NAFTA’s Problems

Ask Your State Legislators to Speak Out Against ISDS

Corporate lobby groups are freaking out!  They’re upset the word is finally getting out about the damage that Investor-State Dispute Settlement (ISDS) can cause to jobs, the environment and public health.

TAKE ACTION: Please write your state legislators urging them to join others speaking out against the ISDS corporate power grab.

As you may know, the United States, Mexico and Canada are currently renegotiating the North American Free Trade Agreement (NAFTA).  One of the proposals on the table is to remove Investor-State Dispute Settlement (ISDS) provisions from NAFTA altogether.

Unsurprisingly, wealthy corporate interests are fighting tooth-and-nail to save this system that lets them profit at the expense of our democracy.  Among many other steps, they’ve gone so far as to air television ads in support of ISDS in Washington, DC.

The current ISDS system enables transnational corporations to challenge federal and state laws, local land use ordinances and even court decisions before arbitration panels of three corporate lawyers.  These ISDS panels can award unlimited sums of taxpayer money, including for the loss of future profits.  The corporations need only convince panelists that a law, ordinance or court ruling violates the expansive rights granted to them under NAFTA.  Their decisions are not subject to appeal.

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The U.S. Needs Cops on the Trade Beat

The Trump Administration’s abruptly announced tariffs on washing machines and solar cells imported to the United States provoked wailing and the gnashing of teeth worldwide.

The same over-the-top beating of breasts can be expected if the administration penalizes steel and aluminum imported from countries that violate trade regulations.

Every time the United States enforces trade law, the recrimination starts. America, the free traders say, has no right to shield its domestic manufacturing from the onslaught of unfairly traded imports. There should be no cops on the trade beat, free traders say. It should be the Wild West when it comes to international trade, with the last factory standing the winner, no matter how many trade rules it defied to get there.

Playing Fair

American manufacturers – including those that make steel, aluminum, solar panels and washing machines – can compete and win against any challenger in the world when the contest is fair, when all firms that export follow trade rules. But American manufacturers lose when foreign producers export underpriced products after receiving loans that don’t have to be paid back, government-subsidized raw materials and other massive state aid.

American manufacturers shouldn’t be patsies in a rigged game. That’s why they are demanding trade law enforcement. They’re not seeking protectionism, which shields domestic manufacturing from fairly traded imports. Instead, they want prosecution, which is punishing trade violators whose cheating destroys American manufacturing and jobs.

China, probably the most flagrant trade rule violator in the world, was among the first to cry “protectionism” after the Trump administration announced the washing machine and solar panel tariffs on Monday. Chinese president Xi Jinping’s chief economic advisor, Liu He, said at Davos this week that his country stood against protectionism and for globalism.

Sure, China wants globalism after its trade violations have destroyed every other country’s industrial base, leaving the Asian giant standing as the only producer globally.

And it’s close to achieving that in the manufacture of solar cells and panels after more than a decade of trade violations. China issued a renewable energy law in 2005 including measures to promote solar manufacturing. Then in 2010, the China State Council listed renewable energy as one of seven industries eligible for special government incentives and loans.

Before China began giving solar manufacturers special perks in 2005, its share of global production was 7 percent. Now, it makes 60 percent of the world’s solar cells and 71 percent of solar modules.

In 2011 the U.S. Commerce Department determined that China was improperly subsidizing its solar producers and that they were selling panels and cells in the United States for less than fair market value, both of which violate trade rules.

As a result, the United States imposed penalties on the imports. Chinese manufacturers ducked the tariffs by moving production to Taiwan.  When American producers asked the Commerce Department in 2013 to deal with this dodge, Chinese companies moved production again.

The Commerce Department concluded that from 2012 to 2016 imports of Chinese solar cells and panels grew 500 percent and the price declined 60 percent, bankrupting and driving out of business American producers. Between 2012 and 2017 – a period of just five years – 25 American solar manufacturers closed. And now, another has shut down and declared bankruptcy.

Last May, two U.S. solar companies asked the U.S. International Trade Commission (ITC) to investigate. The ITC recommended tariffs even higher than those that the president ultimately imposed this week. They penalties are worldwide this time, preventing Chinese companies from evading them by shifting production again.

This kind of trade law flouting by China is exactly what is ravaging the American aluminum and steel industries.

Twenty years ago, there were 23 aluminum smelters in the U.S. Now there are five.

Similarly, in the steel industry, thousands of good, family-supporting U.S. jobs were lost and mills and parts of mills closed as China ramped up production, flooded the world market and drove down prices. Between 2000 and 2014, Chinese steel production rose 540 percent. U.S. production, a mere fraction of the Asian giant’s, fell 13 percent.

As with solar, China put government money into its aluminum and steel industries, improperly tipping the trade scales in its favor. And as with solar, when U.S. aluminum and steel companies won trade cases, some Chinese producers moved or falsely marked products as made elsewhere to skirt American tariffs. The European Union’s anti-fraud office determined the same thing – that Chinese steel was shipped through Vietnam and given fake certificates of origin to evade EU tariffs.

