Who Gets the Gains from Trade?

tppa malaysia

by Stan Sorscher

Let’s start the debate about trade policy on the right foot. Everyone I know is “for” trade. A better question is, “Who gets the gains from trade?”

Gains from anything, trade included, can be divided in 3 ways.

  1. Someone might give you your share of gains, for whatever reason.
  2. You might take your share, if you have power.
  3. You might get nothing, or possibly lose what you have.

Option 1 presumes some level of trust. Microsoft’s CEO, Satya Nadella, projected that sentiment onto women, when he told them to be patient and not ask for raises. Their bosses would recognize their value and reward them in due time. Nadella and other CEO’s are accustomed to power. He was probably expressing benevolence, muddled with sexism.

Ultimately, power relationships determine how gains are shared. If you have power, you get gains. If someone else has power, they get gains. If power is balanced, then gains are more likely to be shared.

Nadella’s paternalism is reflected in an edgy cliché told about trade policy, “Sure, trade creates winners and losers. The winners could compensate the losers.” Right. Winners might voluntarily compensate losers, but the point of being a winner is to win, not to compensate someone else!

Where do workers get power? I remember a time when unions made demands. They could strike to increase their share of gains from productivity and work. Union contracts would then set standards for employment generally.

Sorscher 1

Figure 1. Large works stoppages over time.

In the late 70’s that power started to evaporate.

Continue reading

How Low can the Trans-Pacific Partnership Go?

by Stan SorscherSorcher TPP sinking ship

[Ed. note:  With all the major Presidential contenders opposed, the Trans-Pacific Partnership (TPP) might be regarded as a sinking ship, but the unholy alliance of the mainstream Republican Party, Business Roundtable, U.S. Chamber of Commerce, and President Obama is plotting to sneak its ratification past the American people during the Lame Duck Congressional Session after the November 2016 election.  Stan Sorscher reminds us just how bad an idea this would be].

The Trans-Pacific Partnership, the huge new 12-country trade deal, raises the question: How low would we go to get the next NAFTA-style deal?

The basic idea of a trade deal is that we will lower our tariffs, you will lower your tariffs, and trade goes up. That would be a trade deal.

TPP is much more than that. The tariff schedules in TPP are not controversial. Really, TPP will not pass or fail based on the tariff schedule.

Rather, the rules in TPP are very controversial because the rules define power relationships, and those power relationships determine who will take the gains from globalization.

President Obama wants us to set the rules, so China doesn’t. Good.

But “our” rules were written by and for global investors. Those rules are very favorable to corporations who want to move production to low-wage countries with weak social and political systems.

  • Using very optimistic assumptions, the International Trade Commission estimates TPP would increase GDP by 0.15% after 15 years– a number too small to measure. Our lived experience with NAFTA CAFTA, and other deals tells a different story. Under those NAFTA-style deals our economy has steadily de-industrialized, and millions of jobs have moved to low-wage countries.
  • TPP’s rules for dispute settlement create corporate friendly tribunals, which pay no attention to our Constitution, our Supreme Court, or our legal traditions, and are not accountable to any political process. These tribunals shield global companies from government actions intended to protect public interests.
  • TPP’s toothless rules on currency rates allow China, Korea, Japan and other countries to distort trade, favoring goods produced in their countries for export to the US. This is great for US corporations who produce in China, but is bad for workers and communities in the US.
  • TPP’s weak “Rules of Origin” encourage high-wage countries to source more of their products in low-wage countries. Countries with terrible labor and environmental standards can ship parts to 11 other TPP countries, and voilà! – those parts are now TPP-qualified for favorable access to our markets.
  • TPP’s rules on labor and human trafficking are pathetic. Malaysia qualifies as one of our TPP partners, even though our State Department ranks Malaysia among the worst in the world for human trafficking. Malaysia has a documented history of forced labor and the worst forms of child labor. Malaysia knows that we will never hold them accountable for improving conditions.
  • Our indifference to global labor standards is so deep that Vietnam can embarrass President Obama– to his face – during his latest trip there, by forbidding labor activists from accepting Obama’s invitation to meet with him. President Obama inspires us with soaring rhetoric on human rights in Vietnam, but Vietnam’s leaders know we will never hold them accountable for improving labor conditions.
  • TPP’s environmental protection rules are a step back from earlier standards. That is neither here nor there, because we have never enforced any environmental rules in any trade deal.
  • In spite of repeated documented violations. Peru and other countries with sorry records for environmental standards know we will never hold them accountable when they ignore environmental standards.
  • Berta Cáseres, an internationally recognized Honduran environmental activist, was assassinated in her home. Honduras is one of our CAFTA trading partners. Honduras is arguably the most dangerous country on earth for environmental activists. Civil society around the world condemned Berta Cáseres’ murder, but not a word can be found on the web sites for the White Houseor the US Trade Representative.
  • Another CAFTA trading partner is Guatemala, which is arguably the most dangerous country in the world for labor activists. Our trade officials have “consulted” with Guatemala, and an 8-year old inquiry is underway into Guatemala’s dismal record regarding labor standards. Honduras, Guatemala and Colombia [another free trade partner] know we will never hold them accountable for improving labor conditions.

