Did someone just say “Industrial Policy”?

by Stan Sorscher

  • sorscher-2017

Let’s take a breath and step back from our circus-like introduction to the Trump era.

A few weeks ago, we were trying to decode voters’ messages in the US and UK. Donald Trump, Bernie Sanders, Hillary Clinton, and millions of voters said we have lost trust in the way we’ve managed globalization. Brexit and the US presidential campaigns broke the spell we had been under during 20 years of neoliberal free trade orthodoxy. Even before the election, growing public opposition had worn away support for TPP, the 12-country trade deal. TPP failed because our free trade approach to globalization is exhausted.

Decades of neoliberal market fundamentalism had conditioned us to accept millions of lost jobs, reduced bargaining power for workers, deindustrialization, stagnant wages, and unchecked climate change.

We are ready for a new approach that would balance trade and share the gains from globalization. Labor, environment, and other civil society groups have specific goals – deal with inequality, climate change, access to medicine, food security, internet freedom, and other non-economic issues at home and abroad.

Donald Trump openly endorses industrial policy. To me, “industrial policy” means intervening in markets to prevent or correct market failures. For decades, it was the policy that could not be named in Washington DC. Industrial policy is the conceptual opposite of neoliberal free market – free trade orthodoxy.

Industrial policies can be good or bad. Good ones can serve legitimate national interests and bad ones cause grief – just like good or bad policies for health care, banking, infrastructure, and education. Good industrial policies can help us manage globalization better.

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6 Ways We Could Improve NAFTA for Working People

 by Jackie Tortora

6 Ways We Could Improve NAFTA for Working People

For years we’ve talked about the shortcomings of the North American Free Trade Agreement (we even released this detailed report on its 20th anniversary) and how trade deals created behind closed doors with corporate CEOs harm working people.

Today we released a blueprint for how to rewrite NAFTA to benefit working families. This past election there was much-needed discussion on the impact of corporate trade deals on our manufacturing sector and on working-class communities. The outline below puts forward real solutions that should garner bipartisan support if lawmakers are truly serious about realigning our trade policies to help workers.

We need a different direction on trade. This movement has been largely driven by working people. As we approach the inauguration of a new president, it is important that everyday working people’s perspectives lead the debate, starting with how to rewrite NAFTA.

 The AFL-CIO has long supported rewriting the rules of NAFTA to provide more equitable outcomes for working families. To date, the biggest beneficiaries of NAFTA have been multinational corporations, which have gained by destroying middle-class jobs in the U.S. and Canada and replacing them with exploitative, sweatshop jobs in Mexico. It doesn’t have to be this way. With different rules, NAFTA could become a tool to raise wages and working conditions in all three North American countries, rather than to lower them.

Key Areas for Improvement

1. Eliminate the private justice system for foreign investors.

NAFTA established a private justice system for foreign investors, thereby prioritizing corporate rights over citizens’ rights, giving corporations even more influence over our economy than they already have. This private justice system, known as investor-state dispute settlement, or ISDS, allows foreign investors to challenge local, state and federal laws before private panels of corporate lawyers. Although these lawyers are not accountable to the public, they are empowered to decide cases and award vast sums of taxpayer money to foreign businesses. Under NAFTA, these panels have awarded millions of dollars to corporations when local and state governments exercise their jurisdictional power to deny things such as municipal building permits for toxic waste processing facilities. ISDS gives foreign investors enormous leverage to sway public policies in their favor. Scrapping the entire system would help level the playing field for small domestic producers and their employees.

2. Strengthen the labor and environment obligations (the North American Agreement on Labor Cooperation and the North American Agreement on Environmental Cooperation), include them in the agreement, and ensure they are enforced.

The NAFTA labor and environment side agreements were not designed to effectively raise standards for workers or to ensure clean air and water. Instead, they were hastily patched together to quiet NAFTA’s critics. These agreements should be scrapped and replaced with provisions that effectively and robustly protect international labor and environmental standards. Violators should be subject to trade sanctions when necessary—so that we stop the race to the bottom that has resulted from NAFTA. Without stronger provisions, environmental abuses and worker exploitation will continue unchecked.

3. Address currency manipulation by creating binding rules subject to enforcement and possible sanctions.

Within months after NAFTA’s approval by Congress, Mexico devalued the peso, wiping out overnight potential gains from NAFTA’s tariff reductions. This devaluation made imports from Mexico far cheaper than they otherwise would have been and priced many U.S. exports out of reach for average Mexican consumers. Countries should not use currency policies to gain trade advantages—something China, Japan and others have done for many years. All U.S. trade agreements, including NAFTA, should be upgraded to create binding rules, subject to trade sanctions, to prevent such game playing.

4. Upgrade NAFTA’s rules of origin, particularly on autos and auto parts, to reinforce auto sector jobs in North America.

NAFTA’s rules require that automobiles be 62.5% “made in North America” to qualify for duty-free treatment under NAFTA. Even though 62.5% seems high compared with the Trans-Pacific Partnership’s inadequate 45%, it still allows for nearly 40% of a car to be made in China, Thailand or elsewhere. The auto rule of origin should be upgraded to eliminate loopholes (through products “deemed originating” in North America) and to provide additional incentives to produce in North America. This, combined with improved labor standards, will contribute to a more robust labor market and help North American workers gain from trade.

