridge here, or a package there, or a congressional special this-and-that from the president and this was such a wide margin because there was almost no democratic support. 

Even the 28 Democrats who voted for trade authority two years before were not willing to say that they would vote for the TPP. So the agreement sat there for an entire year, couldn’t get through congress and the horrific mistake, I think, of the Obama administration was instead of sending cabinet officials around to campaign for Hillary Clinton in 2016, they were sending cabinet officials all across the country to those very swing states: Wisconsin, Michigan, to try to put pressure on Democrats to support the TPP for a lame-duck vote after the 2016 election. They were so obsessed with TPP. In my home state in Wisconsin, I am convinced, having the Ag Secretary and others running up and down those Mississippi, Minnesota, border state counties pushing TPP was part of how for the first time ever those districts went for Trump. Because people there lost tens of thousands of jobs to NAFTA, WTO, China and so we saw basically even the effort in the lame-duck session after Trump has won, Democratic disaster, the Obama administration is still trying to pass TPP and at that point the Democrats in congress just, you know, were smearing furious and doubled down in their no votes, Trump came in to an agreement that couldn’t get through congress and then officially gave notice it wouldn’t be approved. That’s what he did. We didn’t actually withdraw; we gave notice that we would not be sending notice of approval and the other countries moved on without us.

Ryan: 

Yeah, so that’s a pretty horrific story about the TPP’s role in the 2016 campaign. Do you think anything has changed today?

Lori: 

I think that is the big question. So, Trump is going to try to say that he fixed things — the data show he hasn’t. He campaigned on stopping outsourcing and getting rid of the deficit. His own labor department has certified 300,000 jobs as lost due to trade under the Trump administration and his trade deficit is bigger than when he took office and it remains to be seen if the Democrats at the presidential level and their campaign leaders have learned the sad lesson. Clearly, they see the downside of touting the corporate rigged status quo but whether they’re going to promote the kind of alternatives that we support, I think that remains to be seen, I think that could be important for how this election ends.

Ryan:

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 work we are doing in the fight for fairer and more equitable trade policies.

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