Monthly Archives: May 2019

Why the Trump Administration’s Approach to Trade Still Leaves Workers Behind

In a world of news cycles dominated by Donald Trump’s latest outbursts, it’s not surprising that a newly-released 45-page document of written questions and answers regarding a March Senate hearing on the World Trade Organization hasn’t garnered much public attention.

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But while the details of WTO functioning may not sound like riveting reading, an exchange buried deep in the document reveals what’s fundamentally wrong with the Trump Administration’s approach to fixing our broken trade system.

By failing to seriously address labor standards in its trade dispute with China and in NAFTA 2.0, the Trump Administration is perpetuating the same failed model of trade that prioritizes corporate interests over workers’ interests in the U.S. and beyond. Unless and until our trade policy takes labor standards seriously and stops incentivizing corporations to pit U.S. workers against our global counterparts, that model will continue to leave workers behind.

In the Q&A, Sen. Sherrod Brown, long a champion of fair trade, asks U.S. Trade Representative Robert Lighthizer what the Administration is doing regarding China’s record of green-lighting worker abuse:

Question: China’s lax labor and environmental standards amount to subsidies for any corporation who does business there. USTR’s most recent report on China’s WTO compliance discusses the fact that the Chinese government denies workers the right to organize and collectively bargain and, in doing so, places significant “institutional restraints,” as you call them, on wage rates.

Given that China’s denial of worker rights is in effect a subsidy, what commitments are you seeking from the Chinese government in the trade talks to protect workers’ right to collectively bargain and to stop suppressing workers’ wages?

Answer: Under President Trump’s leadership, the United States is committed to working toward a more fair and reciprocal trade relationship with China. In the current negotiations with China, we are seeking to address a wide range of unfair trade practices. Although we are not currently directly addressing labor standards, I am committed to working with you and other Members of Congress to discuss options and policy tools for addressing these important issues. (emphasis added)

“We are not currently directly addressing labor standards.” That simple phrase lets the cat out of the bag — the Trump Administration’s approach will not fix our trading system for workers.

American workers have been badly hurt by the trade policies of the last few decades. The U.S. has run trade deficits of hundreds of billions of dollars per year, costing significant numbers of jobs whenever the economy is below full employment. The economies of significant areas of the country, especially across the industrial Midwest, have been hollowed out. And income inequality has exploded, in no small part because workers have lost bargaining power as a result of the pro-corporate trade model.

The loss of bargaining power that workers face through our trade model is why the question about labor standards in China is so important, not only for workers in China, but also for the direct interests of workers in the United States. The reason why our trade model undermines worker bargaining power is because it is designed to make it as easy as possible for corporations to move money, production and jobs anywhere in the world at a moment’s notice. The standard model for our trade agreements involves providing strong legal and intellectual property protections, access to the sizable U.S. government procurement market, regulatory predictability, and, of course, duty-free access for goods to corporations that move jobs overseas. The U.S. Trade Representative annually works to eliminate “trade barriers” with countries throughout the world, but those barriers amount to little more than a multinational corporation’s wish list for making it easier to move money and jobs.

Where do corporations move those jobs? More often than not, to countries where they can operate more cheaply by exploiting and underpaying workers, dodging taxes, and polluting the environment. As a result, companies pit American workers against workers in other countries who are unable to exercise their fundamental human rights. This race to the bottom results not just in domestic job loss, but weakened bargaining power and, in turn, lower wages for all workers whose jobs are vulnerable to offshoring.

Workers fighting to form unions at their workplaces or to secure better pay or working conditions are all too familiar with this dynamic. Companies can — and do — simply threaten to move somewhere cheaper, and often follow through on those threats. For example, when Verizon workers who were members of the Communications Workers of America or the International Brotherhood of Electrical Workers went on strike in 2016, Verizon responded by moving much of the struck work to the Philippines, where workers under an oppressive regime were paid less than $2 per hour. Heroic solidarity by those Filipino workers alongside American workers helped fend off this attack on American union rights, but that sort of solidarity is hard to maintain, especially in low wage countries where decent jobs are hard to come by.

Yet, for the Trump Administration, international worker rights are nothing more than an afterthought. Chinese workers are routinely exploited and denied their basic rights. Chinese workers can’t legally form democratic unions, as the only legally permitted unions are part of the All-China Federation of Trade Unions, an arm of the ruling Chinese Communist Party, and “the vast majority of Chinese union members either do not know that they are union members or have little faith in the ability of the union to represent their interests.” Last year, the Chinese government arrested dozens of workers and labor rights supporters at Jasic Technology Co. in the Shenzen province in response to the workers’ efforts to unionize. And now, a new system of forced labor is emerging from internment camps in the Xinjiang region, where hundreds of thousands of Uighurs and other minority Muslims are held and abused as part of a massive repression program (itself another major problem also being omitted from trade talks).

These abuses are abhorrent and create terrible working conditions for millions of Chinese workers. At the same time, they interfere with a level playing field, as Chinese workers are routinely underpaid and work in unacceptable conditions.

Nevertheless, these key issues are absent from ongoing discussions, even as the conflict continues to escalate. In contrast, one of the Administration’s key objectives is to protect the intellectual property rights of American companies that move production to China. It is obvious why multinational corporations would support these measures, but it is less clear that it would have the effect of leveling the playing field for American workers.

The prioritization of multinational corporate interests over the interests of workers is not limited to the ongoing dispute with China. The Administration’s new NAFTA 2.0 proposal lacks serious enforcement mechanisms for labor rights and environmental standards, and the Administration has so far refused to even consider reopening the agreement to fix the problem. On the other hand, it does include handouts for the pharmaceutical industry that will lock in high drug prices for patients across North America.

Trump’s xenophobia is clearly one of his main strategies for building political support, but related policies and scapegoating won’t fix any of the problems plaguing American workers and will keep distracting us from addressing the real challenges confronting workers. The only real solution to our broken trading system is to end the status quo of enabling corporations to pit workers in the U.S. against our counterparts all over the world in a race-to-the-bottom in wages and working conditions. That means that strong labor rules with swift and certain enforcement at the heart of all of our trade deals. And, over the long term, it means addressing the issue of pitting workers against one another head on by including more ambitious policies like cross-border collective bargaining rights that ensure that, when a corporation operates in multiple countries, workers in those countries can band together to demand better treatment for all.