So, how low would we go to get the shadowy 0.15% growth of GDP after 15 years with TPP? Influential House and Senate members will answer that question.

For many years, Representative Sander Levin has been a strong advocate for trade language that raises labor and environmental standards and protects access to life-saving medicines for treatable diseases in developing countries. As TPP negotiations finished up, Mr. Levin realized that TPP was a step backwards. He opposes TPP and is a champion for a better trade policy.

Mr. Levin’s postcard description from Vietnam describes labor leaders being beaten and jailed. His message stands in contrast to President Obama’s weary acceptance of conditions there.

Representative Earl Blumenauer was an early champion for stronger environmental rules in trade deals. Peru ignored its commitments under previous trade deals, and recently fired the public official who was trying to move those standards forward. We will see how low Mr. Blumenauer might go.

Oregon Senator Ron Wyden worked hard to reveal the details of TPP, which were negotiated in strictest secrecy. He promoted “Oregon values” which meant creating good jobs in his state, promoting human rights, improving labor conditions, safeguarding the environment and protecting a free and open internet. Now, Senator Wyden must decide if TPP upholds Oregon values, or is too low to go.

House Minority Leader Nancy Pelosi said her leadership role did not obligate her to promote a bad trade policy. She said she would happily vote for a deal that does as much for workers and the environment as it does for global investors.

Hillary Clinton says she “opposes TPP before and after the election.” She adds, “I’m not interested in tinkering around the margins of our trade policy. I think we need a fundamental rethink of how we approach trade deals going forward. It is critical that we address labor protections and ensure that human rights are protected, as well as health, environmental, and consumer safety issues in any new trade agreements.”

Larry Summers(!!) backs away from TPP, preferring a trade approach where “issues such as labor rights and environmental protection would be central, while issues related to empowering foreign producers would be secondary.”

TPP is an historic disappointment. Sander Levin, Hillary Clinton, Larry Summers, and Nancy Pelosi recognize that we can’t tweak TPP into shape. We need a new approach. To paraphrase Naomi Klein, “TPP is the no that must be said before the yes.”

The more the public hears about TPP, the less we like it. For most voters, TPP is too low to go. We are very much looking forward to stopping TPP, and starting a “rethink” of our approach to globalization.

Stan Sorscher is Labor Representative, Society for Professional Engineering Employees in Aerospace.  This essay is reposted from the Huffington Post with the permission of the author at
http://www.huffingtonpost.com/stan-sorscher/how-low-would-we-go-for-t_b_10336934.html

Follow Stan Sorscher on Twitter: www.twitter.com/sorscher

 

Trade Deal is an Attack on Our Unions

tppprotesters_062315frBy Richard Trumka –
As a dozen nations gather in New Zealand this week to officially sign the Trans-Pacific Partnership (TPP), working families in the United States are sounding the alarm on a deal that would lower wages and ship even more jobs overseas.

The final text of the agreement, released in November, is even worse than we imagined, with loopholes in labor enforcement and rewards for outsourcing. Like its predecessor agreements NAFTA and CAFTA, the TPP is a giveaway to big corporations, special interests and all those who want economic rules that benefit the wealthy few. It is no wonder the presidential front-runners from both political parties oppose it.

