Rethinking Trade - Season 1 Episode 34: The USMCA, A Year in Review

On July 1, 2020, following a lengthy campaign by unions, civil society groups and congressional Democrats to win key improvements, the revised North American Free Trade Agreement, or United States Mexico Canada Agreement (USMCA), went into effect.

Unlike the original NAFTA, the USMCA requires its signatory countries to respect workers’ rights. And it has a special Rapid Response Labor Enforcement Mechanism. The revised deal largely gutted the disastrous Investor-State Dispute Settlement (ISDS) system. But recently-filed labor enforcement complaints and a “legacy” ISDS case with the corporation behind the XL pipeline demanding $15 billion from U.S. taxpayers provide a stark warning that if and how the USMCA improves life and work in North America will depend on activism in all three nations.

See Public Citizen’s analysis of the delayed phase-in of Mexico’s new labor justice system here: http://bitly.ws/dRnT

Music: Groove Grove by Kevin MacLeod. Link: https://incompetech.filmmusic.io/song/3831-groove-grove. License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

 

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. In our recent episodes, we've been speaking a lot about COVID-19 and the world trade organizations intellectual property barriers, but today we're going to talk about the revised North American Free Trade Agreement, or the USMCA because it went into effect exactly one year ago. In addition to having Lori with us today, we're also joined by global trade watches Research Director, Daniel Rangel. Daniel has been leading a lot of our work around USMCA related labor and workers rights issues, specifically around the implementation of the new labor rights obligations in Mexico. Daniel is one of the lawyers who filed one of the first labor violations cases. Lori, why don't you start us off with a general overview of the labor rules that activists fought for during the Replace NAFTA campaign. And then Daniel, let's talk about the trade next case and the report you recently authored regarding labor reforms and implementation in Mexico.

Lori Wallach 

So one of the biggest changes between the original NAFTA and the revised deal was that Democrats in Congress forced Donald Trump to renegotiate his renegotiated NAFTA, to add a thing called the rapid response labor enforcement mechanism. And what that did is it allowed for actions to be started through petitions by unions or activists that the governments have to respond to that allow enforcement against a particular company with respect to certain specific violations. And the violations relate to obligations each country was required to implement, to, for instance, guarantee basic fundamental union rights to organize to collectively bargain to be able to have, for instance, Mexico's implementation required being able to have votes on your union contract and see it in advance or being able to elect your own officers of your union to make sure they actually represent you. And what this was focused on was the combination of the original NAFTA, having no real labor standards, there was a side agreement, it wasn't enforceable in any way. And the standards themselves were enforce your own laws. So Mexico's laws and the books were pretty good. The problem was they had been enforced for literally decades, such that what were called protection unions, were the vast mass majority of unions in Mexico and in protection union is one that protects the boss. So it's a union that basically the workers don't vote for. They don't elect that union or its officers, it signs contracts with the bosses that are intended to qualify for Mexican labor law requirements that you have a union contract, but the workers never approve it. Some of them don't even know there is a union. And then these so called unions make a lot of money off of getting deductions from the workers wages, to basically be partners with the bosses in keeping wages down. And that horrible collusion, which was just basically reinforced by NAFTA and all the investment protections that helped big US multinationals move down to Mexico to use that kind of exploited labor. That combination is a big part of why, you know, 25 years after NAFTA not only had Mexican wages not risen as NAFTA as original boosters promised, but in fact, they were slightly down, and certainly they were considerably lower than manufacturing wages in China. That was one of the things that had to be tackled, that was both horribly unfair to work as in Mexico, we're making world class products for global companies, and also as a contributing factor to over a million US jobs having been certified as having been offshored to Mexico under NAFTA. So the deal was stronger labor standards guaranteed of independent unions, and for the first time, some real enforcement, but what you have on paper you never know if you have in reality and that is why one year after that all went to a fact the real question, is it changing people's lives.

Ryan 

One of the situations that Lorijust described one of the specific examples of it is something if you listen to our show you've heard about before, which is the case at the Tridonex plant in Matamoros and You know, the situation regarding the labor lawyer who's been representing the independent union there, Susana preeto. Daniel, tell us about what has been happening at the Tridonex factory and also the case that you have lead regarding the violations of labor rights at the Tridonex factory.

Daniel 

Sure. Thank you for having me, Ryan. So basically, this all started in early 2019, when the President of Mexico and then Manuel Lopez Obrador decided to rise the wages across Mexico a 20% increase of the minimum wage. And when the workers in the northern part of Mexico wanted to have that increase for the wages, that was a right that they want decades ago, because that was a provision that was already in much of the collective bargaining agreements that were prevalent in Tamaulipas, when they decided that they want to ask for this increase. They faced repression and violence, not only from companies but also from the local authorities in Tamaulipas, specifically. So one of the ways in which workers decided to claim for the new rights was organizing through a dependent union that's called MOVIMIENTO 2032 that was born out of this struggle. Workers from many factories affiliated to this union, specifically, workers from Tridonex, who played an important role in the initial uprising. When the workers tried to organize independently, they faced a lot of repression, not only from Tridonex to company management, but also the management was parked by the local authorities that in Mexico are called conciliation and arbitration boards, and those are the authorities that Lori was mentioning before that have been colluding with for decades to repress workers and to undermine the rights. So what we have done, along with our partners in labor, both in Mexico, and in the United States, is to help them present a case before the US government arguing why this has been a violation of the labor rights that are recognized by NAFTA, by the new NAFTA, and consequently, making both the Mexican government and the US government to cooperate to try to find a solution. And if it is not possible to impose sanctions on Tridonex because it has been violating labor rights.

Ryan 

And how does this case tie into? You know, I know that there are now a few other cases as well raising the issue of labor violations under the new rules. There's also the issue of the phase implementation of the rules in Mexico. Why don't you talk about the report that you recently authored looking at the status of the labor reforms and implementation in Mexico and how those kind of relate to the Tridonex case,

Daniel 

The Tridonex case is a good parting point to explain why the stage implementation of the labor reform is worrisome. And is because a good deal of the labor reform in Mexico is related to the creation of new labor courts that will deal with the cases that are filed by unions and workers to fight for their rights. The problem is that in Tamaulipas, that is the state where treatment plans are located. This has been the state that is labeled as phase three estate. What this means is that there are not gonna be any labor courts and the new labor courts in this state until May, 2022. So workers will have to go to the old corrupt labor bodies that already exists, and that are not granting them the rights until at least May 2022, for an additional year. This is not only for Tamaulipas, but it's all for all three states that, together, they have half of the manufacturing output of Mexico, half of the labor conflicts that the country registers every year, and an overwhelming number of strikes per year. And that's the problem that we identified in our report on that we're trying to put the spotlight on so that authorities both in Mexico and in the US look for policy solutions to redress this.

Ryan 

And you can see that report at the link in the summary of this episode. Moving on from that, you know, another one of the big victories during the Replace NAFTA campaign, aside from the labor rights and implementation improvements, was the gutting of Investor State Dispute Settlement rules. While this was a huge moment in the fight For better trade policies, there are still ISDS threats looming across North America. I wanted to talk a bit about both trade deals under the ISDS rules and the situation regarding the gutting of ISDS under the USMCA. Lori, maybe you could tell us a bit about ISDS policies in general and how significant the USMCA is in the context of the ISDS status quo.

Lori Wallach 

So I want to start by reminding folks what Investor State Dispute Settlement or ISDS is, it is a system that empowers multinational corporations, to skirt domestic courts and sue governments for unlimited payments of taxpayer funds over any domestic law or policy or regulation court decision that a corporation thinks violates their special investor rights in a trade agreement or an investor treaty. And these cases are decided by tribunals have three corporate attorneys whose decisions are not subject to appeal, and the amounts they can order taxpayers to pay the corporations have no limits. So the North American Free Trade Agreement, NAFTA, which went into effect in 1994, was the first trade agreement that had this extreme system embedded into it. It basically was a mechanism under which corporations could threaten and or literally extract funds from countries for implementing laws that treat foreign and domestic firms the same. And under NAFTA, almost $400 million were paid out in attacks, on environmental policies, and on totally non trade related policies like bands of toxic substances and land use policies, and water and timber policies. And that system was really one of the most pernicious elements that corporate power rigging was one of the most pernicious elements of NAFTA, it also made an incentive to outsource jobs. Because if you took off and you went to any of the other NAFTA countries, you had more of an opportunity to behave badly. And if the government did anything about it, it was like having basically investor insurance, you could go raid the Public Treasury, if they if the government said follow labor law, follow environmental law, really the wrongheaded way of of having global policy. So the really exciting thing about the revised NAFTA, is that with respect to the US and Canada, that system was simply phased out. So we are now 1/3, of the way to the end of Investor State Dispute Settlement in North America, between the US and Canada. And so July 1 is, you know, we're heading down the road, it's really important because an enormous number of the cases where US corporations attacking Canada's better environmental laws. And when US-Canada, investor state goes away, that means that literally 90% of us investor state liability goes with it. So big improvement. With respect to the US and Mexico, the old ISDS system was replaced by a system that includes most of the reforms progressives have asked for, that, among other things, requires a corporation to actually use up all of its remedies that are available in domestic law and spend a bunch of years trying before they could even use the system. But more importantly, it replaces the old substantive rules where you could get money for almost anything, to literally compensation for actual taking of a property without compensation. And that is not what these cases are about, these cases are about a regulation that changes the use and undermines the expectations. And the way the compensation works, it's the difference between what a company thought they would make their expected profits and what they really make. So it's a big honkin deal. There is one big problem with that fix, which is there was an exception with respect to existing contracts in the petrochemical sector. So oil and gas, if a US company has contracts with Mexico, then if Mexico keeps this full investor state system with any other country that has companies with contracts, then there's a grandfathering of the old outrageous rights with respect to those legacy contracts. And that's super problematic, of course, because those kinds of companies are often the biggest players, some of the biggest money grabs a famous agreement under a US-Ecuador treaty is why the largest ones were oil company is the one that is attacking Ecuador and getting literally more than a billion dollars. So it's a it's a problematic exception, but relatively speaking, almost all the cases actually Have all the cases have happened to the old NAFTA couldn't happen under this new regime. However, three years to phase it in, and as much as we can celebrate, that means there's still three years for bad cases. And already in this first year, some of them have been filed. So there have been some, what we can call legacy cases, phase in period cases. So these corporations are scrambling to use these old corporate rights before they go away. And that's a problem.

Ryan 

You know, Lori, some of the things you just said about the existing ISDS rules under the USMCA what was good, but also the carve out and you know, the the phase in and how that presents these kinds of problems. And Daniel, you were talking about some of the phase in problems under the labor rules. When when the USMCA was passed, some, some are celebrating it as a model for future trade deals, and even a, quote gold standard. But I know Public Citizen, we saw it as progress to be built upon, but far short of a model agreement. We're going to ask you both how is the USMCA looking now after a year? And what does it taught us about the future of US trade policy?

Lori Wallach 

What the whole renegotiation of NAFTA told us is that the old US trade model, which was made worse and worse and worse, until you saw the Trans Pacific Partnership, which was horrific, NAFTA on steroids, is nothing sacrosanct. It is just one version. And it was a version that was not very widely supported. And so after all, the damage it did, it got replaced. Yet, the other thing that told us was, this is an ongoing process. This ain't the gold standard. This isn't the fix. The revised NAFTA is not the model. It was important steps in the right direction. And it fix some things and it tests out some important improvements. But there's a long way to go to get a trade agreement that is really worker centered, that is one that works first for people and the planet. And the whole fight over renegotiating NAFTA is basically from going in a way from NAFTA, which was like five layers below hell we got ourselves up to the surface, which is good. But we aint in any way in trade heaven yet. So there's a lot more work to be done. And we will see how well the changes and improvements in the revised NAFTA actually work because those are things from which we can build. But there's plenty of bad stuff that's still from the original NAFTA and some new bad stuff like rules that help big tech escape, being decent to workers, or that can trash our privacy, all that stuff get added in. So there's a lot further to go. But one very big thing I think this whole episode taught is that the old trade authority system, the so called fast track system, is just a total myth. Because the revised NAFTA was negotiated under so called fast-track. And ultimately, when it came back to Congress, and there simply wasn't a majority that was going to pass that agreement, fast-track or no fast-track, they made the administration go back and renegotiate renegotiate the deal. And it ultimately passed with such a huge supermajority you didn't need fast-track. So the theory of fast-track is you have to put handcuffs on Congress. Well, that didn't work because Congress made them renegotiate it. And then the second theory of fast-track is you'll never get an agreement through Congress unless you have fast track, and no one can have any amendments and debates are limited. Except the thing got the biggest majority of any trade agreement in the 35 years I've been working on trade. Why? Because when you actually include a broad set of interests and make an agreement that actually might work for working people, you have a broad set of members of Congress that are willing to give it a try and support it. So long way to go. Fast-track is not part of the plan going forward. And some improvements that need to be built on is the lesson for me.

Daniel 

As for me, I like to say that USMCA provides hints of what a pro-worker pro-environment trade agreement could look like. At the same time, it has worrisome elements as the ones that Lori was mentioned regarding digital governance that is dying, the states to conduct certain kinds of policies are very much still debated and in there. So now, I think that it is for activists and proposal makers to build up from the good terms that we got from USMCA and not go back to the day that corporate globalization model that has repeatedly shown its shortcomings over the last decades.

Ryan 

As this episode was going live. The company behind the notorious Keystone XL pipeline launched a new attack against the US under the USMCA is legacy ISDS terms. The company TC energy claims is due $15 billion in US taxpayer money because the US government rejected the proposed 875 mile pipeline that would have transported 830,000 barrels of highly polluting crude oil across indigenous communities and more than 1000 rivers, streams and wetlands. We're going to talk a lot more about that in the next episode, so stay tuned. Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org, you can also visit tradewatch.org. Stay tuned for more and thank you for listening.

Victory: Pres. Biden and USTR Tai Announce that U.S. Will Support Emergency COVID-19 WTO Waiver of Big Pharma Monopolies to Boost Vaccine Access

By: Mariana Lopez

On May 5, President Biden and U.S. Trade Representative (USTR) Katherine Tai announced U.S. support for an initiative by 100 countries at the World Trade Organization (WTO) to temporarily waive intellectual property (IP) barriers to facilitate more production of COVID-19 vaccines globally.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” USTR Tai announced. 

Under Trump, the United States and a handful of other WTO members blocked negotiations on this waiver from even starting last fall. The Biden administration was handed the opportunity to reverse Trump’s self-defeating blockage. Big Pharma lobbied (and will continue to lobby) heavily against the waiver, while a mighty civil society coalition, that Public Citizen helped to build and lead, waged an intensive campaign. On May 5, the administration sided with the people over Big Pharma.

This was an enormous victory that sends a powerful signal to the world by breaking decades of U.S. trade officials’ active promotion of Big Pharma interests over public health. In collaboration with Public Citizen’s Access to Medicines division, Oxfam, Partners in Health, the Association of Flight Attendants-CWA, Doctors Without Borders, Health GAP, Human Rights Watch, Amnesty International and the nurses and teachers unions, Global Trade Watch campaigned to counter Big Pharma’s team of over 100 lobbyists trolling Capitol Hill and pressuring the U.S. to remain on the wrong side of this issue.

Now, it is critical that U.S. engagement in WTO negotiations leads to the fastest possible agreement on a waiver text that encompasses all health technologies needed to end the pandemic, including vaccines, test kits, treatments, medical equipment and PPE. The pharmaceutical corporations want to protect their monopoly control of supply, in part, because as Pfizer briefed investors in March, they see great profit opportunities in producing annual boosters for sale at much higher prices in rich countries. Activists will continue to fight both domestically and globally to ensure that the scope of the negotiated waiver text does not only cover vaccines.

Background:

The WTO requires its 159 member nations to provide pharmaceutical firms certain monopoly rights in a text called the WTO’s Agreement on Trade-Related Aspects of Intellectual Property or “TRIPS.” These monopoly protections mean that pharmaceutical corporations control how much and where vaccines, tests and treatments are made.

This is significant because current production capacity can’t supply nearly enough vaccines, treatments or diagnostic tests to meet global needs. Most in low- and middle-income countries will not get vaccinated until at least 2022, and those in the world’s poorest countries may have to wait until 2024 for mass immunization, if it happens at all.

As we end the first third of the year, global vaccine production has not reached 1.5 billion doses, while 10–15 billion doses are needed. Creating greater supply capacity is critical, especially because COVID-19 vaccines may be like flu vaccines that must be given regularly, not a one-time shot.

While Public Citizen’s Access to Medicine program has been campaigning for the U.S. government to invest $25 billion in expanding U.S. and international production capacity, the Global Trade Watch program promoted another important part of the solution to these issues of capacity and global access. A temporary COVID-19 emergency waiver of some WTO TRIPS monopoly rights would help Global South producers, governments and researchers gain access to the formulas and technology to make vaccines, medicines and tests to prevent, treat and control COVID-19. The waiver was proposed by South Africa and India and supported by more than 100 WTO member countries, now including the United States. The scope of the waiver (whether it will cover more than vaccines) is to be negotiated, but the United State’s support of a waiver is a critical first step.

In every region of the world, there are firms with the capacity to produce vaccines, treatments and tests and greatly increase supply if the formulas and technology are shared. By refusing to voluntarily contract with these firms or issue voluntary licenses to qualified firms so they invest in creating new production capacity, vaccine originators like Moderna and Pfizer are effectively blocking sufficient supply from being made. Johnson and Johnson (J&J) did arrange a contract with South Africa firm Aspen to make their vaccine, but for months required that 91% of the shots be sent for sale in Europe to fulfil J&J contracts there. 

Beginning in January, GTW has built escalating pressure on the Biden administration to support the TRIPS Waiver:

• We spearheaded an organizational sign-on letter, which garnered the support of over 400 U.S. civil society groups from Democratic base groups like MoveOn and Indivisible to scores of unions, faith groups and more.
• We raised awareness among members of Congress, securing 11 U.S. senators and 110 U.S. members of the House in favor of the waiver.
• We have organized press conferences and webinars with Sens. Bernie Sanders (I-Vt.) and Tammy Baldwin (D-Wis.), U.S. representatives, and leaders in the global access to medicines fight.
• We have performed extensive research and produced fact sheets, backgrounders, memos and podcast episodes to ensure that activists, civil society leaders and congressional decision makers are empowered with the information to counter ludicrous Big Pharma talking points.
• We circulated a petition addressed to President Biden that, with the help of partners, gained over 2 million signers.
• In collaboration with partners, we successfully pitched the TRIPS story to Democracy Now! and The Daily Show with Trevor Noah.

Global vaccine apartheid could cost millions of lives, push tens of millions more into poverty and spawn mutated virus variants that evade vaccines. There can be no end to the public health disaster or economic crises anywhere if people in developing nations are not vaccinated. The announcement from the United States is something to celebrate, but the work does not stop here.

First Labor Rights Claim Under the Revised NAFTA Filed by Migrant Worker Women in the U.S. -- What Does It Mean in Terms of the New Labor Rulebook in the Region?

By Daniel Rangel

The revised North American Free Trade Agreement (NAFTA) hints at key terms that a pro-worker, pro-environment trade agreement should include, thanks to the crucial engagement of congressional Democrats. In 2019, they forced Trump to renegotiate his initial 2018 NAFTA revision to meet Democrats’ demands. The final pact won unprecedented Democratic congressional support in no small part because of enhanced labor obligations enshrined in the agreement and its novel enforcement mechanisms that many hoped could improve the living conditions of working people throughout North America.

One critique made by some progressives was that the deal targeted labor conditions in Mexico, while offering little that could improve working conditions for people north of the Rio Grande — including labor protections for Mexican migrant workers employed in the Northern neighbors.

Well, it turns out that the first demand for enforcement action for failing to comply with the new labor terms is against the United States. The petition submitted on March 23 was filed by Mexican migrant workers, Maritza Perez and Adareli Ponce, and a binational coalition of organizations led by the binational organization Centro de los Derechos del Migrante, Inc. (CDM). Other signers include the American Federation of Teachers, the Association of Flight Attendants-CWA and the United Food and Commercial Workers International Union.

From the outset, it is important to point out that this submission is not under the labor Rapid Response Mechanism (RRM) that is viewed as one of the most interesting new provisions in the revised NAFTA. RRM allows challenges against specific companies and punishes them directly for violations. RRM enforcement only applies to claims about violations of freedom of association and collective bargaining rights, which are not the focus of this complaint. So, the first test run of the RRM provisions is still pending.

Rather, this submission to the Mexican Secretariat of Labor and Social Welfare is effectively a request that the Mexican government initiate what is called a state-state enforcement claim that the United States has breached the revised NAFTA labor rules by allowing gender-based discrimination in its H-2 non-immigrant worker visa program.

The 133-page complaint basically has four lines of argument.

First, migrant women are largely excluded from the U.S. H-2 visa programs. Through systemic, discriminatory recruitment and hiring practices, women are overwhelmingly left out of both the H-2A and H-2B programs. For instance, in 2018, only 3% of all H-2A visas (for non-U.S. citizens to temporarily work in agricultural essential activities) were issued to women, while women make up 25% of the U.S. agricultural workforce.

Second, the limited number of women who get admitted to the H-2 visa program are routinely funneled into H-2B visas, which are generally less desirable because of lower wages and fewer benefits, such as free employer-provided housing. The petitioners point out that the United States issues approximately three times as many H-2B visas to women as compared to H-2A visas.

Third, even within the less desirable H-2B program, employers generally assign women to less favorable and lower-paid positions than their male counterparts.

And fourth, women that participate in H-2 visa programs experience pervasive sexual harassment and sexual violence and limits to their ability to seek legal counsel.

According to the petitioners, the United States is in violation of its obligations under the revised NAFTA by failing to enforce both the new terms of the deal and its own laws that ban these kind of practices, including Title VII of the Civil Rights Act of 1964. Specifically, the case claims violations of the United States-Mexico-Canada Agreement (USMCA) Article 23.3(1)(d), labor rights; Art. 23.5(1) and (2), enforcement of labor laws; Art. 23.7, violence against workers; Art. 23.8, migrant workers; Art. 23.9, discrimination in the workplace; and Art. 23.10, public awareness and procedural guarantees.

Notably, the petitioners rely on provisions of the revised NAFTA and on U.S. domestic law to back their arguments. This speaks to the critiques about the new deal not protecting Mexican migrant workers. Unlike the original NAFTA’s labor side deal, the revised NAFTA’s Labor Chapter is part of the pact’s core text and contains “hard” obligations that are subject to the agreement’s dispute settlement provisions. This includes obligations on the elimination of employment discrimination (Art. 23.3(1)(d)) and on the protection of migrant workers (Art. 23.8). The original NAFTA’s labor-side agreement only mentioned these subjects as “guiding principles” that the parties were committed to promote without setting common minimum standards.

While the substantive standards give tools to organizations in North America to promote the enhancement of working conditions in the United States and Canada, including for migrant workers, there are no procedural guarantees a formal state-state enforcement action will proceed. Article 23.11 of the revised NAFTA obliges the parties to designate a contact point and to provide a timely response to written submissions related to labor matters. However, whether the enforcement process is launched is solely within the discretion of the government that has been petitioned. Thus, while the strong case made in the petition has advocacy value on its own merits, we must wait for the decision of the Mexican government on whether this will become a formal USMCA case and test if substantive protections for Mexican workers employed in the United States and Canada can be enforced.

Acknowledging the existence of migrant workers protections does not mean that the labor terms in the deal treat each country the same. This imbalance is particularly visible in the procedural requirements to activate RRM, alluded to above. A complaint can be initiated against Mexico based on violations of the right to organize and union democracy rights, under legislation that complies with conditions set out in an annex of the agreement. For all relevant purposes, this refers to violations of Mexico’s 2019 reformed Federal Labor Law. However, cases against the United States and Canada are limited to violations occurring after the National Labor Relations Board or Industrial Relations Board, respectively, has already issued an order, meaning that the issue already has been subject to domestic enforcement action. In practice, what this means is that there is an exhaustion of local remedies requirement to start a RRM case against the United States or Canada and there is no such requirement if the complaint is against Mexico. Furthermore, there is not RRM enforcement between the United States and Canada. 

So, what’s next on this petition? According to the revised NAFTA rules, the Mexican government has to consider and provide a timely response to the petitioners behind this brief, but it still has significant discretion about whether to proceed with state-state dispute settlement. If it chooses to do so, the first step is to start consultations with the United States to try to reach a mutually agreeable solution. If consultations fail, Mexico could initiate a formal dispute settlement proceeding and, eventually, impose trade sanctions against the United States if a panel rules that the violations indeed exist and that the U.S. government has not done anything to redress them.

Whether the Mexican government is likely to pursue this case at all or go all the way through a formal state-state enforcement case remains to be seen. Notably, earlier this year President Andrés Manuel López Obrador (AMLO) aired a proposal to create a Bracero style immigrant labor program to allow Mexican and Central American immigrants to temporarily work in the United States to fill labor shortages. Given that this complaint spotlights bad conditions for workers under existing U.S. visa programs for foreign workers, AMLO could try to leverage the case to promote his plan. However, civil society organizations, among them the lead organization behind the complaint, have sounded alarms about a potential Bracero 2.0 program, due to the exploitative working conditions under the original program during World War II.

In any event, the complaint represents many organizations’ intentions to test if the revised NAFTA’s labor terms could be an effective tool to improve workers’ conditions in the United States, in contrast to the current model that has primarily benefited transnational capital. Now, it is for the governments of North America to treat this case, and those that follow, seriously in order to make the revised deal a floor of decency for worker protection across the region.

Rethinking Trade - Season 1 Episode 30: Deep Dive: How WTO Rules Protect Big Pharma Profits

Millions of people around the world may not get COVID-19 vaccines until as late as 2024 due to World Trade Organization rules that protect medicine monopolies for the Big Pharma giants. What do these WTO rules require? How do they implicate access to essential medicines? How do countries escape these WTO-imposed barriers that protect corporate profits for vaccines developed with boatloads of tax-payer money?

On this episode, Lori gives us a guided tour through the thorny thicket of intellectual property monopolies, the “trade” agreement rules that oblige countries to enforce them and the WTO waiver needed to boost production of COVID vaccines, treatment and tests worldwide.

Learn more at rethinktrade.org.

Music: Groove Grove by Kevin MacLeod

Link: https://incompetech.filmmusic.io/song/3831-groove-grove

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

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. Lorie. Last week during one of our regular global trade watch meetings, you talked with us about some complex but fairly important details regarding medicine, patents, copyrights and international trade rules that impact vaccines and other medicines. This was in the context of the campaigning that we're currently doing supporting a call from over 100 nations at the World Trade Organization for a temporary emergency waiver to the WTO trips rules, which would increase global production of COVID-19 vaccines and treatments. So today, I wanted to ask you to basically give that talk again, only this time to our listeners. So if you're with me, let's take a deep dive into the world of pharmaceutical technology, patents, and copyrights.

Lori: The mission here is to get vaccines, treatments and tests to people in every country in the world. Because no one is going to be safe, the economy's not going to get back in its feet anywhere unless people are able to fight COVID everywhere. Right now there is the capacity to make about 4 billion doses of vaccine per year; 15 billion doses are needed. Governments have spent tens of billions of dollars giving it to pharmaceutical corporations to come up with vaccines. Yet the pharmaceutical corporations have monopoly control over aware how much, if the vaccines will be manufactured, where they can be sold, and at what price. And one part of the reason for this lunatic situation where dozens of countries have not had a single dose of vaccine. And many developing countries are not expected to have significant vaccination until 2024 is in part because of World Trade Organization rules in the trade-related aspects of intellectual property TRIPS agreement, these WTO rules require every signatory country to give very lengthy monopoly rights to corporations with respect to not just patents over say a medicine, but the copyright that goes to the computer program for the machine that makes the vaccine or that makes the ventilator work. And the design information about the machine that is used to do a key process and making the vaccine and what's called undisclosed information protections, which has both to do with some of the know-how about what needs to be done to make it work but also has to do with certain test information. And all of those protections are what South African and India now with 100 countries supporting them are asking is temporarily waived. So that those monopolies are suspended to the extent doing so is necessary to treat and to stop the COVID pandemic. And the campaign that's going on around the world is to get governments to support this because the WTO works by consensus. And so far the US has been one of the very few countries along with the UK, with Canada and the EU as a bloc that have been stopping this very important emergency change at the WTO and these trips rules, basically before have led to needless suffering and death. Because these extreme monopoly protections are the reason millions of people in Africa died in the 90s from AIDS. When in the US HIV diagnosis was the beginning of a chronic disease. You took antiretrovirals you had medical interventions that meant you could live a long life. And the US pharmaceutical companies wouldn't share the information. The countries in which these medicines were made fought what was then an effort to get these WTO rules suspended. And the result was millions of people died. Now in this circumstance, not only are millions of people going to die, but if we don't get this right, it's actually against our own national interest. Because if there is an outbreak of COVID any place where mutations can occur that is going to generate the variant that gets around the vaccines we've already had that puts us all back into quarantine that is more deadly but it's more infectious so really really for any of us to be safe we all need to get the vaccines the tests and the treatments.