Don’t be fooled — a system set up to benefit multinational corporations at the expense of workers, communities and the environment won’t be fixed without protecting the rights of those groups to fight back against corporate greed.

Taken From: https://medium.com/@dmauer/why-the-trump-administrations-approach-to-trade-still-leaves-workers-behind-76ea7a17fb4c

Trump agrees to lift steel tariffs on Canada and Mexico, boosting chances for trade accord

Eager to score a victory on trade, President Trump agreed Friday to remove a large set of tariffs, rather than impose new ones as he has been prone to do, to boost the chances of getting Congress to approve the renegotiated North American Free Trade Agreement.

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Trump agreed to withdraw tariffs of 25% and 10%, respectively, on billions of dollars of steel and aluminum from Canada and Mexico that he had imposed a year ago. In return, Canada and Mexico said they would lift retaliatory duties on many American goods, including politically sensitive farm products.

 

The agreement clears one major hurdle for Trump in his bid to get the revised NAFTA through Congress. Trump had faced heavy bipartisan criticism in Congress for levying tariffs on neighboring countries, particularly Canada, America’s close ally. The tariffs were imposed under a section of trade law that allows the president to respond to national security threats, a designation that especially angered Canadians.

 

“I am pleased to announce that we’ve just reached an agreement with Canada and Mexico, and we will be sending our product into those countries without the imposition of tariffs or major tariffs,” Trump said Friday in announcing the agreement. “Hopefully, Congress will pass the USMCA quickly,” he added, using his preferred acronym for the revised NAFTA.

The announcement came just hours after Trump took another conciliatory step, delaying for up to six months his threat to impose sweeping new tariffs on imported autos and auto parts, also on the basis of threats to national security. Had Trump decided to go ahead with those tariffs, it would have sparked a major backlash and likely retaliation from trading partners. After Canada and Mexico, Japan and Germany are the two biggest exporters of autos to the United States.

 

Taken together, Trump’s two moves, delaying one set of tariffs and lifting another, could help deescalate tensions with allies as the administration intensifies its trade fight with China, with whom the United States has the largest trade imbalance and has long struggled to even the playing field.

 

After many months of trade talks, the United States and China appear to be at an impasse,with both sides having ratcheted up tariffs and digging in on their positions. Trump’s unilateral approach to trade and his aggressive use of tariffs have caused friction with allies and adversaries alike.

 

Analysts said they remained uncertain whether Trump, who has repeatedly praised tariffs, was truly now looking to ease tensions with allies and build a coalition to help bring China to heel, as many lawmakers and policy experts have urged him to do. In postponing the auto tariffs, for example, Trump largely repeated his argument that auto imports constitute a threat to U.S. security, a position rejected by many U.S. trading partners.

 

“The automotive tariff threat will continue to hover over the negotiations with Japan and the EU,” said Wendy Cutler, a top trade negotiator for Presidents George W. Bush and Obama and now with the Asia Society Policy Institute. “It doesn’t mean that the [Trump] administration has a clean slate on trade with them.”

 

Trump’s removal of steel and aluminum tariffs, however, won widespread applause from businesses and lawmakers.

 

“The biggest hurdle to ratifying USMCA has been lifted,” said Sen. Chuck Grassley, (R-Iowa). The Senate Finance Committee chairman had said the metal tariffs made USMCA a nonstarter.

 

But the North American deal remains far from assured of ratification by Congress, which is required before it can go into effect. Congressional Democrats have said they would not support the agreement unless changes were made to provisions on enforcing labor rights and the duration that drug companies can keep exclusivity for their products.

 

“It is a good thing these tariffs will be lifted, and we should urge our allies to join us in preventing China’s predatory practices,” said Sen. Charles E. Schumer, (D-N.Y.), the Senate Minority leader. But, he added, “There are still many other issues that are outstanding before Democrats would support the USMCA.”

 

For months, Trump had resisted advice from lawmakers and administration officials to remove the 25% duties on imported metals that he imposed on Canada, Mexico and other countries. Trump wanted to keep protecting domestic steelmakers and help factory workers, who are among his strongest supporters, and he saw the tariffs as leverage for getting better deals from trading partners.

 

But Canadian officials, and prominent Republican senators, had made clear that the revisions to NAFTA could not win approval of either Congress or the Canadian Parliament unless the tariffs were lifted. Canada is the United States’ largest steel and aluminum trading partner.

 

Trump spoke Friday with Canadian Prime Minister Justin Trudeau, their third call in about a week, according to a statement from the Canadian government.

 

“This is pure good news,” Trudeau said, referring to the tariff agreement during a visit Friday to a steel plant in Hamilton, Ontario.

 

“As we look at moving forward with the new NAFTA, it didn’t make a lot of sense to continue to have tariffs on steel and aluminum between our countries,” he said, adding that the tariffs were “harming workers and consumers on both sides of the border.”

 

In a joint statement, the U.S. and Canada agreed that the metal tariffs would be lifted by Sunday.

 

The U.S. imported about $14 billion of steel and aluminum from Canada last year. After the United States imposed the metal tariffs last June, Canada hit back with tariffs of 10% to 25% on about $13 billion of U.S. goods, including steel, whiskey, appliances and motorboats.

 

The two sides agreed to take steps not to import steel and aluminum sold at below-market prices or produced with unfair subsidies and to prevent shipment of those metals from other countries — a provision aimed at preventing Chinese metals from being shipped through Canada to the U.S.

 

The two countries also agreed that they could issue tariffs and counter-tariffs on a narrow basis in case of surges of imports.

 

Although Mexico was also covered by the tariffs, it is a much smaller producer of industrial metals than either the U.S. or Canada. The U.S. imported about $3.5 billion in steel and aluminum from Mexico last year. Mexico had also imposed retaliatory tariffs, mostly on farm and food goods, including apples, pork and cheese.

