A Trade Deal at What Cost ?

HaroldMeyersonAIDHarold Meyerson.

So what gives with the American people? Don’t they realize, as my colleague Charles Krauthammer argued last week, “that free trade is advantageous to both sides”?

The sides to which Krauthammer referred, of course, are nations. But perhaps those who’ve experienced such free-trade consequences as factory closings and lower-paying jobs are thinking about two entirely different sides — capital and labor. Trade promoters cite David Ricardo’s 200-year-old assessments of trade’s benefits to nations, but skeptics can mine a rich vein of mainstream economics that demonstrates how trade deals can, and frequently do, benefit major investors at workers’ expense.

As a letter to The Post noted this week, future Nobel laureate Paul Samuelson wrote in 1955 that, under free trade, “national product would go up, but the relative and absolute share of labor might go down.” More pointedly still, another Nobel laureate, Bertil Ohlin, showed that as a result of trade, a nation’s workers could see their wages decline even if none of them lost their jobs.

Samuelson and Ohlin have been proved right. Increased trade with lower-wage nations over the past 30 years has resulted in both massive offshoring of manufacturing and wage decline for most U.S. workers. As economists David Autor, David Dorn and Gordon Hanson have demonstrated, Chinese import competition has lowered wages not just for displaced manufacturing workers in this country but also, on average, for all workers in their midst. Continue reading

Desperately seeking a new model for trade

by Michael Brune and Randi Weingarten

[Ed. note: The Senate has just voted 68-32 for cloture after an all-too brief debate on this insidious and dangerous legislation. However the outcome is by no means bleak in the House, since both Democratic and Republican legislators are bring swamped by mail and phone calls from their constituents against enacting Fast Track and the Trans Pacific Partnership.  A very broad coalition of representative American organizations is mobilizing against “fast-tracking” gigantic trade and investment agreements that would cement in place global corporate domination over popular democratic rules and safeguards.   Here is a joint statement from the Sierra Club and the American Federation of Teachers.]

Fast-tracking bad trade deals would shrink protections for communities, the economy and the environment.

Each of us has a stake in the legacy we leave our kids. The members of the respective organizations that we lead — the Sierra Club and the American Federation of Teachers — share a commitment to creating an America that is safe, healthy and economically secure. But over the past three decades, the American dream has moved out of reach for too many families, and our communities have borne the brunt of extreme weather and an increasingly disrupted climate.

To make matters worse, Congress is considering a dangerous plan that would put the health and livelihoods of many Americans at risk. The Hatch-Wyden-Ryan trade promotion authority (TPA) legislation would fast-track deals such as the Trans-Pacific Partnership (TPP). It limits Congress’ ability to debate and amend such deals by granting the administration the authority to sign a trade deal before sending it to Congress for a vote. Fast track removes the ability of our elected representatives to ensure that trade pacts don’t sacrifice the health of communities, the economy and the environment.

Although the TPP has been in the works for more than five years, all the negotiating has happened behind closed doors. Hundreds of corporate executives have been involved in shaping the agreement, while ordinary citizens have been left out. The TPP would dwarf the North American Free Trade Agreement and apply to more than 40 percent of the world’s total GDP. Its reach would extend far beyond traditional trade matters such as tariffs and quotas. The TPP includes rules that would expand the power of multinational corporations while limiting the ability of our government to protect our workers, communities and environment.

Put simply, the TPP is toxic for the health of people, our economy and the planet. It is riddled with problems that give serious pause to all of us who care about economic security and future generations. These include provisions that allow foreign corporations to sue our government if they think our industry safeguards might hurt their profits. The investor-state dispute settlement provision could have a chilling effect on our ability to regulate in the public interest.

We need a new model for trade that doesn’t prioritize corporate profits over the health of our communities, the economic security of everyday Americans and the future of our kids.

