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.
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.