 

Mexico’s deputy foreign minister, Jesus Seade, said his country “enthusiastically welcomes” the agreement. “This action will clear the way to progress on ratification of the USMC trade agreement,” he said.

The tariffs have boosted steel production and investments in the United States. Domestic steel factory utilization in early May reached 81.7%, up from 76.4% a year ago, according to the American Iron and Steel Institute.

 

But the import taxes also have hurt a much wider array of domestic companies that have struggled with higher metal prices and supply problems.

 

“I think the administration was feeling a lot of pressure to deliver, either to resolve some conflicts and to get out from under retaliation, and of course it would be nice for the president if he could show some results,” said Philip Levy, senior fellow at the Chicago Council on Global Affairs and a White House economist under President George W. Bush.

 

As a tactic in trade talks, administration officials and supporters say the tariffs have worked, at least in bringing parties to the table and, in Canada and Mexico’s case, in agreeing to revise NAFTA, one of Trump’s key campaign promises. The three countries reached their deal on the newly named U.S.-Mexico-Canada Agreement last fall.

 

Critics, however, said Canada and Mexico were willing all along to negotiate changes to the NAFTA agreement and that the tariffs were not needed.

Taken From: https://www.latimes.com/politics/la-fi-trump-lifts-some-steel-tariffs-20190517-story.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LasVegasStories+%28Las+Vegas+Stories%29

Trump’s new NAFTA back from the dead

A meeting with Trump’s top trade official fueled new optimism from House Democrats.

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Donald Trump’s flailing domestic agenda received a spark of life on Wednesday, with top lawmakers in both parties expressing new hope that the president’s North American trade pact could be ratified by Congress this year.

Key officials negotiating the deal with Mexico and Canada are working both sides of the Capitol in an effort to ease concerns not only over the provisions of the pact but Trump’s ongoing tariff war with Mexico, Canada, Europe and China.

Speaker Nancy Pelosi and her leadership team were upbeat about the U.S.-Mexico-Canada Agreement as they left a meeting with Robert Lighthizer, Trump’s top trade official, saying he finally seemed to take heed of their demands to modify the trade deal after weeks of the two sides mostly talking past each other.

And Senate Republicans, who have been critical of Trump’s decision to slap tariffs on U.S. allies, were relieved at signs that the administration appears to be backing off that offensive as part of an end-game agreement with Canada and Mexico, as well as Congress.

“I’m pretty optimistic about it,” said Sen. John Cornyn (R-Texas). “Everybody wants to do it, I saw Mrs. Pelosi say that she wanted labor reforms done by the Mexicans and they proceeded to do the labor reforms. And I think there’s just a broad bipartisan acknowledgment that this is in Americans’ best interest and we ought to get it done.”

Rep. Scott Peters, a pro-trade Democrat from California, said Pelosi would put the trade deal on the floor only when she feels comfortable, but added, “I certainly think when she does that, we’ll have the votes.”

Whether Pelosi is ultimately willing to give Trump a huge bipartisan accomplishment to run on in 2020 is unclear, and her caucus’ left flank is almost certain to oppose the trade deal on its merits.

But the potential shift in attitudes on the Hill comes at a critical moment for Trump, who has faced sharp criticism from Republicans and Democrats over his aggressively protectionist trade agenda. Both parties have major leverage over his trade deal, his top legislative priority.

Pelosi is fighting to ensure that the agreement’s labor and environmental protections are strongly enforceable. And Senate Finance Chairman Chuck Grassley (R-Iowa) says he won’t move the USMCA trade deal as long as tariffs remain on U.S. allies, but he and other Republicans say the administration is finally softening.

Treasury Secretary Steven Mnuchin confirmed on Wednesday that U.S. officials are “close to an understanding with Mexico and Canada,” on the tariffs, which have been in place for nearly a year. “It is a priority of ours.”

Still, lawmakers on both sides of the aisle distanced themselves from Trump’s decision to escalate his trade war with China over the past week. Members also warned that the move could hurt the chances of getting the trade agreement with Mexico and Canada — which already faces an uphill battle — through a divided Congress.

And the new North American trade agreement is a key signal to how the rest of Trump’s first term will go: If he can’t pass that, there’s little hope of getting an immigration or infrastructure deal off the ground.

Yet after weeks of beleaguered whip counts and frustrated lawmakers, the uptick in optimism on Capitol Hill was real on Wednesday.

“There are issues to be sorted out,” said Rep. Rosa DeLauro (D-Conn.), a trade agreement skeptic, after leaving the Lighthizer meeting. “We believe we can get there, but we’re not there yet.”

The U.S. trade chief is doing all he can to court the entire party, meeting with the Congressional Progressive Caucus last week.

Pelosi has made clear that she will not hold a vote until the Trump administration makes changes surrounding enforcement of the replacement deal for NAFTA. Some Democrats have also expressed concern about the deal’s labor and environmental standards, as well as provisions they say would lock in high prescription drug prices, issues they all reiterated to Lighthizer on Wednesday.

Democrats have been more receptive to the deal in recent weeks after Mexico passed a landmark labor reform law required under the pact. But Pelosi has indicated she still needs to see how Mexico implements the reforms.

Pelosi has also specified that she wants to see changes in the underlying text of the agreement — something that Lighthizer as well as Mexican and Canadian officials have repeatedly rejected.

But House Democratic Caucus Chairman Hakeem Jeffries (D-N.Y.) indicated that Lighthizer was not so steadfast against making changes to the text in the meeting this week.

“He didn’t speak one way or the other about the mechanics of reopening the text, but he understood the concerns … and that absent resolution, it would be very difficult to get to yes on the agreement,” Jeffries told POLITICO.

The Trump administration has been intensifying pressure in recent weeks to get the USMCA ratified, with Vice President Mike Pence traveling across the country to showcase the deal.