Ryan: There's a few key terms and ideas and you talked about some of them just then Lori but maybe if you want to expand on a few of those that might help me and the listeners understand sort of the depth of what TRIPS covers when we think of medicine copyrights or medicine patent you think just oh the pill itself is patented you don't think that everything involved in dispensing it and storing it and all of these things is also covered maybe you could talk about some of that stuff and the differences between a patent and copyright when it comes to these kinds of laws. And then also i want you to get into talking about these compulsory licenses because that's a term that's being used a lot right now as some people are saying oh we can use compulsory licenses we don't need a trips waiver maybe you could talk about that and give us an understanding of what that even means how it works and if it's even applicable right now.

Lori: So one of the first things to know is that at the time i was describing with with the fight over hiv aids medications anti retrovirals typically those medicines had patents so a patents is a monopoly protection granted by a government it's like a license that protects an invention or discovery an idea effectively so if you created some new medicine and it wasn't it was what's called it's original it wasn't something someone else had done you can get this government monopoly right and a copyright protects original works of authorship so like for instance the way to think about how this comes together is at the time of the antiretroviral wto fight for hiv aids the medicines were basically protected by patents so at that time the fight was to make clear you could get what was called a compulsory license that is the ability for a government if a company will not allow a contract for a local manufacturer a monopoly patent holder you can force a license that's what a compulsory licenses you force a license and the license is literally the right to make that thing that is under the patent monopoly so let's just say I had the monopoly on come up with whatever it is medicine and you're in a different country Ryan and your country needs that you have come to me and say alright company and country a I would like this or I may be in the same country i would like to be able to make this medicine too and I would say, "Well I have a monopoly for 20 years it's a patent, go away I can charge as much as I want." And if you could prove an overriding national interest to health emergency etc, then you could go to the government say, "Hey, I've tried to get Wallach to give me this license I'm happy to pay for it but she ain't budging." And then they force it and they say, "I will grant you company, Ryan, a compulsory license to make company Wallach's drug." And the WTO fights in the early 90s was just to make clear that governments could do that because the big pharma interests were saying whoa under these WTO rules you can't even do that so the situation though got kind of more evil so the problem we have now is then there was a patent and then you would do a compulsory license if a company was being greedy. Now the companies that are what are called the originators so the companies that have made the product initially in this instance with the vaccines with literally tens of billions of taxpayer funds but related, but separate issue. So whoever has that intellectual property monopoly now their strategy has been to make what is often called a thicket of intellectual property protections. So instead of there being a patent on the medicine there is a patent on the medicine but then there is also a patent on the three precursor chemicals that were created that go into the medicine and then also the special whirlygig that you created which mixes up your components gets patented it's a machine and it's an invention and that gets patented and then you decide to make a special injector that is especially useful for this and can only your medicine can only be the shot can only be through your injector and that gets patented and then in addition your worldly gig is operated by a computer program and that gets copyrighted. And then also you have very specific rules about how the medicine can be transported and how it can be delivered and how it can be segmented and how it can be dosed. And that booklet gets copyrighted. And then in addition, you have a lot of know-how about the stuff that isn't just the recipe that isn't just here's how the machines engineering is done, that you try as these companies to get some kind of monopoly protection over as undisclosed information, you basically want to make it so it is basically nigh impossible for anyone to be able to make this but you so you control how much you control the prices. And these kind of IP thickets are what right now are like barbed wire around these vaccines. So that if these WTO rules that allow, that require all of these countries to have these rules in place, and allow this kind of mop monopoly protection, it will make it almost impossible for what needs to happen, which is production needs to be scaled up all over the world of these vaccines of these treatments of these tests. Because it's not just we need to get everyone vaccinated once it's going to be an ongoing process. And there is simply I mean, there's no way under the current paradigm, we are going to be able to get the volume, the supply, it's never the money issue. You know, a lot of the pushback from certain people in the US government officials in the US or EU is, "Oh, look, we're starting to give to these different funds that will be buying the vaccines for poor countries." And you know, it's good luck, there's nothing to buy, that's part of the problem, because the entire supply that exists is insufficient, and what is in existence has been already pre-ordered. So we have to have more made, which is why this WTO waiver covers the four different pieces of copyright because the compulsory license for a patent ain't gonna cut it, the thing that worked in the 1990s ain't gonna cut it. You have to have, to the extent it limits the treatment and crushing of COVID, you have to have temporary suspension, also of those copyright rules, as of course of the patent rules of the non disclosed information rules, you have to basically have the whole thicket, you have to have a very strong clipper to go through all that barbed wire and rip it out of the way. So more production can happen.

Ryan: How do these rules interact with our domestic laws? And what happens to them at the World Trade Organization?

Lori: So that's a very big kettle of fish generally, and as part of what is wrong with the WTO. But the short answer is the WTO has a requirement that is each country shall ensure the conformity of its domestic laws, regulations and administrative procedures, with the attached agreements. And that includes all those patents and copyright and other monopoly rules in TRIPS. So every country is obliged to have its domestic laws meet those rules. And if you don't, you can get hit with trade sanctions from another country. And also, frankly, without the blessing of the WTO, to have the changes that many countries want to make. Countries want to be able to help support domestic production, obviously, not every country can do it. But in every region of the world, there are companies in countries that could be making these vaccines and treatments and shipping in the region. And there's just endless stories of how having pharma monopoly control means no supply. There are just, you know, there's a company a very high tech company in Bangladesh, that's been begging all of the Big Pharma and Maderna and all the others to give them a license to be able to contract manufacturer, the medicine for distribution in Asia, the company that is currently having a contract with Johnson & Johnson in South Africa is obliged because Johnson & Johnson totally controls it, to export 91% of what they make to Europe, 9% can be sold in South Africa. So the keeping that monopoly control in your domestic law, when governments want to have the blessing of the WTO in the short term to take the policy changes without threat of sanction, but also effectively like the good housekeeping seal of approval, so that the pharma companies and other countries, don't threaten them with lawsuits, etc. Because you know, pharma can come into the domestic courts and say this is a violation of your obligations under the digit. They just need all of that cleared away, and honestly, also having the waivers enormous leverage, because there's been a lot of sweet-talking to Pharma, please do this please contribute that please share this and none of it's happened. None of it's happened. And so this is the stick, right? This is the stick this is if you guys don't start doing technology transfer, then we will use the rights under this WTO waiver to just do it on our own.

Ryan: Rethinking Trade is produced by Public Citizen's Global Trade Watch. To learn more you can visit rethinktrade.org, you can also visit tradewatch.org. Stay tuned for more and thank you for listening.

Rethinking Trade - Season 1 Episode 29: Will Biden Build Back Green, or Import Green?

Our tax dollars should support green jobs with fair wages, not a global race to the bottom that exploits workers and poisons the environment. But thanks to corporate-rigged trade policies, “Buy American” government purchasing requirements are waived to include purchases from 60 other countries. This means our tax dollars are exported instead of being recycled at home to develop electric car and domestic solar, wind and other renewable energy manufacturing.

With the COVID-19 relief bill currently being implemented and another major spending bill on the horizon, the president must take a simple but important action to keep trillions in taxpayer dollars circulating in the U.S. economy to build a green future. Thankfully, the Biden administration’s Build Back Better plan acknowledges this as a problem for both climate justice and economic justice, but obstacles still remain.

More on this subject is available here.

Transcribed by Sally King

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. Today, we're going to be talking about jobs, the climate and a major part of the Biden administration's plans for the country. Before we get into that, though, there's two things that need to be defined for me and for the listeners. The first one is Buy American. The second is industrial policy. Lori, could you give us a quick understanding of what these terms mean, in relation to the content we're about to discuss.

Lori: So Buy American is literally a statute from the FDR era, that gives preferences to domestic goods when the government spends money. So when the government procures cars or desks or paper or computers or phones, the law requires that the priority be in reinvesting our tax dollars into buying things made here, so that the money goes back into innovation and jobs in the United States. Industrial policy is a broad set of policy approaches that a government uses to incentivize the development of different sectors like manufacturing. Procurement policy, like by American is one tool of industrial policy. But other tools include tax policies. For instance, our current tax system incentivizes the offshoring of investment in jobs, you get a lower tax rate if you produce offshore, that's a choice. It's an anti-industrial policy, or sometimes industrial policy involves subsidies. So the government will give you a payment back if you buy an electric car, if you use solar on your roof, for instance, to try and incentivize certain behaviors with respect to renewable energy. And that basket of different tools many countries use and many developed countries like Germany, where its industrial policy for manufacturing, for instance, and involves tax policies involves educational policies to train workers and technical skills involves investments in research and universities involves incentives and subsidies and tax benefits to cluster different companies together so they can become a solid supply chain in a particular area. And all of those tools together are how the countries that currently are leading in different sectors have been able to do so. So the good news is that the Build Back Better plan contemplates renegotiating those parts of the trade agreements that effectively forbid us from using Buy American preferences by it's going to take a while to do that 60 countries now get that treatment, a lot of different agreements are going to need to get fixed, but a ton of money. And in fact, some of the main policy towards green energy, green auto sector infrastructure is all going to get spent is going to be allocated very quickly. And that is because there will be too big reconciliation bills, the one passed the COVID relief Bill $1.9 trillion. And the next one is going to have a lot of energy, infrastructure, etc, in it. And that is the Recovery Act, the COVID Recovery Act. And those are the two pieces of legislation that can get through the Senate with 50 votes, it's using a sort of arcane budget rule. But those are the things we know for sure are going to actually be the trains leaving the station versus the Republicans in the Senate can block a lot of other stuff. And so if the president doesn't use the authority the President has right now to do a special waiver. So that's that by American exception for all the trade women countries is not it needs to be chucked out just for the COVID spending. We can then go back and renegotiate for the regular spending the trade agreements. But in the short term, if the president doesn't use this special authority that he has, we'll end up offshoring those trillions of extra dollars including in the green energy green jobs, electric car sector instead of building instead of investing to build those sectors here. We'll just end up spending the money to import the goods from someplace else.

Ryan: You kind of hinted at some of this in what you just said. But President Biden's Build Back Better plan calls for some pretty huge investments in green technology as part of the path forward on both job creation, but also addressing some of the priority changes called for by the climate justice movement. A lot of people have observed that this is one of the closest things we've seen in a long time to having a wide-scale national industrial policy, and one that has both national and global implications. I wanted to ask you, Lori, how do Buy American rules play into the Build Back Better vision? And what are some of the critical fixes that need to be made to ensure that these rules can be used to support this initiative?

Lori: Over time, the Buy American policies that were established originally 80 years ago, have been eroded. And they've been eroded in two ways. One is that there are very loose rules about what can be considered American, you can have all the parts and components come from someplace else. And as long as it's assembled here, it qualifies under some circumstances. And so a lot of taxpayer money actually literally is being spent in goods made elsewhere. Another really big exception to the rule is that any country with which the U.S. has a certain kind of trade agreement gets treated all of its goods and services as companies get treated like they're American. So right now by American means by American plus goods from 60 other countries, it's all of Europe, it's Japan, it's Hong Kong, it's Mexico, it's Korea. And for all of those goods, there is basically offshoring of our tax dollars to buy those goods from other countries. And the hitch with the build back better plan is, it both recognizes that this is a problem, and for instance, talks about renegotiating a bunch of those trade agreement rules, which is exactly right. But the hitches a lot of the money is going to be spent through what is called the reconciliation bills, these two bills that only need 50 votes to get through the Senate are some of the only big policy bills that are going to go into place. The first one's already been passed. It's the COVID Relief Act $1.9 trillion dollars. And the next one is going to probably be focusing more on infrastructure and renewable energy. And if there's a big waiver to buy American with the trade agreements for all of that we're going to see a lot of the potential to harness that taxpayer money into a renewable energy future with good jobs being squandered.

Ryan: You were quoted in the Huffington Post recently, in an article called "How a Trade Dispute Between Two Korean Firms Could Jam Biden's Electric Car Plans." The article detailed a rather obscure case moving through the U.S. International Trade Commission's core system, that could have a big impact on some of Biden's Build Back Better plan. Maybe you can explain this case and how it shines a light on the necessity to transform our trade policies as we look towards other systemic domestic priorities.

Lori: So, the case in question is a fight between two Korean companies that make electric car batteries. And there is a piece of U.S. trade law that allows a private company to go to court and basically get an injunction a stop operating order against another company if they can argue that that other company is importing goods or is making goods that violate the intellectual property rights of the other company. So the one Korean company is saying that the other Korean company which is trying to open up an electric car battery factory in Georgia, the company number one is claiming company number two that's opening the new U.S. plant has stolen company number ones electric battery technology, and that it's violating its patent. And under this U.S. trade law, basically, the patent right of the foreign company trumps the goal of the Biden administration and getting a lot of electric vehicles and that supply chain built in the U.S., because it doesn't matter if it's a Korean company, or if it's a U.S. company, if the production is here, and the jobs are here and the supply chain is here. That helps promote what the bind administration is trying to do as far as the climate and jobs goals. So the there's been an original ruling by the International Trade Commission that is forbidding the second company to produce its electric car batteries, they can only do it for a certain number of years and then be shut down. And so there's now an effort by policymakers in Georgia and environmental groups to get the president to use authority to override the shutdown of this electric car battery plant.

Ryan: Last, Lori, for a big question. And that is, do you think the Biden administration will follow through on these promises? Or maybe more importantly, for folks listening to this podcast? What are some of the roadblocks that we need to work to transform to help clear the way?

Lori: My sense is that the administration actually intends to follow through. But it's not going to be a simple matter, because there are a lot of special interests that have enjoyed the existing system. Which is to say, obviously, the oil and gas companies have had all kinds of incentives and privileges in the tax code with subsidies, those have to be taken away. And then the green energy sector and electric car production need to be incentivized. And that's going to be a big battle. But something people can do right now is to communicate by email, by calls, if you're a user of Twitter, by Twitter, the message to your senators and your house members that you need the president to use the President's existing authority to do an emergency waiver of the trade women exception for Buy American, you don't want the big COVID relief and recovery bill money to go offshore. And you know, the easy way to say it basically is can you get the president to end the trade agreement exception for Buy American for the COVID money. That's the cleanest way to say it. So far, 13 senators and a bunch of House members have written to the president asking him to use that authority, it's very easy to do, the president just has to put a little notice in the Federal Register saying, "Hey, for this COVID money, the by American exception for trade agreements does not apply that money staying home -- we're investing at home." It's just a ploy question of getting that to be something the President actually prioritizes doing. Because if we have this unique opportunity with all these large pots of money to try and build the future green infrastructure green energy system, electric car supply chain that we need, both as a matter of having a livable planet and surviving climate catastrophe, but also to create new jobs and transition, have a just transition that takes into account people's livelihoods, then we need to have that money harness here. We've paid it in as taxpayers, we need to transform our economy, our jobs and do our part to protect the climate. And that means we need to make sure it's not all being offshored. Because, you know, the companies that got their original waiver to Buy American for the trade agreements, they always wanted to be able to get their big fat government contracts and to produce the stuff at slave wages offshore. And as a matter of climate justice and economic justice that has to end you want our tax dollars, then A: it's going to be green and B: it's going to be fair wages. So you're going to be having unions, you're gonna be making a lot of it at home, you're not going to be racing to the bottom, and we have control over that. And it's worth talking to members of Congress about that right now because the money starting to move.

Ryan: Rethinking trade is produced by Public Citizens Global Trade Watch. To learn more, you can visit rethinktrade.org You can also visit tradewatch.org. Stay tuned for more and thank you for listening

Public Health and Big Pharma Monopoly Protections: Why a WTO Waiver on IP Rules Is of the Essence

By Daniel Rangel

With growing momentum behind the global campaign for a temporary, emergency waiver of some of the World Trade Organization’s (WTO) intellectual property (IP) to boost production of COVID-19 vaccines, treatments and tests, the pharmaceutical industry is arguing the initiative is not necessary or helpful. These claims, while not original, are still worth debunking, given they distract from the mission at hand: removing legal and political obstacles to scale up manufacturing of the critical goods we need to combat a raging pandemic.

There are several accounts that thoroughly explain why waiving certain provisions of the WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is critical and how it could contribute, along with other efforts, to ramping up production of vaccines, treatments, diagnostic tests and equipment so that we can end the pandemic as quickly as possible. (You can see our contribution here.)

The IP-maximalists — the usual Pharma CEOs and various associations and spokespeople — started from the old hymnal: (i) IP is not really an obstacle, (ii) developing countries do not have the capacity to produce and (iii) TRIPS has incorporated flexibilities that allow countries to balance their public health needs with the IP protection.

This December 2020 brief from Doctors Without Borders does a nice job taking down these “myths.” However, as these claims have been disproved, some new arguments are rising.

One theme is that the TRIPS waiver would not be enough to make a difference, and thus countries would fare better if they focused their efforts elsewhere, such as on COVAX. (While COVAX is an important initiative, its reach should not be overstated. If it has the funds and vaccines supply to reach its most ambitious goal, COVAX would cover the 20% most at-risk portions of low- and middle-income countries’ populations. That is far below the percentage needed to achieve herd immunity and crush the virus.)

Why would the TRIPS waiver not be enough to make a difference? Because countries would need to make swift changes to their own laws, which would be difficult, if not impossible, this argument goes. It’s a rather odd argument, given that more than 100 countries are supporting the WTO proposal precisely because they want to adjust their domestic IP policies and practices in the face of the pandemic. A major point of the waiver is to gain policy space to act without the risk of facing a WTO challenge and legal defense expenses or other WTO nations’ sanctions.

Countries, faced with the COVID-19 disaster, have not hesitated to act swiftly and enact all sorts of measures to deal either with the public health crisis or the struggling states of their economies, as documented by COVID AMP, a project led by the Georgetown University Center for Global Health Science and Security, that tracks policies taken in response to the pandemic. Countries have enacted nearly 250 pieces of legislation, at the national level, to adjust their legal frameworks to make them more suited to the innumerable challenges posed by the pandemic.

Parliaments around the world have adopted legislation to approve unprecedent fiscal stimulus packages; compel health providers to serve everyone, without delay and free of charge; allow health authorities to restrict large gatherings, sport events and commercial activities; ban financial intermediaries from collecting debt; and impose national mask-wearing mandates. After all of that, making changes to intellectual property regimes so as to ensure the public has access to vaccines, treatments and tests to crush the pandemic hardly seems impossible, especially if the right message is sent from the WTO.

In fact, rich countries, such as Canada, Germany and France, already passed legislation streamlining and expediting the process for getting compulsory licenses for patented inventions. Notably, Canada — a country that has opposed the WTO TRIPS waiver — reformed its Patent Act in March 2020, as a part of its COVID-19 Emergency Response Act, to expand the federal government’s power to authorize a compulsory licensing system in the context of a national health emergency to facilitate production and sale of patented products without having to seek authorization from the patent holder and regardless of its capacity to satisfy the domestic demand.

Unlike many developing countries that are largely deprived from access to COVID medical goods, Canada has ample legal resources to battle out at the WTO whether this new policy complies with TRIPS requirements for compulsory licensing. But most low- and middle-income countries that support the waiver proposal and that now have no or very limited vaccine access have neither the legal capacity nor the political clout to do as Canada has. Indeed, when these very countries have tried to use the existing flexibilities in the WTO TRIPS Agreement, they are often bullied by the United States or the European Union to alter their plans or face trade disputes and sanctions. This is why a waiver that defangs the usual legal and power plays both is the necessary signal for developing countries and their manufacturers to invest and act.

Perhaps more importantly, as Doctors Without Borders noted, even with this new legislation, Canada was not able to convince or compel COVID-19 vaccine developers to manufacture doses in its territory while it was negotiating its purchasing agreements. This leads to a major point: even for a country like Canada that has the legal capacity and political clout to expand its legislation on compulsory licensing, the existing TRIPS flexibilities — which are expressed domestically in the form of compulsory licensing systems for patented inventions — are just not enough to overcome the myriad of challenges that countries are facing to kickstart COVID-19 vaccine production in their territories. Challenges go from the thicket of patents covering every step of vaccine development and manufacturing to the undeniable need of knowledge and technology transfer from vaccine developers to manufacturers around the world, to the sizable investments required to retool existing facilities and create new ones. Whereas the waiver, as opposed to the current flexibilities, would allow countries to undertake actions to get rid of the first challenge, there are clearly more steps required to deal with the second and third ones.

There is much that could be said about these issues, and they probably warrant a different entry on this blog. For the purposes of this piece, it is enough to clarify that the waiver would give every country, but particularly those in the developing world, the policy space needed to undertake bold legislative and administrative action, which could be crucial to expand vaccine production wherever it is technically feasible. 

The latest “novel” argument against the waiver is that many developing countries have entered into free trade agreements (FTAs) with TRIPS-plus obligations, i.e., terms that require governments to provide Pharma firms protections beyond those afforded by the TRIPS Agreement. This indeed is a problem, one that arises when — behind the façade of trade liberalization — countries enter into “trade” deals full of provisions that are not related to the exchange of goods and services across borders and instead are behind-the-doors concessions to corporate interests. For decades, civil society groups have warned of the risks that these kinds of agreements represent for the democratic debate both in developed and developing countries.

However, these FTA TRIPS-plus terms are not grounds for quashing a TRIPS waiver. Rather, the waiver would provide a foundation for FTA parties to issue démarches agreeing to equivalent temporary, emergency waivers or cease-fire agreements renouncing the use of trade-pact dispute settlement to enforce IP related to products necessary to fight the COVID-19 pandemic. Especially since a TRIPS waiver would be adopted by consensus at the WTO General Council, it’s highly unlikely that countries agreeing to waive IP rules at the multilateral level would do the opposite via bilateral deals. Attempts to do so would face global condemnation.

The truth is that South Africa and India, which initiated the waiver proposal, along with other governments, civil society groups and think tanks, have produced swaths of evidence that support the waiver. And, no one has claimed that if a WTO TRIPS waiver is approved, somehow, magically, production facilities will sprout in every country. However, the waiver is the critical first step towards boosting production. It would be pivotal to make other global initiatives work, such as the World Health Organization COVID-19 Technology Pool, and to empower countries worldwide in the colossal effort of bringing the COVID-19 pandemic to an end everywhere and for everyone.

Hundreds of Prominent US Civil Society Organizations Call on Pres. Biden to Stop Blocking COVID-19 WTO Waiver to Boost Vaccines, Treatments Worldwide

MSF, Oxfam, Partners In Health, Human Rights Watch, Public Citizen, MoveOn, Indivisible, Unions, Faith Groups, Citizens Trade Campaign, Health GAP, and More Urge U.S. Support for Waiver at March 1-2 WTO General Council

FOR IMMEDIATE RELEASE: February 26, 2021

CONTACT:  Matt Groch [email protected] (202) 454-5111

WASHINGTON, D.C. – Today, U.S. consumer, faith, health, labor, human rights, development and other civil society groups urged the White House to support an emergency COVID-19 waiver of World Trade Organization (WTO) intellectual property rules, so that greater supplies of vaccines, treatments, and diagnostic tests can be produced in as many places as possible as quickly as possible. The pandemic cannot be stopped anywhere unless vaccines, tests, and treatments are available everywhere, so variants that evade current vaccines do not develop.

At a press conference joined by Reps. Rosa DeLauro, (D-Conn.), Earl Blumenauer (D-Ore.) and Jan Schakowsky (D-Ill.), U.S. civil society leaders released a letter signed by hundreds of prominent U.S. organizations calling on the Biden administration to join more than 100 nations in support of the waiver. The Trump administration led a handful of countries opposed to the waiver at the WTO. At two recent WTO committee meetings, the new administration has not reversed the Trump era obstruction of the waiver.

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) requires countries to provide lengthy monopoly protections for medicines, tests, and technologies used to produce them. While there is production capacity in every region, WTO rules block the timely and unfettered access to the formulas and technology needed to boost manufacturing. Unless much greater volumes are made, many people in developing nations may not get COVID-19 vaccines until 2024. The unnecessary loss of life will be compounded by the loss of livelihoods for millions. According to an International Chamber of Commerce study, the world could face economic losses of more than $9 trillion under the scenario of wealthy nations being fully vaccinated by mid-2021, but poor countries largely shut out.

Statements from Participants:

 

U.S. Representative Rosa DeLauro (D-Conn.), Appropriations Committee chair

“The COVID-19 pandemic knows no borders and the need for vaccine development and dissemination across the globe is critically important. The TRIPS waiver raised by India and South Africa at the WTO would help the global community move forward in defeating the scourge of COVID-19 by making diagnostics, treatments, and vaccines available in developing countries. We must make vaccines available everywhere if we are going to defeat this virus anywhere. The U.S. has a moral imperative to act and support this waiver at the WTO, and I am hopeful that the Biden Administration will support this waiver to help our allies around the globe bring an end to this pandemic.”

 

U.S. Representative Earl Blumenauer (D-Ore.), Ways and Means Subcommittee on Trade chair

“As a global community, we must come together and use every tool at our disposal to stop this pandemic,” Blumenauer said. “Unfortunately, we have seen intellectual property rules and corporate greed have disastrous impacts for public health during past epidemics, and we need to ensure that this doesn’t happen again. Working to ensure that trade rules do not stunt the developing world’s access to vaccines, treatments, and diagnostic tests is a clear step. It’s the right thing to do not only for our country, but for the entire world.”

U.S. Representative Jan Schakowsky (D-Ill.), Senior Chief Deputy Whip and Energy and Commerce Consumer Protection and Commerce Subcommittee chair

“I support the proposed TRIPS waiver because I support equitable vaccine distribution worldwide, because if vaccines aren’t available everywhere, we won’t be able to crush the virus anywhere. The new COVID-19 variants, which show more resistance to vaccines, prove that further delay in immunity around the world will lead to faster and stronger mutations. Equitable access is essential. Our globalized economy cannot recover if only parts of the world are vaccinated and have protection against the virus. We must make vaccines available everywhere if we are going to crush the virus anywhere.”

Paul Farmer, Co-Founder, Partners In Health

“If we want to stop COVID-19 here, we have to stop it everywhere. The world does not have time to wait for the usual, slow, and unequal distribution of treatments, diagnostics, and vaccines. We can take a lesson from the global AIDS movements and make sure patent laws don’t block access to lifesaving therapies for the poor. It’s a similar story for vaccines, which in the case of covid19 we’re so lucky to have and in such short order. Moderna has waived these rights and others should follow suit as we deploy one of the mainstays required to end this pandemic.”

Sara Nelson, President, Association of Flight Attendants-CWA

"COVID does not have borders and neither should vaccine access. Flight Attendants know our jobs depend on a strong global network. We must work to ensure that people around the world have access to the vaccine in order to eradicate this virus. We cannot succeed as a global community without taking care of all people."

 

Sister Simone Campbell, Executive Director, NETWORK Lobby for Catholic Social Justice

“We have learned over the past year that pandemics are communal struggles. We are all vulnerable, and we all can help control the virus. In our nation, over 500,000 people have died and millions have been infected. The U.S. government has invested over $13 billion in taxpayer funds to create vaccines, and other developed nations have invested as well. Now, we in these rich nations have an obligation to share with the global community. That is the only way to protect the vulnerable here and abroad. Both faith and pragmatics demand it. When we faithfully care for our neighbors, we pragmatically care for ourselves.”

Yuanqiong Hu, Policy Co-coordinator, Doctors Without Borders (MSF) Access Campaign

“Governments must not squander this historic opportunity and avoid repeating the painful lessons of the early years of the HIV/AIDS response. This proposal would give countries more ways to tackle the legal barriers to maximizing production and supply of medical products needed for COVID-19 treatment and prevention. Defending monopoly protection is the antithesis to the current call for COVID-19 medicines and vaccines to be treated as global public goods. In these unprecedented times, governments should act together in the interest of all people everywhere.”

Akshaya Kumar, Director of Crisis Advocacy and Special Projects, Human Rights Watch 

"Sharing the recipe for vaccines by pooling intellectual property and issuing global, open, and non-exclusive licenses could help scale up manufacturing and expand the number of vaccine doses made. This means instead of arguing about how to ration better we could be rationing less."

