Labor’s Fight for Trade Justice in the Trump Era

Trump’s Trade Team

Adding to the confusion, it has been difficult to determine who is really setting the agenda on Trump trade policy, particularly as the confirmation of a new U.S. Trade Representative, trade lawyer Robert Lighthizer, was held up until May 11, 2017. Because of his past work as a lobbyist for the Chinese and Brazilian governments, ⁶ Lighthizer required a waiver, in exchange for which Democrats demanded pension and health care funding legislation for coal miners. With Lighthizer’s confirmation, on a solidly bipartisan vote, followed three days later by the administration’s formal notification to Congress of its intent to renegotiate NAFTA, there was hope that the Trump trade agenda might move in a more coherent direction. Rep. Sander Levin (D-Mich.), former chair of the House Ways and Means Committee and now a member of the Subcommittee on Trade, explained that Lighthizer understands “the harmful impact of unfairly traded imports on U.S. workers and businesses,” adding, “His challenge will be to bridge very disparate opinions in a Trump administration and create responsible trade policy that moves beyond the Trump campaign slogans.” ⁷

Indeed, whereas previous administrations have placed the U.S. Trade Representative at the forefront of trade negotiations, the Trump administration has created a greater role for Commerce Secretary Wilbur Ross. Trump also appointed economist Peter Navarro to head the new White House National Trade Council, Agriculture Secretary Sonny Purdue has created a new undersecretary position on trade, and many of the most prominent voices in the administration, including Jared Kushner, Steve Bannon, National Economic Council Director Gary Cohn, and Treasury Secretary Steve Mnuchin, have all weighed in on the direction of Trump trade policy.

. . . [The Trump] administration . . . consulted some five hundred business advisors on NAFTA last month while labor movement advisors . . . were left out.

If the administration lacks a clear trade agenda, the same cannot be said of the labor movement, which is united in seeking an international trade model that is fair to working people as well as a more transparent negotiation process. The Obama administration was strongly criticized for a lack of transparency, granting privileged access to negotiating texts to more than five hundred corporate advisors—who influenced U.S. negotiating positions to advance their interests ⁸ —while shutting out labor and other social movements. Dan Mauer states,

The labor movement has long been treated as an unwanted stepchild in trade negotiations. If we want better outcomes, we need to make sure that labor advisors have quality, timely access to information, are able to participate in a meaningful way on advisory committees currently dominated by corporations, and get substantive responses to the items that we propose.

Early indications suggest that things may not change under the Trump administration. According to Public Citizen’s Global Trade Watch, the administration consulted some five hundred business advisors on NAFTA last month while labor movement advisors to the Office of the U.S. Trade Representative were left out. ⁹

What Is in Play?

With TPP now a dead issue for the United States, Trump has shifted focus to NAFTA and China. The Transatlantic Trade and Investment Partnership (TIPP), a free trade deal under negotiation with the European Union, appears to be on ice for now, with Trump instead interested in pursuing free trade agreements with individual countries. So far, he has focused on specific issues with specific nations: sugar with Mexico; softwood lumber and dairy with Canada; beef, chicken, and liquified natural gas (LNG) with China. Trump’s intentions regarding the massive yet little-known Trade in Services Agreement remain largely a mystery.

Renegotiating NAFTA

Although the granting of Permanent Normal Trade Relations (PNTR) with China in 2000 has probably had greater impact on U.S. jobs, the best-known symbol of this impact is NAFTA, which Trump described as “a disaster.” Almost immediately after Trump’s election, United Auto Workers (UAW) President Dennis Williams expressed interest in meeting with and working with Trump to reform or kill NAFTA and expressed support for his proposed 35 percent tariff on Mexican automobiles. ¹⁰

Dan Mauer points out that in addition to the hundreds of thousands of auto-parts jobs that have moved to Mexico since NAFTA was enacted, “telecom companies have taken advantage of NAFTA’s investment protections to move thousands of call center jobs to Mexico.” He also explains that it has become much harder to negotiate good contracts, as demands for good jobs and wages are often met with threats to move jobs overseas. He objects to using NAFTA as a starting point for a new deal, stating, “Rather than a few tweaks around the edges, NAFTA needs to be totally restructured around benefiting workers.”