Pence told Senate Republicans that he has spoken to Canadian Prime Minister Justin Trudeau about moving the agreement through Congress, and Canadian officials are in active talks with the Trump administration on a breakthrough on the tariffs.

Though it’s only May 2019, advocates of the deal know they need to move quickly. As the Democratic presidential campaign ramps up, the possibility of passing new major legislation decreases significantly. Republicans and pro-trade Democrats say that if the legislation can’t pass before the chamber breaks for August, it may stall permanently.

“The window was before the August recess, in part because of politics that already exist. The window hasn’t expanded. Congress can act, but it’s already difficult. It becomes more difficult in time,” said Sen. Jerry Moran (R-Kan.).

“Once it goes beyond October, forget about it,” added Rep. Bill Pascrell (D-N.J.).

Canadian Foreign Minister Chrystia Freeland was also on the Hill on Wednesday to convey the message to lawmakers that the window is closing for Canada to ratify the new pact this year. The Canadian Parliament adjourns in mid-June and will not be back for a normal session until 2020. Ratification efforts could be further complicated next year if the trade deal becomes the subject of controversy in the fall Canadian election.

And if a vote were held in the Senate today, there’s essentially no way the trade agreement would pass given GOP outrage over the tariffs on allies. Though the trade deal can’t be filibustered, Senate Majority Whip John Thune (R-S.D.) said he will need Democratic votes to get it across the finish line. The White House, however, has done little to court Senate Democrats, according to Senate Minority Whip Dick Durbin (D-Ill.).

Instead, Sens. Sherrod Brown (D-Ohio) and Ron Wyden (D-Ore.) are coordinating with House Democrats on enforcement demands to firm up the Democratic whip count. Republicans privately say Pelosi and Senate Democrats will push for more legislative sweeteners, including perhaps a minimum wage increase.

“I could see where Democrats would kind of dig in and want a fight and not give Trump an accomplishment, but I think this is something everybody kind of needs to get done,” said Thune. “And if it doesn’t get done, the alternatives aren’t very good.”

Some Republicans had urged the White House to rush the deal through Congress while the GOP still had the House last winter. The administration didn’t listen, waiting for Pelosi to assume her post as speaker — which some in the GOP are now lamenting.

“We were right, and they were wrong,” said Sen. John Kennedy (R-La.). “Because I don’t know if we’re going to get that thing approved.”

Taken From: https://www.politico.com/story/2019/05/15/trump-trade-congress-1327362

Mining Companies Use Excessive Legal Powers to Gamble with Latin American Lives

JOE BIDEN’S UNION SCHTICK IS ALL PERFORMANCE. HIS POLLSTER JUST SIGNED UP TO LOBBY AGAINST LABOR FOR TRUMP’S NAFTA 2.0.

JOHN ANZALONE, AN adviser and pollster for Joe Biden, is working for an industry-funded lobbying group formed to help pass President Donald Trump’s NAFTA 2.0, which unions have thus far opposed. The announcement was first made in Politico Playbook.

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Anzalone is the president of Anzalone Liszt, a prominent Democratic polling firm. He is joining Trade Works for America, an organization co-founded by Marc Short, who is now Vice President Mike Pence’s chief of staff. Funding for the group, which expects to spend $15 million to $20 million, comes from “the pharmaceutical industry, oil and gas, the automotive and agricultural sectors, and traditional GOP donors.”

Trade Works has bipartisan co-chairs: former Republican Governors Association Executive Director Phil Cox, and former North Dakota Sen. Heidi Heitkamp, a Democrat. Last year, when she was in office, Heitkamp declared NAFTA 2.0, which Trump has termed the United States-Mexico-Canada Agreement, “disappointing.” (Anzalone, as a pollster, isn’t required to register as a lobbyist if he doesn’t spend a significant amount of time talking directly to lawmakers or their staff.)

Unions share Heitkamp’s prior assessment. The AFL-CIO formally announced opposition to USMCA in its current form in March. “The NAFTA renegotiation requires strong labor rights provisions and strong enforcement provisions that as of today are not yet in the agreement,” their statement read. The agreement also locks in protections for certain pharmaceuticals, which progressives have loudly opposed.

Biden has sought to position himself as a union stalwart, kicking off his campaign at a Teamsters local and winning the endorsement of the International Association of Fire Fighters. But he also had his first fundraiser hosted by a union-busting lawyer, and this week he held another fundraiser in Los Angeles at the home of a board member of Kaiser Permanente, the hospital chain currently mired in a labor disputewith the National Union of Healthcare Workers. Health care workers picketed the Biden fundraiser on Wednesday. Now, his pollster has joined an organization dedicated to passing a trade agreement labor unions are against.

Biden has also set himself up almost entirely in opposition to Trump, while his pollster pushes to get Trump a win on trade policy, a signature issue for the president.

Owen E. Herrnstadt of the International Association of Machinists has laid out labor’s opposition to USMCA: There is no funding for enforcement or monitoring in the agreement. The labor standards are framed as “principles” rather than actual rights, and fields not involving trade or investment don’t have to abide by them. Also, workers cannot get employers who violate the agreement sanctioned on their own. It’s not even clear whether the murder of a trade union activist would qualifyas a USMCA violation, since violations must occur “periodically and repeatedly.”

Mexico did pass amendments to its labor law, which unions had said must be completed before any agreement. The amendments give Mexican workers access to secret-ballot union elections for bargaining and contracts, and ban “protection unions” set up before anyone is hired. However, unions still believe it falls short.

Trade Works for America has been talking up the agreement on Capitol Hill, claiming that it will support 14 million jobs. As economist Dean Baker has noted, an analysis by the U.S. International Trade Commission estimated that USMCA would add 0.02 percent of gross domestic product to the economy per year, “an increment that would be essentially invisible.” And those increases are only secured through “greater certainty” for business investment, which makes no sense since there is already a trade agreement in place with Canada and Mexico and has been for a quarter-century.

The group has already spent nearly $700,000 on digital advertising and television, mostly targeting Democratic House members in swing districts.

