Monthly Archives: December 2016

Danger Still Lurks in TiSA Under Trump

Fair Traders who are celebrating the defeat of the Trans-Pacific Partnership (TPP) may see their hard work undone if the talks towards the proposed Trade in Services Agreement (TiSA) continue under Trump.

tisa-620xauto-1Many Democrats who minimized the importance of the negative impacts of corporate trade deals on working class Americans have now paid the price in the recent elections. As my colleagues at the Center for Economic and Policy Research have pointed out, racists and xenophobes were always going to vote for Trump but the key voters the Democrats were counting on that they lost were largely working class voters, many of them union members, in states hit hard by trade deals (supported by both parties) that put working class people in competition with lower-income manufacturing workers in other countries whilepreserving protections for intellectual property-holders and high income professions.

While these working class voters may have voted against their economic interests in terms of workers’ rights, social security, work/life balance, and other pro-worker provisions in the Democratic platform, they were right that both parties have become too aligned with corporate interests — and trade agreements is one of several instances where that is the case.

It is yet to be seen how or if President-elect Trump will make good on his pledges on trade to these voters, but in the initial preview of his first days in office, he has promised to withdraw from the TPP. Likewise the talks with the EU on a Transatlantic Trade and Investment Partnership (TTIP) are on hold. In the EU, the EU-Canada agreement, known as CETA, is in limbo while the European Court of Justice decides whether the dispute settlement mechanism in the agreement complies with EU law.

Fair trade advocates are rightly celebrating important victories and noting that, thanks to successful grassroots campaigning, President Obama did not ever have the votes to send the TPP to Congress for approval, and won’t be able to do so in the lame duck session as he had originally intended.

Unfortunately there is still a corporate trade agreement under negotiation that has so far received scant attention: the proposed Trade in Services Agreement (TiSA). Trump has not commented about the TiSA, so we really don’t know his views. But there are three reasons why we’re not “out of the woods” with the TiSA, and why the TiSA isn’t in the same category as the TPP and TTIP for now, despite media reports that the deal is on hold until US negotiators get new instructions:

1. Trump is not against corporate-driven trade agreements; he has said that he thinks US negotiators did a bad job negotiating and that they’ve gotten bad deals, and that he’s going to renegotiate and get good deals. So he could very well take up the TiSA as an agreement that’s still under negotiation, put his stamp on it, and then claim that “this is what happens when you negotiate a good agreement!” And you can bet that the corporations are doing their best to talk with him now about doing this, because they are not going to abandon the project when he has yet to state his position.

2. The TiSA is about locking in further deregulation and privatization, and Trump loves deregulation and privatization.

3. The TiSA is focused on services, so it may not speak to the working class in his base in the same way that agreements that result in the transfer of manufacturing jobs to low-wage, worker-unfriendly countries like Vietnam do.

Thus, there is an urgent need in the United States to not only ensure that Trump does not take up a re-packaged TPP or TTIP (and possibly negotiate an even worse deal for ordinary citizens), but also to use the short window of time before he announces his opinion on the deal to ensure that the TiSA is permanently sidelined as well.

However, it’s important not to think of TiSA as “only about services.” Now that nearly every chapter of the agreement has been leaked, a more complete picture has emerged: that the TiSA is fundamentally an offshoring and outsourcing charter.* The TiSA is intended to lock in a system of rules to allow multinational companies to operate in a borderless digitized environment with minimal regulation and maximum rights regarding the treatment of labor, capital, inputs, and the new key element of data. As promoted by the multinational financial, logistics, and big data corporations through Team TiSA, the agreement would set severe limits on the ways that governments can regulate domestic economies, removing key tools of economic management and the ability to shape the service economy while providing an extensive corporate bill of rights for multinational companies’ operations across the globe. Given the shift in employment patterns from high-paying manufacturing jobs to low-wage services jobs, and given the potential offshorability of millions more services jobs, the danger posed by TiSA is daunting.

Read on for ten ways that the TiSA could fundamentally affect jobs and the labor market, based on provisions in the leaked texts, some of which have been accepted by all parties and some of which are under negotiation.

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Trump And Trade: A Plus For Workers?