In December, the AFL-CIO released its “Blueprint on Rewriting NAFTA to Benefit Working People.” ¹¹ The plan recommends eliminating Investor State Dispute Settlement (ISDS) provisions, which give foreign investors the power to attack U.S. laws in international tribunals where they can demand unlimited sums in compensation for loss of expected future profits as a result of a court ruling or new law or regulation, including environmental, public health, and labor laws. ¹² ISDS also incentivizes offshoring by U.S. corporations, shielding them from risk overseas. Arbitrated by international trade lawyers, NAFTA’s ISDS tribunals have weak conflict of interest provisions and lack the transparency of U.S. courts. ¹³

Although the granting of Permanent Normal Trade Relations . . . with China in 2000 has probably had greater impact on U.S. jobs, the best-known symbol of this impact is NAFTA, which Trump described as “a disaster.”

The AFL-CIO Blueprint also calls for strong labor and environmental chapters to be added to NAFTA’s core text, in contrast to the current toothless side agreements, creating binding rules subject to enforcement and possible sanctions to address currency manipulation; upgrading NAFTA’s rules of origin, particularly on autos and auto-parts; deleting the procurement chapter that undermines “Buy American” laws; and upgrading the trade enforcement chapter, which hinders antidumping measures.

In February, the Steelworkers, the Teamsters, and the AFL-CIO joined a group of House Democrats in challenging Donald Trump to rewrite the treaty in favor of workers instead of corporations. AFL-CIO Trade and Globalization Policy specialist Celeste Drake stated that replacing NAFTA rather than scrapping it altogether might be a better option for workers, given that supply chains have developed around the rules of NAFTA. She also noted the possibility of adding progressive measures, such as standards to allow cross-border collective bargaining.

. . . [A] leaked administration memo . . . suggested that . . . the administration planned to just tweak . . . [NAFTA] and . . . add measures that match or exceed some of the worst aspects of the TPP and the TIPP . . .

Yet Drake also recognizes that renegotiation could make NAFTA even worse, a fear reinforced by a leaked administration memo in March. This, according to Public Citizen’s Global Trade Watch, suggested that instead of the massive NAFTA overhaul Trump promised voters, the administration planned to just tweak the agreement and to add measures that match or exceed some of the worst aspects of the TPP and the TIPP, including, ¹⁴

When the administration publicly gave Congress notice of intent to renegotiate NAFTA on May 18, 2017, it did so with a document that was far less specific than the earlier memo. ¹⁵ Thus, it is not clear whether the March memo revealed the Trump administration’s real trade agenda or if it was merely an artifact of the administration’s internal trade battles, not necessarily representative of the direction that Ross and Lighthizer intend to take.

By giving notice of intent to renegotiate, the administration triggered a ninety-day waiting period required before the start of trade negotiations, after which they can take as much time as needed. Assuming negotiations reach a successful conclusion, President Trump must then give ninety days’ notice of his intent to sign the reworked deal. Once signed, legislation to implement it is sent to Congress for a vote. Despite the lack of legal restrictions on the length of negotiations, political considerations give negotiators reason to complete a deal in 2018. The Mexican election in July 2018 will likely see the election of left-leaning Andrés Manuel López Obrador, who may be unwilling to continue on course with the negotiations as begun by the centrist Peña Nieto government. And a vote shortly before the midterm election in the United States would risk angering voters if the renegotiated deal does not address the core concerns of unions and working people. Thus, labor must consider the possibility of a fast negotiation followed by a vote in early to mid-2018. Unions must be prepared to push for reforms on NAFTA that will create an agreement worth supporting while the negotiations are underway—and then to quickly lobby members of Congress to support or oppose the renegotiated agreement.

Beyond the TPP: China and South Korea

Days after being confirmed as U.S. Trade Representative, Ambassador Lighthizer traveled to Vietnam for the Asia-Pacific Economic Cooperation (APEC) Ministers Responsible for Trade meeting, where he found himself the odd man out among nations still committed to pursuing the TPP. As a result, there was no agreement on a statement representing participating nations. According to Reuters, “U.S. officials . . . wanted to include a reference to ‘unfair trade practices that result in unbalanced trade’ and another calling for the removal of barriers that distort trade to ensure that it is ‘both free and fair.’” ¹⁶ In a press conference at the meeting, Lighthizer argued that “our view in this administration is that we can take action to stop unfair trade in the U.S. market, and to the extent that those steps are confused with protectionism, we find that unfortunate.” ¹⁷ Perhaps the administration’s most dramatic reversal has been on China. Trump himself dropped his threats to label China a currency manipulator and to place a 45 percent tariff on Chinese goods. Instead, on May 11, the administration announced a new trade agreement with China that Wilbur Ross touted as “a herculean accomplishment.” ¹⁸ The deal opens the door for liquified natural gas and beef exports to China (ending a ban in place since a mad cow disease case in 2003) and for Chinese cooked poultry exports to the United States. According to the Associated Press,