Other politicians turned lobbyists working to pass USMCA include former holder of Rep. Alexandria Ocasio-Cortez’s seat Joe Crowley, former Republican Rep. Erik Paulsen, and former Obama administration Commerce Secretary Gary Locke.

A separate coalition working on the deal includes AT&T, John Deere, Kraft Heinz, the American Petroleum Institute, and the National Restaurant Association, with co-chair lobbyists who work for Cargill, Citigroup, Fiat Chrysler, and UPS.

A spokesperson for Biden did not immediately respond to a request for comment.

  1. Taken From: https://theintercept.com/2019/05/10/biden-lobbying-usmca-nafta/

Mexico will not accept more labor enforcement in new NAFTA, top official says

A top Mexican official delivered an ultimatum to Democrats on Friday, saying the country will not accept a stronger labor enforcement mechanism in the new North American trade pact and will not support reopening the deal to further negotiation.

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“We don’t see what more is necessary or possible,” Jesús Seade, Mexico’s undersecretary for North America, told POLITICO in an interview on Friday, days after Mexican lawmakers passed a landmark labor reform law required by the U.S.-Mexico-Canada Agreement.

“The labor provisions in the agreement are very far-reaching. It’s a complete A-through-Z of good labor practices. There is nothing else you may want,” he added.

Seade’s comments come as House Speaker Nancy Pelosi and Democrats have intensified calls for the Trump administration to make changes to the text of the USMCA.

Pelosi has specifically said enforcement of the agreement is the “overarching” issue that must be dealt with as part of the deal — not through a side letter or subsequent legislation — before Democrats will consider the NAFTA replacement. Democrats want stronger labor provisions, but also changes to the deal’s environment and prescription drug provisions.

Seade, who is the leading voice on U.S.-Mexico trade issues in the administration of new Mexican President Andrés Manuel López Obrador, directly shut down a proposal floated by Senate Finance ranking member Ron Wyden (D-Ore.) and Sen. Sherrod Brown (D-Ohio) that would require Mexico to conduct inspections of factories accused of poor working conditions.

“Not only [is Mexico] against that proposal, but also, we don’t envision at all any reopening of the agreement,” Seade said.

Seade’s comments on the Wyden-Brown proposal also mark a shift in Mexico’s position, as Mexican Ambassador to the U.S. Martha Bárcena said recently that Mexico would be open to a labor enforcement tool as long as inspections of factories would also take place in the United States.

In recent weeks, Democrats had cranked up the pressure for Mexico to deliver on its promised labor commitments. After the labor law was passed on Monday night, some Republicans on Capitol Hill, particularly Senate Finance Chairman Chuck Grassley (R-Iowa), said it was time for Democrats to take up the agreement.

While ratification of the deal is the top legislative priority for the Trump administration this year, U.S. Trade Representative Robert Lighthizer has said the administration will not submit a bill to implement the pact until Pelosi asks for it. The top House Democrat has said she wants to see how Mexico implements the new law, which overhauls the country’s labor structure.

Seade repeatedly emphasized that Mexico will fully enforce the labor reforms because it is a major domestic priority for López Obrador — and not because the U.S. is forcing the Mexican government to do so.

“The moment there is any departure from the commitments, the U.S. has the means to exercise retaliation, to exercise pressure through dispute settlement. That shouldn’t be minimized,” said Seade, who served as López Obrador’s chief NAFTA negotiator during the transition from former Mexican President Enrique Peña Nieto’s administration.

Seade added that long-term concerns about labor enforcement in Mexico can also be addressed when it comes time to review USMCA. The new pact includes a so-called sunset review clause, which requires that the three countries review the agreement every six years after it enters into force.

“If by that time the U.S. has any basis to fear that Mexico is rolling back some of its commitments on labor, it would be perfectly possible to then say: ‘For us to continue, we want this,'” he said.

Taken From: https://www.politico.com/story/2019/05/03/mexico-nafta-labor-enforcement-1410806

The real future of agriculture

Last month, Woody Johnson, United States Ambassador to the United Kingdom, called the U.S. industrial agriculture system “the future of agriculture,” urging Europeans to open their markets to chlorine-rinsed chicken and growth hormone-fed beef in the name of free trade.

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But Ambassador Johnson conveniently glossed over the enormous associated costs of this system to rural communities and farmers, our water and air, and our health, and that many in the U.S. are fighting back against the multinational agribusiness and food companies that benefit.

The intentional, policy-driven shift away from family farms in the U.S. toward a factory farm model that serves global agribusiness firms has been devastating for many rural communities. Fewer, much larger farms tied to global supply chains now extract food and wealth from rural communities to those global firms. Almost the entire U.S. poultry sector now operates on contract, where the farmer takes on all the risk, and is at the mercy of the big chicken companies. This exploitative contract system has been duplicated in the pork sector, and now is extending to the dairy industry, where low prices and an alarming number of farm bankruptcies are forcing farmers to accept whatever price Wal-Mart or other massive buyers offer.

Most U.S. pork, poultry, beef and dairy is produced by a Concentrated Animal Feeding Operation (CAFO) model, where thousands of animals are packed tightly together, producing large amounts of manure stored in giant pits. These waste lagoons cause enormous harm to rural communities but are also spurring growing resistance.

The CAFO model is closely linked to the contamination of rural waterways, whether in Iowa, Wisconsin or California. It is also a source of air pollution. This month, global pork giant Smithfield lost its fifth consecutive nuisance lawsuit brought by neighbors in rural North Carolina related to the company’s CAFOs. Rural community leaders in states like Minnesota, Missouri and Oregon are fighting back—and often winning—at the county and state levels for strong protections from CAFO pollution.

As if those problems weren’t troubling enough, the industrial meat production system also often includes the exploitation of labor. Meat processing is considered some of the country’s most dangerous work. It relies largely on new immigrant workers and has a well-documented history of exploitation. The Trump administration recently created new loopholes to dramatically increase production line speeds in poultry (and possibly soon pork) making this work even more dangerous. The U.S. food safety system of oversight relies on the companies to play a large role in regulating themselves. In the case of poultry, it also relies on chemical washes to remove the bacteria that accumulates on the chickens as they are rushed through processing. The U.S. meat system has become so industrial that food companies have launched more than 25 recalls since the beginning of 2018 related to the contamination of dangerous materials like metal, plastic or rubber.  