Consumer protections such as ensuring affordable prescription drug prices and country-of-origin labeling are also in jeopardy because of the TPP. Buy-American procurement rules would be undermined by a provision that would force the U.S. in some instances to treat foreign bidders the same as American ones. Also, the TPP not only fails to address climate change but would exacerbate the crisis by granting new rights to big polluters and encouraging investments in the countries with the weakest environmental protections.

Some are touting the TPA legislation as an opportunity for Congress to shape the contents of the deal. But this is simply not the case, for a number of reasons. First, after more than five years of negotiations, the TPP is nearly complete, and the TPA would remove any remaining leverage that Congress has to shape the deal. Second, any worker, consumer, environmental or human rights protections that Congress identifies as priorities under the TPA would be completely unenforceable. Legally, they are goals rather than obligations, and a deal that doesn’t achieve them still gets a luge run through Congress. The negotiating guidelines in the bill won’t even help protect workers and the environment. For example, there is not a single mention of climate change in the legislation.

We commend Congress for considering trade adjustment assistance, which provides support to workers who have been affected negatively by the loss of jobs because of past free trade agreements and offshoring. But packaging fast track with other legislation such as trade adjustment assistance will not prevent it from hurting the jobs and wages of working families.

As advocates for working families and the environment, we ask ourselves, Will our trade policy help us fulfill our collective obligation to our kids? Will they have clean air to breathe and water to drink? Will they have access to quality education and health care? Will we keep our promise to them that if they work hard and play by the rules, they can build decent lives for themselves? The Hatch-Wyden-Ryan bill would set us on the wrong path on all those fronts and must be opposed.

We need a new model for trade that doesn’t prioritize corporate profits over the health of our communities, the economic security of everyday Americans and the future of our kids.

Michael Brune is the executive director of the Sierra Club.
Randi Weingarten is the president of the American Federation of Teachers.

Reposted from Al Jazeera Opinion page.

 

LA Advances Toward $15 Minimum Wage

by Bobbi Murray

raisewagecityhall4Fair wage advocates won a big victory Tuesday, when the Los Angeles City Council voted 14-1 to advance a measure that would gradually boost the base pay in the City of Los Angeles to $15 an hour by 2020. City Attorney Mike Feuer will now be asked to draft a minimum-wage ordinance that the council will vote upon to make the measure law.
The legislation begins by raising the current wage of $9 an hour to $10.50 in July of 2016—after that the hourly wage would go up each year by one dollar. The vote could lead to making Los Angeles the largest city in the nation to set a minimum wage standard above the federal level, one that will benefit some 600,000 employees in the city—some 40 percent of L.A.’s workforce. The decision also adds heft and momentum to efforts nationally to raise the minimum wage for the nation’s lowest-paid workers.
“That will be fantastic,” says Dan Flaming, president of Los Angeles’ Economic Roundtable, a nonprofit policy research group. “Our cost of living is 37 percent higher than the national average. We’re a low-wage city with a high cost of living.” The United States, with an hourly federal minimum of $7.25, ranks 11th out of the 27 countries in the developed world that set a minimum wage standard. The U.S. minimum wage makes for an hourly take-home pay of $6.25. Continue reading

Message from Iowa To Presidential Candidates: Which Side Are You On?

by Larry Cohen

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More than 500 active leaders from 56 organizations spent Saturday at Iowa State University in general sessions and workshops uniting around issues and strategies at the Working Families Summit. I had been to Iowa in previous presidential election years as presidential campaigns warmed up, but Saturday’s conference was not about a candidate or even a platform. It was broader than that. Recognizing that the leading candidates who are eventually the party nominees will raise and spend in excess of $2 billion, on Saturday, Iowans were energized by the longer road through the nominating process, the 2016 election and beyond. Big money in politics has changed our democracy, but on Saturday populism was alive and well, despite the hard path ahead.