Brook Baker, Health GAP Senior Policy Analyst & Northeastern University Professor of Law

"As an expert in intellectual property law and access to life-saving medicines, I can assure the Biden administration that IP barriers are real, and they're blocking millions of people around the world from accessing life-saving COVID-19 vaccines. By obstructing the TRIPS waiver proposal, President Biden is breaking his promise to share COVID-19 vaccine technologies with the world. His administration must support the TRIPS waiver and send a message to big pharma that it's unacceptable to write off the lives of 90% of people in low- and middle-income countries."

Arthur Stamoulis, Executive Director, Citizens Trade Campaign

“Supporting this waiver is an easy way for the Biden administration to start reestablishing the United States’ standing within the international community, while also benefiting public health and economic recovery here at home. Trade rules cannot be a cudgel used to force countries into putting pharmaceutical company profits ahead of human life.”

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

“What is the possible upside of the U.S. blocking this WTO waiver supported by most countries given there is manufacturing capacity around the globe to greatly increase supplies of vaccines, tests, and treatments if formulas and technologies are shared? We are in a race against time with a pandemic that cannot be stopped unless vaccines, tests, and treatments are available everywhere because outbreaks anywhere spawn variants that can evade vaccines and/or are more infectious.”

Link to Recording of Full Press Conference

Rethinking Trade - Season 1 Episode 28: What The Biden Administration Can Do To Fix Our Trade Mess, Part 2

The Biden administration inherited a political and trade policy landscape transformed since the end of the Obama presidency by both the Trump trade strategy and the COVID-19 pandemic.

To deliver on its Build Back Better promises, the administration must create new approaches to trade that prioritize good jobs, promote the environmental and energy policies needed to counter climate catastrophe, protect consumer health and safety, and promote small business by breaking up monopolies.

In part one of a two-part series, we discuss the short and middle-term steps the Biden Administration should take to accomplish these goals. Welcome to the Cliff Notes version of the Transition Memo on Trade Policy, recently released by Public Citizen and the United Brotherhood of Carpenters.

Learn more at rethinktrade.org.

Music: Groove Grove by Kevin MacLeod 

Link: https://incompetech.filmmusic.io/song/3831-groove-grove

License: http://creativecommons.org/licenses/by/4.0/

Transcribed by Sally King

Ryan: Welcome back to Rethinking Trade where we don't just talk about trade policy, we fight change it. I'm Ryan, and I'm joined once again by our in house trade expert, Lori Wallach. So Lori, two weeks ago, we ran through day one and first 100 day suggestions for the Biden administration on how to fix our rotten trade policies. Today, we're going to jump into the longer-term changes laid out in the recent transition memo and trade policy that Public Citizen and the Carpenters Union put together. For the listeners, you should definitely check out part one as well. But here's part two. Lori, are you ready to answer some questions?

Lori: I am.

Ryan: So like last time, I'm going to read the headline from this document for each of these policy proposals. You're going to have about one minute to explain it to our listeners, when you hear the buzzer means your time is just about up. You ready to go?

Lori: I am.

Ryan: All right, part two, number one: Conduct an inclusive, comprehensive, transparent process to review existing trade agreements for consistency with the Build Back Better plan.

Lori: So that's kind of self-explanatory. The point is that many terms in our existing trade agreements have nothing to do with trade per se, but rather conflict with the climate and the health and economic justice focus of the Build Back Better plan. And its things as diverse as the ban on buy local or buy American procurement, which is used to reinvest our tax dollars into developing new EV electric vehicle technology or renewable energy sources domestically, it is rules to get subsidies that could help that could stop the government from investing in making more medicine domestically, it is rules about standards that could basically require us to import goods that are climate dangerous and not be able to distinguish. And so all of that stuff needs to be reviewed needs to be fixed. So our trade agreements support, not undermine the whole wide set of non-trade goals that are in the bill back better plan.

Ryan: Number two: Launch a review of USMCA implementation to develop an action plan around labor and environmental rules.

Lori: So the revised NAFTA, which Trump called the US Mexico Canada agreement, had some improvements on paper, but a lot of it still is not implemented. And there are a lot of powerful interests and elite players in the governments of the three countries that may or may not be interested in implementing all of it. So it's really important that the people and planet parts of that agreement, the labor standards, the environmental standards, water quality, etc, that a plan to make sure that stuff is actually translating from paper to improvements on the ground is created and then enforced. And that's everything from cracking down on those border maquiladora plants where workers are being forced to go back to work without COVID protections in Mexico, where unions are still being busted to making sure that the investment of water improvement funds and environmental cleanup money actually goes to where it's supposed to be.

Ryan: All right off to a good start again. Number three: Establish a position at the National Security Council focused on U.S. supply chain resilience.

Lori: So the idea here is we need an all government focus on rebuilding domestic supply chains, and also diversifying these sources of imports for critical goods. The COVID-19 crisis made clear to every American. Here we are in the richest country in the world, and we can't get basic stuff. I mean, we can't get the medical stuff like masks and enough medicine, which in itself is a crisis. But we can't get basic stuff so that if one country in a long, hyperglobalized thin supply chain, were to make, you know one product of food or one electronic product, you have to have the pieces only made each one in one country of 50 countries and one country goes down because there's sickness could be a natural disaster next time the whole thing falls apart. can't have that. This was a real lesson. And so we need coordinated plans to rebuild our resilience and to build stronger supply chains.

Ryan: Number four: Implement the Build Back better by American and other domestic preference program reforms.

Lori: So this is really actually extremely urgent. This is both a longer-term project where our new US Trade Representative will need to be negotiating with other countries to take back the policy space for how we use our taxpayer dollars in procurement that was given away and agreements like the WTO and NAFTA and CAFTA. Right now we have to treat the goods, the services, the companies from 60 other countries as if it was Buy American, so Buy American now means the US and 60 other countries. So that needs to get fixed, because that's in the terms of agreements that need to be renegotiated and President Biden has said he wants to renegotiate those so we, but also our trade partners, can use their tax dollars as a tool to develop their own economies and innovate and invest in their own people. But in the short term, the president needs to immediately wave with respect to the emergency trillions of dollars for COVID relief, and recovery, these limits that make us basically break Buy American. Otherwise, instead of stimulating our economy, instead of starting to invest in being more resilient at home, that money is just gonna get offshored. And there's no conditions on labor standards or environmental human rights conditions. So it could mean our tax dollars go to invest in, you know, goods made in horrible human rights conditions in China, or in plants have busted unions in Mexico. So this is both the short term and long term problem.

Ryan: Number five: Launch a review process to formulate a new US position on digital trade.

Lori: So digital trade is the corporate brand that the Big Tech firms have given to trying to use trade agreements to impose worldwide limits on the regulation of the Big Tech platforms. And some very bad rules like that are in the revised NAFTA, but and in an agreement with Japan that the US pushed, but also they're being pushed at the World Trade Organization for the whole world. And the US has been one of the leaders in pushing for these rules that basically mean governments can't regulate for our consumer data privacy, something that's a huge problem in the US and in many countries, but the US is way behind everyone else. It means that we can't get rid of the liability waiver. That right now means things you buy online, Amazon and other companies pretend that they have no product safety liability. So if the product kills you, you could sue a store, but you can't sue them, they pretend they're not the buyer. They pretend the seller, I mean, they pretend they're just a communications platform, and also a lot of problems around discrimination based on the algorithms that the companies use. So that, you know, white people are offered information on better jobs and black people get less information on good housing, all of those kind of rules, we have to have a new approach to because we need to regulate big tech, not let them use trade agreements, to basically abuse people worldwide.

Ryan: Number six: Implement new US Trade Representative transparency standards.

Lori: So it's not so much the USTR per se, but rather the whole agency. Historically, there has been a lot of behind closed doors, negotiation and secrets information. And these are these negotiations are making policy on things that affect all facets of our everyday lives. But unlike say the Freedom of Information Act, we can get government documents or the government the Sunshine Act, where meetings have to be open. There's a lot of secretive stuff that happens in trade. That is just inappropriate, given what today's trade agreements have meddling in from, you know, access to medicines, to food safety, to where our tax dollars go. So we need to actually have a much more open process so that people not only can get access to the information and know what the government is doing, ostensibly on our behalf but also so that we can have more of a means of giving input of what we want. Right now. There are 500 official advisors who are cleared to see the secret documents have special access, and almost all of them are corporate that can't stand.

Ryan: Number Seven: Work with Congress to update trade preference programs, including the Generalized System of Preferences or GSP, and an early reauthorization of the African Growth and Opportunity Act (AGOA).

Lori: So in addition to trade agreements, the US has what are called trade preference programs. Nice statutory programs that set terms for special, better access into the US market for developing countries that are better tariff, lower tariff rates, for instance, that are included in our global WTO commitments. And the idea that these programs is they should be development programs. And they need to have conditions are pro-development for what a country has to do to get these special market access rights. Unfortunately, over time, the agreements haven't kept up to the transformation and trade policy. So GSP has some labor standards, but they're pretty weak. And the African Growth and Opportunity Act has a variety of conditions you wouldn't want to impose on countries we're trying to help them develop. And in both instances, the programs need to be updated to basically put people and planet standards in place. But also, with the African Growth and Opportunity Act. It needs to be reauthorized early because President Trump was running around to African countries threatening it would go away, and they better sign up for a whole free trade agreement or else which really isn't in their interest or ours.

Ryan: Number eight: Work with the Treasury Department to require all foreign private-sector sovereign wealth fund controlled or state-owned enterprises seeking to list on us capital markets to meet all transparency standards to which US domestic firms are subject.

Lori: Okay, so that was a mouthful. But what that boils down to...

Ryan: That almost took me a minute.

Lori: What that boils down to is this scam, which is the Treasury Department has been waiving the requirements, particularly for a state-owned enterprise means just literally that government-owned firm. There are a lot of Chinese state-owned enterprises, but also some of you there, it's not inherently a problematic thing. You know, the US government port authorities are like a state-owned enterprise. But there are a lot of commercial ones that aren't running services like the Tennessee Valley Authority is a state-owned enterprise. But yeah, it's a government service. But the ones that are competing and trade from other countries and sovereign wealth funders, that's government money, that is investing as if it were a private investor, they're allowed to go to the stock markets, which is where the capital market is so to the New York Stock Exchange, without meeting all the normal requirements that US firms be subject to. And what this is caused is these real conflicts where Saudi Arabian state-owned enterprises and sovereign wealth funds and others from the oil-producing nations, and Chinese state-owned enterprises are buying up US firms that might have a security concern with such ownership or countries with really horrific human rights reputations are buying up sensitive firms and we don't know and or they're getting money on the capital markets, without us knowing. So something's being listed. And we're having us stock buyers put money into it and make it powerful. We don't know who it really is.

Ryan: Number nine: Direct the Department of Commerce to declare that China is not a market economy.

Lori: So this is another kind of wonky thing, but it's actually has a lot of repercussions. How you ask domestic trade policy works with respect to different trade, cheating remedies, like dumping stuff on the US market, below the price of production, that and also how a country is treated at the World Trade Organization has to do with whether or not a country is considered a market economy. If you're a market economy, you get kind of treatment the US, Canada, Brazil, India, Japan, Korea, South Africa get but if you're not a market economy, ie you have a lot of government intervention, a lot of government funding. So you know, a country like China, then you are treated with, I would say, more wariness about what's a subsidy and what isn't? What's fair trade and what isn't? And so it's going to make a big deal for US jobs. And for US companies, especially those that try and create some new US investment in things like electric vehicles and battery storage, new materials, the cutting edge industries, that it's clear, China's not a market economy and they need to be treated that way. And China has been making a lot of threats about if countries don't declare the market economy, they're going to do this or they're going to do that. And so far all the world's countries have stuck together and said, if you're a market economy you are but you're not so you're not and that should stay the current position.

Ryan: All right, we are at the final one number 10: Don't continue with business as usual with respect to publishing a national trade estimates report that includes lists of other countries environmental food, safety, health. and other public interest protections identified as, quote, illegal trade barriers.

Lori: So every March 1, the US government comes out with a report called the National Trade Estimates. It sounds like innocuous, it's not. It's a country-by-country report where, in the course of the year leading up to it, US industry is invited to offer things that they think are unfair trade practices of other countries. And they get listed in the official government report of things these other countries better get rid of. And so the problem is, it ends up being a list of, you know, there are some real trade problems in there, like subsidies or, you know, things that act like a quota a limit on imports, that aren't health or safety-related, and they're honest to god protection. But the vast majority of what is in this report is just targeting the environmental, health, worker safety, food safety, product safety, and other public interest protections that other countries have. And that won't be if they're if the US product has GMOs, and the country requires labeling, if it comes in, if it's not labeled, it can't come in. If another country, for instance, bans the use of chlorine washes, you know, basically crappy chicken, chicken that least liras, feces on it, dipped in chlorine, which is how our system works versus making sure it's clean on the front end. If it can't come in, it can't come in, if other countries will not, for instance, store computer data through the US, because we don't have any privacy protections. And we're not considered safe for that. All right. And so be, as long as it's not discriminatory, it shouldn't be on a trade shit-list. And that is what that national trade estimates list has become. And instead, it should focus on whether real trade problems, where there's actually a benefit for us workers to fixing real trade cheating and not become a hit list of other countries domestic policies that our companies don't like because some products they make can't be sold there.

Ryan: Good work, Laurie, I think you got 50% of them and under a minute. And again, folks should check the link in the summary of this episode, or just go to tradewatch.org. And you can see the transition memo on trade policy.

Lori: And for all the fun that Ryan and I are having about my trying to say what this means each of these bullets in one minute. It's worth reading the memo because it does spell out a roadmap to how we could have a US trade policy taking the opportunity of an incoming administration that seems keen to change some things to actually try and have policies that put people on the planet as a priority.

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 to find out how you can get involved in the work we're doing to fight for fairer and more equitable trade policies.

Rethinking Trade - Season 1 Episode 27: President Biden Should Reverse Trump's Deadly Obstruction of Global COVID-19 Vaccines

Millions of people around the world may not get COVID-19 vaccines until as late as 2024—unless President Biden reverses the Trump administration’s deadly position at the World Trade Organization (WTO).

SIGN THE PETITION: https://rethinktrade.org/actions/urge-biden-reverse-trumps-deadly-obstruction-of-global-covid-19-vaccine-access/

Transcribed by Sally King

 

Ryan: Welcome back to rethinking trade where we don't just talk about trade policy, we fight change it. I'm Ryan and I'm joined once again by our in house trade expert, Lori Wallach. Do you all remember the episode we did back in December about how rules at the World Trade Organization were preventing countries across the world from accessing the technology they need to produce COVID-19 vaccines and treatments and how the Trump administration had led the way in opposing a proposed waiver to temporarily on an emergency basis allow those countries to access that technology? Well, unfortunately, the situation has not changed even though Trump is out of office. So we are re-releasing that episode today. But before we go back to it, we're going to hear from Lori and get an update on the situation and hear a little bit about some of the campaign work that we are involved with to try to change the U.S.'s position at the WTO regarding these intellectual property protections for Big Pharma. Lori, why don't you just give us an update on what's happening and why this is so important right now.

Lori: So two really important things have happened since we last talked about the WTO rules that could really undermine the necessary supply of COVID vaccines and treatments and testing worldwide. Number one, the WTO had its first meeting since the by the Biden administration entered office. And unfortunately, it does not appear that the memo got to the permanent U.S. WTO staff sitting in Geneva, there has not yet been a new U.S, Trade Representative confirmed; she's going to be great. And there's no new U.S. WTO ambassador to give political marching orders. So that crew that is in Geneva all the time at the WTO just repeated the same old bad old pharma defense that Trump had been dishing out, which is basically, "Yeah, there's no need to change these WTO rules to make sure that the developing world also gets vaccines and gets treatments. We're just going to make sure that all these pharmaceutical companies get these monopoly rights." And you know, no shocker. The U.S. officials did not mention that these vaccines that the U.S. pharmaceutical companies they touted developed, were funded by us, the taxpayers. Yes, these companies did not put their own money up. They got U.S. government money, ie our tax dollars for the development for billions in pre-purchases to cover the expense of the testing, etc. So if there's ever been a time that a waiver of Monopoly rights about where and how much of something is going to be made, as far as medicine and its price, the vaccines for COVID would be the case. So unfortunately, new administration, but not yet a new position. And that's what's going to take everyone's activism. So as Ryan said, we have a petition going on about this, there are other things everyone can do. In addition to signing onto the petition, please consider calling your member of Congress, because here's the second development, it has become incredibly clear that no one anywhere will be safe from COVID. And this epidemic cannot be stopped in any one country, because we have all witnessed variants, mutations of the original virus that are developing wherever there are major outbreaks. And if we do not get vaccines to people around the world, we can vaccinate ourselves 100% in the U.S., but we're going to see a variant a mutation that's not going to be subject to that vaccine. Hell, that could reinfect people have antibodies from surviving new original COVID and anytime there's a chance of huge outbreaks there's a huge chance of more mutations. And the most recent studies suggest people in middle and low income countries won't be able to get vaccinated until the end of 2022. And people in the poorest countries until 2024. That means if we're being really self centered and thinking about just what it means for us, we in the U.S. 100% vaccinated, let's just say, will not be safe. If we do not get these TRIPS, rules waived. At the WTO, so that as much vaccine can be made in as many countries as possible, as quickly as possible so that everyone can get vaccinated, everyone can get tested, everyone can get treated, no one will be safe until everyone is safe. And right now, these WTO rules are a big impediment to all of that. So please help get the word out, help get the U.S. to join the rest of the world and do the right thing. The fix is not a heavy lift, the U.S. just needs to stop blocking the initiative by South Africa and India as the WTO that now has more than 100 countries supporting it. So that more vaccine more treatment, more testing can be produced worldwide. 

Ryan: You can find the link to the petition in the description of this podcast episode, or you can go to rethinktrade.org or tradewatch.org. You can find the petition there, sign it, share it with folks. And stay tuned, because what's following is our episode from December where we take a bit more of a deep dive into this issue.

Lori: So let's take one step back. The World Trade Organization enforces a dozen plus agreements, including the old trade rules, which are called GATT, the General Agreement on Tariffs and Trade, that's the part that really is about trade. One of those other agreements is the thing you just mentioned Trade Related Intellectual Property Rights, which is often called TRIPS. That is basically the antithesis of free trade. That is a set of monopoly protections every WTO signatory country is obliged to guarantee to big pharmaceutical corporations. And that includes a guarantee of a 20 year monopoly. For any medicine, it creates periods of exclusivity over the data use to prove a drug is safe, so that the generic manufacturers sometimes have to wait even longer. All of those kinds of rules, of course, are really the opposite of what you think of for free trade, right competition. Those are rules designed to block competition to give monopoly powers to big pharmaceutical firms, they can charge any damn price they want for medicines. So in the face of having that imposed on 160 countries worldwide, we're all but the least developed countries are required to have these very stringent monopoly protections for big pharmaceutical firms. A set of countries led by South Africa and India, came in with a proposal now supported by dozens of countries. And that was to waive those pharmaceutical company, monopoly rights for temporarily anything during the COVID crisis that is necessary for the production of treatments of vaccines and the technologies around the production. So the actual medicines, and also the know-how to produce them. And it's really obvious why to do this, we need to get billions of doses of vaccines, hundreds of millions of doses of treatments. And the only way the whole world is going to get better, is if the whole world gets better. It's an epidemic. So it's actually in the interest of people all around the world to get enough of the vaccine made, so that there's no one who can't get it and quickly. But right now, the way the WTO rules are set up, if a country, for instance, simply copied the vaccine, or insisted that the company provide the know-how for how to copy the vaccine, then it would be in violation of these WTO rules. And a country's imperative to save lives, would subject the country to indefinite trade sanctions. So a developing country would have huge penalties billions of dollars put against its actual exports needed to keep its country going, because they put people's lives first.

Ryan: And what would that process actually look like if a country was held in in violation?

Lori: Well, let's just be super concrete, because sadly, this is not the first time this has happened. During the peak of the AIDS epidemic, when hundreds of thousands people were dying, antiretroviral treatments were available, but they were so prohibitively expensive, that throughout the developing world, in Brazil and South Africa, people were dying needlessly for whom if generic versions of these medicines could have been produced, their lives would have been the life of a person in the U.S. or Europe, with with AIDS which is basically the anti-retrovirals would make it a treatable perennial but treatable disease. Instead of having a chronic treated disease, people all over the global south are dying. And countries started to want to make their own medicines and some developing countries have the capacity India can do it. Argentina can do it South Africa, Brazil, and the United States on behalf of its big pharmaceutical companies basically threatened to go to the WTO and attack those specific countries for violating these trade agreement. pharma monopoly roles, instead of basically helping those countries try and save the lives of their people who had HIV or AIDS. And that case ended up blowing up because that was folks who remember, when Al Gore was running for president, people from act up, were following him around busting into his event screaming "greed kills." Well, that was a WTO TRIPS case, that was the gift them to back down the clinton ministration on these attacks using the WTO against HIV/AIDS medicines. So what happens with the sanctions is practical, one of these WTO tribunals decides that some country's health law is a violation of the WTO rules. And then the country is told you have 90 days to get rid of that regime for making medicine available that pharmaceutical generic company, and if you don't, then we're going to impose penalties on all of your exports. What that means practically is, for instance, every good that a developing country would export would be hit with a huge tariff on the way into other countries. So that basically, it's like a strangle. It's basically we're gonna choke you to death if you don't change. And we're going to do that by cutting off your exports.

Ryan: I know there's an effort underway right now to pressure the U.S. and other countries to support this waiver at the WTO and prioritize responding to the pandemic over protecting Big Pharma intellectual property rights. But ultimately, who has the power to change the U.S. position here? And also, what are the prospects of this position changing under the incoming Biden administration?

Lori: Ryan? That is exactly the question to ask. So the who has the power to change this? This is a position that's taken in the executive branch. It doesn't require Congress to pass anything. Whomever is the president and the president's top trade official, the U.S. Trade Representative decides the positions the United States will take at the World Trade Organization, the United States sits in a council it's called the general council with the other countries who are signatories to the WTO. The general council takes positions if the United States, which under the Trump administration has joined Europe and handful of other countries who are the homes of the big pharmaceutical corporations to block this proposal if the U.S. change sides, something the Biden administration could do without Congress again, and then what it would look like is, the instructions go from the White House to the U.S. representatives at the WTO in Geneva. And they go to that meeting, which the next one right now their meeting, we're going to say the wrong thing, the U.S. has been to say the wrong thing. So when it meets again, in January, that General Counsel, the U.S. can go in and say we now join those countries that want to temporarily waive the WTO special monopoly protections for Big Pharma. It's a temporary waiver until the epidemic crisis is over. It only applies to those medicines and technologies with respect to vaccines and treatments for this crisis. But we join putting public health first that's all it would take. And who can make that happen? Well, that's us. So we all need to be taking action to contact our members of the House or members of the Senate. And frankly, as soon as Joe Biden is sworn in the White House, which will be taking, of course the usual hotline, emails and letters, and the reason to get Congress engaged as this is not a one off. So these WTO rules in this particular waiver is extremely urgent. It's literally going to make the difference between life and death for people all over the world in relation to the COVID-19 epidemic. But this is a fight that we started with the NAFTA renegotiation, when we got the most extreme Big Pharma giveaways that Trump added to the old NAFTA making it worse, we got that out. But we need as the United States of America to have a new position about these kinds of pharma protections in trade agreements, they don't belong there at all. It's not just the WTO rules should be waived, but rather we need to negotiate these terms. So we're putting people's health first. Yes, we want to reward innovation. So when a company comes up with a great invention, there are ways to reward that, but the amount of time and what the balance is between people getting access to medicine, and the gluttonous profits that these Big Pharma companies make is a real problem. Because this is something where on the first day the Biden administration can show they're going a different way on trade. They're going to put people over profits, they're going to put health over Big Pharma. And this is one of those things they can do on their own if we all join inand push them to do it. 

Ryan: And if you go to rethinktrade.org, you can scroll to the bottom to the take action section and you can send a letter from there to your representative and senators. And on the eyes on trade blog. You can also which I'll link in the bio of this episode, you can read more about the WTO trips issue. 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 to find out how you can get involved in the work we're doing to fight for fairer and more equitable trade policies.

Rethinking Trade - Season 1 Episode 26: What The Biden Administration Can Do To Fix Our Trade Mess, Part 1

The Biden administration inherited a political and trade policy landscape transformed since the end of the Obama presidency by both the Trump trade strategy and the COVID-19 pandemic.

To deliver on its Build Back Better promises, the administration must create new approaches to trade that prioritize good jobs, promote the environmental and energy policies needed to counter climate catastrophe, protect consumer health and safety, and promote small business by breaking up monopolies.

In part one of a two-part series, we discuss the short and middle-term steps the Biden Administration should take to accomplish these goals. Welcome to the Cliff Notes version of the Transition Memo on Trade Policy, recently released by Public Citizen and the United Brotherhood of Carpenters.

Transcribed by Sally King

 

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, we're recording this in the very first days of the new administration. And as much as the joy as it was watching Donald Trump leave the White House last week. This week, we are focusing on the hard work ahead of us. Importantly, we're not just talking about fixing the damage brought on by Trump, but by decades of corporate rigged trade policies. So Public Citizen and the Carpenters Union have just released a lengthy transition memo and trade policy which you helped author. The memo lays out a lot of suggestions for fixing US trade policy. So I suggest listeners follow the link in the description to read all of it. But today, we're going to do a sort of 20 questions style episode covering the memos day one and first 100 day suggestions for the Bible administration. Before we get started, though, Lori, maybe you can just give us a bit of an overview of the vision laid out in this memo,

Lori: I think it could be useful to first start with a little bit of that context. The Biden administration is inheriting a US trade policy and political landscape that has been transformed since the end of the Obama presidency by both Trump and COVID-19. So the COVID-19 crisis, and really the inability of the world's richest country to make or get essential goods in the face of crisis has awakened a lot more Americans two fundamental problems with the current trade regime concentrating production, a few low wage countries, and having destroyed 60,000 us manufacturing facilities in the last 25 years and the hyperglobalisation. That's been implemented by agreements like the World Trade Organization, and NAFTA, that have left lots of countries really not all resilient, lis supply chains stretched super thin. So lots of countries just couldn't get self or gear up to make the stuff they needed. And then you have the Trump effect of Trump becoming president, by connecting to many Americans real anger, about the good manufacturing jobs that are trade policies implemented by Democratic and Republican Presidents alike, have killed and what it's done to cities and towns across this country, to have the almost 70% of Americans in the workforce without a college degree. See their lives go from a middle class, livelihood to scraping by and uncertainty, and that anger was seized by Trump. But then Trump failed to implement the critical changes that were necessary to really significantly alter the outcomes of US trade policy. Now, on the one hand, there is one really good thing, which is Trump's Trade Representative Robert Lighthizer. managed to create an enormous amount of leverage pushing in the right direction generally. And the new Trade Representative, a very capable person and Katherine Tai will inherit a bunch of that leverage the outstanding tariffs against China, the revised North American Free Trade Agreement, which has some good stuff, but isn't getting enforced yet. There are some big problems with the enforcement. So there's some good stuff to work with at the World Trade Organization, as well, where there's a bunch of new leverage because of what light hyzer did. So when you then look at what is it exactly that ought to get done? It boils down to something really simple. We really need to change us trade policy to promote not undermined the major domestic policy goals, like dealing with good jobs and decent wages and the underlying economic inequality and racial inequality that has been exacerbated by years of outsourcing good middle-class jobs, and the weakness and frailty in our health and economic security that we have seen with the loss of the ability to make stuff. And making sure in the middle of a climate crisis that is a planetary imperative to deal with. We are harnessing our trade policies to cure the climate crisis, not as has been the past make it worse. And as we face all of the simultaneous challenges, our current trade policies conflict with a lot of the policies that this administration says we're going to implement things that countries around the world say have to happen. And so the highest of the top-line agenda is, we have to get rid of the policies embedded in our trade agreements by corporations who rigged the rules, that undermine good jobs and affordable medicine and a livable planet. And then we need to put in place the missing roles that prioritize people in planets so that the global economy is harnessed to work for us not to make a handful of really big corporations even richer.

Ryan: And we're going to get into the specifics about how to do that. Now, how I structured this Lori is it's going to be like 20 questions, but really 20 statements. And I'm going to read the headline from the transition memo for each of these proposals. And then you're going to have one minute to explain to our listeners the context of each one. I'm going to set a buzzer on my phones when you hear the buzzer. Time is up, we're almost up. So you have to wrap up. Are you ready? 

Lori: I'm really nervous but ready.