It didn’t have to be this way. The labor movement supports trade. We know that opening up new markets to American products the right way can create jobs and lift up working people. But trade must be done under a fair set of rules that puts people ahead of profits. The TPP fails that test miserably.
From the outset, the AFL-CIO provided detailed and substantive suggestions for improving this agreement and evidence to support our positions. On everything from labor enforcement to investment rules, we offered a path forward. Unfortunately, our policy recommendations were ignored, as were those from the environmental, consumer, public health, global development and manufacturing sectors. That’s what you get from secret
negotiations driven by corporate and investor interests. Continue reading

TPP is Bad for Unions

TPPUrge Congress to Oppose the Just-Signed TPP

U.S. Trade Representative Michael Froman is in New Zealand right now joining other trade ministers from throughout the Pacific Rim in signing the Trans-Pacific Partnership (TPP). Signing is not the same as ratifying. What the signing means is that the negotiations are concluded; the text is done; and that the TPP can now be submitted for a Fast Tracked vote in Congress at almost any time.

It’s critical that Congress is hearing strong constituent opposition to the TPP right now. Please write your Members of Congress and urge them to come out publicly against the TPP.

For the better part of a decade, we have told our representatives we want a “Fair Deal or No Deal” on Trans-Pacific trade. Now that the text is finalized and changes are all-but-impossible, it’s clear that — while a handful of well-connected corporations got a more-than-fair deal for themselves — for everyone else, the TPP would be a disaster for the economy, the environment and public health.

The TPP Is Bad for Jobs & Wages
As you would expect from a deal negotiated with hundreds of corporate advisors, while the public and the press were shut out, if enacted, the TPP would offshore good-paying American jobs, lower wages and increase inequality by forcing Americans into competition with highly-exploited workers abroad paid less than 65 cents an hour. Continue reading

Honduras and CAFTA Show Why TPP Must be Opposed

Map of all countries which have ratified the D...

Map of all countries which have ratified the Dominican Republic–Central America Free Trade Agreement. (Photo credit: Wikipedia)

12/10/2015Brian Finnegan
This week, the governments of Honduras and the United States signed an action plan to begin addressing the widespread failure to enforce labor laws in Honduras. While this is a small step in the right direction, the Honduran government has not fully considered or included workers’ recommendations regarding this Monitoring and Action Plan. The Honduran government, employers and unions have reached consensus on some points, but major issues remain unresolved. The action plan should not have been signed until the parties reached agreement on the draft inspection law that is central to the viability of the action plan.

The plan also stops short of calling for stronger enforcement action should Honduras continue to fail. It is far too early for congratulations. Through such delayed and partial actions, the U.S. government has not acted effectively to defend workers’ rights in Honduras and with other trading partners. Continue reading

Why It Would Be a Mistake for SEIU to Endorse Clinton

Français : Logo SEIU

Français : Logo SEIU (Photo credit: Wikipedia)

Why it would be a tragic mistake for SEIU to endorse HRC at this time.
This letter is being sent to SEIU President Mary Kay Henry and members of the IEB.  This is also being cc’d to members of the Board of Directors of SEIU Local 503 in Oregon, the local to which we belong.
Unhappy with the pro-corporate/pro-Wall St. bias of the Democratic Party establishment, of which Hillary Clinton is a major player; early on we have been among the many labor activists calling for Sen. Elizabeth Warren to step up and run for President.
We have long been appreciative of the stances taken by Senator Bernie Sanders on labor issues, and on broader economic and social justice issues.  However, when Sanders first announced his candidacy, many of us were unsure that he could mount a credible national campaign and candidacy.  What has happened since has surprised almost everyone.  The issues and values that we hold near and dear are today at the center of national discussion and in the Presidential debate.  For this, we largely have Senator Bernie Sanders to thank.
We list a number of reasons below why, 1) Hillary Clinton is not our candidate, at least not in this primary period, and 2) any primary endorsement should be the result of an exhaustive process of union-wide discussion in which our International provides hard facts to our members on the actual positions and voting records of all the candidates on the issues of critical importance to us. Continue reading

TPP Unveiled

TPP REVEALED: Special bulletin from our colleagues on Pro Trade: The Obama administration has released the text of the Trans-Pacific Partnership agreement. Read it here: http://1.usa.gov/1Pbxeru

The release sets the stage for a divisive fight in Congress next year that will once again pit Barack Obama against the labor movement and most of his fellow Democrats, reports Pro Trade’s Doug Palmer.

Approval of the landmark trade agreement between the United States, Japan and 10 other Asia-Pacific countries would rely heavily on votes from Republicans, in a replay of this year’s battle over trade promotion authority, which allows Obama to submit TPP to Congress for straight up-or-down votes without any amendments.

From Politico’s Morning Report.