We were labor and green, students and seniors, farmers and community organizers, urban and rural, immigrants and native-born, all realizing that more than ever, we have a common narrative based on democracy and economic justice that goes beyond our organizational silos, as important as those silos may be.

In years past, hosts of a meeting like this might have invited presidential candidates. But these 56 organizations with tens of thousands of Iowa members realize now that the path to real change on the national level is blocked by structural issues in our democracy and will likely continue to be blocked for years to come.

For a presidential candidate, the current debate on fast track and the Trans-Pacific Partnership is central to credibility on any claim to a populist agenda. The issue in Iowa is not trade or no trade, as some apologists for fast track try to argue. The issue is what kind of ground rules do we want so that we can evaluate trade deals after 20 years of corporate trade agreements that mostly are meant to protect the investment profits of multinational corporations.

For example, why is the U.S. the only nation of the 12 current TPP partners considering fast track? Under fast track, Congress all but signs off on adoption of trade deals for the next six years with no authority to amend, and agrees to quick up or down votes. This goes well beyond the TPP and President Obama, since fast track would likely last for six years. Eight of the 12 TPP nations are democracies and their parliament or congress will read the full document before taking any action. With 90 percent of the TPP already negotiated, the only real reason for fast track for the TPP is the growing realization that the TPP never would be adopted if it was subject to careful review and meaningful congressional oversight.

Why has there been little modification in the investor-state dispute settlement (ISDS) process in the leaked chapters of TPP despite rising global opposition? ISDS means private and virtually secret tribunals where multinational corporations can sue national and local governments for any governmental action that limits the corporation’s future profits. Currently there are 500 such cases pending. Philip Morris has sued Australia and Uruguay for implementing plain package cigarette labeling. Occidental Petroleum has won a $2.3 billion judgment against Peru for limiting its right to drill based on environmental concerns.

The U.S. Trade Representative answers the criticism by saying the U.S. has not lost a case yet. But Ambassador Michael Froman knows full well that ISDS provides incentives for moving investment outside the U.S., by guaranteeing that future profits are insulated from stronger environmental or other regulations in other nations.

Democratic presidential contenders campaigning in Iowa need to step up now and tell us “which side they are on.” The president controls trade policy so what these candidates say on trade is far more consequential than on issues that require congressional approval.

For Democrats campaigning in Iowa, the case is even clearer. Two-thirds of Senate Democrats and 80-plus percent of House Democrats are opposing fast track. Are we going to nominate a presidential candidate who turns her/his back on those who are running for office at the same time? Just as importantly in Iowa and across the nation, the entire base of the Democratic Party is saying “no” to fast track. Former Secretary of State Hillary Clinton, Vermont Sen. Bernie Sanders and other Democrats in Iowa owe it to the party to speak out now when it matters. Particularly in the House, the vote in several weeks will be very close. Dodging the issue will lead to little accountability in the campaign and in the years ahead.

Saturday was inspirational for so many reasons. For me it renewed my hope that working families in Iowa and across our nation are ready to Stand Up and Fight Back!

Larry-Cohen-avatar-1413481216-60x60Larry Cohen will step down as President of the Communication Workers of America (CWA) on June 8, 2015

Nike supports TPP. Here is why

Leo Gerard

America is in an abusive relationship with trade-obsessed politicians and corporations.

Despite their long history of battering the U.S. middle class with bad trade deal after bad trade deal, these lawmakers and CEOs contend workers should believe that their new proposal, the Trans-Pacific Partnership (TPP), will be different. President Obama and the CEO of Nike, a company that doesn’t manufacture one shoe in the United States, got together in Oregon on Friday to urge Americans to fall once again for a trade deal.

The trade fanatics say everything will be different under the TPP – even though it is based on deals like the North American Free Trade Agreement (NAFTA) that lured American factories across the border, destroyed good-paying jobs and devastated communities. They plead: “Just come back for one more deal and see how great it will be this time!” And, like all batterers, they say: “Sorry about the terrible past; trust me about the future.”