Ryan: It's like a game show. Lori: Dun, dun, dun dun, Ryan: A very geeky game show. Okay, this is for the day one immediate stuff. Number one: nominate a US trade representative who is suited to the mission of transforming US trade policy towards a pro-worker, pro-small business, pro-health and pro-environment focus,

Lori: Ding, ding, ding. That was done. Katherine Tai is a terrific nominee for the US trade representative's office, who will hopefully be quickly confirmed. She is very knowledgeable. She has the right perspective and thinking about how to fix our trade policies. So it works for people on the planet. She's very hard-working, she's very strategic. She is the best Democratic nominee for USTR. That could have been possible. So check the box that was done.

Ryan: We are off to a good start number to launch the buy American Trade Pack plan described in the Build Back Better plan.

Lori: So that one is a little bit more of a mixed story. The good news is on the 25th of January, the President issued an executive order that covered most of the territory of what needs to be done. But that executive order did not actually do the things that are necessary to improve the policy. So it will be a matter of watching closely about whether they follow through on a lot of the things that they said they would do in this executive order. If they do it could make a big difference. The big issue here is that the President's about to spend almost $2 trillion in very much needed COVID stimulus emergency relief. But if they don't close the loophole that currently has 60 other countries treated like by American thanks to trade agreements, they no longer that money is going to get offshored instead of being invested back into our job. And it won't stimulate the economy.

Ryan: And folks can see the public citizen statement on the buy American executive order at tradewatch.org. Number three, issue an executive order to remedy abuses of de minimis import provisions by big tech platforms.

Lori: It sounds complicated, but it's not. It's a loophole. The big online sales platform slipped into law in 2015. That means that every day you can bring in imported $800 of stuff with no tariffs, no taxes, no inspection. The trick is the Amazon and the other platforms have it set up so that you the customer, not them, the company is considered the importer. What does that mean? They're bringing in hundreds of millions of packages by air that don't get inspected, that don't get taxed. It's dangerous for the consumer. It's not fair to the brick and mortar store that actually has to pay the taxes when they bring in the three $700 bicycles. They're paying tariffs and taxes and having that stuff all inspected. But if we each individually buy those two bicycles. Amazon's making windfall profit, and it's not fair and it's not safe and it's easy enough to fix. We just have to do it.

Ryan: Okay, number four, announced that the new USTR will consult with Congress stakeholders and allied countries to develop a comprehensive us approach to the future of the World Trade Organization.

Lori: And then there's an additional thing and will not support appellate body appointments during this process. So that's the punchline that's very important. The previous administration stomped along the appointment of the final judges at the WTO. These are the folks who basically order countries to change their laws if their food safety standards are too high, or their financial regulations are too strong, or their environmental laws are too protective of the planet. And so there was a bunch of cases where these on appointed international lawyers in Geneva were just making stuff up and making countries change laws. And it wasn't even stuff countries that signed up to at the WTO. So right now, we need to figure out before the US starts approving new judges how the rules need to get changed both the procedural rules and the substance. So what we need here is a policy where we basically have a big conversation, what are the goals of the WTO? Heck, it's already 20 years old anyway, it hasn't worked out well. So what rules do we need to change what procedures should be changed, and we shouldn't start up the whole thing, again, to attack our laws and undermine our goals unless and until we know how to fix it.

Ryan: Number five, announced a moratorium of any new trade agreements until a comprehensive review has been undertaken to develop a new trade agreement model.

Lori: So the administration committed candidate Joe Biden committed that they weren't going to do any more trade agreements and less until they had made major investments in domestic infrastructure worker education and training and manufacturing capacity. And the idea was to get our house in order before we write new agreements, but also to make sure we have agreements and new way of doing them that promote goals like good jobs, good wages, etc. So the big question is, will they stick to that 100%. And what that would mean is not picking up the trade agreements that include a lot of really problematic goodies for big tech and Big Pharma and the financial services, the Wall Street guys, there are agreements being negotiated right now at the United Kingdom, and with Kenya, that are not the right model. And this moratorium needs to apply to those need to go into the deep freeze, if not the recycling bin. And then there's a really worrisome agreement, global wine at the WTO, that would have all kinds of new rights and privileges for big tech firms that you couldn't regulate them, they could basically have their way with our privacy, etc. And that needs to also be part of the moratorium.

Ryan: Number six: Direct US Customs and Border Protection to issue a regional withhold release order on all-cotton goods imported from the Zhenjiang region of China.

Lori: So this is easy and quick, that's actually got done so this administration just needs to keep it in place. What that means is basically an assumption that goods that come from that region, are made with forced labor in these abusive prison internment camps that the Chinese government has filled with ethnic Muslim minorities from the region. And you have to prove as the importer, that the production chain is without forced labor, its assumption that it can't come in unless you can prove it's not forced labor. And that creates basically pressure on China to reverse its behavior.

Ryan: Number seven: Announced that existing tariffs on Chinese goods will be maintained while the new administration develops its demands with respect to Chinese subsidies, currency misalignment, and labor and human rights abuses.

Lori: So this is like the WTO situation. You have leverage going in as a new administration. In this case, it's 30% tariffs on $350 billion worth of stuff. And as you can imagine, all the corporate lobbies are screaming take off, the tariffs take off the tariffs, except those tariffs are leverage. China's imports to the US have declined in the sectors that have the tariffs on them. And it is a problem. It is a problem that Chinese elite in the government and industry want to have go away, which is to say they might be willing to do some things to make them go away. The previous administration was prioritizing things like better intellectual property protections for companies operating in China, or easier investor terms in China. These would not be things that help US workers. Those are things that actually are counterproductive. They make it easier to offer So the question is, let's get our policy of what, which certainly is going to focus on things like labor rights and human rights and wages, currency, and not have those tariffs given away without trying to use them to improve the policies.

Ryan: Number eight: issue a de Marche to countries in the UN Commission on International trade laws ISDS Working Group regarding current and future Investor-State Dispute Settlement rules.

Lori: So there's been so much opposition growing against Investor-State Dispute Settlement ISDS, that the law, the corporate law firms, and some of the big oil companies that like to use that system, which empowers individual companies to go before a tribunal of three private lawyers to demand unlimited compensation paid by US taxpayers, from any government for any perceived violation of an investment agreement, or the investor rules in an agreement like NAFTA, just under NAFTA, over $400 million has been paid out and attacks against environmental policy, health policy, etc. So the guys who like that outrageous rigged system, realize they're in trouble. And they went to UNCITRAL, that UN body, which is one of the places where they take these cases, to really try and get off the steam. And the idea was to pretend that they were talking about reforming ISDS to try and distract the opposition. And instead, they decided to make that a place to try and lock in a new form of ISDS. And so the US needs to make clear, a written position that the US is no longer for ISDS and isn't going to join up in that farce.

Ryan: Number nine: Issue a démarche to all nations that now qualify for the African Growth and Opportunity Act or AGOA, or that could qualify, clarifying that the program is not about to be terminated.

Lori: So what this is about is President Trump making threats, including in a meeting with the president of Kenya, that the African Growth and Opportunity Act, which is a policy, it's not a bilateral agreement, it's a policy, where the United States passed a law that says African countries from Sub Saharan Africa, if they meet certain criteria can have duty free access into the US, and basically have terms of trade better than what a lot of other countries might get in the World Trade Organization. And the idea was for it to be a development program that wasn't cash aid, and to help build diversified economies now, Africa, and that policy sunsets in 2025, the current extension, but it's been extended in 10-year chunks, repeatedly five-year chunks a couple of times. It's just it's not controversial. So President Trump was trying to get the president of Kenya to sign up for a free trade agreement where instead of having this access, and you would have to basically have a lot of obligations to US corporations to get the same old access. And it's really important countries in Africa realize that program is not going away. They don't need to make a deal that's bad for their people just to keep what they already have.

Ryan: We're at number 10. This is the final one for the day one. Number 10: Issue an executive order reaffirming that US trade officials are prohibited from promoting tobacco sales, reducing tobacco tariffs, or seeking to undermine the regulation of tobacco products.

Lori: So what that's about is what's called the Doggett Amendment, which was a prohibition from almost 20 years ago, and US trade officials promoting big tobacco. Sadly, during the Obama era, they basically ignored that. And they did a bunch of stuff that was really pro-tobacco in agreements like the Trans-Pacific Partnership. So the idea is to reaffirm that US trade negotiators aren't going to be pushing deadly tobacco products and other countries in our trade negotiations.

Ryan: You did it!

Lori: So that was that 10th item of what was supposed to be the first-day agenda. Given I couldn't even summarize each of the 10 items in one minute. Obviously, no matter how good an administration they couldn't get all that done in the first day. So first day is kind of a term of art for meaning the most urgent short term things that have to happen. And we just got an overview of all the things to set up a good trade policy going forward. And there's a lot of work to make sure that still happens.

Ryan: And stay tuned for part two where we're going to do the first 100 day top 10 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. You can find out how you can get involved in the work we're doing to fight for fair or equitable trade policies.

Strikes Hit U.S. Factories in Mexico as Corrupt Unions Again Sell Out Workers

This week, the city of Matamoros, Mexico is again seeing wildcat strikes as expected annual wage increases have been traded away by corrupt unions.

Though the revised North American Free Trade Agreement (NAFTA) includes improved labor rights terms and Mexico enacted significant labor law reforms in 2019 – both of which could help workers in Mexico to organize and win real changes in their lives – little has changed on the ground.

That’s why workers in factories along the Texas border are on strike right now.

They are part of a growing independent labor movement seeking to oust corrupt “protection” unions and transform working conditions in Mexico, where real wages since NAFTA was enacted 25 years ago are 40% lower than manufacturing wages in China.

The 20/32 Movement

The story of the Tridonex plant, operated by a subsidiary of Philadelphia auto parts maker Cardone, spotlights the glaring enforcement failures for both Mexico’s new labor law and the revised NAFTA.

While Cardone still claims to be Philadelphia’s largest manufacturing employer in 2016, the company announced it was sending 1,500 of the city’s union jobs to Matamoros. It sent another 200 in the years since.

In 2019, workers in dozens of maquiladoras in Matamoros, including Tridonex, began organizing work stoppages demanding pay raises enacted by the new Mexican president Andrés Manuel López Obrador. Their demands – a 20% salary increase and a one-time bonus of 32,000 pesos – helped launch the 20/32 Movement.

After numerous wildcat strikes protesting not only factory bosses but also the corrupt unions that collaborate with them to lock in low wages and bad working conditions, the movement won.

After the 2019 victory, Tridonex workers petitioned to join the independent union that was born in the strikes: the National Independent Union of Industry and Service Workers, or SNITIS. The local labor board refused to allow an affiliation vote.

In the spring of 2020, the region was again at the center of labor controversy as workers launched wildcats strikes while factory management defied COVID-19 closure orders. Against this backdrop, Tridonex workers marched on the local labor board, which was still refusing to issue the decision to send the workers’ union dues to SNITIS.

Months later, a lawyer and labor advocate who represents workers at Tridonex and other factories during the strike, Susana Prieto Terrazas, became a target of reprisals by the local powers-that-be. Arrested and wrongfully charged with instigating a riot, Susana was held in jail for a month on trumped-up charges of “mutiny, threats and coercion.”

Amidst growing international pressure, including from the U.S. Congress, she was released under coercive conditions, including banishment from Matamoros, designed to stop her from representing independent unions.

After her release, the governor of Chihuahua, Matamoros’ neighboring state to which Prieto was banished, issued new arrest warrants for which she has a hearing on February 25. Since then, Susana has been subjected to repeated threats on her life and safety. In early January, she sent a desperate plea to Mexico’s president, who had promised her protection but failed to follow through.

It has been a year since Tridonex workers petitioned to change their union, and to this day, the company has not held a vote and the local labor board has not acted.

Not only are the actions of Tridonex a clear violation of Mexico's new labor law reforms and the protections provided under the revised NAFTA, the story provides a clear-cut case of what outsourcing incentivized by race-to-the-bottom trade deals looks like on the ground: decent union jobs are sent to countries where wages are far lower and where gross labor violations are routine. Good jobs are transformed into bad jobs, and union security is replaced by exploitation and violence.

Unless Mexico’s labor law reforms and the revised NAFTA are enforced, nothing will change.

Rethinking Trade - Season 1 Episode 25: Rethinking Trade in 2021: What Are We For?

With Georgia’s run-off elections shifting control of the Senate to the Democrats, the party will have a lot more room to pursue progressive reforms than in previous years. What does this mean for fixing our rotten trade rules, and what kinds of policies should we be pursuing?

In part one of this episode, we address this question by discussing the TRADE Act of 2009. Co-sponsored by 135 members of the House and developed with a coalition of labor, environmental and other civil society organizations, the TRADE Act laid out a comprehensive vision for trade policies that would promote employment and development while protecting the environment and public health. But a lot has happened since then, from the harsh lessons COVID-19 had taught us about the facilities of hyperglobalization to the growing climate crisis to Big Tech’s monopoly choke hold. So how would progressives build on the vision of a decade ago?

In part two, we look at President-Elect Biden’s commitment to impose a moratorium on new trade deals until major investments are made to protect U.S. workers, and we discuss how important it is that this period also include a process of rethinking and fixing U.S. trade policy to work for people and the planet.

 

Transcribed by Sally King

Ryan: Welcome back to rethinking trade where we don't just talk about trade policy, we fight change it. I'm Ryan and I'm joined once again by our in house trade expert, Lori Wallach. Lorie, it's hard to know exactly how to start this episode, given the shocking things that have happened in the last week and a half in the United States. I'm sure more is to come. One thing that's not changing, however, is the results of the Georgia election and the fight for control of the Senate, which will no doubt have an impact on the fight for good trade policies in the coming year and years. I know many of our listeners are wondering whether these results will help deliver new trade rules that work for working people and the planet. To introduce this new political moment, though, I wanted to do two things. First, I wanted to actually step backwards a bit to just over a decade ago to discuss a comprehensive trade bill that you know a lot about called the TRADE Act. And then I want to talk about the more immediate trade deal moratorium that President-elect Biden has committed to. Let's start with the Trade Reform, Accountability, Development and Employment Act or TRADE Act. What was this bill? Or why is it important for us to be discussing it today?
Lori: So the TRADE Act was a comprehensive vision of a different kind of trade and investment policy that would promote employment, development, accountability, promote the environment and public health. And it was developed from the bottom up from members of Congress who would oppose the old NAFTA/WTO model of trade agreements, and a vast set of citizens groups, family, farm groups and consumer groups, labor unions and environmental groups, faith groups and small business groups. And it basically came out of a process that was a year long, that was basically started with discussions, what would it be? What would we be for? What do we want? What are the outcomes we want, and then some of the trade wonky allies sat down and start writing the technical trade language that would get to those results. And then there was an iterative editing process, until ultimately, with the members of Congress and the outside groups that basically are like the core constituency of the Democratic Party, a fully articulated version of what kinds of trade agreements, how to review the old ones. And if they weren't working, fix them, and how to replace the fast track trade authority with a new process that would put an emergency brake and a steering wheel on the negotiations, to make sure that the substantive vision in the TRADE Act was going to be the outcome for agreements negotiated under this new process. And the thing that's the most amazing about this is a 60, page long, detailed bill ended up with something like 150 c0-sponsors, agreeing that this should be the new way forward on trade.

Ryan: And what is what is this bill mean, now 10 years later, do you think we need a new TRADE Act for today?

Lori: For sure, because at that point, the focus was on a lot of issues that are still around with serious problems, offshoring of jobs, race to the bottom wages, multinational companies, abusing workers and developing countries and effectively violating people's basic human and labor rights to maximize their profits. And really bad environmental practices and attacks on our best existing environmental and health and safety laws. All those issues were issues already. And those issues were dealt with in the TRADE Act. But now there's been a decade more experience of what does and doesn't work as far as the rules and trade agreements and whether they can change the behavior of these dangerous multinational corporations. But then there are a whole set of issues that weren't at the forefront when the TRADE Act was being created. Climate we knew, but we didn't know that it was the do or die crisis of our future. Or at least a lot of people didn't. Some smart people did. The whole sort of issues around the massive digital monopolies, the Amazons, the Googles, Facebook, the platforms that have both become enormous threats it to small businesses to the safety of consumers with their unsafe imported products that sneak around normal tax and other obligations small businesses have to face, but also their monopoly of information and their training and our private information as if it were commodity, those issues were really not engaged then. And those issues are now some of the outrageous tie the hands of government rules that big companies are trying to insert into trade agreements. And then finally, I think the TRADE Act, though it was way ahead of its time, also didn't fully incorporate the degree to which multinational companies would be using the so called trade agreements to dodge things like financial regulation, and anti trust breaking up monopolies broadly, not just the big tech companies, and trying to systematically undermine the space government's had domestically to ensure that the economy works for most people. So all of the outrageous problems that were surfaced with COVID of these hyper brittle globalized supply chains, where the only thought was efficiency, not web and corporate profits, not whether consumers could get goods they needed for their health and safety and to deal with emerging crises. So those are things that any new trade policy going forward is going to need to deal with up front that the TRADE Act did not.

Ryan: And I will drop a link in the description of this podcast episode where you can learn more about the TRADE Act from Public Citizen's website. Laurie, for part two of the podcast, I wanted to talk about President Elect Biden's commitment to impose a moratorium on trade deals, meaning he would not negotiate any new deals until we've, quote, made major investments here at home and our workers and our communities, equipping them to compete and win in the global economy. That includes investing in education, infrastructure and manufacturing, here at home and quote, why is it important that Biden stick to this plan, and maybe you could just tell us a little more about this plan.

Lori: It's important that Biden's stick to his promise about a moratorium on new trade agreements. And that also that that moratorium practically means that they're not going to continue with the negotiations that the Trump administration started. For free trade agreements with the United Kingdom, or with Kenya, or for new rules that big tech wants at the WTO to handcuff all of our governments from protecting our privacy and holding these monopolies accountable. All of that stuff needs to go on hiatus. And a lot of it just needs to get dumped. Because number one, a lot of the existing rules directly conflict with the goals and policies that the Biden administration itself has said it will prioritize as part of its build back better plan. So expanding by American and by America, reinvesting our tax dollars, into creating innovation and jobs, and improving our infrastructure here violates existing trade rules, giving subsidies to create the industries of the future, necessary for our resilience and ability to respond to future crises necessary to improve our economic resilience in this global economy, necessary to address economic injustice by investing in communities of color and poor parts of the country that have not had real investments for decades to create jobs, and move the economies in these regions. Those kinds of subsidies, depending on how they're done will violate WTO and NAFTA rules against subsidies or breaking up the big tech firms regulating the banks making sure we have affordable health care, depending how any of that is done, or all of the most common sense things we need to do with respect to the climate crisis with respect to energy, for instance, a bunch of those violate or conflict with the service sector, corporate guarantees and the WTO and all of our free trade agreements. And that's just serve a sampling of the problem. So to do what the bytom ministration is guaranteeing they're going to do domestically, not about trade, they need to fix the existing rules, they should not be doubling down on damnation and problems they need to fix the existing rules. And then the number two reason why this moratorium is critical is we need to get the rules, right.
So we know what didn't work. We know what the policy disasters of that have been. And we now have seen that political disasters, that these corporate rigged rules that leaves so many Americans clobbered and feeling hurt and aggrieved have caused. So we need to take the damn time to have the conversation in Congress, in the administration, with outside stakeholders in, in labor in the environmental and consumer and small business and family farm and faith communities, everyone who could be engaging needs to be engaging in sorting out what do we want trade policy to do? The new US Trade Representative nominee Catherine Thai said exactly right. trade is not an end until itself. It is a tool to use to promote our values and our goals. So as a country, we need to have a discussion about how do we make a new trade policy for the future that actually promotes not undermine undermines where we want to go with climate and saving the planet; with creating good jobs and improving people's wages, and dealing with racial and economic inequalities that have blighted our nation for decades. What are we going to do? As a nation? How do we want to go building an infrastructure that's not just safe, but creates innovation gets us ready to be part of the climate solution, not part of the disaster? All of those questions need to be thought out in the context of "Oh, that tool that's called trade, the rules we've been using make it worse, how do we actually make it better? How do we harness that tool to promote our goals, not have the old policies undermine the things we care about." And without a moratorium to basically put the steamroller in neutral and pull it off, and park it and have a thoughtful discussion. We're going to just be continuing the disaster, or a lot of us are going to be distracted from being able to put our shoulders to fighting what for what we're for. Because we'll be in these stupid backwards repeated fights to stop the bad stuff. And you know, we'll do it and you know, we can. We stop the TPP, US activist united. But what a dang waste of time as compared to having this hiatus and having time to think about how we're going to go forward together.

Ryan: And how can civil society organizations like the ones that you've mentioned, how can folks like that and grassroots activists, like many of our listeners, helped shape this process to ensure that it results in real progressive changes in our trade policies?

Lori: Well, that's the perfect question. So the first thing is, we have to make sure that the moratorium is real. And that includes those agreements, including the WTO, big tech agreements, the UK and Kenya free trade agreements, and any new investment agreements with ISDS or without are not going forward. First thing to do about that is I recommend folks call members of Congress, email text, right? They're members of Congress with a two part message. Number one, I want this moratorium on trade, and I want to be reliant needs to include all the leftover Trump agreements. And number two, right to me member of Congress, and tell me what the new trade policy is going to be after this moratorium, I want to be part of creating that I want you to be part of creating that we need to replace our old trade policy. You want to get the members of Congress thinking about it, and you want to get them engaged. So open that discussion, you don't have to have the answers. And then number two, to help you think about the answers go to our website, tradewatch.org and rethink trade. Both of those are places where number one, you can see what was in that trade at. But number two, you can start thinking for yourself what's most important to you, in a good trade policy, what things should always be in trade agreements, obviously, they all have to have a floor of decency that companies have to meet if they want to get the benefits of the trade agreements, certain labor and wage standards, certain environmental standards, certain human rights standards, they don't pay, they don't play. And number two, there's certain things trade agreements can never have again, some of them obvious like, for instance, big new protection monopolies for Big Pharma, to jack up medicine prices, the Investor State Dispute Settlement system that has corporations empowered to attack our governments. Basically, the bottom line is all of us progressives, labor unionists, activist, environmentalist, small business people, people of faith, we banded together and we made Trump have to go renegotiate his renegotiate NAFTA. And the deal we got was not perfect. It's not what we're for. We all said it. It's just the floor from which we are going to continue the fight and build onward. So this next piece of business is to remind Congress that NAFTA ain't the fix the new NAFTA is where we start from, and to get them engaged and get your brains engaged. This is that turning around moment, an enormous amount of hard works been done till now. So now, at that point, what do we for? What do we want? We will use this moratorium after winning this moratorium to actually turn around and actually rethink trade. So we get trade policies that support the goals and values that we all support.

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 to find out how you can get involved in the work we're doing to fight for fairer and more equitable trade policies.

Defenders of Trade Policy Status Quo Say Black and Latino Workers Not Hurt by U.S. Trade Policies, Despite Data to the Contrary

Last week, we published a report showing past U.S. trade policies have had a disproportionately negative impact on Black and Latino workers. Defenders of the trade status quo are arguing that our focus on trade-related job loss, downward pressure on wages and income inequality was off base. 

Their main substantive argument was one made for decades by defenders of the trade policy status quo: Even if some workers lost jobs, we all ended up better off because we had access to less expensive, imported stuff. 

Except, that has not been true for most of us for many years. As job offshoring moved up the wage ladder, the losses we suffer in wages now significantly outweigh the savings we get as consumers. Said who? The grandfather of modern trade economics, Nobel laureate Professor Paul Samuelson.

According to standard trade theory, while specific workers who lose their jobs due to imports may suffer, the vast majority of us gain from trade “liberalization” because we can buy cheaper imported goods.

However, as jobs have been offshored from more sectors of the economy and job offshoring has moved into higher wage jobs, this is no longer necessarily true. 

Professor Samuelson published a startling 2004 academic paper that mathematically shows how the offshoring of higher-paid jobs to countries like China and India can cause U.S. workers to lose more from reduced wages than they gain from cheaper imported goods. I recommend reading the paper, even if you skip the mathematic formulas through which he proves this point. Because this is the scholar whose groundbreaking work applying the theory of free trade to modern economic realities is the basis of the trade-liberalization-is-a-net-gain-for-all fact so widely accepted. Except, it no longer holds true, and he explains quite clearly why this is the case.

A few years before Professor Samuelson’s paper, the non-partisan Center for Economic and Policy Research (CEPR) applied the actual trade flow, consumer price and employment and wage data to the theorem. They found that when you compared the lower prices of cheaper goods to the income lost from low-wage competition under status quo trade policies, the trade-related wage losses outweigh the gains in cheaper goods for the majority of U.S. workers. The CEPR study found that U.S. workers without college degrees (61% of the workforce) lost an amount equal to about 10% of their wages, even after accounting for the benefits of cheaper goods. That meant a net loss of more than $3,500 per year for a worker earning the then-median annual wage of $35,540.

At the time, CEPR’s findings were widely attacked. And then Professor Samuelson’s paper showed that what they found was not a fluke or some anomalous years of data, but rather the new reality.

Since then, other proponents of trade liberalization have published papers discussing permanent, significant trade-related wage losses for many – for instance David Autor and colleagues with respect to China trade. And there also is broad consensus in the economics field that the wage suppressing feature of trade liberalization is a major contributor to income inequality here. The other critiques of our report on trade-impacts on Black and Latino workers fall into the category of distracting statistical gymnastics and misdirection.

We point out that in the decades since the North American Free Trade Agreement (NAFTA) and China’s entry into the World Trade Organization (WTO), the United States has lost millions of higher-paying manufacturing jobs. We found that Black and Latino workers were disproportionately employed in nine of the ten sectors hardest hit.

The standard counter argument that the U.S. economy created millions of jobs during the same period is irrelevant. Even if overall unemployment remained low because lower-paying service sector jobs were being created, Black and Latino workers disproportionately lost better-paying manufacturing jobs, and as a result they suffered significant wage losses. Trade policy shapes the quality or types of jobs available for people of different education levels, and thus affects wages. Other factors, such as fiscal and monetary policy, generally have a greater influence on the total number of jobs available in an economy.

Or as a National Bureau of Economic Research study puts it more formally: “Offshoring to low wage countries and imports [are] both associated with wage declines for U.S. workers. We present evidence that globalization has led to the reallocation of workers away from high wage manufacturing jobs into other sectors and other occupations, with large declines in wages among workers who switch.”

Speaking about wages, the standard counter argument critics have also raised, that average hourly wages have grown in the past two decades, is the same as saying there has been inflation. What counts is inflation-controlled real median wages – what our earnings can buy and how much the majority of us are making.

Economists now widely name “increased globalization and trade openness” as a key explanation for the unprecedented failure of wages to keep pace with productivity, as noted in Federal Reserve Bank research. Even economists who defend status-quo trade policies attribute much of the wage-productivity disconnect to a form of “labor arbitrage” that allows multinational firms to continually offshore jobs to lower-wage countries.

And finally, critics raised the most recent go-to, if false, argument about automation and technology having caused manufacturing job loss, not trade. If you want to see the data, check out this paper but here’s the gist of it:

First, investment in automation actually slowed during the post-2000 period of mass manufacturing job loss. However, during that period, the U.S. trade deficit exploded. Researchers have found that job displacement from technology is at its lowest level in decades now, even as the automation-not-trade argument has become increasingly popular among defenders of the trade status quo.

Second, data often used to show that automation-caused manufacturing job loss are premised on a basic misinterpretation. The popular view is that, because the value of what is being produced in the U.S. manufacturing sector has grown even as millions of manufacturing jobs were lost, each manufacturing worker is producing more because factories were automated.

Labor economist Susan Houseman at the Upjohn Institute showed that this story is based on the mistaken assumption that productivity growth reflects the rise of automation. In fact, the growth in U.S. manufacturing output comes mainly from just one sector: computers and electronics and has to do with how new iterations of machinery are valued. Overall manufacturing output today is only 8% higher than in the 1990s and remains lower than before the Great Recession.

Bottom line: Even accounting for Americans’ access to cheaper imported goods, the current trade model’s downward pressure on wages outweighs those gains, making most Americans net losers. And sadly, given our nation’s history of structural racism that has permeated the workplace, education, housing and more, our report’s findings may have been foreseeable: While working-class Americans of all races and ethnicities lost from the trade policies enacted by the United States over the past several decades, Black and Latino workers were overrepresented relative to their share of the workforce in industries that were hardest hit, and they lived in parts of the country that were slammed.

Add to that all of the non-trade corporate protectionism that lards up our “trade” agreements and no doubt we need to rethink our trade policies. At issue is what rules of the global economy can deliver for the most people and remedy past wrongs – not whether we should trade or not.

It is important to differentiate between free trade and our current “trade” agreements. Because one of the critiques to our study, by the conservative group National Taxpayers Union, focused on tariff cuts, it’s worth noting that today’s trade pacts are not mainly about cutting tariffs to expand trade. 