At just about the same time the solar and washing machine trade cases were filed last year, the Trump administration announced it would investigate whether the damaging effects of unfairly traded steel and aluminum were threatening national security. If so, the administration could impose import quotas and tariffs. Initially, Commerce Secretary Wilbur Ross said these investigations, under Section 232 of the Trade Expansion Act of 1962, would be completed by June 30, 2017.

Integral to every jet, submarine and military weapon, steel and aluminum are vital for defense. Infrastructure is part of national defense as well, from interstate highways to pipelines. The inability to produce these metals in sufficient quantities and qualities domestically jeopardizes national security.

The Commerce Department report was delayed for months, during which time foreign producers flooded as much steel and aluminum as they could into the United States before the anticipated tariffs. Steel imports rose almost 20 percent. Aluminum and bauxite imports rose nearly 32 percent.

The Commerce Department finally delivered the steel report on Jan. 11 and the aluminum report on Jan. 19. Neither was made public, and the administration can, under the terms of the law, wait another 90 days to act. White House Deputy Press Secretary Lindsay Waters said the administration would announce its decision at an appropriate time.

That time is now. It is great that the administration punished the trade-violating exporters of solar products and washing machines. The American steel and aluminum industries and workers want that same enforcement immediately from the nation’s top trade cop.

Leo Gerard is President of the United Steelworkers

 

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Renegotiating NAFTA Would Be a Lot Easier, If We Knew What We Wanted

Stan Sorcher, Labor Rep. SPEEA/IFPTE

Updated Sep 06, 2017

  • The Trump administration just started the process of renegotiating NAFTA, the trade deal between the US, Canada, and Mexico that became the template for globalization in the 21st Century.
  • This would make more sense if we knew what we want to renegotiate.
  • In 2016, voters answered two simple questions,
  • “Who gets the gains from trade?” Not us.
  • “Who do you trust?” Not any politician who told us what a great idea NAFTA would be.

In the period following World War II, gains from productivity were shared broadly and our communities prospered. Not anymore. Since the mid-70’s gains from productivity and trade have gone almost entirely to the top 1%, while many communities declined dramatically.

NAFTA went into effect in 1994. It embodies our failed neoliberal approach to globalization. [“Neo” means new. In the language of economics, “liberal” means free-market.]

In the neoliberal vision, our economy is merged or integrated into the global economy. National identities are blurred, shareholder interests have top priority, legitimate public interests are devalued, and gains go almost entirely to investors. Boon will trickle down, as markets solve all our problems. Government is bad. Power and influence favor those who already have plenty of both. Continue reading

NAFTA: Don’t Make A Bad Deal Worse

Don’t Make a Bad Deal Worse: UE Statement on Renegotiating NAFTA

UE General Executive Board

 

Three years ago, on the 20th anniversary of NAFTA’s passage, North American labor, environmental groups, human rights organizations, and other citizen watchdogs—united to call out the terrible impact of this trade agreement on working people and our communities. As attention returns to NAFTA, now that President Trump has notified Congress officially of his intention to renegotiate, we caution against any belief that his administration will seek a deal benefitting people and the planet. NAFTA benefits corporations and those who have an interest in the free flow of capital, rather than improving the lives of workers, our communities, or the environment. Past attempts to appease concerns from labor and environmentalists have not been meaningful. .

We see the consequences of this failed treaty vividly: Across the continent, workers and families have been hit hard, as evidenced by persistent unemployment, wage stagnation, and record wealth and income inequality. There continues to be a decline in good-paying, union manufacturing jobs, as well as a loss of high-paying jobs in smaller businesses.  In those pockets where manufacturing has expanded, the jobs created have been mostly low wage with little attention to worker health and safety. In Mexico, the jobs that have emerged have been at such low rates of pay that poverty rates have risen—not fallen—since 1994. Mexico has experienced a loss of jobs in agriculture, where heavily-subsidized US corn, sugar, and other commodities led to the collapse of the Mexican farm economy.  Since the implementation of NAFTA, workers in the three countries have suffered, while wealthy investors and big corporations have seen their profits balloon.

 

Communities of North America continue to suffer under NAFTA as corporations continue to exploit our shared environment for profit and pollute our land, air, and water as governments are unable or unwilling to force corporations to clean up hazardous mistakes created by negligence. This is evident from the St. Lawrence River in Québec, which is threatened by fracking from Lone Pine Resources, to the Midwestern plains, where oil leaks from the TransCanada-owned Keystone Pipeline, to the hills of Guadalcázar, where residents pray they have seen the last child born with birth defects from the toxic waste MetalClad has refused to clean up. Corporate profits continue to grow while the health of our communities and environment suffers.

NAFTA enables the unrestricted flow of capital causing misery for working people, including: the forced migration of people looking for jobs; increased rates of homelessness; mental health problems associated with dislocation; higher rates of diabetes and other ailments linked to cheap high fructose corn syrup; and rising violence, particularly against women. NAFTA devastated the Mexican economy, particularly agriculture and family farms by allowing US corporations to dump cheap corn and other staples into Mexico. It is a key reason why millions upon millions of Mexican workers have been forced to migrate north to the US looking for better work.