The agreement would also streamline the evaluation of pending U.S. biotechnology product applications; pave the way for allowing American-owned suppliers of electronic payment services to begin the licensing processes in China; and facilitate the entrance of Chinese banks into the U.S. banking market, among other measures. ¹⁹

China President Xi Jinping badly wants to revive the U.S.–China Bilateral Investment Treaty (China BIT) talks that began in 2013. The Trump administration appears less interested in the China BIT but also has not ruled it out. Mauer considers that the China BIT is “one of the most harmful pending trade deals. The U.S. should withdraw from those negotiations immediately. The BIT is designed simply to make it safer for companies to offshore jobs to China.”

Perhaps the administration’s most dramatic reversal has been on China.

One underdiscussed problem created by the BIT is the prospect of allowing foreign state-owned or state-backed companies to threaten the United States with ISDS suits. This could further endanger public-interest laws, while also allowing the Chinese government to abuse the ISDS process to achieve diplomatic goals. Given the arbitrary and complicated nature of ISDS suits, these suits would put laws designed to encourage job creation here at enormous risk.

Potentially under review also is the Korea–U.S. Free Trade Agreement (KORUS), which Trump described in April as a “horrible deal” that his administration may “terminate or negotiate.” Negotiated in 2007 under the Bush administration, the deal languished until President Obama sent legislation to Congress to implement it in 2011. Originally facing universal opposition from the labor movement, the deal was ultimately supported by the United Food and Commercial Workers (UFCW) and UAW after an agreement to drop South Korea’s 40 percent tariff on U.S. beef and cut Korean tariffs on U.S. automobiles in half while loosening safety, fuel economy, and emissions standards on imported U.S. vehicles. ²⁰ Sold as an agreement that would create export opportunities and jobs for the United States, KORUS has been an abject failure, causing the U.S. trade deficit with South Korea to increase 85 percent since the pact went into effect. ²¹

Europe and the TTIP—Is It Alive or Dead?

The administration has also given mixed signals on whether it will begin negotiations on TTIP, which were frozen upon Trump’s election. In April, The Times of London reported that German Chancellor Angela Merkel convinced Trump of the merits of TTIP, and Paul Ryan went on record saying the United States still plans to pursue TTIP. ²² However, Peter Navarro reiterated that the Trump administration prefers bilateral to multilateral trade deals and denied that the administration intends to pursue TTIP. ²³ Adding to the confusion, Wilbur Ross in late May stated on CNBC,

The EU is one of our largest trading partners, and any negotiations legally must be conducted at the EU level and not with individual nations. Thus, it makes sense to continue TTIP negotiations and to work towards a solution that increases overall trade while reducing our trade deficit. ²⁴

In theory, TTIP presents an interesting opportunity. Many EU countries already have higher wages and better labor standards than the United States has, so it could be used as an opportunity to pursue a race to the top and improve worker protections here. But, so far, TTIP negotiations have followed the same race-to-the-bottom path that our other trade deals have used.

When Trump met with Angela Merkel in March, she explained to him eleven times that Germany does not negotiate bilateral trade deals . . .

The Trump administration has expressed interest in negotiating bilateral deals with the individual nations who participated in TPP and TTIP negotiations, but overtures to Japan and Germany, the largest participating economies other than the United States, have been rebuffed. The Japanese government still intends to pursue TPP without the United States and has expressed a lack of interest in a bilateral deal with the United States. When Trump met with Angela Merkel in March, she explained to him eleven times that Germany does not negotiate bilateral trade deals, but only enters trade agreements as part of the EU. ²⁵ The one case where this approach may actually work is with a post–Brexit United Kingdom, though negotiations could not begin until Brexit is completed in 2019. ²⁶

Labor and Social Justice in Trump Times

Trump’s presidency has raised questions regarding the relationship between organized labor and the broader struggle for social and environmental justice. Trump’s economic nationalist agenda treats offshoring and immigration as twin forces threatening jobs. However, the labor movement has largely come to recognize that while immigration is not the job killer that xenophobes claim it to be, crackdowns on undocumented workers seriously undermine organizing efforts, as bosses use the threat of U.S. Immigration and Customs Enforcement (ICE) raids as a union-busting tactic.

As Stan Sorscher of the Society of Professional Engineering Employees in Aerospace put it, “Immigrants are made precarious, contingent, and totally at risk. They have no bargaining power—no market power—no political power. This goes for low-wage and high-wage tech workers on H-1B visas. This is a consistent feature of neoliberal policy.”