For instance, most of the chapters of the NAFTA, USMCA or WTO – as well as the now thankfully-defunct Trans-Pacific Partnership (TPP) – actually have nothing to do with traditional trade matters like cutting tariffs, opening quotas, standardizing customs procedures and the like. Instead, these pacts set binding rules to which every signatory country must conform their medicine patents and pricing, financial regulatory, food safety, government procurement and other policies. 

Consider the raw protectionism for pharmaceutical companies in these pacts that help pharmaceutical firms avoid generic competition for longer and keep prices high. As we envision the philosophers of free trade - Adam Smith and David Ricardo - rolling in their graves at a high velocity at the prospect of  “free trade” agreements mandating that governments provide new rent-seeking opportunities for protected industries, let us contemplate how we got into this mess. 

With 500 official U.S. trade advisors representing corporate interests historically given special access to the policy process, while the public, press and largely Congress have been shut out, it should not be surprising that corporate interests thoroughly captured the U.S. trade policy process. 

By hijacking the good name of “free trade” and taking advantage of a uniquely non-transparent policymaking process, they transformed trade agreements into delivery mechanisms for an array of retrograde policies – many of which failed when pursued in Congress and state legislatures. 

Instead of fighting about whether there was damage, given the data and people’s lived experience verify it, hopefully we can focus forward together on what new approach could deliver for more people in this country and around the world. 

Rethinking Trade - Season 1 Episode 24: How US Trade Policies Disproportionately Impact Black and Latino Workers

In this episode, Lori is joined by Dolores Huerta, co-founder with Cesar Chaves of the United farm Workers and renowned civil rights activist, to discuss our Trade Discrimination report. This new research reveals how decades of corporate-rigged trade policies have disproportionately impacted Black and Latino workers.

In her decades of labor and civil rights activism, Huerta has witnessed how corporate-rigged globalization has gutted Latino and Black livelihoods and communities nationwide.

Trade Discrimination: The Disproportionate, Underreported Damage to U.S. Black and Latino Workers From U.S. Trade Policies, published this week at Public Citizen’s Global Trade Watch, details how U.S. structural, race-based social and economic inequities that undermine the economic and social welfare of people of color have been further exacerbated by U.S. trade policies. You can find the report here.

Transcribed by Sally King

Ryan: Hey, everybody, and welcome back to rethinking trade. We have a special episode this week because Global Trade Watch has just released a report called Trade Discrimination the Disproportionate Underreported Damage to U.S. Black and Latino Workers from U.S. Trade Policies. You can find the report linked in the description of this episode or at tradewatch.org joining Lori and I to discuss the very real stories behind all the data in the report is legendary labor leader Dolores Huerta. Dolores co-founded the National Farmworkers Association, which later became the United Farm Workers. And she's been a tireless voice for social and economic justice for half a century. Dolores, thank you so much for being here.

Dolores: Well, thank you very much for having me.

Ryan: Lori, why don't you get us started by telling us a little bit about this report. What does the report cover? And what are some of the big takeaways in it?

Lori: Well, the best part of this podcast is Dolores. So let me quickly lay out what the report is about. So a lot of people generally know about the damage that's been caused by corporate-led hyperglobalisation the kind of model that's been implemented over the last several decades by so-called trade agreements like NAFTA, the North American Free Trade Agreement, or the World Trade Organization. But that mass outsourcing. And now as we learn with the COVID-19 crisis, the unreliable supply chains. That damage really has been mischaracterized as something that particularly impacted white working-class Americans. And in fact, in his 2016 presidential campaign, Donald Trump, basically, you know, hasted progressive critique of corporate globalization and job outsourcing and bad trade agreements. But he reframed it into a narrative of resentment with racialized appeals to target white working-class voters as the victims.

 And the reality is this new report called Trade Discrimination finds in looking at the government data on impacts of these trade agreements is that the trade-related decline of us manufacturing and the outsourcing of union call center jobs has had a dire impact on racial minorities. And in fact, in many ways, the damage has fallen disproportionately on people of color in the United States, from these race to the bottom trade agreements. And to some degree, we saw at the 2020 election, working-class voters, namely people who make $50,000 or less coming back to the Democrats in a big swing. That was that and union voters are two of the big reasons why Biden beat Trump. And so now it's kind of on the Democrats to prove to those working-class voters who are giving the democrats another chance that they got it, that the damage is real, and that the Democrats are going to do a new trade policy that actually delivers for working-class people. But part of the deal is the Democrats have to understand who the damaged parties are, and that they have a working-class problem, not just a white working-class problem. So here are the highlights of what our report of both surveying the other studies that have been done, but we did a lot of original data crunching shows with respect to how and why Black and Latino workers have suffered disproportionate injury. First of all, Black and Latino workers were disproportionately employed in the manufacturing industries that were the hardest hit by offshoring and import competition. So for instance, Black workers are about 10 and a half percent of the entire labor force when NAFTA starts, but they represented 14%, paper manufacturing 12% and chemicals 12% in transportation equipment, the auto sector trucks. So those are sectors that got flattened by NAFTA and China entering the WTO. Latinos were just under 9% of the labor force, but they were 12 and a half percent of the workers in manufactured fabricated metals, they were 12% of furniture 10 and a half percent of plastics and rubber. And the beverages industry are lots of imports are not coming from Mexico, had both over-represented African American Latino workers. Now, if you look at the sectors that got hit, and the sectors we have the biggest new trade deficits, you have just massive job losses, where the Bureau of Labor Statistics, for instance, shows that black workers have lost nearly a half a million manufacturing jobs since NAFTA and the WTO. And so it was in part because the workers were in the sectors that there were explosions of deficits in manufacturing industries are offshoring. But that also then caused a huge stagnation in wages, because wages were basically flat in those industries, as there were lots of workers who no longer have those jobs now fighting for the same jobs, fewer numbers of them, compared to, you know, hospitality, and leisure, which pays a lot less to start with, didn't have great growth in wages, but they grew.

So as those jobs were disappearing, the other thing that really clobbered Black and Latino workers were where the jobs were leaving from. So the 20 US states that are the least racially diverse, had only 20% of all government certified trade job losses during NAFTA and WTO. But, for instance, the 15 states that are home to 85% of the total Latino population in the US represent over half of the certified trade job losses. The 15 states that are home to 85% of the Black population accounted for basically 3 million of the 4 million total manufacturing job losses. So not only was it that African Americans and Latinos were in the sectors of the economy clobbered, but they were in the parts of the country that got clobbered. And so cities like Detroit, Chicago, Pittsburgh, New York, Cleveland, that were incredibly hard to hit. We're also locations where Latinos had come particularly from Mexico several decades ago, more recently from Central America, to seek better lives in the manufacturing sector. 6 million black workers fleeing from racial terror and poverty in the Jim Crow South had fled to the manufacturing sector in the north and create vibrant communities in the first half of the 1900s. So this devastation in the sectors and in the parts of the country in the numbers of jobs also resulted in basically reinforcing existing structural racism because black and Latino workers who lost their jobs ended up having a much harder time than their white counterparts finding a replacement job According to the Bureau of Labor Statistics. Certainly part of that is just racial discrimination, hiring, and promotion, etc. But then, the phenomenon basically of increased competition for a reduced number of well-paying jobs available to people without college degrees, then exacerbates these underlying racial discriminatory practices. So basically, after 25 years of NAFTA and WTO, the racial gaps in wage levels are in some areas wider have basically not closed with, for instance, black men earning 75 cents and Latino men earning 64 cents for every dollar earned by white men, black women earning 88 cents and Latinas 78 cents for every dollar earned by a white woman. And instead of getting better, those gaps have either stayed or gotten worse, which, you know, partially is our structural racism, but a big piece of it is the disappearance of the good union, middle-class jobs, that the trade agreements basically incentivize to be offshored and fostered a huge wave of job-killing imports. So that is the sum of this study, it challenges the conventional wisdom. And then the real question is what happened on the ground, and Dolores has been traveling around the country speaking in communities for decades. And so it's our honor to have her here to basically describe some of what this is actually meant practically that's the data, but what it meant to people. And you were one of the people who predicted this in the early 1990s. So, Dolores, I wanted you to tell a little bit of the stories that you were telling me back then, of what you thought was going to happen both to the apparel workers Latinas, in LA, two people working in making blue jeans on the border to people in the Central Valley, in the various Green Giant and other plants. And then what also happened to people in Mexico under this corporate trade regime?

Dolores: Well, we saw, what happened is that workers were devastated that the loss of workers is terrible. And we're talking about thousands and thousands of workers that have been left without jobs throughout the United States. And not only in Los Angeles, with places like Texas, places in the south, places in New York, the whole garment industry with his were totally destroyed. And every time that they talk about the trade wars, the one thing they forget to mention is that the corporations are really behind all of this, you know, like you have a right now in the United States, we have all of these 99 cent stores and dollar stores or whatever, that, you know, sell the cheap goods that come from China and other places. But none of the manufacturing has been done in the United States by us workers.

And it's had a devastating effect on our economy and on the workforce, but also on the political scene. So when you have so many people that are clamoring for jobs in the United States, and when you go to some of these cities in the Midwest, particularly where you had all of these factories, and you see these abandoned buildings, and then, of course, it's affected the tax base, because you don't have money coming into these cities, for schools, for libraries for job training programs, for infrastructure. So the economic impact of all of this has been, it just affected the United States terribly. And we see it played out when you have all of these people that put us in this last election, that vote for Donald Trump because people are angry because they don't have jobs. And then we see all of the homeless people on our streets. And, again, you think, "How can this happen?' When we are the richest country in the world, in the United States of America, and we have so many people in poverty, so many people that are homeless, people that have to work two jobs just to be able to pay the rent and pay food. And of course, now with a pandemic, that has also affected us workers. I mean, the devastation continues. And this in this whole notion that somehow people have to work for free, that workers shouldn't be given a living wage, they shouldn't be given a pension plan, they shouldn't be given a medical plan. And, and we don't have, it's the working people that really hold up a society, not only by creating the economic base in the income base, the revenue base of our society. So when you have the basis of your society, that is deteriorated to such a point, that it affects everything. And so, and I think it's also a moral ground when you think about it, that workers should be expected to work for minimum or less than minimum wages, literally for free, when even when they work, they cannot earn enough money, to be able to afford a home or to have a living wage. And so it's almost like making slavery, normal and legal.

Lori: And that is a phenomenon that you've just beautifully described that under the government data explaining what happened after NAFTA in WTO, has hit African American and Latino workers, disproportionately hard. So that 20 US states that are the least racially diverse, had only one-fifth of the government certified trade-related job loss, but the 15 states that are 85% of the total Latino population, they account for over half of the trade job loss of 1.6 million jobs. So I'm thinking about some of the places where Latino workers had built vibrant, middle-class communities, like the industrial workers in Chicago, like many people whose families had migrated to these factory union jobs to create a wonderful middle-class existence in the industrial sector. And I know you travel all over the country, what what are what's happening in those in those communities, Milwaukee has a very strong Latino community relating to the auto sector. And as well, obviously, the textile and apparel sectors all across the country, what's happened with these communities? Where El Paso where lembu hair obrera has organized valiantly, but they still lost 25,000 sewing jobs. What is your experience of what's going on in these communities now?

Dolores: Well, people live in poverty, they live in extreme poverty. And a lot of people they have to go to the service jobs, which of course, don't pay very well. And so again, it just means an increase in poverty, but it only affects people in terms of their income levels, but their educational levels so that people can't afford to go to college, that people can afford to have businesses. And then of course, it also displays itself in terms of delinquency, the maybe addiction to us in substance abuse, and of course, the it affects the health. And we've seen the pandemic, how the over the COVID-19 has affected Hispanics, and people are getting infected at a higher rate, people are dying at a higher rate. So it has all of these manifestations that come with poverty. And so it is, you might it reaches deep into the community. And it affects all of the social strata, the educational policies that I just mentioned. And it puts people at risk, basically, for everything that possibly could happen to people that are in poverty is happening to them. And then of course, and I do believe that part of the mass incarceration policies also have to do with the lack of job opportunities, because we have seen the mass incarceration that kind of came at the same time, as you have mentioned before, in your reports, that the mass incarceration systems coincide with these global trade policies and the export of jobs to other countries here in the United States. I think whoever does these social designs, I don't know whether they plan it this way, or it just happens that way. But it seems like they do coincide so that people's lives are not only do they have to live in poverty, but their whole careers and features are taken from them when they are when they are jailed. And you have these harsh criminal sentences that keep people in prison for years and years and years.

Lori: I'm wondering, as you've traveled around the country, and you are a heroine in so many Latino communities where you're celebrating you speak across the country, what you actually observed in Latino communities. And how have they been how what is your experience of how they've been directly impacted by the job loss from NAFTA from China trade? Do you have some memories personally, because you've been traveling the country for so many years that you actually have lived the timeline, from the highest rate of unionization and the strongest manufacturing base? You've lived through the whole period of deindustrialization. And what are your personal memories of some of these communities and what you've seen this shift do?

Dolores: Well, I think one of the hardest areas that have been hit I mentioned before, was the on the educational level. And even here in California, for instance, or we are like the fifth largest economy in the world, and that we could actually be a country and, again, have one of the richest states that we have in the United States of America. And yet we have such high poverty rates. For instance, in terms of the amount of money that is going to for education for our children in California, where California where that was going to school many decades ago, we were number one in the country, in terms of the amount of money that we gave per student, per education. Now we are number 39 in the country. And this is ability adversely affected people, young people of color. And, and it's not just in California, it's the same thing that happens when you go to Arizona, when you go to Texas, when you go to the Midwest, in Chicago, when you go to New York State, you have the same thing that is happening now that our children of color, are not getting an equitable education. And, and so this is true all over the United States of America. And it seems that somehow, is our black and brown communities expand and we know that they are growing in the United States of America get the amount of money that is there for education is shrunk. And it is shrunken in such a major way that all of these young people of color are not getting an equitable education. And this is, of course, going to have a lot of impacts in terms of the future of our country. When all of these young people, I mean, you know, hundreds of thousands every other graduate from high school. And of course, you have the ones that don't even finish high school, that this is going to have a big effect on our economy in the future.

Lori: Certainly the deindustrialization. But also now increasingly, the offshoring of union call centers, the offshoring of information technology, jobs, and medical transcription, jobs, and engineering jobs, this race to the bottom has gutted the tax bases of cities, and small towns across the country. And so that the students who are relying on the public schools, versus who have a way to buy their way into a private school to get a good education, what you're saying is, those are the students that are being the most impacted, which then just continues a trend of poverty.

Dolores: Yeah, and at the same time, these are the populations that are growing the fastest.

Lori: So for the future of our country, the rising majority, under this paradigm of race to the bottom, globalization, which has stolen so many good jobs and gutted the tax base, is basically creating a majority population that has not will have neither the quality education of previous generations. And that will not find the jobs that pay well, for people who don't have higher education, it's a real catch-22 is you said, it's like some kind of social design.

Dolores: And when you think about the only way that poor people can survive, again, I mentioned a little while ago, where you have all of these outlets that sell goods that come from China. And when we think about, you know, this is the only way that poor people can survive, is to, they're the ones that actually go to those stores for the things that they need. And so the system and perpetuates itself, it doesn't really give any remedies that just say people sustain themselves by going to the dollar store, even for groceries, you know, because they sell groceries now. And this is the only way that they can possibly survive is by being the consumers and sustainers of this poverty system.

Lori: So that is a downward spiral for sure. And when Joe Biden was running for president, he talked a lot about his build back better plan. And one of the things that's a big priority, and that plan is creating more manufacturing capacity, doing more investment in domestic jobs and education. And he has basically tried to think about how not only can we get out of the COVID economic crunch, but that when we come on the other side of it, we've actually invested to be in a better place than before the COVID-19 crisis happened. Do you have a sense that Joe Biden understands these very real dynamics that you're describing? And that he can we'll do something about it?

Dolores: I don't know. I think that's the question. The big question is, how do you get these corporations to cooperate? Because they don't really, I don't think they care. As long as prophets have their motive, and they want to make as much money as possible. I think they're going to continue to the system that gives them the greatest wealth. And I don't know that Joe Biden can rein them in, or what he can do to save them, you got to come back to the US, and you've got to pay taxes in the United States of America. You know, we recently lost proposition 13 here in California that we were all working on, that proposition would have been in $12 billion, 60% of it would have gone to our local communities, which are hurting because of COVID-19. And the other 40% would have gone to our school systems. But the corporations that they, you know, they got together and they spent all this money that they could, and ended the tax of this money that would have come in for this $12 billion would have come in from the wealthy corporations like Amazon, Disney, Chevron, only 10% of the wealthy corporations that work in California would have valued 2% of the money would have come from those very mega-corporations, but they did everything that they could to defeat it. So I think that is like a mirror that really shows that these wealthy corporations don't give a damn if our kids get an education or not. They don't really care if people live in poverty. And so the big question is, how was the president-elect, Biden going to rein these corporations and even when you're talking about, about, you know, Medicare for all, they will not stand up to the big pharmaceuticals and, and these big insurance companies, which is, the only way that we can get Medicare for All is by taking these, these people are out of the health business and, you know, giving the money to doctors and hospitals and nurses and the people that do tend to the, to the people that are sick, and not to these middle managers. And I don't know Joe Biden's going to be able to do that. He back down on Medicare already, because they just have such a powerful lobby, powerful communication systems. And the general public has no clue about what it what that even means, you know, they call it, quote-and-quote, socialism, and something that you have to be afraid of?

 Lori: Well, one thing you told me back during NAFTA, when we were moping, and in, in a very blue mood about how we would get some of the California Democratic members of Congress to vote against NAFTA. And, you know, I remember saying, boy, they're really convinced they don't want to vote against NAFTA, all these corporations are telling them, they have to vote for NAFTA. And I remember you saying something, like, we're just gonna have to make them do it, we're gonna have to organize. And that's been your whole life. That's something you've taught me, you've taught generations of people, that the companies don't want to do the thing that's good for the people, you have to make them do it. And so it strikes me that in a weird way, the COVID-19 crisis provided a lesson for a lot of people who aren't the working people who already knew that this system was rigged against them. All those people who you know, don't work in a factory, don't do a service job that isn't a doctor or a lawyer suddenly have this experience of somehow in the richest country in the world, they couldn't get the things they need it because we don't make it anymore. And it was suddenly a wake-up call that here we are, and they couldn't get masks, and no one could make masks and someone could die because they couldn't have a ventilator. And we couldn't make ventilators. And it just makes me wonder as you know, your that you are the Empress of organizing, what your view is about how we can leverage this unifying experience of how screwed we are in a country that can't make things anymore, to try and get some of the people who haven't really cared about what happens to the people who make things. But because they're the people who buy things, they're now also the people who are on the losing end of this version of trade and globalization. What is your view of how we can basically organize the people who make the stuff we're used to the people who bought the stuffing cans to make Joe Biden do the right thing?

Dolores: Well, I think it will continue the organizing, and I have a lot of hope. I mean, we have seen all the young people that are marching out there and on the issues of racial justice. And somehow I have said this before, but I know back in the 60s and the 70s, we had a cultural revolution in the United States of America. But you know, that's when the LGBTQ movement got, really, you might say, it grew so much, and the environmental justice movement was just starting. The woman's movement was like, in its second or third phase. The Civil Rights Movement made a lot of changes. And but I think this next revolution and ethics got it, the young people that wasn't gonna have to lead it. And it's got to be an economic revolution. I think before it might have been iffy because people didn't really feel the pain that much. But now I think people are not only feeling the pain but seeing the pain because you can't walk down a single street without or any city in America without seeing homeless people on the street. It's so it's all very, very visible now, and maybe doubted that we were going to this pandemic, this might be a good time to really start uplifting those messages and explaining to people like you do with your great work that you're doing on the research so that you can actually show people the data, as you're doing and say, "Look, this is what it looks like this is what's happening." And so, especially younger people that may have said, Well, I don't know how this all happened, I was just, you know, born into this, this system and this situation. And you can say, "No, this is how it happened. And these are the people that are making it happen. Okay, so now it's time for us to address this, and do it in a mass way," the way that people are now organizing around racial justice. And I think we saw one little piece of this when the republicans were trying to get rid of Obamacare. And so you had people demonstrating at the opposite of all of these senators, and Congress people that were involved in trying to get rid of Obamacare, and they back down. So it's got to be that same type of organizing. And I know it's a little bit more difficult with the virtual organizing. But I think the main thing is that we have to get people to understand and to see this, to see what's happened, because people really can't take action until they understand. And once they understand, then we can go for the solutions, and then put the pressure on the big corporations.

Lori: Ladies and gentlemen, you heard it here. First, Dolores Huerta, one of the deans of political organizing strategy and progress in the United States of America has given us our marching orders. And that is Dolores. That is spot on. And we can't tell you how much we appreciate the honor, you've honored us by coming to be on this podcast and sharing your wisdom. And so we will see you at the barricades as we fight for a trade system that is just for working people. And that puts the corporations on the receiving end of the limitations, not the environment, not the workers, not our health. Thank you so much.

 Dolores: Now, thank you for inviting me, and thank you for sharing your wisdom and your research and all of your great energy. Thank you very much, Lori. I feel honored.

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

Must-Read Piece on the WTO

By Lori Wallach

Farah Stockman has done a great service in writing about the World Trade Organization (WTO) in Thursday’s New York Times in a way that is compelling and accessible. The siloed, practically religiously devoted defenders of the WTO (the Knights Templar WTO) are in a tizzy that the secrets of the palace are being revealed, but the comments section on the New York Times website shows how eager most people are to understand how this organization has failed them and what would do better.

The op-ed merits a read and share to get as many eyes on it as possible, and the comments are some of the most informative and interesting of any piece I’ve seen.

Read The W.T.O. Is Having a Midlife Crisis!

Season 1 Episode 23: U.S. Officials Are Blocking Global COVID-19 Vaccine Access at the WTO

World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives.

But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?

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Transcribed by Sally King

Ryan: Welcome back to rethinking trade, where we don't just talk about trade policy, we like to change it, and Ryan and I'm joined once again by our new house trade expert, Lori Wallach, the World Trade Organization is meeting, as we record this podcast, and one of the items on their agenda, it's going to have a huge impact on the world's access to COVID-19 vaccines and treatments. That's because the WTO intellectual property rules were designed to protect the Big Pharma giants, not the people who need medicines to survive. Lori, could you tell us what is happening right now at the WTO? What trade related intellectual property rights are. And what they have to do with the covid 19 pandemic?

Lori: So let's take one step back, the World Trade Organization enforces a dozen plus agreements, including the old trade rules which are called GATT, the General Agreement on Tariffs and Trade, that's the part that really is about trade. One of those other agreements is the thing you just mentioned Trade Related Intellectual Property rights which is often called TRIPS. That is basically the antithesis of free trade, that is a set of monopoly protections. Every WTO signatory country is obliged to guarantee to big pharmaceutical corporations, and that includes a guarantee of a 20 year monopoly for any medicine, it creates periods of exclusivity over the data used to prove a drug is safe so that the generic manufacturers sometimes have to wait even longer. All of those kind of rules of course are really the opposite of what you think of for free trade, right? Competition. Those are rules designed to block competition to give monopoly powers to pharmaceutical firms they can charge any damn price they want for medicines. So in the face of having that imposed on 160 countries worldwide. Were all the least developed countries are required to have these very stringent monopoly protections for big pharmaceutical firms, a set of countries like South Africa and India came in with a proposal now supported by dozens of countries, and that was to waive those pharmaceutical company monopoly rights for temporarily anything during the COVID crisis that is necessary for the production of treatments of vaccines and the technologies around the production so the actual medicines and also the know how to produce them. And it's really obvious why to do this. We need to get billions of doses of vaccines, hundreds of millions of doses of treatments, and the only way the whole world is going to get better is if the whole world is better. It's an epidemic. So it's actually in the interest of people all around the world to get enough of the vaccine made so that there's no one who can't get it, and quickly. But right now the way that WTO rules are set up, if a country, for instance, simply copied the vaccine, or insisted that the company provide the know how for how to copy the vaccine that it would be in violation of these WTO rules, and a country's imperative to save lives with subject country to indefinite trade sanctions. So a developing country would have huge penalties billions of dollars put against its actual exports needed to keep this country going because they put people's lives first. And what would that process actually look like if a country was held in violation?

Lori: Well let's just be super concrete, because Sadly, this is not the first time this has happened during the peak of the AIDS epidemic when hundreds of 1000s people were dying antiretroviral treatments were available, but they were so prohibitively expensive that throughout the developing world in Brazil and South Africa. People are dying needlessly for whom, if generic versions of these medicines could have been produced their lives would have been the life of a person in the US or Europe with AIDS, which is basically the antiretrovirals would make it a treatable pill perennial but treatable disease. Instead of having a chronic treated disease, people all over the global south are dying and countries started to want to make their own medicines and some developing countries have the capacity. India can do it. Argentina can do it. South Africa. Brazil. And the United States, on behalf of its big pharmaceutical companies, basically threatened to go to the WTO and attack those specific countries for violating these trade agreement pharma monopoly rules, instead of basically helping those countries try and save the lives of their people who had HIV or AIDS. And that case ended up blowing up because that was, for folks who remember, when Al Gore was running for president, people from amped up or falling around busting into his event screaming, “Greed kills.” That was a WTO trips case. That was the get them to back down the Clinton Administration on these attacks using WTO against HIV AIDS medicines. So what happens with the sanctions is practical. One of these WTO tribunals decides that some countries, health law is a violation of the WTO rules. And then the country is told you have 90 days to get rid of that regime for making medicine available that pharmaceutical generic company. And if you don't, then we're going to impose penalties on all of your exports what that means practically is for instance, every good that a developing country would export will be hit with a huge tariff on the way into other countries. So that basically it's like a strangle. It's basically we're going to choke you to death if you don't change and we're going to do that by cutting off your exports.

Ryan: I know there's an effort underway right now to pressure the US and other countries to support this waiver at the WTO and prioritize responding to the pandemic over protecting Big Pharma intellectual property rights. But ultimately, who has the power to change the US position here, and also what are the prospects of this position changing under the incoming Biden administration?

Lori: Ryan, that is exactly the question to ask. So, who has the power to change this? This is a position that's taken in the executive branch, it doesn't require Congress to pass anything, whomever is the President and the President's top trade official the US Trade Representative decides the positions the United States would take at the World Trade Organization, the United States sits in a council it's called the general council, with the other countries who are signatories to the WTO the general council takes positions. If the United States, which under the Trump administration has joined Europe and a handful of other countries who are the homes of the big pharmaceutical corporations to block this proposal if the US changes sides, something the bind administration could do without Congress again and then what it would look like is instructions go from the White House to the US representatives of the WTO in Geneva, and they go to that meeting which the next one right now the meeting, we're going to say the wrong thing. The US is going to say the wrong thing. So when it needs to get in January, that General Counsel the US can go in and say we now join those countries that want to temporarily waive the WTO special monopoly protections for Big Pharma. It's a temporary waiver until the epidemic crisis is over, it only applies to those medicines and technologies, with respect to vaccines and treatments for this crisis, but we join putting public health first, that's all it would take. And who can make that happen? Well, that's us. So we all need to be taking action to contact our members of the House, or members of the Senate. And frankly, as soon as Joe Biden is sworn in the White House which will be taking, of course, the usual hotline emails and letters. And the reason to get Congress engaged is this is not a one off. So these WTO rules in this particular waiver is extremely urgent. It's literally going to make the difference between life and death of people the world in relation to the COVID-19 epidemic. But this is a fight that we started with the NAFTA renegotiation. When we got the most extreme Big Pharma giveaways that Trump added to the old NAFTA making it worse; we got that out. But we need, as the United States of America, to have a new position, about these kinds of farmer protections in trade agreements, they don't belong there at all. It's not just that the WTO rules should be waived but rather we negotiate these terms. So we're putting people's health. First, yes we want to reward innovation. So when a company comes up with a great invention there are ways to reward that but the amount of time. And what's the balances between people getting access to medicine, and the gluttonous profits that these big pharma companies make is a real problem, because this is something where on the first day, the Biden administration can show. They're going a different way on trade, you're going to put people over profits to kind of put health over Big Pharma. And this is one of those things they can do on their own, if we all join in and push them to do it.

Ryan: And if you go to rethinktrade.org you can scroll to the bottom to the take action section and you can send a letter from there to your representative and senators. and on the eyes on trade blog, which I'll link in the bio of this episode, you can read more about the WTO TRIPS issue. 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 to find out how to fight for fair or equitable trade policies.