President Trump says he wants to renegotiate this “bad deal,” but his vague plans are anchored in building a wall for workers and tearing down walls for capital. He makes a xenophobic argument for renegotiation, and we reject its racist and nationalistic orientation. Commerce Secretary Wilbur Ross and Agriculture Secretary Sonny Perdue have stated that the rejected and discredited Trans Pacific Partnership (TPP) would be the starting point for a renegotiated NAFTA. Unionists and environmentalists rejected TPP for good reasons and to have that as the administration’s starting point is very troubling.

The Investor-State Dispute Settlement (ISDS) mechanism in NAFTA infringes on sovereignty and citizens’ rights to self-governance by allowing corporations to sue governments who restrain profit-making opportunities. This would have been made more powerful under TPP. TPP would have weakened US health and safety standards, including those that ensure safe pharmaceuticals and food. TPP attacked net neutrality and a free and open Internet. NAFTA was negotiated in the early 1990’s and the internet was not included in the original NAFTA. We expect this to be a major target of the administration’s renegotiation.

We reject the corporate-led vision for a renegotiation of NAFTA and call for a new set of trade policies that prioritize workers common interests and relies on international solidarity as its cornerstone. Any renegotiation of NAFTA must be oriented around the improvement of workers’ lives and protection of the environment focused on those regions of the continent where conditions are the most desperate.

We call for the end of the ISDS protections NAFTA offers to  corporations to exploit working people and the environment.  As we said three years ago, 20 years after the passage of NAFTA, any new treaty must “strengthen governments’ ability to protect social, environmental and labor rights, particularly for migrants.”

We demand, as required by the UN International Labor Organization (ILO) conventions 87 and 98, an end to laws that allow employers to prevent workers from choosing their own unions or from exercising their rights to assemble, organize, and represent workers without any employer interference. This includes an end to attacks in the U.S against unions seeking to negotiate union security clauses with employers.

We demand government investment to create good-paying jobs in our communities, to build affordable housing, accessible public transportation, and green energy production, with quality food, education, and healthcare for all, and with improved access to clean air and water, public parks, and green recreation spaces. All trade negotiations must be opened to civil society participation, which includes prior publication of the texts and the construction of mechanisms for information sharing, social participation and deliberation, while avoiding the imposition of any “fast track”. A renegotiated NAFTA treaty must include effective mechanisms to protect human, labor, and environmental rights with meaningful sanctions and enforcement provisions to assure the supremacy of human rights over corporate privilege.

We support the “Political Declaration of the Encounter of the Social Organizations of Canada, United States, and Mexico” which came out of meetings held in Mexico City on May 26 and 27, 2017. We unite in international solidarity with these goals in mind and are prepared to fight back against any and all attempts to divide or devalue our work, our communities, and our environment.

Reposted from our friends at Portside.

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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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Restoring Trust after Free Trade Charade

by Stan Sorscher

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The 2016 elections threw a bucket of cold water into the face of free-trade orthodoxy. It’s no surprise that voters in Wisconsin, Michigan, Ohio, Pennsylvania, and elsewhere are deeply discouraged by decades of failed promises of boon from establishment leaders. The real surprise is, what took us so long?

We need a new approach to globalization that does as much for workers and the environment as it does for global investors.

Everyone I know wants trade and globalization. However, we have managed globalization badly.

Our failed “neoliberal” approach has been to manage globalization through trade deals, written by and for the interests of global companies. The neoliberal vision is a fully integrated global economy, where national identities are blurred, shareholder interests have top priority, public interests are devalued, and gains go almost entirely to investors.

Nothing in trade theory or history says global economic integration is a good idea.

In this neoliberal vision, markets will solve all our problems, government is bad, and power and influence should favor those who already have plenty of both.

A growing number of economists and policy-makers recognize that neoliberalism is exhausted, politically unstable, and increasingly reckless. Martin Wolf, the most influential living British economist, argues that our failed market orthodoxy weakens Democracy. What Wolf sees in Europe is doubled in the US political experience.

The collapse of the Trans-Pacific Partnership (TPP), a 12-country NAFTA clone, is a historic event. TPP was radioactive all through the presidential campaign, for good reason – voters have lost trust in the neoliberal NAFTA approach to globalization.

The discussion has started on a new approach. Representative Sander Levin and economist Simon Johnson recognize that our distorted power relationships and insistence on maximum possible trade cannot solve our problems.

Jared Bernstein and Lori Wallach go through TPP’s shortcomings, suggesting remedies. A recent proposal from the AFL-CIO offers 6 objectives for renegotiating NAFTA. A Sierra Club discussion paper brings environmental interests into sharper focus.

Jeff Faux makes it crystal clear. It’s time to start over.

“The trade policy of the last quarter century is now bankrupt, economically and politically. This is the moment for America to go back to the drawing board and rethink strategies for competing in the global economy in ways that raise living standards for all.”

 

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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