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On a good day, Donald Trump can fool some people into thinking that he will be a change for the better on trade policy, and by extension on American jobs.

 

He’s for keeping more jobs in the US, renegotiating NAFTA, and taking a tougher line with China.He did a cute publicity stunt, strong-arming Greg Hayes, the CEO of Carrier’s parent corporation into keeping several hundred jobs in Indiana (lubricated by tax breaks).

Progressives were on the verge of killing the misconceived Trans-Pacific Partnership, when Donald Trump administered the coup de grace—and took the credit.

Trade deals like TPP, and NAFTA before it, signaled American workers that trade policy was mainly for corporate and financial elites, not for regular people. Despite the repeated claims that these deals would produce expanded benefits for all, the benefits went to the top.

The fact that Bill Clinton, Barack Obama, and Hillary Clinton all promoted NAFTA and TPP (until Hillary awkwardly tried to walk back her support), split the progressive coalition and helped Trump. Some pro-business economic nationalists, such as Alan Tonelson, have contended that progressives, therefore, ought to be applauding Trump’s trade initiatives.

Should they?

Trump’s top adviser on trade, Dan DiMicco, is former CEO of Nucor Steel, a very successful (and viciously anti-union) mini-mill producer, which has on occasion filed trade complaints against China. It’s not clear whether DiMicco will get a job in the administration, but DiMicco supports U.S. manufacturing and is very familiar with the games that China plays.  Trump’s Commerce Secretary-designate Wilbur Ross is also a longtime critic of the U.S. government’s failure to get tougher with China.

Trump’s people are already reaching out to some progressive activists on trade. It makes sense to listen, even to make suggestions, but then to be very, very skeptical of the results.

If we go back to first principles, what’s wrong with U.S. trade policy? For one thing, it has promoted a set of global rules that define ordinary forms of financial, labor, health, safety and environmental regulation as violations of free trade.Secondly, trade policy has promoted deals like NAFTA that not only make it easier to export and outsource jobs, but create extra-legal private tribunals to which corporations and banks can file complaints and not have the decisions subject to court review. Third, trade policy has failed to challenge the mercantilist practices of other nations that close foreign markets to U.S. exports and leave American producers vulnerable to subsidized imports. That has caused the Midwest to hemorrhage jobs—and again, opened the door to Trump.

In the 1970s and 1980s, U.S. trade policy displayed these odd indulgences because state-led economies like Japan and Korea were good Cold War allies. More recently, American presidents have failed to get tough with China—no ally―in part because China cut a deal with American financiers to give them a piece of the action (thank you, Robert Rubin) and in part because U.S.-based multinationals are quite happy to produce in China’s low-wage, subsidized factories. In other words, trade policies under both Democratic and Republican presidents have helped American industry and finance sell out American workers. This was the year that somebody called them on it, and workers noticed.

But what will Trump do now, and where, if anywhere, is there common ground with progressives?

Photo-ops with executives pressured into keeping a few more jobs at home may be smart politics for Trump, but they don’t add up to a trade policy.

It helps to remember that America’s misguided trade policies are part of a suite of policies that have been bad for workers. The others include financial deregulation, inadequate labor regulation, tax policies that promote outsourcing, insufficient public investment and a war on unions.

Trump’s policies in all of these other areas are likely to make things worse, not better. Just look at who he is appointing to key labor, environmental and regulatory posts.

It also helps to remember that Trump’s administration is turning out to be corporatist. If Trump tries to tell his business allies where to produce at more than token levels, the corporate pushback will be yuge.

Photo-ops with executives pressured into keeping a few more jobs at home may be smart politics for Trump, but they don’t add up to a trade policy. That said, Trump has decided to ally with Russia and get tougher with China. You could imagine Trump taking a harder line against China’s subsidized exports. The U.S. government has the authority to initiate anti-dumping trade cases, but with America’s kid-gloves policy towards China, that not has been done since the 1980s. In industry after industry, complaints and the cost of pursuing them have had to come from private parties―unions and companies. If Trump were to change that policy, it would be hard for progressives not to applaud, even while holding their noses. For instance, New York City just signed a contract to use public money give a Chinese state-owned company, the China Railway Rolling Stock Corporation (CRRC) the contract to build at least 1,025 new subway cars. CRRC has already built about 1,000 subway cars for Boston and Chicago. As part of the New York deal, the Chinese state company gets to acquire a U.S. producer of rail cars. That aspect of the deal required the approval of President Obama, and certification that the deal did not have national security implications, over the objections of a rare bipartisan group of 42 senators.