Rethinking Trade - Season 1 Episode 22: Biden Administration Part 1

President-elect Biden’s appointment of the next top U.S. trade official has taken on enormous political and symbolic value. In just a few weeks, the White House is going to look a lot different – but what about U.S. trade policy? On this episode, we examine whether the new president’s political commitment to fixing some of the worst aspects of the old corporate-rigged trade agenda will become reality, or if the office of the U.S. Trade Representative will function as a gateway for big corporations to write the rules.

 

Transcribed by Garrett O’Brien

Ryan: You're listening to rethinking trade with Lori Wallach. Welcome back to Rethinking Trade everyone and welcome to the last full month of the Trump administration. In just a few weeks, the White House is going to look a lot different as will the world of trade policy. So today, we're going to focus on a few things related to the new administration, from the people being tapped to lead it to some of the policy elephants looming in the room. Lori, let's talk first about the Biden administration as it currently stands. As far as the future of trade policy, what positions matter the most? And what are you seeing in terms of personnel choices so far?

 

Lori: Well, what candidate Biden said was three things. First, he basically announced a moratorium on new trade agreements, which he just reiterated this week. He said that until there were major investments in US production, in healthcare, in training, there would not be any new trade agreements. And that's right, because there needs to be a new US trade agreement bottle that builds off the new floor that the revised NAFTA set. He has said that he wants to greatly expand Buy American procurement, domestic preferences, and how the US government spends its money, which is the right thing to do. And to do that he also as a candidate said that he would fix the trade agreement rules that currently forbid this and make Buy American really mean “Buy American plus 60 other countries” who get waivers to Buy American and our tax dollars get offshored. So that's something we're going to need to watch carefully both that they don't do new trade agreements, and that they fix the Buy American rules in the old trade agreements. And then the third thing he said he wanted to do is a variety of priorities relating to revitalizing the US economy, investments in infrastructure, health care for more affordable for more people, more affordable medicines, and a bunch of those things as well, his priority climate initiatives, run into some of the bad old corporate rigged rules of our trade agreements. So some of that stuff is going to have to get fixed. So with all of that is what they've said, then it's who is going to do what, and the most single important job and the appointment that matters the most in the short term is the US Trade Representative that is a cabinet level appointment, and is an independent agency, and it's the lead trade policy setter for any administration. And so far, they haven't announced someone, there are some good candidates in the mix, everyone seems to think, who would be able to put forward a pro-people pro-planet agenda, but there are also some worrisome characters, and who gets that nod is going to be very symbolic, because it's going to represent either a political commitment to fixing the old corporate rigged trade agenda, or if the wrong persons in that position, it's going to be signal that it's going to be a war. And there are huge policy and political implications for that, not the least of which is hard to imagine: a president who is a democrat who's not prioritizing trade wants to get into a family feud with congressional Democrats, unions, and other base groups, and have a lot of them fighting with the administration against the administration about either a bad USTR choice or bad trade policies versus fighting side by side to try and promote the administration's non-trade agenda. There are some other appointments that have already happened that are important. One of those is Treasury. So Janet Yellen is the number one, she is a little bit too much the standard view of economists typically on trade, not sort of focusing on all the non trade rules that undermine things ostensibly she would before. The deputy, the top deputy, is a guy who was in the Obama administration. His name is Wally Adeyemo, and he is a guy who Senator Elizabeth Warren has been praising, but my past dealings with him had him as a pretty strong advocate for the Trans Pacific Partnership. And having negotiated on behalf of Treasury, where he was Deputy Chief of Staff during the previous administration, during the Obama administration, the very weak provisions in the TPP that didn't do anything to discipline currency cheating. On the other hand, he was also the guy who put his foot down and demanded that there was a limit on financial data transfers, so that Treasury could stay on top of fishy business if there was another financial crisis. So I would say the biggest thing to watch is if any of the really bad guys end up at USTR and probably number one in that list is a guy who'd love that job, who there have been a few news stories about maybe being thought about for the job. You knock me over with a feather if this comes true, but Rahm Emanuel, corporate hack extraordinaire, man who sat on tapes of criminal behavior of police in a police-related shooting in Chicago for a year, a man who I suspect if he got named to even dog catcher if there was such a title for the administration would probably cause street protests in Chicago, among other places. But Rahm Emanuel aspires to a new job in this administration, and, h having been effectively persona non grata in Chicago, so I guess he's looking to move east again. And there are a lot of people considered persona non grata for this administration, but his name has been associated with the USTR gig, and that would be catastrophic.

 

Ryan: You already answered my next question, actually, when you were talking about Biden's Buy America plans. So let's just jump on to the sort of final question. This is sort of part two of the podcast, I suppose. When you were talking about Wally Adeyemo you mentioned the Trans Pacific Partnership. And we didn't want to have to talk about this, but because it's been in the news, we have to, and that is the Regional Comprehensive Economic Partnership or the RCEP a lot of news outlets have been talking about the RCEP as sort of China's Trans Pacific Partnership, and they've been using that framing to suggest that Biden should try to rejoin the TPP. Or at least you know, the question is being asked, but this is not an accurate depiction of the RCEP. So my question for you, maybe you can tell me in the listeners, what is the Regional Comprehensive Economic Partnership? How does it differ from the TPP? And why is this framing of it so problematic?

 

Lori: Well, I'll start with the last part, which is the same people who are trying to push us into the terrible corporate-rigged, job killing, big tech helping, medicine price increasing, environment destroying, climate disaster fueling TPP are just recycling their same old efforts. But their hope is somehow the Biden administration will not have learned the political lesson of how the Obama administration pushing TPP right through the presidential election helped make Donald Trump president, but also that most of what's in the TPP directly contradicts what Biden has said is his priority domestic agenda. So what they're basically, what the usual suspects, which are, you know, the usual corporate hacks and the lobbyists and the front groups that, you know, claim to be think tanks, who are cycling this stuff up and there are lots of op eds, lots of “Oh, no, we're left behind.” They're arguing their newest slice of this is to talk about this Asian agreement. So here's the backstory. At the time that the TPP was started, some countries in a grouping called ASEAN, which is basically the Southeast Asian countries, it's anchored with Malaysia and Indonesia and Vietnam and the Philippines and Thailand, they decided that they would, because they weren't invited to TPP, they would have a negotiation that involved they're having a free trade agreement with Japan, with Korea, and with China, who are the big countries in the region. And then they invited New Zealand and Australia as well. So there is some overlap between TPP countries and RCEP countries. But way back when the idea was these are going to be what they called two different kind of mega regionals. But it was never China's agreement. It was the ASEAN countries agreement, so it was never going to be something exactly like the TPP because the ASEAN countries in the TPP were the ones who were saying, “hey, let's not go so deep on all this non trade stuff.” So the RCEP was under negotiation even longer than the TPP. The RCEP was under negotiation for almost 12 years. And ultimately what happened last month, is they decided that they either could have a deal like the TPP that was dead on arrival and no country would or most countries wouldn't implement. Or they could basically roll it way back. So the final deal looks nothing like a TPP or even what they had in mind with the RCEP when they started. It's a lot more like a brand, a label, than a trade agreement. So to put this in perspective, unlike the TPP this agreement doesn't get rid of all tariffs. It largely doesn't even cover agriculture at all — the most contentious area where tariffs were zeroed out and TPP. It does not have Investor State Dispute Settlement, ISDS, which was the heart of the TPP. It does not have intellectual property rules, Big Pharma patent goodies and the copyright rules not in there. It has the most modest service sector rules not forcing countries to privatize and liberalize service sector. It does not have digital trade rules to lock big tech privileges in place and limit governments from regulating. Its main thing is it has common, what are called Rules of Origin, which simply has to do with what kind of product has what kind of test to see if it meets the terms of agreement is it the last step of processing has to be in one of the countries in the group? Or is it does a certain value has to be X percent of the value comes from countries in the deal. And you know, that's something because all of those countries already have free trade agreements, this is not a big economic deal. In fact, the one country that could have actually made a big deal, which was India, quit the whole thing like a year and a half ago and just said, “We don't even want part of this reduced brand.” So the other countries all have deals with each other. And even though this doesn't really have much in the department of contents, the common rules of origin are really the only there there, which is why I really say it's a brand. But you know, the folks who have been saying, “TPP we should do it” have been saying that all along. You know, frankly, if they thought they could get away with it, they would say we need to have TPP to avoid an alien abduction or a zombie apocalypse. I mean, they would make any damn argument. So, you know, to some degree, that the RCEP is a competing deal and we're left out Heaven forbid or it's China's deal, that has as much validity as doing the TPP to avoid a zombie apocalypse. It's just it's a non sequitur goofiness. But of course, they're gonna bring that up ‘cause you know, people know there is no zombie apocalypse. And people don't know what those three initials are RCEP even mean. So that is something we're going to need to stay on top of. My sense is politically, the Biden folks, even if they would be inclined to buy the bologna, understand this would be a political third rail that would undermine their domestic priorities and basically doom the Biden presidency from day one.

 

Ryan: And this is probably just the first example of many that we'll see of attempts to reestablish the status quo corporate rigged trade policy set, in the Biden administration.

 

Lori: I mean, the reality is that if they want to use it, the incoming administration has enormous leverage on trade. The previous administration, US Trade Representative Bob Lighthizer, broke a lot of furniture. So at the WTO, with respect to China, there is a lot of leverage sitting there that this administration could use. It would be an enormous mistake if they just lifted the China tariffs, which thankfully, this morning, President-elect Biden said he wasn't going to do or if they just decided, “let's start appointing WTO tribunalists and get that system working again,” which so far, they have not said they're going to do. But if they would do that, it would just be like, you know, it would be like having someone on third base with a known home run hitter at the plate, and then deciding that they would just, you know, basically, with all the bases loaded, decide to foul themselves out. I mean, it would just be a huge waste of potential leverage and ability to actually get some of the things done that working people and the planet need as far as trade policy. Now, the flip side of that is that having basically broken all the furniture and the world didn't end, a Biden administration that wants to do the right thing inherits also from the Trump administration, a lot more policy tools. So everyone said when Lighthizer started doing things like tariffs on China, or jamming up the WTO, everyone said, “Oh, my God, it's going to be the end, perhaps the earth will fall off its axis and hurl into the sun. Or at least we'll have a major worldwide depression.” And these are the kinds of arguments that get made every time someone wants to do something to use trade policy leverage to try and actually change the rules. And Lighthizer did it. And he had the spine to do it. And all these horrible things didn't happen, which basically demonstrates that if the right person is chosen for the trade representative’s job, then that person has a lot of leverage and has a lot of new tools to actually do the right thing. But you are spot on right, Ryan, that we are going to have to fight and keep the pressure on because, you know, there is a whole set of former Obama administration, former Clinton school people who are getting a bunch of top jobs. And you know, look, just at Secretary of State was a big, you know, “oh, we should be inside the TPP. If we're not inside, then other people will write the rules.” That's Tony Blinken. Now, I doubt he knows the rules basically favor China because I don't think he's going to be a total squish on China. But there are a bunch of people who have that mindset, that sort of State Department's silo, “I don't know what's in there. But I'm sure it's good for us to be in some agreement.” So there's going to be work to do, for sure there's going to be work to do. But I think what we need to do is basically keep the focus on the political price of doing the wrong stuff, and to try and keep the pressure on with a big welcoming, thank you hug of the president-elect, following through on the things he promised: moratorium on new agreements, fix the old agreements so that we can have the Buy America expansion and the climate policies and health policies we need. And then hopefully, we'll spend that time in the moratorium figuring out what a good trade model is, and we can build on the progress that was made in the NAFTA revisions.

 

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 to find out how you can get involved in the work we're doing to fight for fairer and more equitable trade policies.

Will Biden push a pro-people and planet trade agenda?

There is a lot to celebrate about the end of a presidency marked by racism and xenophobia, false promises to working people and record tax breaks for the wealthiest one percent.

The fact is, Trump failed to deliver an end to job offshoring or to revitalize U.S. manufacturing. Nor did he achieve changes to the Chinese government’s predatory practices or reduce our unsustainable trade deficit.

But his 2016 promises to do so were powerful because they connected to real and severe damage that many Americans suffered from so-called “trade” policies.

Now more than ever, we must prevent a continuation of the pro-corporate trade agenda that too many past presidents have pushed – both Republicans and Democrats.

In order for President-elect Joe Biden to deliver on his most fundamental promises to the American people, he must create a new approach to trade.

And if he fails to deliver, no doubt a right-wing autocrat will seek the presidency by exploiting many Americans’ anger over offshoring and trade job losses.

Many core elements from Biden’s “Build Back Better” plan conflict with existing U.S. trade agreements and policies, including those related to major Buy American investments in infrastructure, climate-related energy policies and standards, expanding access to affordable health care and medicines, and more.

That’s because the corporate guarantees and constraints on government action that are baked into current “trade” pacts — and the race-to-the-bottom regime of hyperglobalization they promote — conflict with Joe Biden’s goals of creating the good jobs necessary to battle economic and social inequalities, ensuring all Americans have affordable healthcare and medicines, and averting climate catastrophe.

The good news is, President-elect Biden has made some big promises on addressing our current, corporate-rigged trade rules, including:

• Imposing a moratorium on “new trade agreements until we have major investments in American workers, including (a) modern, job-creating infrastructure, (b) widespread investments in education and worker training” and “targeted support for American manufacturers, and (c) specific investments in communities to build up research and manufacturing hubs.”
• Appointing “experts from organized labor and the environmental movement to work in trade negotiating and enforcement positions” and making sure that “labor and environmental advocates are at the table from day one in future trade deals.”
• Aggressively pushing “for strong and enforceable labor provisions in every trade deal my administration negotiates – and not sign a deal unless it has those provisions.”
• Opposing “the ability of private corporations to attack labor, health, and environmental policies through the Investor-State Dispute Settlement (ISDS) process” and opposing “the inclusion of such provisions in future trade agreements.”
• Banning fossil-fuel subsidies, slapping tariffs on imports that produce high amounts of carbon and putting emission reduction commitments into trade deals.

Our job is to build the public pressure needed to make these promises realities.

One early indicator of President-elect Biden’s trade policy plans will be who he appoints as U.S. Trade Representative – the top U.S. trade official.

As they say in Washington, “personnel is policy,” so this decision will tell us a lot.

Unfortunately, some of the candidates being floated are the same old, revolving door, corporate lobbyists and neoliberal fanatics who got us into our current trade policy mess.

We need a USTR who represents the growing Democratic consensus that our trade policies and pacts need a major overhaul.

Joe Biden will inherit a policy and political landscape on trade totally transformed since the Obama presidency ended.

This moment presents significant opportunities to reshape U.S. trade policy to benefit working people, consumers and the planet’s environmental health.

Sign our activist volunteer form to help us win new trade rules that raise wages, lessen economic inequality, counter the climate crisis and challenge corporate power.

While we continue to monitor numerous trade deals being negotiated by the Trump administration as well as the implementation of the revised NAFTA deal, we are building momentum to win big, progressive trade policy changes in 2021.

The Asian Regional Comprehensive Economic Partnership, Lots of Hype, But Not Really a Big Deal…

By Lori Wallach, Director of Public Citizen's Global Trade Watch

The Regional Comprehensive Economic Partnership (RCEP) that was signed today among 15 Asian nations is more of a brand than a major trade deal. Negotiations that boosters of the Trans-Pacific Partnership (TPP) once tried to spotlight as a worrisome Asian-led competitor that should spur the United States into TPP ultimately fizzled into an exercise that has become newsworthy for simply ending.  

Amidst all the breathless hype about the pact covering 30% of the global economy and 30% of the global population, there has been little attention to the deal’s limited terms. Unlike the TPP, an agreement with 30 chapters of which only six actually focused on trade, the RCEP is about trade, although with many limits:

• RCEP’s actual trade terms are limited in that it does not cover all goods or zero out tariffs and excludes most agricultural goods.

• RCEP’s coverage of the service sector is not comprehensive.

• RCEP does not include the controversial Investor-State Dispute Settlement (ISDS) regime.

• RCEP does not set uniform product standards.

• RCEP does not have a procurement chapter.

• RCEP does not address state-owned enterprises.

• RCEP does not have enforceable “digital trade” rules.

Just as the U.S. Congress rejected the overreaching TPP, many countries involved in the decade of RCEP negotiations rejected the old corporate-favored trade-pact model. India exited the process altogether. Although some of the remaining countries aspired to a TPP-style deal, it became apparent that either there would be a much more limited agreement or no agreement.

India’s exit is one reason the pact will have little effect on the global or U.S. economy. Optimistic projections are for 2/100s of a percent in growth gains. The pact’s impact also is limited by the fact that most of the nations involved already have trade deals among themselves. Some RCEP proponents hope it could somehow magically unjam various configurations of China, Japan and Korea trade talks that have dragged on for years. But that a decade of RCEP negotiations resulted in more of a brand than a trade deal suggests otherwise. RCEP’s main benefit probably is its rules of origin (ROO), which will replace the ROOs of the various bilateral and plurilateral pacts among the RCEP signatories.

And no, RCEP is not “China writing the rules.” RCEP is not a Chinese initiative, but rather came from the Association of Southeast Asian Nations (ASEAN*). The RCEP final text, which connects the ten ASEAN nations with Australia, China, Japan, New Zealand, and South Korea, is based on ASEAN terms.

The RCEP will not go into effect until its signatories conduct domestic approval processes. But because of its relatively “shallow” terms, approval is not expected to be controversial. This contrasts with the TPP’s fate. It remained scores of votes short of approval in the U.S. House of Representatives from when it was signed in February 2016 until the end of the lame-duck session of Congress in December 2016. In 2017, shortly after being sworn in, President Trump formally pulled the plug with a notification that the United States would not be ratifying the TPP.

*ASEAN members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.

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COVID-19 Vaccine Access vs. Trump Trade Protections for Pharma

By Mariana Lopez

Disponible en Espanol aqui

U.S. trade policies have made it difficult for patients to access the medicines they need for far too long. The Trump administration has only exacerbated this problem.

Last week, the United States joined several other countries to block a temporary waiver of World Trade Organization (WTO) rules that require all WTO signatory countries to guarantee pharmaceutical firms expansive monopoly protections for medicines and medical technologies. These WTO terms could create legal barriers and undermine efforts to produce enough affordable doses of an eventual COVID-19 vaccine and other medicines and medical equipment necessary to end the COVID-19 epidemic and save lives worldwide.

While Republican and Democratic administrations alike have prioritized Big Pharma’s interests in trade pacts and policies, this latest development comes in an entirely unprecedented context: More than 1.1 million people have died from COVID-19 in the past ten months and many more will absent widespread access to vaccines, treatments and life-saving medical equipment.

Public Citizen was among 400-plus of civil society groups worldwide to support India and South Africa’s proposed waiver to sections of the WTO’s Trade-Related Aspects of Intellectual Property (TRIPS) agreement that guarantee pharmaceutical firms expansive monopoly protections

Dozens of WTO member countries agreed, arguing that the waiver would help countries disproportionately affected by COVID-19, especially those with limited manufacturing capacity to supply their populations with vaccines and other medicines, personal protective equipment, ventilators, and other pandemic-related medical goods.

The pandemic has revealed the flaws in the hyperglobalized system of production that corporate-backed trade policies and intellectual property barriers have created. In addition to access to critical medicines and medical supplies being undermined by trade-pact monopoly protections for drug and medical device manufacturers, long, thin supply chains mean production problems in one nation quickly translate into shortages worldwide of medicines or chemicals needed to make medicines and components of ventilators and other medical equipment. With individuals, hospitals and even entire nations, struggling to access PPE and critical medical goods during this time, the temporary waiver that India and South Africa proposed would help ease affordable access and address growing inequities within and between nations.  

According to a Geneva-based trade official, India tried to persuade the United States and others to “put people’s lives before anything else.” Trump administration officials at the WTO didn’t see it that way.

The U.S. government’s position was: “Weakening IP [intellectual property] protection and enforcement would be counterproductive to our global fight against Covid.” This despite numerous studies showing that extending IP exclusivities for pharmaceutical companies has led to higher prices for medicines, not to greater investment in innovation or development of affordable treatments and vaccines.

Public Citizen estimates that taxpayers have contributed at least $70.5 million to develop Gilead’s Remdesivir, an experimental COVID-19 treatment. Meanwhile, according to Doctors Without Borders, Gilead has signed non-transparent deals with several handpicked generic companies, excluding much of the world’s population from access to the drug. Additionally, not one pharmaceutical company has opted into the voluntary program, CTAP, created by the World Health Organization, which encourages global sharing of IP, data and technology to increase access to COVID-19 treatments. “These recent actions by pharmaceutical corporations show that relying on their exclusive rights and limited voluntary actions is not the solution in a global pandemic,” said Doctors Without Borders

The battle over a temporary WTO waiver continues, with the issue expected to resurface at a WTO meeting in early 2021. As Public Citizen’s Burcu Kilic noted in a recent The Guardian op-ed, there is a strong case for suspending pharmaceutical monopoly powers during the pandemic. Simon Lester, of the libertarian CATO Institute think tank, also supports the waiver to remove obstacles so that “all governments can and will take certain measures to protect the public health of their citizens.”

U.S. opposition to waiving the WTO protections for Big Pharma is not the first time the Trump administration has prioritized pharmaceutical corporations’ interests over public health. In 2018, President Donald Trump signed a trade agreement with Mexico and Canada that included giveaways to pharmaceutical companies that would have exported pharma-friendly U.S. medicine policies to Mexico and Canada and locked them in here. But for the efforts of consumer, labor and faith groups and Democratic members of Congress, the new North American Free Trade Agreement (NAFTA) would have established an additional barrier to fighting for accessible and affordable medicines.

The rapid development and equitable distribution of lifesaving vaccines, treatments and medical equipment is not a partisan nor Global North versus Global South dispute. Amidst a global pandemic, it is a human imperative. 

Please tell your member of Congress to take a stand here.

Acceso a Vacuna de COVID-19 v. Protecciones Comerciales de Trump para Farmacéuticas

English Translation: COVID-19 Vaccine Access vs. Trump Trade Protections for Pharma

Escrito por Mariana Lopez, Traducido por Alma Andino

Las políticas de comercio estadounidenses han hecho medicinas esenciales inaccesibles para pacientes por demasiado tiempo. La administración de Trump solo ha exacerbado esta crisis.

La semana pasada, los Estados Unidos, junto con varios otros países, bloqueó una moratoria de las reglas de la Organización Mundial del Comercio que requieren que todos los países miembros de la OMC garanticen protecciones y control monopolizado sobre medicinas y tecnología médica para corporaciones farmacéuticas. Estas obligaciones podrían crear barreras legales y contrarrestar los esfuerzos para producir suficientes dosis económicas de una vacuna contra el COVID-19 y otras medicinas y equipo médico necesario para controlar la pandemia de COVID-19 y para salvar vidas.

A pesar de que las administraciones Republicanas y Demócratas  han priorizado por igual los intereses de corporaciones farmacéuticas en políticas y acuerdos de comercio, este último desarrollo llega en un contexto sin precedentes: más de 1.1 millones de personas han muerto de COVID-19 en los últimos diez meses. Muchos más morirán si no tienen acceso a vacunas, tratamientos y equipo para salvar vidas.

Public Citizen fue uno de más de 400 grupos de sociedad civil del mundo que apoyaron una moratoria de apartados del Acuerdo sobre los Aspectos de los Derechos de Propiedad Intelectual relacionados con el Comercio (ADPIC) de la OMC,propuestapor India y Sudáfrica; estas secciones garantizan protecciones expansivas de monopolio para corporaciones farmacéuticas.

Decenas de países en e la OMC acordaron, argumentando que esta moratoria ayudaría a países desproporcionadamente afectados por COVID-19, especialmente aquellos con capacidades industriales limitadas que están luchando para proporcionar a sus poblaciones vacunas y medicina, equipo protectivo, ventiladores, y otro equipo médico.

Esta pandemia ha expuesto defectos en el sistema hyper-globalizado de producción que fue creado por políticas de comercio promovidas por corporaciones y por barreras de propiedad intelectual. Además del limitado acceso a medicinas críticas y equipo médico causado por protecciones de monopolio instauradas en acuerdos “comerciales, las cadenas de producción son largas y frágiles. Esto implica que problemas de producción en un país causan escasez global de medicinas y partes necesarias para hacer medicinas, ventiladores, y otro equipo médico. Mientras individuos, hospitales y naciones enteras luchan para acceder equipo médico crítico durante esta época, la moratoria propuesta por India y Sudáfrica ayudaría a facilitar el acceso económico y a combatir las crecientes desigualdades dentro y entre países.

De acuerdo con un oficial de comercio basado en Ginebra, India intentó convencer a los Estados Unidos y otros países para que “priorizaran las vidas por encima de todo”. Representantes de la administración de Trump en la OMC no estaban de acuerdo.

La posición del gobierno americano es: “La debilitación de protección y aplicación de IP [propiedad intelectual] sería contraproducente para la lucha global contra el COVID.” Sin embargo, varios estudios han demostrado que la extensión de derechos de IP para corporaciones farmacéuticas ha causado precios médicos más altos, en lugar de mayores inversiones en innovación o desarrollo de tratamientos y vacunas económicos.

Public Citizen estima que los contribuyentes estadounidenses han contribuido por lo menos $70,5 millones para desarrollar Remdesivir de Gilead, un tratamiento experimental contra el COVID. Mientras tanto, según Médicos Sin Fronteras, Gilead ha firmado tratos clandestinos con varios compañias genéricas, excluyendo a la mayoría del mundo de acceder a esta droga. Adicionalmente, ni una compañía farmacéutica ha entrado en el programa voluntario, CTAP, creado por e la Organización Mundial de la Salud que fomenta el intercambio de IP, información, y tecnología para aumentar el acceso a tratamientos para el COVID-19. “Las acciones recientes de corporaciones farmacéuticas muestran que confiar en sus derechos exclusivos y acciones voluntarias limitados no es la solución en una pandemia global”, según Médicos Sin Fronteras.

La lucha sobre esta moratoria sigue y probablemente emergerá de nuevo en la reunión de la OMC al principio de 2021. Como ha notado Burcu Kilic de Public Citizen en un op-ed reciente en The Guardian, hay buenas razones para suspender los poderes de monopolio de las compañías farmacéuticas durante la pandemia. Simon Lester, del instituto libertario CATO, también apoya la moratoria para eliminar barreras para que “todos los gobiernos pueden tomar y tomen medidas para proteger la salud pública de todos sus ciudadanos.”

La oposición de Estados Unidos contra la moratoria de protecciones de la OMC para compañías farmacéuticas no es la primera vez que la administración de Trump ha priorizado intereses de corporaciones farmacéuticas sobre salud pública. En 2018, Trump firmó un acuerdo transnacional que incluía el trasplante de políticas a favor de corporaciones farmacéuticas a México y Canadá. Sin los esfuerzos de grupos de consumidores, sindicatos, y grupos religiosos, y congresistas demócratas, el nuevo Tratado de Libre Comercio de América del Norte (TLCAN) habría establecido más barreras contra la lucha por medicinas accesibles y económicas.

El desarrollo rápido y la distribución equitativa de vacunas, tratamientos y equipo médico no es una disputa partisana o nacionalista, tampoco es una lucha entre el Norte y el Sur Global. En una pandemia global, es un imperativo humano.

Por favor pida a su congresista que haga lo correcto.

Rethinking Trade - Season 1 Episode 21: China Phase 2

Donald Trump has made a big deal out of his “big deal” with China. But the first phase of this plan, with trade rules that actually encourage U.S. companies to outsource jobs to China alongside agreements by the Chinese government to increase purchases of U.S. goods, has pretty much flopped.

The second phase, meant to contain stronger labor protections and other rules that would’ve actually made a difference here and in China, never happened. That’s a real problem, because U.S. trade policy with China has enormous implications for working people both in the U.S. and in China, where labor conditions remain bleak.

On this episode we break down Trump’s China trade deal and how it became yet another one of his broken promises to working people.

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, back at the beginning of the year, Trump was making a big deal out of what he called his “Phase 1 trade deal with China.” He made perhaps a bigger deal out of what would follow, Phase 2. But Phase 2 is pretty much MIA right now. Let’s talk a bit about this deal and maybe you can help us figure what the hell happened to Phase 2.