This is trade abuse.

United Steelworkers of America.

At the Nike world headquarters in Beaverton, Ore., the chief executive officer of Air Jordans told the chief executive passenger of Air Force One that Americans should believe in the TPP because it’ll be like Santa Claus stuffing jobs down chimneys across America.

CEO Mark Parker promised that the TPP would miraculously prompt Nike, the brand that is the icon for shipping production overseas, to create 10,000 U.S. manufacturing and engineering jobs – over a decade, that is.  Not only that, Parker pronounced, the TPP will generate thousands of construction jobs and as many as 40,000 indirect positions with suppliers and service companies – again, over a decade.

Now those are some great-sounding promises! Nike employs 26,000 American workers now, a few of whom make soles in Oregon and Missouri. But presto, Parker says, the TPP will increase that number by nearly 40 percent!

The thing is, Nike could easily create 10,000 manufacturing and engineering jobs in the United States right now. No TPP required. It employs 1 million overseas, the vast majority in low-wage, high-worker-abuse countries like Vietnam, China and Indonesia. To bring 1 percent of those jobs – 10,000 – to the United States doesn’t seem like such a Herculean, TPP-requiring task, especially considering Nike’s massive profit margin.

The average cost to make a pair of Nike shoes is $30. The American sneaker consumer, who may pay $130 to swoosh, is certainly not getting the benefit of low prices from Nike’s cheap overseas production.

Instead of manufacturing in America, Nike chooses to “just do it” in countries where it knows workers are abused. In the 1990s, the media slammed the corporation for sweatshop conditions in its foreign factories. Like a typical abuser, Nike promised to reform its ways. It said in a news release last week, “Our past lessons have fundamentally changed the way we do business.”

Well, not really. The company admitted in 2011 that two Indonesian factories making its shoes subjected workers to “serious and egregious” physical and verbal abuse. Nike told the San Francisco Chronicle then that there was “little it could do to stop” the cruelty.

And it accomplished exactly that – little. Just last month, a three-part series in the Modesto Bee described sickening conditions in Indonesian factories producing Nike shoes: Workers paid $212 a month for six-day, 55-hour work weeks. Workers denied the country’s minimum wage and overtime pay. Workers paid so little they couldn’t afford to care for their children. Workers fired for trying to improve conditions.

 

 

Nike Sweatshops

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Last week, the world’s largest athletic gear maker said, “Nike fully supports the inclusion of strong labor provisions (in the TPP) because we believe that will drive higher industry standards and create economic growth that benefits everyone.”

Promises, promises. Why doesn’t Nike simply insist on higher standards at its factories? What exactly is there in a trade deal with 11 Pacific Rim nations that is essential to Nike establishing higher standards and stopping the abuse of workers in factories making its shoes?

Oh, yeah, the American middle class, which has suffered most from past trade deals, is not allowed to know that.  The TPP is secret. Well, except to the privileged corporate CEOs who helped write the thing.

In pushing for “Fast Track” authority to shove the deal through a Congress that has abdicated its Constitutional responsibility to oversee foreign trade, President Obama admitted “past deals did not always live up to the hype.”

That’s not quite right. It’s actually way worse than that. Past deals killed U.S. factories and jobs. Since NAFTA, they’ve cost Americans 57,000 factories and 5 million good, family-supporting jobs.

Just three years ago, trade fanatics promised that the Korean deal, called KORUS, would definitely provide more exports and more jobs. Instead, U.S. goods exports to Korea dropped 6 percent, while imports from Korea surged 19 percent. So the U.S. goods trade deficit with Korea swelled 104 percent. That means the loss of 93,000 America jobs in just the first three years of KORUS.

It’s the same story with the other trade deals that followed NAFTA, including the agreements that enabled China to enter the World Trade Organization. The Commerce Department announced just last week the largest monthly expansion in the trade deficit in 19 years. The deficit with China for March was the biggest ever.