In reality, it is a mistake to call this a U.S. system; it is a system developed by global food corporations. Under the North American Free Trade Agreement (NAFTA), which will undoubtedly serve as the model for any U.S. trade deal with the UK or EU, those companies are indifferent about where different aspects of production occurs because trade deal aren’t only about exports. It is about locking in place the same rules, the same kind of CAFO model, contract farming, or meat processing rules, no matter where production happens. Any U.S.-UK or U.S.-EU trade deal will be no different.

The good news is that a growing number of Americans disagree with Ambassador Johnson’s belief that this industrial food system represents the “future.” There are rising concerns about whether it is sustainable for our water and climate, for our rural communities, for our food system workers—and of course, for eaters. The fastest growing segments in the U.S. food system are organic and locally produced, and grass-fed and humanely raised meat. These new approaches should be the real future of farming, Mr. Ambassador.

Taken From: https://www.iatp.org/blog/201904/real-future-agriculture?utm_source=IATP+Full+List&utm_campaign=c070548283-MARCH_NEWS_18_COPY_01&utm_medium=email&utm_term=0_3f024f9ff8-c070548283-74996437

Medicine Monopolies Are Poised to Get Worse

Tobeka Daki lived in the Eastern Cape of South Africa, and was the mother of two sons. In 2013, she was diagnosed with HER2-positive breast cancer.

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Photo by Pixabay on Pexels.com

What should have been good news for Daki is that there is a medicine called trastuzumab, marketed under the name Herceptin, that can be effective at treating her form of breast cancer. The groundbreaking research that led to the discovery of trastuzumab was funded by the U.S. government. A year’s dose can be manufactured for about $176.

The bad news for Daki was that global trade agreements had ensured that the multinational corporation Roche held monopoly rights to trastuzumab throughout most of the world, including South Africa. So the corporation was free to set a price of about $34,000 in South Africa for a year’s worth of doses — 193 times the manufacturing cost. That cost was also five times more than Daki’s entire income. She died on Nov. 24, 2016, never having received trastuzumab.

Tobeka Daki became one of 10 million people who die each year because they cannot afford the cost of medicines. Most medicines are inexpensive to make, and virtually all were discovered thanks to government investments. So, it is no exaggeration to say that the worldwide network of medicine monopolies, which give unchecked power to charge virtually any price on life-essential goods, were the cause of most of these deaths. Proposed terms in the new NAFTA, called the U.S.-Mexico-Canada Agreement (USMCA) by the Trump administration, would strengthen and create more medicine monopolies across North America. But the faith community, led by a broad coalition of denomination leaders and advocacy groups, is pushing back.

The Trade-Related Aspects of Intellectual Property Rights Agreement of 1994, commonly known as TRIPS, sets the stage for corporations to obtain medicine monopolies worldwide. Those corporations have eagerly taken advantage, maneuvering for as much exclusivity as possible. Virtually every medicine has a fortress of monopolies built around it: for example, the corporation AbbVie has taken out 247 patent applications on Humira, the world’s best-selling drug.

This is an enviable business model: The corporations that sell the medicines make record-breaking profits and spend more on marketing and lobbying than they do on research. New cancer medicines average over $100,000 per patient. Some medicines are now priced as high as $750,000.

Yet the law does not have to work against patients. The TRIPS agreement permits countries to choose to create far-cheaper generic alternatives to monopoly-protected medicines. They can do so either through compulsory licensing (allowing companies to manufacture generic medicines with some reimbursement for the patent holders), or importation of generics from other countries.

But access to generic medicines has been undercut by so-called “TRIPS-Plus” trade agreements that include even more corporate monopoly protections than the original deal. The USMCA is firmly in that TRIPS-Plus category. Among other monopoly-extending terms, the USMCA would add a frightening barrier to the existing NAFTA: a full 10 years of what is called “data exclusivity” on biologics drugs. Data exclusivity blocks would-be competitors from accessing the information needed to gain approval to sell cheaper “biosimilars.” It is a monopoly separate from patent protection, designed to last beyond the life of the patents the corporation already received.

Biologics, made from living organisms, are some of the most impactful new medicines, especially for treating cancers and autoimmune diseases. They are often the most expensive, too. The USMCA proposes to create longer monopoly protections for biologics than any trade agreement in history. It would force Canada and Mexico to lengthen monopolies under their national laws, and handcuff the U.S. from pursuing the many national proposals to reduce our own data exclusivity period.

The bottom line is this: If the new NAFTA becomes law, it will cause unnecessary deaths in the U.S., Mexico, and Canada. There will be thousands more like Tobeka Dakis.

For people of faith, this is unacceptable. All major religious and moral traditions embrace a responsibility to provide for the poor and the sick. And that obligation goes beyond direct care, calling us to use our voices to protect those in desperate need of medicines.

The leaders of major Christian denominations have come together to urge the president and Congress to do better on the USMCA. Organized and supported by Jubilee USA, leaders of the U.S. Catholic, Episcopal, Methodist, Lutheran, United Church of Christ and Presbyterian churches sent a joint letter last May. The letter states, “We call on you to ensure that terms of a renegotiated NAFTA avoid enhanced and extended monopolies on life-essential medicines. Instead, we ask that a renegotiated NAFTA reaffirm . . . the human right to health and access to medicines for all.”

Taken From: https://sojo.net/articles/medicine-monopolies-are-poised-get-worse

Food standards on the menu at U.S.-EU talks

With the endorsement on April 15 by a majority of the heads of government of its member states, the European Union has finally taken the formal step needed to move ahead with trade negotiations with the United States.

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The talks may yet blow up over automobile tariffs, airplane subsidies or a dispute about the inclusion of agriculture in the negotiations. The EU says it never agreed to include agriculture; the Trump administration claims that agriculture is included, and powerful members of Congress have asserted there can’t be a deal without it.