The signature moment of the U.S. trade justice movement was the 1999 Battle of Seattle—where labor, environmentalists, and a variety of social justice movements converged to successfully derail the Millennium Round of World Trade Organization talks. This strategy—fighting for trade justice as a movement of movements—has been critical to all the battles against trade deals for the one percent, including the successful campaigns to defeat the Free Trade Area of the Americas and the TPP.

Trump’s election has heightened divisions between labor and environmental and social justice movements. During the president’s first week in office, while a broad spectrum of social justice movements took to the streets to declare cross-movement resistance, Teamsters President James Hoffa, in interviews on Fox News, praised Trump for pulling out of TPP and committing to renegotiate NAFTA. He also praised Trump’s support for the Keystone XL (KXL) Pipeline and the Dakota Access Pipeline (DAP), projects fiercely opposed by environmental and indigenous rights activists, stating, “We welcome it because it’s a beginning of working with unions to help rebuild our infrastructure.” ²⁷ Hoffa even appeared to support Trump’s border wall, a project fiercely opposed by immigrant rights activists.

Trump’s election has heightened divisions between labor and environmental and social justice movements.

The Keystone fight has also been a rallying point for trade justice activists as a result of an $18 billion NAFTA investor rights suit brought against the United States by Keystone Pipeline owner TransCanada under the ISDS provision in NAFTA. Should organized labor’s role during a Trump presidency be transactional—seeking common ground with and backing the administration in areas that align with unions’ agendas—or should labor, instead, throw in its lot with “the resistance,” working with social and environmental justice groups to build an across-the-board movement in defense of communities and a planet under attack by this administration?

So far, it is hard to say what position unions will take. Labor has an advisory committee to the Office of the U.S. Trade Representative and will ultimately file recommendations. Coming out in support or opposition to a given deal will probably only happen near the end of a negotiation, as taking a position too early risks losing what small level of influence unions have over U.S. negotiating positions.

Trump’s Conflicts of Interest and the Trade in Services Agreement (TISA)

In February, Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, and Rep. Richard Neal (D-MA), ranking member of the House Ways and Means Committee, introduced legislation requiring President Trump to disclose “income, assets, and liabilities associated with countries with which the United States is negotiating a trade or investment agreement, countries subject to presidential determinations in trade enforcement actions, and countries eligible for trade preference programs, and for other purposes.” ²⁸

In April, Wyden wrote to Walter Shaub Jr., then director of the U.S. Office of Government Ethics, expressing “concerns that conflicts of interest arising from [Ivanka’s] business efforts will have a deleterious effect on our trade and foreign policy” and requesting that Shaub “determine whether her role as a White House advisor creates an impermissible conflict of interests.” ²⁹ This raises the concern that the Trump administration will pursue trade deals that will advance the financial interests of the Trump family, whether or not it comes at the expense of U.S. workers.

Hotel magnate Trump’s potential conflicts of interests raise particular concerns regarding TISA, a fifty-two-nation deal currently under negotiation that focuses heavily on deregulation and privatization of a whole range of services, including telecommunications, air transport services, e-commerce, health care, and more. The administration has been largely silent on the megadeal. Its aversion to multilateral trade agreements suggests that it will not seek to pursue it, but the potential direct benefits to Trump may encourage him to stay engaged.

Hotel magnate Trump’s potential conflicts of interests raise particular concerns regarding TISA . . .

Union leaders point to two things that make TISA uniquely bad. First, as Dan Mauer explains, unlike every U.S. trade agreement over the last decade, it would not, as drafted, include any labor protections at all. Such protections in past deals have proven wholly inadequate, but as he and others point out, at least they provided the opportunity to name and shame offenders. TISA does not even pretend to uphold worker rights. Moreover, Mauer explains, financial deregulation is a much higher priority of TISA than it has been in other deals. Less than a decade ago, financial deregulation caused the greatest global financial crisis since the 1930s, costing millions of workers their jobs, livelihoods, and homes. Even to this day, predatory financiers are able to load up companies with debt, strip them of their assets, and leave workers out in the cold. Instead of strengthening rules against predatory financialization, TISA would begin the process of rolling back even inadequate existing rules.

Taking Action

Faced with the ambiguities and contradictions of Trump’s trade agenda, the labor movement is taking a wait-and-see attitude. As AFL-CIO’s Celeste Drake says,

For now until we find out what if anything will work differently with this very unusual administration, union members have to do what we have always done, which is organize, mobilize, educate, and certainly resist things that are not in our interest.