What this means is that instead of exporting goods, America is exporting jobs. Foreign workers get the jobs making the stuff Americans buy. And they’re often employed by factories producing products for so-called American corporations like Nike. They’re employed by factories that collapse and kill hundreds. Factories that catch on fire and immolate workers trapped inside. Factories where workers are ill-paid, overworked and slapped when they can’t meet unrealistic production quotas. Factories that pollute grievously.

American workers no longer are willing to engage in this abusive relationship with trade fanatics. They no longer believe the promises of change. They don’t want the federal money TPP fanatics promise them to pay for retraining as underpaid burger flippers after their middle class-supporting factory jobs are shipped overseas. They’re over trade pacts that benefit only multi-national corporations like Nike.

To Fast Track and the TPP, they say, “Just Don’t Do It!”

Leo Gerard. President . United Steelworkers of America.

Follow Leo W. Gerard on Twitter: www.twitter.com/uswblogger

 

 

The Trans-Pacific Partnership: The Undemocratic Job-Killing Trade Scheme

by Leo Gerard

No Fast Track
Free traders in Congress formally proposed last week that lawmakers relax, put their feet up and neglect the rigor of legislative review for the Trans-Pacific Partnership (TPP) trade scheme.

The TPP is a secret deal among 12 Pacific Rim nations that was covertly negotiated by unelected officials and corporate bosses. It’s so clandestine that lawmakers elected to represent the American people were refused access to the deliberations. It would expand secret trade tribunals that corporations use to sue governments over democratically established laws and win compensation from taxpayers.

The Congressional free traders want to Fast Track authorization of the TPP. Fast Track enables Congress to abdicate its constitutionally mandated duty to regulate international trade. Instead of scrutinizing, amending and improving proposed trade deals, lawmakers use Fast Track to gloss over the specifics and simply vote yea or nay on the entire package as presented. With elected officials excluded from the talks, details of the treaty deliberately shrouded in secrecy and free traders demanding lawmakers ignore the deal’s effects on constituents, this process condemns democracy.

As usual, the free traders say, don’t worry, the TPP is gonna be great, just great! Trust us, they say.

For opponents of the deal—unions, environmentalists, human rights groups and Congressional progressives—there’s no trusting free traders. That’s because they’ve proven to be nothing but flimflam men. Deals they’ve peddled previously, like NAFTA, CAFTA and KORUS, have not, in fact, been great. They’ve dramatically increased the nation’s trade deficit, prompted corporations to ship manufacturing offshore, cost millions of American workers their jobs and suppressed wages.

President Barack Obama, who is pushing the TPP, admits opponents are right to be wary. During a meeting recently with small business executives, he conceded, “Trade deals have not always been good for American manufacturing. … There have been times where because the trade deal was one way, American workers didn’t benefit and somebody else did.”

Even so, he too sought trust, adding: “Well, we intend to change that.”

There’s no trust when 32 percent of American steel mill production is idled and more than 6,000 steelworkers are laid off or warned of impending furloughs because of unchecked imports of illegally subsidized steel from China.

The AFL-CIO, the Alliance for American Manufacturing, the United Steelworkers and others have pleaded with the administration for years to provide relief from China’s price-distorting currency manipulation. The administration responded with inaction.

There’s no trust when free traders promised workers that NAFTA would generate hundreds of thousands of jobs, but as it turned out, those jobs were poverty-wage positions in Mexico created when American manufacturers took advantage of NAFTA provisions to close American factories and move them across the border.

Public Citizen’s Global Trade Watch examined the effect of NAFTA and wrote in a report issued in February of 2014, “Twenty years later, the grand projections and promises made by NAFTA’s proponents remain unfulfilled. Many outcomes are exactly the opposite of what was promised.”