5. Delete the procurement chapter that undermines “Buy American” laws (Chapter 10).

NAFTA contains provisions that require the U.S. government to treat Canadian and Mexican goods and services as “American” for many purchasing decisions, including purchases by the departments of Commerce, Defense, Education, Veterans Affairs and Transportation. This means that efforts to create jobs for America’s working families by investing in infrastructure or other projects, including after the financial crisis of 2008, could be ineffective. This entire chapter should be deleted.

6. Upgrade the trade enforcement chapter (Chapter 19).

NAFTA allows for a final review of a domestic anti-dumping or countervailing duty case by a binational panel instead of by a competent domestic court. This rule, omitted from subsequent trade deals, has hampered trade enforcement, hurting U.S. firms and their employees. It should be improved or omitted.

Reposted from the AFL-CIO News blog

Attacking Workers Not OK Mr. Trump

Donald Trump ran for president promising to respect the working people of America. Now, at his very first opportunity to show respect to America’s working families, the president-elect has failed the test.

Just last week, Trump was touting his effort to keep jobs at a Carrier plant in Indiana from moving overseas. Thanks to corporate tax breaks offered by Trump’s running mate, Indiana Gov. Mike Pence, Carrier is keeping hundreds of jobs in the state. These Carrier workers are no doubt relieved to be spending the holidays knowing their jobs are more secure, and we are grateful for it.

But Trump wasn’t honest with the workers at Carrier or the American people. And Chuck Jones—the president of United Steelworkers Local 1999 who represents the workers at that plant and has fought hard to bring the plight of his workers to the public’s attention—knew he had to hold Trump accountable. He explained Trump was taking credit for saving 350 jobs that were already slated to stay, but that 550 workers would still lose their jobs.

“Trump and Pence, they pulled a dog and pony show on the numbers,” he said.

And because Jones told the truth, Trump—the president-elect of the United States—responded by personally attacking Jones and our union sisters and brothers across this country.

Trump took to Twitter and said Jones “has done a terrible job representing workers” because Jones wouldn’t let Trump get away with lying. He suggested the steelworkers should be working harder. Continue reading

It’s Time to Start Over on Trade

In a challenge to President-elect Donald Trump, EPI Distinguished Fellow Jeff Faux writes in U.S. trade policy—time to start over that Washington’s fixation with trade agreements has diverted attention from the more important question of how to put American workers back on the historic track of rising wages and opportunities.

Faux warns that, having declared the multinational Trans-Pacific Partnership dead, Trump now says he intends to continue the pursuit of bilateral trade deals, on the grounds that he is a better negotiator. But even if he is, writes Faux, new deals will not solve the problems of off-shored jobs and depressed wages that Trump raised during the presidential campaigns. http://www.epi.org/publication/u-s-trade-policy-time-to-start-over/

Therefore, Faux calls on Trump to announce an indefinite freeze on any new trade negotiations, until his administration and the Congress commit to and implement a credible comprehensive agenda for making American workers competitive and balancing our trade with the rest of the world.

“For two decades Democratic and Republican leaders have had it backwards,” writes Faux. As the Economic Policy Institute has been reporting for decades, trade deals have systematically traded away the income and job security of American workers in exchange for promoting the interests of American international investors. The effect has been to “open up American workers and their communities to brutal global competition for which they have not been prepared. The result is that the costs to American workers of each cycle of expanded trade relentlessly exceed the benefits.” Continue reading

Trump and The Crisis of Labor

By Harold Meyerson

As Pennsylvania, Ohio, Michigan and Wisconsin – states that once were the stronghold of the nation’s industrial union movement – dropped into Donald Trump’s column on election night, one longtime union staff member told me that Trump’s victory was “an extinction-level event for American labor.”

He may be right.

A half-century ago, more than a third of those Rust Belt workers were unionized, and their unions had the clout to win them a decent wage, benefits and pensions. Their unions also had the power to turn out the vote. They did — for Democrats. White workers who belonged to unions voted Democratic at a rate 20 percent higher than their non-union counterparts, and there were enough such workers to make a difference on Election Day.

That’s not the case today. Nationally, about 7 percent  of private-sector workers are union members, which gives unions a lot less bargaining power than they once had, and a lot fewer members to turn out to vote. The unions’ political operations certainly did what they could: An AFL-CIO-sponsored Election Day poll of union members showed 56 percent had voted for Hillary Clinton and 37 percent for Trump, while the TV networks’ exit poll showed that voters with a union member in their household went 51 percent to 43 percent for Clinton, as well. In states where unions have more racially diverse memberships, Clinton’s union vote was higher (she won 66 percent of the union household vote in California). Continue reading

Unions Celebrate Victory over TPP

TPP

by Paul Garver

The Teamsters (IBT) and the Communication Workers of America (CWA) informed their members that the long campaign against the Trans Pacific Partnership [TPP] has succeeded in blocking a ratification vote in the lame duck session of Congress.