The U.S. negotiating objectives clearly intend to cover agriculture broadly. The trade negotiation mandate adopted by the EU has two parts, one of which addresses tariffs and the other, domestic regulatory changes. The negotiation instruction on tariffs is limited to industrial goods and specifically excludes “agricultural products.” The latter instruction on regulatory cooperation and compatibility, however, does not exclude agriculture.

Thus, we can be sure that food and agriculture will be directly affected by an EU-U.S. trade deal, because any potential carve-out relates only to discussing tariff reductions. As in the New NAFTA, food and agriculture—including product labeling and oversight of food safety, chemical use and emerging technologies—will still be directly affected. This is because both the EU and the U.S. have committed to reducing so-called “non-tariff barriers” through regulatory cooperation measures, conformity assessments and mutual recognition agreements specifically aimed at public protections such as food safety oversight.

In its negotiating objectives announced in January, the U.S. is quite transparent about wanting to block labeling and oversight of currently unregulated newer genetic manipulation techniques, such as gene editing. In the section on food safety the U.S. Trade Representative (USTR) calls for “new and enforceable rules to eliminate unjustified trade restrictions or unjustified commercial requirements (including unjustified labeling) that affect new technologies.” The USTR also wants to “establish a mechanism to remove expeditiously unwarranted barriers that block the export of U.S. food and agricultural products in order to obtain more open, equitable, and reciprocal market access.”

Public statements by U.S. Agriculture Secretary Sonny Perdue make clear that EU prohibitions on common practices in the U.S., such as using the growth-promoting drug ractopamine in pork production, or chlorine and other chemical rinses to disinfect chicken and vegetables, are the kinds of “unwarranted barriers” he expects a trade deal to lift for U.S. exports to Europe. In recent meetings with members of Congress, Perdue has doubled down on these statements, stating Europe will “pay the price” if it restricts pesticides including RoundUp, which contains the endocrine-disrupting ingredient glyphosate, or if it continues to require stringent oversight of gene editing and other new technologies.

The EU wants what it calls a “conformity assessment” agreement that would require the U.S. to accept EU regulators’ determinations—and vice versa—as spelled out in the second part of its negotiating mandate. There are no red lines in this document that would exclude food and agriculture, as is made clear in the accompanying negotiating directives. The only real constraint on the EU’s negotiating authority relates to President Trump’s threats to impose auto tariffs: The European Commission “may suspend negotiations if the United States adopts trade restrictions against European Union exports on the basis of Section 301 of the 1974 Trade Act or under any other similar United States law.” In a previously leaked memo to the European Parliament’s Trade Policy Committee the trade directorate explained its approach to the U.S. negotiations in more detail, touting conformity assessments and mutual recognition agreements in order to “provide for mechanisms to avoid an unnecessary duplication of costs” in agreed-upon “areas of economic importance.” While the EU insists it will maintain current protections and not agree to conformity measures where there are “important systemic differences,” food safety was specifically mentioned as a possible area of agreement in this memo.

What could a trade agreement devoted to conformity assessment mean in practice? Even if the U.S. doesn’t export its food safety standards and the EU maintains its current protections—as its politicians insist it will—the negotiations will still result in weaker food safety protections. Why? Lax inspection and compliance oversight will be exported instead. The plan proposed by both U.S. and EU trade negotiators is to rely on each other’s systems for inspecting products and certifying compliance. How then will the U.S. system—which relies heavily on chemical treatments to kill contaminants and end-product inspections—guarantee that U.S. products meet the tougher food safety standards of the EU, where farm-to-fork tracking protects against contamination throughout production, slaughter and processing?

Bottom line: The U.S. won’t be able to guarantee European consumers that imported food products meet EU standards. In fact, the food safety system overseen by the U.S. government can’t even assure U.S. consumers that our food is safe. The U.S. has a broken system that’s rapidly deteriorating under the Trump administration. For example, as the New York Times editorial board explains, the administration plans to drastically cut independent government trained and employed inspectors by 40 percent, permit unlimited slaughterhouse line speeds and essentially, allow the industry to regulate itself. The delegation of USDA inspection authority to meat plant employees, who are unable to stop production lines when meat products are contaminated, poses a risk to EU consumers and the reputation of U.S. meat exports. A trade deal that reduces government authority to adopt and enforce protective standards will apply here just as it would in Europe, limiting the ability of future administrations and Congress to reverse the privatization of meat inspection and other food safety measures.

In their joint statement initiating the trade talks, the EU and U.S. presidents announced commencing “a close dialogue on standards in order to ease trade, reduce bureaucratic obstacles, and slash costs.” Both the U.S. negotiating objectives and the EU negotiating mandate are premised on the view that maintaining independent regulatory oversight authority after a trade deal is signed is a public burden harming the economy. Yet time and again, just the opposite has proven true. Overlapping oversight can have significant public benefits and helps assure confidence in products in the marketplace and in the economy as a whole.

Take, for example, the Volkswagen emissions testing scandal. U.S. environmental testing (especially at the state government level) discovered widespread cheating by German and other automobile manufacturers that was either overlooked on purpose or left undiscovered by an ineffective EU regulatory system. Had the U.S. and EU already been bound by a trade deal eliminating “duplicative” emissions testing and certification, this fraud on consumers and harm to the environment might never have been uncovered.

Or, consider port of entry checks of food.  U.S. sampling of imported meat (what the industry calls a duplicative and unnecessary “barrier to trade” and wants to eliminate through regulatory cooperation) discovered E.coli contamination of Canadian beef, leading to a massive recall. Canadian regulators missed the problem, but because food inspections were required on both sides of the border, a public health crisis was averted. While we don’t yet know the full story of the Boeing 737-MAX and the tragic crashes of two of these airplanes, there is general agreement that the U.S. safety certification was rushed and delegated significant responsibilities from the Federal Aviation Administration to the manufacturer. Even recognizing that the EU’s Airbus is in competition with the U.S.’s Boeing, is it any wonder that European regulators are rethinking reliance on U.S. regulatory oversight?