The most devastating upside-down outcome is jobs. The Global Trade Watch report notes that more than 845,000 U.S. workers qualified for Trade Adjustment Assistance after having lost their jobs as a result of imports from Canada or Mexico or relocation of U.S. factories there. It’s extremely difficult to qualify for Trade Adjustment Assistance, so this number probably understates the total job losses significantly.

In addition, when workers who lost jobs landed new ones, they got paid less, with the average reduction greater than 20 percent.

KORUS is the same sad story. Free traders pledged three years ago that the deal with South Korea would produce tons more exports that would, of course, create lots of new American jobs. Instead, the U.S. goods trade deficit with Korea grew 84 percent, excluding the value of foreign-made goods that pass unaltered through the United States on their way to Korea.

Calculating with the trade-to-jobs formula that free traders used when they were promoting KORUS, the U.S. trade deficit with Korea translates into the loss of nearly 85,000 U.S. jobs—in just three years.

This does not engender trust.

Still, free traders now are huckstering the TPP with promises of job gains. They’re not fooling everybody, though, with their claim that it will create 650,000 jobs. In January, the Washington Post fact checker gave this promise its highest liar-liar-pants-on-fire rating of four Pinocchios.

Using the free traders’ own method of calculating, the Post determined TPP would create no new jobs. That would be a fabulous result after the track record of these trade pacts causing massive job losses. Fantastical probably is a better descriptor, though, for a no-job-loss outcome.

But don’t worry, the free traders say, TPP will include Trade Adjustment Assistance to help workers thrown out of jobs by offshored factories and employers bankrupted as a result of dirt-cheap imports produced by exploited workers in countries without pollution controls. Trust us, the free traders say, displaced workers can use tax dollars to train for brand new jobs that pay 20 percent less!

Based on broken promises, Americans don’t like free trade schemes. So free traders in Congress, like Republican Sen. Orrin Hatch, are trying to fast track Fast Track before the public notices. The New York Times explained this: “Both the Finance and Ways and Means committees will formally draft the legislation next week in hopes of getting it to final votes before a wave of opposition can sweep it away.” The Times quotes Hatch saying about the rush to legislate: “If we don’t act now, we will lose our opportunity.”

Earlier former U.S. Trade Representative Ron Kirk explained why the administration refused to disclose the contents of the TPP, a task that Wikileaks took on instead. Kirk told Reuters that telling the publicwhat the deal contains would make passage impossible.

Concealing potentially job-killing trade schemes from the American public thwarts democracy. Rushing unpopular legislation through Congress before American citizens have an opportunity to review it and tell their elected representatives how they feel about it obstructs democracy.

No trade treaty, no matter how great free traders cross-their-hearts-and-hope-to-die it will be, is worth damning Americans’ cherished democracy.
Leo Gerard is the President of the United Steelworkers international union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco’s nickel smelter in Sudbury, Ontario at age 18.  Numerous USW locals were among the 2009 organizations that signed a letter to Congress as part of the Citizen’s Trade Campaign demanding Fast Track and the TPP be rejected.

Gerard’s statement is reposted from the Working In These Times blog.

Stop Fast Track! Stop TPP !

Legislation granting Fast Track trade authority to President Barack Obama was introduced in the U.S. Senate today. In a statement, AFL-CIO President Richard Trumka said:

At a time when workers all over the country are standing up for higher wages, Congress is considering legislation that will speed through corporate-driven trade deals. For decades, we’ve seen how fast-tracked trade deals devastated our communities through lost jobs and eroded public services. We can’t afford another bad deal that lowers wages and outsources jobs.

Call your senators—855-790-8815—and tell them to say no to Fast Track.

See article here. http://www.dsausa.org/greasing_the_fast_track_to_global_catastrophe_dl

Fast Track would make it easier to ram through complicated trade deals without significant oversight from members of Congress or the public, just a simple “Yes” or “No” vote with no amendments allowed on trade agreements such as the Trans-Pacific Partnership (TPP). Continue reading

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