The Communications Workers of America (CWA) reported  this on the news that the Trans-Pacific Partnership (TPP) trade deal won’t be brought up for a vote this Congress.

The news that the TPP is officially dead for this Congress is welcome, overdue, and a lesson for the future. We’re glad to see that all observers finally recognize the reality that TPP will not and should not go through. For more than five years, CWA members, allies, and working families throughout the country mobilized to expose this corporate-friendly trade deal and the serious consequences for working families and communities if it did take effect. CWA members and allies long have been ahead of Washington on the issue of TPP and trade policy, and this work built a strong public base of voters who rejected what they clearly recognized as bad deal, no matter their political party.

As CWA has been stating throughout this past year, the votes in Congress simply aren’t there to pass TPP. But beyond the vote count, the very act of trying to advance the corporate-friendly TPP would have demonstrated that Washington was willfully ignoring the American public. After a 2016 election season in which anti-TPP sentiment was a rare area of bipartisan agreement and a major factor in shaping election results, trying to ram through the TPP in lame duck would have been an act in willful opposition to the American electorate’s stated wishes.

We will be ready to take on any attempt to revive the TPP in the next Congress or advance other corporate-friendly trade pacts based on the same failed and outdated model of trade.

http://www.cwa-union.org/news/releases/cwa-on-news-tpp-dead-for-congress-welcome-overdue-and-lesson-for-future

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TPP’s End is Near Thanks to Workers

After years of taking aim at the terrible Trans-Pacific Partnership (TPP), the Teamsters and their allies can finally see victory in their sights.

In the wake of last week’s election results, congressional leaders made it clear they would not press forward with considering the 12-nation Pacific Rim trade deal. And U.S. trade officials acknowledged on Friday that efforts to pass this corporate boondoggle would not continue this year.

The good news is that view will not likely change anytime soon. President-elect Donald Trump was an outspoken critic of the TPP and his transition team has made it clear it will not move forward with consideration of the trade deal. In fact, it plans to drop out of it.

But this looming win is not about any one political leader. It is about the long-standing coalition of union, fair trade, environmental and health care advocates that have stood strong against efforts to craft a trade proposal that would have further fattened the wallets of the corporate elite at the expense of everyday Americans who continue to struggle to support their families.

Concerns about the TPP were first raised more than six years ago when allies gathered outside the first U.S.-based negotiation session to raise concerns that the TPP was a dramatic departure from previous trade deals that would only further the interests of big business. And it grew to become a bipartisan opposition bloc on Capitol Hill.

As Arthur Stamoulis of the Citizens Trade Campaign wrote, “Let’s make sure we’re not letting Trump steal credit for something he didn’t earn. And let’s especially make sure that the movement of movements is getting the credit it deserves. We’re heading into some very rough years ahead, and people need to be reminded of their power.”

The TPP is a scourge on society because not only would it have shipped American jobs overseas, it also would have depressed salaries at home as well. It promised to increase the amount of unsafe foods and products shipped to U.S. store shelves, worsen the global environment and drive up drug prices worldwide.

It also would have left member nations on the hook for any perceived efforts to curb the profits of multinational corporations through legislation or regulation. Pro-corporate tribunals would have heard complaints filed by companies, and taxpayers would have had to foot the bill.

That’s not right or just. But because Teamsters and others took a stand against TPP, now workers and all Americans will benefit. Thank you members for your work!

https://teamster.org/blog/2016/11/tpps-end-near-thanks-workers

Get Out and Vote!

hillaryandtrump

By John O. Mason

You simply MUST get out and vote this November 8; the stakes have never been higher for this country for a long time. Donald Trump is simply unfit to be President of the United States. His calling to build a wall against Mexico, characterizing all Mexicans as criminals, rapists, and drug dealers; his call for a ban on Muslims entering this country; his contempt for women in any capacity but subordinate to him; his associating with the most infamous racists like David Duke, and aligning with the racist “alt-right” movement; his encouraging assaults on protesters in his rallies; his willful ignorance about foreign affairs and the launch system for nuclear missiles; his refusal to say he would abide by the election results, win or lose-all these indicate the kind of President he would be, a dictator.

A myth in our politics says that “If we give the running of our government over to businessmen, they’ll run it as a business, efficiently and cost-effective.” Well, let’s see how businesslike Trump has been-Trump steaks, Trump vodka, Trump Shuttle airlines, trump magazine, Trump World magazine-all failed business ventures. Trump University-charged with fraud. His casinos and hotels-bankrupt. He has been able to negotiate his way out of trouble, since the bankruptcy laws are so weighed in favor of corporate types like him; but does he think that Putin, Kim Jong Un, or the Ayatollahs of Iran would cut him any breaks, give him any favors?

And Hillary-there is no other choice but to vote for her. Hillary Clinton DOES have political and governmental experience, albeit too much playing safe on the side of corporations. I fear that if we the people don’t constantly monitor the Clinton administration 2.0, it would be just like Bill’s regime, too much in favor of the corporations and shying away from those “nasty unions,” signing such trade deals as NAFTA in Bill’s time, and TPP, which lies dormant in Congress like a disease. Continue reading