Lori:

So, China trade has obviously been a big deal in the last couple of years. And there are two different things going on. There are the tariffs that were put in place to try to counteract China’s subsidies and their misalignment of their currencies. All of which are basically ways in which China, the government working very closely with companies, some of the companies are owned by the government or military, figures out ways to make sure that goods sent to the US actually are priced at below what they really cost to make. Meanwhile, they come up with ways to make sure that goods that went from the US to China become too expensive to be competitive. This boils down to what some people call “trade cheating” and there are lots of different ways to go about it. So, those tariffs that got put in place under regular old trade law, domestic law, and called Section 301 of the Trade Act and that basically allows tariffs to be put in place to counter the subsidies another country is using. So, to some degree doing that domestically was leverage ostensibly to then set up a negotiation to get China to change the underlying policies that create those subsidies that rewire those counterbalancing tariffs to make the goods when they come here fair. So, overtime, basically what happened is they were not paying every time the goods came here it just became too expensive for Chinese foods to come here so China stops sending goods here. That’s when you can negotiate usually to change the policy in this instance though the Phase 1 deal instead of dealing with the things that ostensibly those tariffs were supposed to be countering like slave labor and forced labor and cheating on currency values to make the Chinese currency artificially lower so the products are cheaper than they really are or good old government subsidies paying companies. No of that stuff was actually covered in Phase 1. Instead, Phase 1 actually had stuff in it that makes it easier to offshore US jobs and invest in China. So, Phase 1 had things like Wall Street has new rights to invest in China, in new sectors. How is it a good idea to make it easier for dollars to go to China to create jobs there? Or Phase 1 had China agreeing to stricter protections of intellectual property rules which seem counterintuitive in the sense that the US is a good place to invest because basic rights and the rule of law operates here. So somehow making it easier for companies to be able to have their cutting-edge designs and technologies protected if they're made in China it is still not clear about why that is a good thing for US workers. It all boils down to its not. So, Phase 1 was what China was willing to do and that was in part because it was in China’s interest. It’s a thing that can help China get more money to invest in monopolizing what it sees as industries of the future and they have a plan for that called China 2025. So Phase 1 didn’t really get a lot of love in congress from Democrats and certainly didn’t get anything from unions because it basically was against the interest of workers so then we heard well that’s all that China agreed to do. There is no doubt they were doing it without us telling them that we wanted them to, it’s in their interest. So Phase 2 was supposed to be the real stuff, the hard stuff, labor rights and keeping out forced labor goods made by Uighurs and dealing with the currency manipulations that make it very hard for US exports to get into China and get their goods dumped here and very importantly there was supposed to be disciplines on subsidies. That’s the stuff that would’ve made a difference on working people here and that never happened and now it looks like it never will.

Ryan:

Speaking of things never happening, before we get too much into Phase 2, I wanted to go back to Phase 1 real quick. How much of Phase 1 actually happened? What did and didn’t happen in that window? And, you know, is that something that was just sold to the public or were there real things going on in the background there?

Lori:

So, there were two levels to Phase 1. One was things China ostensibly was going to do to change their policies. And a bunch of those things were things China wanted to do anyway. They were going to make it easier for US dollar investment to happen in China because they wanted the money to make more jobs in China. China was going to say that they were going to protect intellectual property better because they wanted US companies to relocate their production there and bring their technology there. So, those were policy shifts China was making whether they get enforced is a different matter. The sort of meat and potatoes part of phase1 was supposed to be agreements by the Chinese government to purchase specific amounts of more US goods and that in itself was really kind of bullshit because having one time purchase agreement of “I will buy more stuff over the next two years” in no way phases out China trade problems. That’s just useful for Trump to say, “Oh look I got China to buy some stuff before the election.” But even as narrow as that was as an idea, those sales haven’t happened. So, there were specific requirements to buy more US agricultural exports that is maybe at 30% of the level of what should be necessary to meet that commitment. There were promises to buy more US liquid natural gas. Separate from the environmental disaster that plan is, that has not come to fruition. So, the meat and potatoes part basically ended up with some potato peels and a couple of bones. It was not as narrow as that would have been. The “We’re selling a lot of stuff” outcome that they promised. And the policy stuff was stuff China was already doing bit it’s against our interest. It promotes outsourcing so that the whole current picture of the so-called Phase 1 has come to pass.

Ryan:

And that would be a good time to bring up the question of the day, which is where is Phase 2? Does it exist or is it just another one of Trump’s broken promises to American workers?

Lori:

There is no Phase 2 China trade negotiation. There will not be a Phase 2 China trade deal. I mean for one thing, there is only a limited amount of time before the end of this president’s term, I can’t presuppose the outcome of the election but looking at the state of the relationship between the US and China there are not even conversations about the preceptive second phase deal but also there is, I would say, it is more likely that Donald Trump is going to get us back into the Paris Climate Treaty than there is going to be a Phase 2 deal under the Trump administration with China. Which is to say fat chance.

Ryan:

So, it sounds like Phase 2 is probably not happening. Does that matter? what is the significance of it not happening?

Lori:

You bet it matters! That was all the stuff that was supposed to help US workers and US small businesses. So, Phase 1 was, you know, what the big banks wanted, what the biotech companies wanted, what Pharma wanted. Phase 2 was all the stuff that was supposed to make a difference to try to stop the flood of subsidies imported Chinese goods that are wiping out US production but also you know ostensibly how investment decisions are made has to do with where companies think that they can export from and what the import competition is going to be. So, if you don’t actually fix those actual underlying structural issues in China you either have to fix those or you have to figure out how to actually just stop some of that Chinese stuff from coming in if it’s going to be unfairly subsidized. And Phase 2 was all of that. It was all the stuff that really mattered. It is really only the tariffs that are keeping us from having an ever bigger Chinese deficit and if you don’t fix the underlying problems you’re not going to actually create the kind of trade relationship between the US and China that would actually put people first.

Ryan:

And we’ve said this many times on the show but we do need a new progressive approach to China that centers labor, human, and environmental rights above the multinational corporation and authoritarian government collusion that we have now. After November we’re gonna have to carve that path regardless of who wins. In closing, maybe you could give a snapshot of what they could look like and what kind of policy changes it might entail.

Lori:

So, the good news is that there are now 30% tariffs on $350 billion worth of Chinese goods as the background. And that is a Section 301 tariff and it was painful to get there a lot of people could argue with the way in which it was done but the reality is that it’s the new normal and that creates a lot of leverage. That leverage basically has shifted the trade deficit with China. So, it hasn’t fixed the trade problem, but it has brought down the bilateral deficit. So not the trade is shifting to other countries, so you need a broader trade policy that deals with the same issues: cheating on currency, subsidies, in other countries. But I would say that with respect to China, there are two things to think of going forward especially because you have that leverage from those tariffs. One are there any ways that the US and China actually can negotiate on some rules that are kind of the Phase 2 menu of fixes? I’m skeptical about it but it’s worth trying and the way to try it is to put up the leverage. And we’ve got that leverage from those tariffs. But we might be the biggest import market but we’re not the only import market. So, we need other partners in Europe, in Japan, in Canada, in Australia et cetera to join us in shutting down the markets available to China if it continues  its current practices. The reason why our tariff regime has helped bring down the bilateral deficit but hasn’t helped change China's practices is because the current practice can continue and there are still other places where goods made in that cheating way can continue to go. So yes, there is negotiation strategy but also there has to be a recognition that to some degree unless the pain level gets a lot higher for the Chinese government, maintaining their status quo is something they are going to not change unless given from their perspective would be painful but the pain of not doing so gets a lot higher. So, then you get to what the hell do we do. And we have a lot of capacity domestically that has not been used. So for instance, with respect to labor rights and human rights, under existing law right now we could be shutting down imports from for instance we could have under existing law we could have a ban on imports of all goods connected to the Uighur slave labor camps and to goods suspected to be made by people in forced labor in China. And you basically could as a president put that in place under existing authority congress is delegated by statute. Or for instance, we could right now ban Chinese firms from listing on the US stock markets effectively do that by requiring to actually provide all the information that US firms must provide about who owns the firms and what the investment status is all things that a lot of the government owned or People’s Liberation Army military-owned firms will not make public. So that basically we aren’t having our stock market fuel investment that is unfair and that is against US workers. With respect to specific sectors of the economy, we also have a lot of laws that let us put countervailing measures against what is effectively subsidizing goods by dumping toxins and undermining environmental standards. So not only can you just keep stuff out for a human and labor rights violation, but you can basically sanction countries for importing goods that either violate multilateral environmental agreements or are like subsidized by a matter of dumping their toxics and polluting. So, these are all tools that a new president has that the old president has had and not used and those tools using domestic law are going to have to be an important part of dealing with China. And finally, we need to actually, through existing domestic law or imposed domestic law, deal with the currency issues. So right now China is holding onto so many US dollars in their reserve that even if they are not actively intervening in currency markets to bring down the value of their currency they are bringing down the value of the US dollar to a place where our exports aren’t competitive. So this all sounds quite wonky and confusing and down in the weeds, the cut to the chase on this whole question is we have international tools, we have domestic tools. A lot of what is going to happen is going to happen domestically and there are going to be a lot of bumps in the road along the way that folks are just going to have to hitch up their  seatbelts and go for the ride.

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.

 

Rethinking Trade - Season 1 Episode 20: Fast Track

The most damaging U.S. trade agreements were hatched using the same process: “Fast Track.” Fast Track empowers the executive branch to unilaterally select partner countries for trade deals, decide their contents, and negotiate and sign them – all before Congress gets to vote on the matter. 

Meanwhile, hundreds of official U.S. trade advisors representing corporate interests have special access to texts and negotiators. Under Fast Track, when Congress finally has a say, it is limited to a “yes” or “no” vote with limited debate and amendments forbidden. 

The result? Wide swathes of U.S. law and policy entirely unrelated to trade get rewritten with the public and Congress locked out, and the U.S. is locked into corporate-rigged agreements with trade sanctions imposed on us if Big Pharma does not get special protections, food imports that do not meet U.S. safety standards are prohibited or foreign investors do not get better treatment when they offshore investment. 

But there’s good news: Fast Track only exists if Congress grants it. And the last grant ends on July 1st, 2021. That means soon, we will have a chance to create a new process with the public and congress playings the lead role in the formative stages of trade deals with more accountability over trade negotiations.

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, all of the most damaging trade deals of recent years have happened under a system called fast track. Fast track allows the executive branch to unilaterally select partner countries for trade deals, decide the agreement's contents, and then negotiate and sign them all before Congress gets to vote on the matter. You literally wrote the book on fast track, or rather the book exposing and opposing it. Can you tell us what fast track is exactly, and why it is such a big deal for those looking to transform our current corporate-rigged trade policies?

Lori: So, Fast Track Trade Authority is kind of the root of all evil of how we’ve gotten into this disaster of corporate rigged trade agreements. So, I want to take a step way back to the founding of the country. The United States was created in part because of a trade war. Which is to say the Boston Tea Party everyone learns about in grade school involved tariffs, taxes on imports on tea and other goods imposed by the King of England against the colonies because he wanted to raise money to finance his war with France, imposed in way that really messed with people’s lives and they went “that was the last straw” – they wanted a rebellion. And when the Founders wrote the Constitution they were steeped, pun intended, in that example. So they gave exclusive constitutional authority over trade to the United States Congress, with the logic that this was the body closest to the people and they didn’t want the same scenario as with the king, the president, being able to unilaterally impose terms of trade that were not in the national interest or moreover favored some foreign entanglement over what would be good for workers and businesses and consumers in the country. And so, Article 1 (8) of the U.S. Constitution is one of the starkest, most clean checks and balances. It makes clear that Congress has exclusive authority over tariff levels but also setting the terms of commerce between the nations. And separately the Constitution gives the Executive branch exclusive authority to negotiate with foreign sovereigns. So, to negotiate a trade agreement, Congress sets the terms and then the Executive branch is supposed to go out and negotiate it. And in the history of the country there were different ways that those authorities were coordinated, typically Congress calling the shots and the Executive branch doing the negotiations. 

Enter Richard Nixon. Now here’s a shocker, he wanted to consolidate more power in his control. So, he proposed a new trade authority that would consolidate, really, Congress’ trade authority but moreover piece of Congress’ core function, legislating, under the president’s right to proclaim changes to U.S. laws after setting terms in negotiations with foreign countries in the context of trade. 

Now if this sounds like a form of, if you will, diplomatic legislating, where Congress gets put in a deep freeze and one president and his or her trade negotiators are suddenly both setting the terms of international commerce and rewriting wide swathes of U.S. law – BINGO! That’s exactly what it is. Now, ultimately Congress said ‘no it's not constitutional to simply have the president dictating changes to US law; and the deal they settled on, on which Congress got the short end of the stick, was the Fast Track Authority which for the first time in the history of the country allowed U.S. trade negotiators new authorities to start writing in trade agreements policies and things like procurement and product safety standards and worker safety standards and food standards. And then in 1988, Ronald Reagan took what was Nixon’s initial incursion into diplomatic legislating and made it a deregulation corporate power tool by expanding the areas that trade negotiators could set rules binding on the US Congress and all the state legislatures to also service sector regulations, everything from education and healthcare to energy and transport, intellectual property so what length of patents for big pharma or whether textbooks copyrights would make education more expensive. And effectively, suddenly, our trade agreements went from being about trade, thanks to Fast Track, into being kind of slow-motion coup d'états.

Ryan: Under the Fast Track system, when a trade deal is created, just remind us again, Congress literally doesn’t have a say in it until it comes to the floor for a vote and even then they can’t edit it, correct?

Lori: So, the way Tast Track works is hard to even fathom. Effectively when Congress passes fast track, they have set a five-year or ten-year term where they have created effectively a Fast Track factory, and in that factory, they hand the keys over... as soon as that legislation is in place a president can unilaterally, number one, pick any country to negotiate with and Congress has no say, Congress can think it’s a really bad idea to have that country as a trade partner, too bad so sad you’ve thrown away any control. Number two, the Executive branch gets some negotiating objectives that are general but are like, taped up on the wall of the Fast Track factory, “here’s how it’s supposed to go” but there’s no accountability. So, the Executive branch, the president, can negotiate whatever terms it wants. Number 3, it can sign and enter into the agreement before Congress has any vote either on what country or what terms. Then number 4, and this is a shocker, the Executive branch writes legislation that is going to Congress. It is the only legislation the Executive branch writes. It is exempted from having to go to congressional committees for normal what is called a markup and it’s in review as that piece of legislation goes right into a hopper to go right to a vote. And then number five, the rules for consideration of this legislation written by the Executive branch that Congress has not had any say on what would rewrite wide swathes of US law to implement an international executive agreement to which the U.S. is bound and would face trade sanctions if they violate. That vote is preset as yes or no with no amendments, 20 hours of debate only allowed and that’s even in the Senate so there’s no filibuster, there’s no normal process. It’s a legislative luge run at the end for an agreement on the front-end Congress has had no role in for legislation that has, and can, rewrite wide swathes of legislation that has nothing to do with trade. If this hadn’t been the system that was used to pass more than a dozen really unhelpful agreements people wouldn’t believe it was possible or constitutional.

Ryan: Maybe you could talk about some of the specific historic examples and also like the Fast Track has been on your radar for a long time so maybe talk about some of the moments in which people have confronted the fast track system and tried to get rid of it.

Lori: So, here’s the good news: this is also looking forward to the fact that, yay, Fast Track in its current Fast Track factory closes its doors on July 1st 2021 there was a delegation that was passed  for six years in 2015. So, there have been long gaps as more and more members of Congress, but also the public, has realized that this is a lunatic way to make policy and it has resulted in these corporate-captured agreements that are doing a lot of damage economically for sure. But not only there has been more and more resistance by chunks of Congress to give away this authority. 

So for instance fast track lapsed for the period between 1995 and 2002 that was sort of fallout from all the badness that happened with NAFTA and the WTO and members of Congress realized. There was a knock-down drag-out Fast Track fight that got Fast Track reauthorized for a short period of time in 2002 but then that ended in 2007 and it took a knock-down drag-out fight in 2015 to pass it by very few votes and that authorization is going away. 

So now is the moment when the whole thing can be redone, and a new kind of trade authority can be created that puts a steering wheel and emergency brake on these negotiators. Because the kind of really bad stuff that has happened is, for instance, in the World Trade Organization, and the NAFTA, but mainly in the World Trade Organization agreement, one of the ways that corporate interests were able to use the broad fast track delegation was to achieve something that the big pharmaceutical corporations were trying to do for decades. So Big Pharma had been trying to get the US patent system changed. A patent is a monopoly license. For decades the US law had been that a patent lasted for 17 years. So for 17 years the maker of a medicine could have the right to set any price, to decide how much of it could be produced, to not license production to anyone else, and this system of monopoly patents on medicines and the duration of the medicine monopolies is part of why medicine prices are so high. So, people can remember say you know, ibuprofen, is now sold as Nuprin and other brands, Motrin, when that was under prescription, each tablet was the equivalent to almost $100 today. Now you can buy a whole container for $12 with 300 tablets. So that is the difference between something under monopoly license. So, 17 years is what we had, in the WTO negotiations U.S. negotiators pushed on the whole rest of the world and then basically rewrote U.S. law to 20 years of monopoly. And this is something consumer groups had worked with a variety of members of Congress to stop over and over and over for decades when Big Pharma was trying to do it in Congress, and we won. It got done through the back door of the Uruguay Round, which created the World Trade Organization. The World Trade Organization’s implementing bill passed on this legislative loser on the Fast Track, literally, just has a provision in the thousands of pages that said “strike 17 replace with 20” and that quickly U.S. patent law was written to give Big Pharma a longer monopoly to raise medicine prices by billions and there was no debate, there was no discussion, something that had been rejected in democratic processes was undone through the back door of a trade agreement  and there are scores of examples like that. For instance, we didn’t import any meat or poultry that didn’t at least meet U.S. safety standards. In the NAFTA and the WTO implementing legislation passed on Fast Track was another of these changes and again none of this stuff can be amended when it comes to Congress it just goes right through and it changed the words from “must be equal to US standards” to “must be equivalent to” and now we import an enormous amount of meat and poultry from countries whose inspection safety systems are not only not similar to ours but are diametrically opposed in key ways, for instance not having continuous inspection, not having the same risk standards, et cetera. So, these are just a handful of the examples of the really bad things that got rammed down our throat thanks to this procedure.

Ryan: And you mentioned this earlier but the current Fast Track period ends next year which means whoever wins in November will have to decide reauthorization. Are you anticipating another public fight around this?

Lori: I suspect that whomever is elected president, there will not be any trade authority immediately but there could be a fight over it. I think in Congress there is a real appetite to rethink a new model of trade authority that has Congress have a more robust role on the formative stages of trade agreements to shape what the contents are and also to have more accountability over negotiations to make clear that Congress has a role in all negotiations. But also I suspect if Biden is elected, the Biden administration is not as likely to ask for a new authority given that Biden has promised he’s not going to focus on new trade agreements but rather focus initially on trying to get U.S. policies in place to try to fix the economy and get our own house in order. If Trump is reelected, he probably will ask for Fast Track authority right away and I doubt he would get it. Not only because Congress wants to have a big rethink about it in general but also because many in Congress think the president has basically bent the rules of the current system and many in Congress are not of a mind to extend more authority. 

But there will be a big knock-down drag-out fight over that because the corporate interest that want the status quo will be wanting to see an extension of what is an incredible corporate power tool.  I mean from their perspective, it allows behind-the-borders non-trade policies to be set in a context where hundreds of corporate trade advisors have privileged access to otherwise secret documents, secret negotiations, access to negotiators while congress is left Cooling its heels. And Congress, the press, and the public are basically excluded from even seeing the documents much less than having a more fulsome role, as would be the case if these policies were made in the sunshine of democratic policies.

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.

Donald Trump Bestows Pledge to America’s Workers Presidential Award to Entities That Offshore American Jobs and May Be Importing Uyghur Slave Labor Goods

By Matthew Groch and Sarah Grace Spurgin

The September 23, 2020, White House event with Ivanka Trump and Commerce Secretary Wilbur Ross was supposed to generate good economic news for President Donald Trump by spotlighting the best of U.S. business entities and all the great things they were doing for U.S. workers.

Except, four of the nine businesses being spotlighted as winners of the inaugural Pledge to America’s Workers Presidential Awards have been certified by the U.S. Department of Labor for offshoring American jobs. Those businesses include Lockheed Martin Corporation, Northrop Grumman Corporation, Oberg Technologies LLC., and Textron Inc. And the National Retail Federation, which also received the award, represents a batch of companies that have relocated much of their production to low-wage countries and have come under attack from human rights groups sourcing good produced by Uyghur and other Muslims ethnic minorities whom the Chinese government has locked up in prison campaigns in the western Xinjiang region of China.

It is no surprise that after recent reports of over 300,000 American jobs having been lost to offshoring and trade during Trump’s presidency, the administration would want to try to distract from its actual record. So, you’d figure they would check up on the entities getting the awards.

One recipient of the award was Lockheed Martin. The firm promised it would commit $100 million in new training over five years when it signed the pledge in 2018. Despite a history of offshoring U.S. jobs (including since 2017), Lockheed Martin has received over $140 billion in federal contracts from the current administration.

Lockheed Martin was not the only award recipient who received federal contract dollars while shipping out U.S. jobs.  Textron Inc. has also received billions in federal contracts from the Trump administration while being certified as outsourcing U.S. jobs during the Trump presidency… and it still got an award!

The National Retail Federation (NRF) was also a recipient of the new award. The NRF is a trade association made up of thousands of retailers across the world, including big names such as Nike, Cisco and L.L. Bean. These three firms combine for a cool $104,508,450 in federal contracts awarded during the Trump administration (most of which went to Cisco) despite each having a history of certified job losses to trade or offshoring U.S. jobs, according to the U.S. Labor Department Trade Adjustment Assistance (TAA) program. In fact, according to TAA data L.L Bean has offshored jobs as recently as March of this year and Trump still deemed them deserving of the Pledge to the American Worker Award.   

These three firms (and others in the NRF) have been called out by various human rights organizations for continuing to source products from the Xinjiang region of China, where the Chinese government has imprisoned Uyghurs and other Muslim minorities, forcing them to work for low wages under brutal conditions.

The U.N. estimates more than a million Muslims have been detained in these camps. Trump’s own State Department has accused Chinese officials of subjecting Muslims to torture, abuse “and trying to basically erase their culture and their religion.”

Yet, the Trump administration chose to honor the trade association representing the companies called out by name by 72 Uyghur rights groups and over 100 civil society organizations.

Since its inception, Trump’s “pledge” has seemed to be strong on PR pageantry and weak on substance. For instance, there is no accountability or even tracking about whether firms are meeting their pledges.

The selection of these entities for awards underscores that the Trump administration has not delivered on many of Trump’s pledges to American workers. For example, although in 2016 Trump promised Carrier workers in Indiana that he’d save their jobs, 1,300 of those jobs have been offshored to Mexico. And although Trump vowed to punish corporations that ship jobs overseas, his administration has lavished more than $425 billion in federal contracts on companies that are certified to have offshored jobs.

So, congratulations to the inaugural class of Trump’s Pledge to America’s Workers Presidential Awards — shining examples of how to exploit workers at home and abroad.

Lori Wallach: Global Trade Agenda in a Post-Covid-19 World

Lori Wallach, Director of Public Citizen's Global Trade Watch, discusses the role trade agreements will play in a post-COVID-19 world and how they may shape domestic rules and policies on the digital economy.

Current Trade Deficit Is 22% Higher Than Same Period in 2016

August 2020 Data Show the Largest Monthly Trade Deficit Since August 2006

WASHINGTON, D.C. – An inflation-adjusted analysis of today’s latest Census Bureau trade data conducted by Public Citizen shows that the $424.8 billion trade deficit in the first eight months of 2020 is more than 22% higher than the $347 billion deficit during the same period in 2016.

The August 2020 monthly deficit of $67 billion is also the largest monthly deficit since August 2006, an unexpectedly large growth in the trade deficit given that the value of trade flows declined 15% overall (down $570 billion) compared to last year because of the global COVID-19 crisis.

“The overall 2020 deficit is on track to be larger than in 2016,” said Lori Wallach, director of Public Citizen’s Global Trade Watch division. “The Labor Department has certified more than 200,000 more American jobs offshored since 2016, with more than $425 billion in government contracts granted to firms that offshored jobs.”

Public Citizen’s analysis of the new U.S. Census Bureau trade data also showed:

• The eight-month 2020 deficit in manufactured goods is 12% higher than in 2016.

• The August 2020 trade deficit is the largest monthly deficit since August 2006. August’s 2020 goods and services trade deficit rose from $63.4 billion in July 2020 to $67.1 billion, a 5.9% increase. Imports grew 3.17% in August relative to July, from $231.6 to $239 billion, while exports only grew 2.15%, to $171.9 billion, and remain below the $209.6 billion in February 2020 before the pandemic.

• The August 2020 monthly trade deficit in goods ($83.8 billion) is the highest on record. And the 2020 eight-month trade deficit in goods ($579.7 billion) is 7.32% higher than during same period in 2016, when it was $540.2 billion (in inflation-adjusted dollars). The U.S. trade deficit in goods decreased 3.6% in inflation-adjusted terms from $601.3 billion in the first eight months of 2019 to $579.7 billion in the same period in 2020.

• The August 2020 surplus in services trade was the smallest since January 2012, at $16.76 billion.
  
  
• The goods deficit with Mexico hit a record high of more than $16 billion in August 2020. The trade in goods deficit with North American Free Trade Agreement (NAFTA) partners is almost 19% higher in the first eight months of 2020 relative to the same period in 2016, but down 11% relative to 2019 even as Mexican exports to the U.S. began to expand significantly in June.

• The China trade-in-goods deficit is down relative to 2016, but there is a “trade diversion” effect of imports increasing from other countries.

• The 2020 eight-month trade in goods deficit with China of $194 billion is 20% smaller compared to 2016, when it was $244 billion in inflation-adjusted dollars for the January to August period. The China deficit is down more than 17% in inflation-adjusted terms from 2019, when it was $236 billion in the first eight months.

• In inflation-adjusted dollars, the goods trade deficit with the rest of the world (excluding China) increased from $365.7 billion to $385.3 billion in the first eight months of 2020 relative to the same period in 2019, a more than 5% rise.

 

*Data Note: Trade data is sourced from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis. We present deficit figures adjusted for inflation to the base month of August 2020 and expressed the data in constant dollars, so the figures represent actual changes in the trade balances. We also offer the “nominal” figure, which is the number you will see in the U.S. Census Bureau data for figures earlier than 2020. Some economists view the nominal data as more accurately reflecting the overvalued U.S. dollar.

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Virtual Press Conference: Promises Made, Workers Betrayed: Trump's Bigly Broken Promise To Stop Job Offshoring

President Trump has awarded more than $425 billion in federal contracts to corporations listed among those responsible for offshoring 200,000 American jobs during the Trump era, according to a new report released today by Public Citizen’s Global Trade Watch.

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.

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.  

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.

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.

 

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

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.

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.

 

 

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.

Global Corporate Ambulance Chasing: Law Firms Recruiting Corporations to Attack COVID-19 Policies in ISDS ‘Corporate Courts’

By Melanie Foley

Many governments have taken urgent actions to stem the COVID-19 pandemic, save lives, protect jobs, counter economic disaster and ensure people’s basic needs are met.

But now, multinational corporations are poised to launch a wave of attacks against governments to demand compensation from taxpayers for these COVID-19 policies using the Investor-State Dispute Settlement (ISDS) regime.

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. Corporations have been awarded millions or even billions of taxpayer dollars, and some countries have chosen to revoke their democratically enacted policies in order to reduce their payouts. 

How do we know that COVID-19 policies are the next ISDS target?

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

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. All of these policies apply equally to domestic and foreign companies. But thanks to ISDS, foreign multinational corporations can launch cases and rake in taxpayer money in compensation.

“It is unfortunately very likely that a whole spate of ISDS attacks on governments’ COVID responses will begin to be filed,” said Lori Wallach, director of Public Citizen’s Global Trade Watch in her weekly Rethinking Trade podcast. “And the reason why is, under this regime, an enormous amount of money can be made by both the lawyers and the corporations. It is a legalized raid on treasuries.”

Public Citizen and more than 600 organizations from around the world are sounding the alarm. These labor, consumer, environmental, development and other civil society organizations 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.

The powerful and diverse group of organizations from the United States includes the AFL-CIO, CWA, the Presbyterian Church USA, the United Methodist Church, Greenpeace and the Sierra Club. International signers include Oxfam, Doctors Without Borders, Friends of the Earth International and Action Aid.

For many decades, the United States was a leading proponent of this system and forced it on their trading partners. But public outrage over ISDS has been growing for years and was one of the reasons why the Trans-Pacific Partnership (TPP) could not get support to pass in Congress.

And thanks to civil society’s campaigning, ISDS was largely eliminated in the new NAFTA. (The original 1995 NAFTA was the first trade pact to include ISDS.) The unusually large, bipartisan votes in the Senate and House for the new NAFTA set a new standard that to be politically viable, U.S. trade pacts can no longer include extreme ISDS terms.