Deals like this happen all the time. If would not be hard for Trump, as a good New Yorker, to insist that this contract go to an American producer. That would be a nice symbolic demonstration of concern for U.S. industry and jobs, as well as a way of showing up the Democrats. Trump is a master of the symbolic stunt, and on trade he actually has some advisers who know what they are doing.

Trump may try to keep more jobs at home―but by destroying social standards he assures that they will be low-wage jobs. For decades, progressives have been calling for a new global trade regime that helps raise rather than lower social standards, in labor, the environment, health, and human rights. Whatever else Trump delivers, he will not deliver that. What he might deliver, though, is a form of economic nationalism that helps his corporate allies, while doing little if anything for American workers, with the exception of workers in extractive industries, a relative handful of production workers, and some construction jobs if he gets serious about infrastructure (though he also supports killing the Davis Bacon Act which supports construction wages).

As the outlines of his policies become clearer, there may be occasional points of convergence, such as the mercy-killing of TPP, and the retention of some jobs at Carrier (though it only took Trump a little while to trash the president of the union local), and some get-tough stuff with China. Here is the real risk. A moderately tougher trade policy could take the spotlight off the net effect on workers. Regulatory relief and lower taxes for industry plus the trashing of unions and labor standards may create more jobs, but with wages and career horizons that are even lower.

As Trump goes through the motions of a pursuing a trade policy that serves the people who voted for him, our job is to be very careful not to be gulled or co-opted, to keep pointing out what a real pro-worker trade policy looks like, and to challenge Trump to support one.


Robert Kuttner is co-editor of The American Prospect and professor at Brandeis University’s Heller School. His latest book is Debtors’ Prison: The Politics of Austerity Versus Possibility
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Six Ways We Could Improve Nafta

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.

6-ways-we-could-improve-nafta-for-working-people_blog_post_fullwidthToday 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.

Read the full key areas for improvement.

What Trump’s Picks Tell Us About Trade

It doesn’t make America great to undermine public education, undercut workers, restrict access to health care or pit people against each other.

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Trump voters responded to his mantra of jobs, jobs, jobs, and his pledge to help the little guy and stick it to elites. But that doesn’t square with his nomination of business executive Andrew Puzder to serve as secretary of labor. Puzder has shipped jobs overseas, promoted replacing workers with robots and fought increases to the minimum wage for low-wage workers like those at the fast-food restaurants his company owns. His company was fined for wage theft and required to pay back pay to workers after an investigation by the very department he may lead. You don’t make America great by trampling workers’ right to earn a living.

Trump’s nomination of U.S. Rep. Tom Price (R-Ga.) to head the Department of Health and Human Services shows that he intends to strip access to health care for millions of Americans, including 8 million children. That’s what ending the Affordable Care Act and the Children’s Health Insurance Program would mean, if Price gets his way. Price also wants to privatize Medicare by giving seniors a voucher with which to try to buy health insurance, turning the right to health care that our seniors now have into a commodity.


Wilbur Ross
, Trump’s choice to serve as secretary of commerce, has been called a vulture investor for his practice of extracting profits from troubled companies by slashing jobs, squeezing unions and gutting pensions. Steven Mnuchin, tapped to head the Treasury Department, made a fortune foreclosing on homeowners like a 90-year-old woman targeted for a 27-cent payment error. Not so great, in most people’s books. Whose side is Trump on? When a local union officer who has been leading the fight to save manufacturing jobs called out Trump for embellishing the number of jobs preserved at an Indiana Carrier plant through tax breaks for the corporation, Trump lashed out at him on Twitter. The Twitterverse turned on Trump in a storm of moral outrage, condemning him as anti-worker, dishonest, thin-skinned and a bully.

It doesn’t make America great to undermine public education, undercut workers, restrict access to health care or pit people against each other. Standing up for our values and aspirations shows our true greatness.