There are several reasons that trade negotiations initiated in the Obama administration for a Transatlantic Trade and Investment Partnership (TTIP) broke down even before the 2016 U.S. elections.  As IATP has detailed, consumers and farmers in Europe understood that the proposed agreement was a recipe for lowered standards and a flood of industrial food products that would undermine what remained of smaller-scale, more sustainable farming practices. TTIP remains so toxic that the new EU negotiating mandate specifies “The negotiating directives for the Transatlantic Trade and Investment Partnership must be considered obsolete and no longer relevant.”

That may be so, on paper.

But with TTIP’s regulatory conformity goals imported into the new negotiating directives on both sides of the Atlantic, without any red lines clearly excluding agriculture, food and health and environmental standards, it looks like we’re being asked to buy a trade policy “pig in a poke.”

Taken From: https://www.iatp.org/blog/201904/food-standards-menu-us-eu-talks?utm_source=IATP+Full+List&utm_campaign=c070548283-MARCH_NEWS_18_COPY_01&utm_medium=email&utm_term=0_3f024f9ff8-c070548283-74996437

When climate goals and trade rules collide

Countries are increasingly advancing proposals to address climate concerns within new and existing trade agreements.

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Most modern trade agreements, and governing bodies like the World Trade Organization, were negotiated with little or no acknowledgement of the climate crisis. While the 2015 Paris Climate Agreement is based on voluntary pledges, trade agreements include legally binding enforcement tools that are now being considered in the climate context.

In March, the European Commission set new rules on the use of imported palm oil for biodiesel in order to slow associated deforestation and climate change. The European Union is the world’s second biggest importer of palm oil. The new rules are connected to the EU’s renewable energy goals and include a certification system for imported palm oil, primarily from Malaysia and Indonesia. The Council of Palm Oil Producing Countries, whose members produce about 90 percent of global supply, announced they will jointly challenge the rules through bilateral consultations and at the WTO. While calling the new rules an important milestone, the European group Transport and Environment pointed out that loopholes remain for soy-based biodiesel, another major contributor to deforestation around the world.

The EU has been grappling with the tension between its efforts to both expand trade and implement its Paris climate commitments. In 2018, the European Commission passed a non-binding resolution to only engage in trade talks with countries that are part of the Paris Climate Agreement. But the EC has wavered in its tentative talks with the Trump administration—which is in the process of pulling the U.S. out of the Paris Agreement. European NGOs, including IATP Europe, opposed the EU decision to continue negotiations with the U.S., charging that it would undermine global climate commitments. In deals with Japan and Mexico, the EU has referenced the Paris deal. The issue has become more heated as the EU negotiates with the South American bloc of countries called Mercosur. These tensions have escalated with Brazil’s new President Jair Bolsonaro, who is backing away from climate commitments and forest protection. More recently, French officials have raised questions, as the EU begins trade negotiations with Australia, about whether Australia’s GHG emissions targets are strong enough to meet their Paris climate goals. The EU is pushing for a clause in any Australia-EU free trade agreement that includes full implementation of the Paris Agreement.

The Trump administration’s first trade deal takes several steps back from international commitments on climate change. In addition to failing to even mention climate change in the text, the renegotiated North American Free Trade Agreement (dubbed U.S.-Mexico-Canada Trade Agreement) commits to honor just three of seven Multilateral Environmental Agreements included in previous trade agreements. It also maintains extraordinary protections for U.S. investors in Mexican oil, gas, energy, transportation and infrastructure sectors, allowing those companies to sue the Mexican government for compensation over environmental or other public interest rules that undermine their profits.

Even in this context, Congress is finding new ways to approach climate and trade. Representative Bill Pascrell (D-NJ), chair of the House Ways and Means subcommittee on trade, has requested that the Commerce Department conduct a Section 232 investigation into the national security threat posed by climate change. Pascrell and Reps. Jimmy Gomez (D-CA) and Judy Chu (D-CA) sent a letter to the Commerce Department calling climate change “an existential emergency.” The letter stated, “Clearly, carbon dioxide emissions are exacerbated by international trade and imports to the United States. This carbon pollution threatens agricultural markets and infrastructure, among other sectors of our economy, which Commerce should investigate with the urgency and gravity that this emergency warrants.”

If the Department determines that climate change poses a national security issue, the President could then impose tariffs or quotas on imports to address the risk. Specifically, Pascrell asked for an investigation of imports of carbon emissions, which may ultimately be challenging to implement. Emissions related to the production of a good traded are different than trade rules governing the products themselves. As some commentators have pointed out, while the Trump administration is unlikely to take a climate-related investigation seriously, Democratic Party presidential candidates are making climate change a campaign issue. And, though it may be tough to pass climate legislation, a Section 232 ruling could give the President some power in climate matters—including in negotiations with other countries. Such enforcement would have major implications for agricultural trade, which is coming under increasing scrutiny for driving deforestation around the world. Commerce has 270 days to submit a report to the President with recommendations.

Countries have been considering carbon tariffs as an enforcement tool for domestic climate policy. The goal is to prevent incentivizing the off-shoring of emissions by multinational companies hoping to sidestep domestic climate policy. Recent research shows that tariff cuts associated with free trade deals involving the G-20 countries make it difficult to meet global climate targets when considering emissions embedded in imports. But developing countries are skeptical of how carbon tariffs might be used to restrict their exports, particularly when those same trade agreements impede clean energy technology transfer and other investments that could help them transition to lower emissions.

The latest efforts to consider climate change within trade rules are just beginning—and they will have major implications for agriculture markets. As climate-related events escalate, and the political pressure to dramatically reduce emissions rises, governments will have to usher in a new era of trade rules to protect the planet.

Taken From: https://www.iatp.org/blog/201904/wfbclid=IwAR1wbo3ny4K_NH6BkiMrNo2A_10VrJ2Liu2c-xa4qcWWBnYvW3cDcHEPIWk