The agreements the United States is currently negotiating with the United Kingdom and Kenya, while potentially damaging in other ways, are reportedly not going to have ISDS. Other countries also have taken steps to withdraw from ISDS, including Bolivia, Ecuador, South Africa, India and Indonesia.

“These coming COVID cases should be exhibits 1, 2 and 3 of why other countries should also exit the regime,” advised Wallach.

Rethinking Trade - Season 1 Episode 15: What’s the Real Story With All the “Buy American” Hype?

Since the 1930’s, “Buy American” rules have required that the U.S. government purchase goods – from cars and computers to planes and paper – that are made in the United States. But these rules that recycle our tax dollars to support jobs and promote domestic innovation have been severely undermined by our trade policies in the last few decades.

Today, “Buy American” really means that companies and products from 60 countries must be given the same access to the almost $600 billion spent annually in U.S. government contracts as U.S. firms and products. Effectively, we now outsource our tax dollars to support jobs in other countries.

On this episode, we unpack these policies and examine both Donald Trump and Joe Biden’s recent Buy American policy proposals.

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.

Lori, a lot of people may have seen that Trump just issued an executive order on ‘Buy American’ rules. And last month Joe Biden announced his own Buy American plan. Before we dig into both of these, why don’t you just give us a brief overview of what Buy American rules are in general.

Lori: 

So, since Franklin Delano Roosevelt was president, the U.S. has had, as part of its federal law, a preference that when the federal government procures things, from cars and trucks for government fleets, to office furniture and desks and phones to paper, whatever it is, that the purchases are made of goods that are made in America. The idea is two-fold: first is to recycle tax dollars back into the economy, creating jobs and supporting communities in the United States. So, it’s a virtuous circle, where you have a job, you pay your taxes and those taxes come back into your community to buy things that are made in the community for people who paid those taxes.

The second thing is its an industrial policy tool for innovation-- because the government, by making long-term contracts in certain areas and setting certain criteria, can basically help a private market get created. A classic example is fuel-efficiency standards for automobiles. We all think of CAFE when we hear that, the corporate average fuel economy standards, that reference what the average is when you buy a car. But there are also federal requirements that a fleet of cars produced by a maker must have a certain average fuel efficiency standards. But initially, before that became required of all cars sold in the US, the US government fleet had to meet those rules.

So for a number of years, to create a demand, to create a market, to have the companies put the money and research into designing those more fuel efficient, economical cars, the government started setting standards that they had to meet for government purchases. So, if GM or Ford or Chrysler wanted to get a government contract, which of course is very lucrative because the government buys a lot of cars, then they had to have their cars be more fuel efficient and better for the environment. And after a number of years of the government fleet having that requirement and the investment being made, it was made federal law that all cars had to meet those standards. That kind of conditionality is done for various purposes. 

Another thing under that category is called prevailing wage laws, which apply also. Buy American is procurement of goods and services, Buy America is government money for construction, road building, schools and water systems. For Buy America, the contracts have to have prevailing wages, which means basically wages at the prevailing union wage in an area, so you can’t have subcontracts that are trying to cheat good, middle-class union jobs. So those kinds of policies, to reinvest, to innovate and to ensure conduct is rewarded, the conduct we want by government contracts, is what Buy America and Buy American laws are about. Again, Buy American from the thirties, and Buy America since the 1980s.

Ryan: 

So, what’s this executive order all about? We’ve talked about this on the podcast before, but there are already these rules as you’ve just explained. So why do we need an executive order to recognize these rules? Or maybe you can explain what this is and what is it actually doing?

Lori: 

So, there are two things that have been going on. First of all, the Buy American and Buy America rules have waivers. And one of the waivers is a ‘public interest’ or ‘national interest’ waiver, and effectively what that means is price.  And it’s not defined. The rule is not ‘if you can find something that is 25% cheaper, go for the foreign good and bypass the Buy American requirement’. Instead, it’s just open ended. So, a lot of agencies have started to waive Buy American broadly. If they find something that’s even 5% cheaper from another country, they just waive Buy America standards saying that it’s in the ‘national interest’ to do so, without thinking about, for instance what the COVID crisis has made so apparent: we need some production domestically. We need diverse sources of imports, and we need some domestic production so we have a reliable supply of essential goods. We cannot have a situation where we allow an entire sector, like we have in the manufacturing of antibiotics, or we have in a lot of PPE manufacturing, we can’t have that all hollowed out. 

So, by having these waivers we have gutted Buy American. But the biggest waiver is within trade agreements. And there’s a really sad and ugly story behind this. Big multinational manufacturing corporations wanted to outsource production of their cars, or for General Electric of their turbines and generators and lighting systems, of Boeing their airplanes, they still wanted to be able to get government Buy American-required contracts. But if they were doing their work in Mexico or China or wherever, obviously they wouldn’t qualify. So they got the genius idea of trying to ram into trade agreements yet another un-trade-related item, and that is just a made-up rule that any country that has a US trade agreement is considered American for buy-American purposes. So this waiver that’s now in place excuses Buy American rules, so that US government agencies get, basically, to waive Buy American privileges for 60 other countries. So “Buy American” now is Buy American or Japan or Korea or Mexico or Canada or all of Central America or a boatload of other countries- all of our free trade partners. And that waiver has meant practically that Buy American is now basically gutted.

Ryan: 

So, just to be clear, the New NAFTA also contains these waivers, correct?

Lori: 

It does. And this is the hypocrisy in all of this. That waiver system is something that, by statute, any US president can cancel, unilaterally. So for three and a half years, Donald Trump has had the ability, simply by executive order- one of the few things he really could have done legitimately by executive order- to just end that trade agreement waiver. It is a statutory delegation of authority for the President to be able to, basically, just issue what the list of waiver countries are. And it’s something that can be changed at any time. And as well, in the World Trade Organization (WTO), you can get out of those procurement rules that are in the agreement itself, without any penalty. 

Trump did a very early, first year in office, 2017 “Buy American Hire American'' executive order. And instead of fixing this huge exception that eats the rule, that executive order said that we have to have compliance with our international agreements. So basically it was a hoodwink, where I guess Trump hoped no one would realize what he was saying was “Hi! It’s Buy America Hire America, except we won’t!”, because he was saying to follow the current rules, that don’t actually let us buy American.

Now, this most recent order repeats some of that language, but for the first time it has a new thing. And my theory is that it has this new thing because it’s something that actually the Biden presidential campaign did. Which is, before Trump did this latest executive order, about a month ago, the Biden administration issued an order on what they were going to do on trade and domestic supply chains. And the most interesting thing in there in a way was is that they had in there a clause in this policy plan that says ‘we are going to change our trade agreements to make Buy American real,’ instead of saying ‘we’re going to change Buy American, to prioritize trade agreements.’ That is a pretty stunning shift for Biden, because that’s not necessarily a position Biden has had, but is definitely where the country is heading. The COVID crisis has made everyone realize, even people who have been big supporters of these trade agreements, realize we need to have some domestic manufacturing. We need to diversify our imports, but we also need to make some of this stuff for emergencies, like PPE and essential medicines. So that, I am guessing, is why this new Trump Buy American has a clause that orders our top trade official, the US Trade Representative, to renegotiate our trade agreements to allow domestic purchase, only of a variety of essential medicine supplies: PPE, medicines, supplies, etc. It’s sort of a catch-up, so that now both of the contenders in the US presidential race are taking a position that is much more similar to what the public position is. Polling shows repeatedly that people want, at like 80% of the public want Buy American rules strongly enforced, and want to reinvest their tax dollars into having the government buy American-made goods, so now both the Democratic and the Republic contender are suggesting we fix the trade agreement rules so we really do have Buy American. 

Now, whether or not that happens I suspect is going to take a lot of activism, because there are a lot of multinational corporations that have enjoyed having it both ways- they produce in Mexico, China, Vietnam and then they find a way to be able to still be able to get a government contract. Perversely, I actually think some the horror of the COVID-19 crisis could provide an opportunity for more people in this country to demand these kinds of changes with our procurement policy, to reinvest in building some production capacity for essential goods, for medicines, for PPE, for basic communications and electronics equipment, the things that we vitally need just to be healthy and secure, because up until now, unless you lost a job to outsourcing, or you were in a community that was devastated by outsourcing, and there are many of them across the country, but there are also a lot of people who haven't been directly touched, you may not have personally experienced how dangerous and devastating this model of hyperglobalization, under which we have been living, is for all of us. And that system is not from God, it’s one set of policies, one set of corporate rigged rules that incentivize those behaviors, 

So, there’s more of an interest in changing the rules to change the outcomes, because now everyone is facing the experience of “Oh my lord, my family isn’t safe because I can’t get a damn mask!” Or, “what do you mean we simply can’t make ventilators? We created the technology, the patents on the technology are here, what do you mean people could die because they can’t breathe?” Or, “my kid’s going to get infected because they can’t get the pump for the bottle for Purell, because it’s only made in China now, and that injection molding with the metal spring is not possible here?” 

People have lived with the results in a way that I think could build the demand to actually have not just our Buy American policies change, but the trade agreements change. So that yes, we can get the benefits of trade, of which there are many of them, but so we can basically remove the overreach into domestic policy space, in areas like: Why the hell are trade agreements dictating domestic procurement policies? States, through their state legislators, should decide how state dollars are spent when the state procures, not a trade agreement! The federal government, through Congress, should decide what the priorities are. I mean, hell, just think of it as climate policy. We are going to need to create a whole new set of demand for different kinds of technology for climate, or we’re going to kill ourselves and the planet. So how are we going to actually use policy tools to create those incentives if we’re not allowed, through government purchasing, to direct funds for that kind of innovation? So I think through the COVID-19 crisis and the climate crisis, there’s more awareness. So I think, if people get informed and get activated, we can actually see these changes come to fruition. 

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

Reps. García, Schakowsky, and 107 Members of Congress Urge Mexican President López Obrador to Drop Charges Against Activist and Protect Labor Rights

Today Reps. Jesús “Chuy” García (IL-04), Jan Schakowsky (IL-09), and 107 Members of Congress sent a letter to Mexican President Andrés Manuel López Obrador urging him to ensure Mexican state governments drop politically motivated charges against labor lawyer Susana Prieto Terrazas. The letter also urges Mexico to ensure states comply with the labor rights guaranteed by the US-Mexico-Canada Agreement (“USMCA”).

The US-Mexico-Canada Agreement, implemented on July 1 of this year, requires each of its signatory countries to respect workers’ rights. Last year, Mexico passed labor law reforms that strengthen collective bargaining and independent unions in the country.

Susana Prieto Terrazas, a Mexican labor rights activist, was imprisoned in June by the state government of Tamaulipas after years of organizing along the US-Mexico border. She was released on conditions that prevent her from continuing labor advocacy and require her to move to the Mexican state of Chihuahua, where the government has issued a warrant for her arrest.

“To protect workers’ rights in the United States, we must defend the rights of workers around the world and in Mexico. I’m sending a letter with more than 100 colleagues to call on Mexican President López Obrador to ensure that Mexico respects workers’ rights and ends its political persecution of labor activist Susana Prieto Terrazas,” said Congressman Jesús “Chuy” García. “American legislators cannot stay silent while corporate interests and corrupt politicians undermine the law to extract profits at the expense of working people. When the US-Mexico-Canada Agreement passed Congress, we were told it would protect workers’ rights and labor standards in the US and Mexico. But if state governments in Mexico can willfully violate basic labor rights provided by Mexican law and affirmed by the USMCA, these protections are meaningless.”

“Mexico must live up to its obligations under the USMCA and enforce labor laws completely and uniformly throughout the country,” Congresswoman Jan Schakowsky said. “Anything less than this is unacceptable, will render these labor protections meaningless, and will require action by U.S. Trade Representative Robert Lighthizer. I look forward to continuing to work with my colleagues in the U.S. as well as my counterparts in Mexico to strengthen workers’ protections across North America.”

 The rights of workers across North America must be enforced, including in Mexico, said Congressman Joaquin Castro, Chair of the Congressional Hispanic Caucus and Vice Chair of the House Foreign Affairs Committee. “The U.S.-Mexico-Canada Agreement (USMCA) has new labor provisions to guarantee worker’s rights to organize for better conditions and higher wages, and must be respected. The United States Congress needs to ensure our trading partners live up to their commitments to expand the rights of workers.”

A PDF of the letter can be found here.

Trump Trade Deficit 6.5% Higher than Obama’s Last Year, Not Eliminated as Then-Candidate Trump Promised

Trump Trade Deficit Increases Even as Trade Flows Show COVID-19 Effect, Dropping 15% in First Six Months of 2020 Compared to Same Period in 2019

The U.S. trade deficit in the first half of President Donald Trump’s fourth year in office remains 6.5% higher than in the same period in President Barack Obama’s last year, despite a 15% overall fall-off in trade flows related to the global pandemic, new trade data released by the U.S. Census Bureau shows.

“Worldwide COVID-19 has reduced trade flows, so the fact that Trump’s trade deficit is larger than  the same period in the last year of the Obama administration shines a big fat spotlight on Trump’s failure to ‘eliminate’ the trade deficit, which he promised endlessly as a candidate in 2016,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Even as trade flows overall dropped 15%, the U.S. trade deficit in the first six months of 2020 was only down 9% relative to the same period in 2019. This is in part because imports from Mexico have begun to rise significantly. 

The new U.S. Census Bureau trade data showed that:

• The effects of the COVID-19 pandemic on commerce in general and trade in specific are evident in the six-month 2020 data: Comparing the trade flows in the first 6 months of 2019 to the same period in 2020, U.S. trade has decreased 15%.

• • Total U.S. goods and services exports in the first half of 2020 were $1,066 billion relative to $1,266 billion  in 2019. Imports in the first half of 2020 were $1,341 billion versus $1,563 billion  in 2019.

• The six-month 2020 trade deficit is 6.5% higher than the deficit for 2016, the year before Trump took office, even as the COVID-19 effect reduced the deficit 9% compared to the first six months of 2019. Comparing the first half of Obama’s last year in office (January to June 2016), the overall trade deficit increased 6.5% rising from $257 billion to $274 billion in inflation-adjusted terms. (The unadjusted figures provided in the government data base show a rise from $238 billion to $274 billion.)

• • The overall U.S. goods and service trade deficit with the world dropped 9% in first half of 2020 relative to the same period in 2019 from $301 billion to $274 billion in inflation-adjusted terms (The unadjusted figures provided in the government data base show a drop from $297 billion to $274 billion.)

• • The U.S. trade deficit in goods decreased 7.5% in inflation-adjusted terms from $446 billion in the first six months of 2019 to $412 billion in the same period of 2020. However, the trade deficit in goods during these months is still 3% higher than the one experienced in the same period of 2016, rising from $399 billion to $412 billion (inflation-adjusted dollars).

• The China deficit is down relative to Obama’s last year, but there is “trade diversion” effect of imports increasing from other countries. 

• • The trade deficit with China decreased 22% in inflation-adjusted terms going from $169 billion in the first half of 2019 to $132 billion in the first half of 2020. It is also smaller compared to 2016, when in inflation-adjusted dollars, it was $173 billion for January to June.

• • In inflation-adjusted dollars, the goods trade deficit with the rest of the world (excluding China) increased from $277 billion to $280 billion in the first half of 2020 relative to the same period in 2019.

• The deficit with North American Free Trade Agreement (NAFTA) partners is 11% higher in the first half of 2020 relative to the same period in Obama’s last year in office but down relative to 2019 even as Mexican exports to the U.S. began to expand significantly in June.

• • The NAFTA deficit in the first six months of 2020 was $97 billion, 11% higher than the same period in 2016 when it was equivalent to $88 billion in inflation-adjusted dollars. (In nominal terms the goods trade deficit with NAFTA parties increased by 18%, or $15 billion.)

• • The goods trade deficit with NAFTA parties decreased by $19 billion in inflation adjusted terms compared to the same period in 2019, largely because of measures taken to prevent the spread of COVID-19.

• • Even as the COVID-19 pandemic narrowed the trade deficit with NAFTA parties during the first half of 2020 compared to 2019, the reduction was not as large as expected given the jump of Mexican exports in June. According to the data released by Mexico’s statistics authority Mexico’s statistics authority (the National Institute of Statistics and Geography), Mexican exports, of which more than 80% are destined to U.S. markets, grew 75.5% in June relative to May. This resulted in Mexico posting a six-month January to June surplus of $2.6 billion even as Mexican exports decreased overall 12.8% compared to June 2019, Mexican imports dropped almost 10% more in the same period (22.2%).

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.

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:

• Data on which foreign countries provided what share of U.S. imports of various categories of medicines.

In addition, the web feature includes updated data showing:

• The U.S. has grown even more dependent on imports from China and the rest of the world for key medical goods during the COVID-19 era as the U.S.-China and U.S.-world deficits in key medical goods increased through May 2020 (latest data available as of July 2020);
• U.S. exports of masks and ventilators to the world continued to spike through May 2020 after a major increase in U.S. exports of critical medical goods to China when U.S. domestic demand was highest in January-March 2020; and
• How the sources of medical goods imported into the U.S. have shifted over time. (Wherever possible, we use data showing volume, rather than value. Volume more accurately represents what goods are being traded while the value data often reflects distortions in prices caused by transfer pricing and other corporate tax manipulations.)

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.

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.

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.

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.

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.

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.

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 8^th 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)

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.

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.

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.

Rethinking Trade - Season 1 Episode 11: New NAFTA’s Start Marred by Labor Activist’s Arrest

After a multi-year campaign by unions, civil society groups and congressional Democrats won critical improvements to the bad NAFTA 2.0 deal Trump signed in 2018, the new North American Free Trade Agreement goes into effect on July 1.

But it’s a bad start: a leading Mexican labor lawyer, Susana Prieto Terrazas, 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.

In this episode we discuss the decades-long movement against the original NAFTA, that pact’s outcomes, the recent Replace NAFTA campaign and the cross-border effort to free Susana Prieto Terrazas.

Transcribed by Kaley Joss

Ryan: You’re listening to Rethinking Trade with Lori Wallach. I’m Ryan, and I’m joined once again by our in-house trade expert, Lori Wallach.

So, Lori, Wednesday is a big day, because it's the day when the new NAFTA is going to be implemented. This is something that you’ve worked extremely hard on, not just in the last few years, but in the last few decades. Maybe you can tell us first about NAFTA, and what the new NAFTA is. 

Lori: So NAFTA, the North American Free Trade Agreement, was this radical, corporate experiment in using the brand “Free Trade Agreement,” to implement a set of new corporate rights and powers and to constrain government regulatory authority on a wide scale, on issues that never would have gotten through Congress as normal legislation. So at the heart of NAFTA are foreign investor rights that made it easier, cheaper, less risky to outsource U.S. production jobs to much lower-wage Mexico. These investor rights basically took away a lot of the potential threats that would otherwise be associated with outsourcing jobs and investment. And in short order, we saw a mass movement of higher wage union jobs from across the United States, not just the Midwest but California, New York, Texas, that in NAFTA’s 25 years resulted in over a million government-certified NAFTA job losses, which some of the pro-NAFTA think tanks say is an undercount of one out of ten of the real damage. 

Also, at the heart of NAFTA were corporate tribunals called investor state dispute-settlement tribunals, where corporations were empowered to go before tribunals of three corporate attorneys to demand taxpayer compensation for any domestic law, or government action, court decision that the corporations claimed undermined their NAFTA investor rights. Over the decades of NAFTA, $400 million dollars were paid out in taxpayer money, to corporations attacking tax expansions, water policies, timber policies and energy policies. There is no outside appeal in these cases, and there is no limit to what the corporations can get paid. 

And finally, NAFTA had, at its heart, some very strong limits on its government policies that are pro-people, pro-planet. So, for instance, it did not have any disciplines on subsidies for agribusiness, but it had rules banning certain food policies that were designed to protect small farmers. So, in the course of NAFTA, even in its first 10 years, according to the Mexican government, more than two million campesinos, small independent farmers, were pushed off their land. And NAFTA even made the Mexican government change the Mexican revolutionary-era constitution, to allow U.S. agribusiness to buy up farmland. 

Very quickly, migration of desperation from Mexico to the U.S. expanded enormously, as workers first went to the borders, where they were seeing dollar-an-hour jobs in these U.S. plants that had moved to Mexico. But so many more people lost their jobs, that even those low wage jobs couldn’t contain people's needs. There was a wave of really NAFTA-forced migration to the U.S.. NAFTA’s been a loser for people on the planet for all three countries, but there've been some big multinational corporations that loved it. And, because the NAFTA experience has been so devastating, and there are whole parts of the country—El Paso, Texas, Parts of Los Angeles—where there are a lot of Latino workers, the African-American new union-based middle classes of Milwaukee, Wisconsin, Detroit, Michigan—people were just devastated. And, there’s been a lot of pushback from Congress to fix NAFTA.

So when NAFTA renegotiations were announced, there was some hope that actually, things might get fixed. But, the first new renegotiated NAFTA that Donald Trump announced, actually kind of made things worse. It didn’t fix the bad stuff that promoted outsourcing, and it added a variety of new giveaways for Big Pharma that would have locked-in high U.S. medicine prices, and exported our medicine/Pharma monopoly ripoff pricing policies to Mexico and Canada. So it wasn’t a big shocker that the Democrats in the House of Representatives said, “Uh, no thank you.” And they ultimately, after a year of a standoff where Trump tried to ram that bad NAFTA 2.0 deal through Congress and Congress said “No,” finally that deal got renegotiated a second time, Trump got forced to take the Big Pharma giveaways out, to improve the environmental and labor standards, and to implement a totally different enforcement system for labor that might have some chance of raising wages in Mexico, which obviously is critical for people there, and also is critical to stop the race-to-the-bottom outsourcing. 

And that deal passed with very wide majorities of Democrats and Republicans in both the House and the Senate. And on July 1, it’s supposed to go into effect. But some of the things that were supposed to happen before it went into effect, especially Mexican labor rights, just aren’t looking so good. 

Ryan:

So speaking of those labor rights, and the coalition that fought against Trump’s original NAFTA 2.0, maybe you can talk about the coalition that formed around the original NAFTA’s implementation, and how that same coalition of different types of organizations are working together now to address future trade policies and advocate for changes for people and the planet.

Lori:
The original NAFTA fight really birthed the fair-trade movement in the United States. At that point, the labor unions and the environmental groups were fighting over the Clean Air Act. The consumer groups and the family farm groups were fighting over a dairy bill, and no one was really working together on trade. But NAFTA was such an obvious threat to everyone’s interests, because it had become this cauldron, where every corporate interest from Wall Street, to the food processors, to oil and gas companies, to the chronic outsourcing of manufacturing companies like GE. They all had thrown all their favorite ingredients into this toxic soup, and so, really, a lot of groups that were fighting with each other sat down and realized, well, hell we have a lot more in common trying to fight this corporate nightmare NAFTA than we have in fighting each other. So let's put those to the side. We’ll keep having them over those specific issues, but lets get united together across the country with all of our different organizations—labor, environmental, faith, family farms, women's groups, consumer groups—and let's figure out if united we can actually try and beat the corporations.

And in 1993, on November 17 in the House of Representatives, NAFTA was almost defeated. In fact, two weeks earlier there was a large majority against NAFTA. Then President Clinton bought the votes one by one, trading a project there, a highway there. NAFTA narrowly passed and went into effect February 1, 1994, and the disaster was ongoing.

The groups that started that fight back in the early ‘90s stayed together. And as the evidence of the disaster that was these corporate-rigged trade agreements became more evident, they started to have successes: stopping the expansion of the WTO, stopping a hemisphere-wide NAFTA expansion called Free Trade Area of the Americas, stopping a 30-country investor-state dispute settlement agreement called the Multilateral Agreement on Investment, ultimately making it possible for the Trans-Pacific Partnership to get through the U.S. Congress for the year after it was signed. And then that was the coalition of groups that basically made it impossible for Donald Trump to railroad through the House of Representatives his NAFTA 2.0 deal that was worse than the original. And that’s ultimately the group that forced the renegotiation of the renegotiated NAFTA. 

So that now we have an agreement that, though certainly not the model going forward, is better than the original NAFTA. It might have some chance of improving the labor situation in Mexico, which would be a big deal. It doesn’t have the investor-state dispute settlement at all between the U.S. and Canada, and it is much scaled back between the U.S. and Mexico. Got rid of some outrageous mandatory natural resource export rules, but left in place the bad agriculture rules, the problems with food safety and added some really retrograde rules that have to do with limiting the government's ability to regulate in what they call “digital trade,” which is what we’d all think of as our online privacy and the liability of the big online platforms. So, it’s a mixed bag. It’s better than the original for sure. It was worth passing this so that we don’t have the old thing. 

But again, it's like the difference from being in the twelfth rung below Hell, and we’re now, you know, a ring above the surface, but our butts still are getting grilled. This is not the agreement that we want! We want something that is aspirational, that is actually, objectively good for people and the planet. So, yes, big improvement, something to be proud of, but again, there’s a lot more work to be done to build on the gains that were made between the NAFTA renegotiation and the kind of agreement we’d really be for. 

Ryan:
So one of the more significant of those changes was in the labor rights and the labor standards. We just received news recently, from Mexico, that independent labor activist Susana Prieto Terrazas has been arrested on bogus charges, and it does not look good, considering Mexico’s commitment to sweeping labor reforms. Maybe to close us out, you could just talk a bit about the challenges facing improved labor standards in the new NAFTA, and how society can play a role in making sure those changes are made real. 

Lori:
So, there’s no doubt that the new NAFTA on paper is an improvement over the old one. But it remains to be seen if real people’s lives get improved: if in Mexico people for the first time are allowed to actually organize independent unions that can fight to raise their wages, if their working conditions will improve, whether that will incentivize U.S. companies to not see Mexico as a labor-union-free, low-wage, torment-the-worker zone, and if as a result there’d be less outsourcing from the United States of manufacturing jobs. We do know, under the new NAFTA, corporations will lose the investor-state attack rights. We do know policies like mandatory natural resource exports are out. But the real change, the real thing, is still to be seen: will the new NAFTA translate to improvements on the ground of labor rights for Mexican workers where they can fight to improve their conditions?

And this situation with Susana Prieto is really bad news. She is a very well known, very brave organizer and labor lawyer. She was involved in fighting for rights of workers along the U.S.-Texas border last year. You probably saw in the news a lot of what were called ‘wildcat strikes’ of workers at maquiladora plants, which are where workers at the border manufacturing plants in Matamoros and Juarez, Mexico fought to get pay increases. Totally inspiring. They did strikes, they got renegotiated contracts, they got pay increases. She was one of the folks who helped workers there achieve that goal. And she’s been incredibly forceful fighting for workers now that they’re being pushed to go back into their plants when it's not safe. COVID is increasing and maquila workers are dying from exposure to the coronavirus in these plants. She’s been pushing to get health and safety improvements and to not reopen the plants until workers have personal protective equipment,and there's plexiglass between their stations, et cetera. She was swooped up on false charges of mutiny, among other things, and not only jailed but now denied bail twice. She is locked up 200 kilometers away from where she lives in the capital of one of the border states, in what is a really dangerous situation. Like in the U.S., the Mexican jails have very high incidences of COVID-19. She’s been denied bail, locked up, they don’t want her organizing and they don’t want her helping the workers. And the thing she was fundamentally trying to do was one of the guarantees in the new NAFTA. That is, to have workers vote for their own union leadership, to file a petition to get rid of an old, fake ‘protection’ company union and replace it with a real union that represents the workers. That’s one of the essential guarantees of the new NAFTA, and that is basically what she was arrested for trying to file.

So it is super ominous, she has been in jail for three weeks, the federal government- the president of Mexico- has not intervened. It’s obvious that some right-wing governors in some states in Mexico are heavy-handed in trying to defeat the labor reform. But, now it’s the issue of AMLO, the president of Mexico, as well, because he hasn’t done anything to, hell, get her out on bail, much less to ensure that the labor law reforms that he enacted in Mexican law, great improvement, and on paper in NAFTA, much better, actually result in improvements people's lives. It really is casting a very dark shadow over the July 1st enactment date of the New NAFTA that Susana Prieto is in jail. And frankly, a bunch of those corrupt unions that she’s been fighting against have tried to legally challenge the new labor law, which would be implemented with NAFTA. So we are all going to have to really be on our toes.

If you tune into our rethinktrade.org website, you can get updates about what’s going on. We’re going to be tracking Susana’s situation, and also the status of the labor law reforms. If you want to read a legal memo about those issues, it’s posted at tradewatch.org. Working with our counterparts in Mexico, we intend to fight tooth-and-nail to actually make real the changes we want on paper in the NAFTA renegotiation fight. 

Ryan:

That’s all for today, thank you all for listening. 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’re doing to fight for fairer and more equitable trade policies.