Monthly Archives: December 2019

The New NAFTA Is a Raw Deal for Workers

Democrats and labor leaders are touting the renegotiated NAFTA deal as a win for workers and the planet. Don’t believe them: it’s a pro-corporate framework that will continue to bludgeon working people in Mexico, Canada, and the United States.

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NAFTA 4 EVER!

The Democratic Party and the AFL-CIO might as well put this on a T-shirt after their jubilant unveiling of the United States-Mexico-Canada Agreement (USMCA) this week. House Ways and Means Committee chair Richard E. Neal hailed the trade deal as “a triumph for workers everywhere.” AFL-CIO president Richard Trumka tweeted: “Working people have created a new standard for future trade negotiations.”

NAFTA 2.0 has the Republicans in good spirits as well, despite the impending presidential impeachment trial. Iowa senator Chuck Grassley said that while Republicans didn’t get everything they wanted in the new agreement, “the overall thing is very, very good. We may lose some Republicans . . . but it’s going to get through the United States Senate.”Have we finally fixed NAFTA?Well, from the perspective of mainstream politicians and big businesses, NAFTA 1.0 wasn’t broken — it was already a dream come true. Since 1994 manufacturers and agricultural companies have invested billions in production networks that stretch from Mexico to Canada, fine-tuned for maximum profitability. Trump’s campaign promise to blow the whole thing up in a bid to reduce the US-Mexico trade deficit and create jobs for workers in the United States created intense anxiety among investors and business owners, even after the three countries reached a tentative agreement last September.This week’s announcement triggered a sigh of relief across all three countries among politicians and most big corporations. Most but not all. Pharmaceutical companies are peeved that Democrats managed to jettison a clause granting drug manufacturers protection from generics on certain types of medicine. The Canadian dairy industry will face heightened competition as US farmers gain increased access. Mexican business’s only sweetener seems to be continued tariff-free access to the US domestic market.

More broadly, the investor-state dispute settlement mechanism was nixed, meaning companies have also lost the ability to sue countries for passing legislation (such as environmental restrictions or health and safety ordinances) that hurts their bottom line.

Nonetheless, experts say the USMCA is 90 percent NAFTA. The country-to-country dispute mechanisms that Canada desperately wanted to preserve remain in place. Neither Canada nor Mexico faces any dramatic new import quotas. And the United States hasn’t mandated job creation in sectors hit by NAFTA or domestic content restrictions that would spur additional US production.

Changes fall mostly in the range of neutral to friendly to corporations. US tech companies, for example, are happy about new language that “defends companies’ ability to move data freely across borders.” Digital marketplaces like Amazon will also benefit from a hike on de minimis levels in Canada and Mexico, which will make it cheaper for consumers in those countries to order goods online from the United States.

Overall, the twenty-five-year-old free-trade zone — which has afforded North American corporations unprecedented mobility and flexibility — has been preserved. So why are some hailing NAFTA 2.0 as a victory for working people? Short answer: our expectations have hit rock bottom, and the USMCA is slightly better than NAFTA for workers and the environment.

On the environment, the USMCA ends subsidies that contribute to overfishing; maintains the role for the Commission for Environmental Cooperation (an organization designed to promote public participation around conservation issues); and establishes a potentially wide scope for trilateral collaboration on conservation, pollution reduction, and sustainable development. Scrapping the investor-state dispute settlement machinery will also help on the environmental front by making pro-environment legislation less vulnerable to corporate attack. Bigger strides, however — such as aligning the USMCA with the Paris Accord — were apparently off the table.

As for workers’ rights, the main improvement is that Mexico has promised to implement new labor laws. The legislation — which Mexico’s Chamber of Deputies passed in April — establishes independent labor courts, adds new protections for union organizing drives, weakens company unions, and includes measures to protect workers from employer abuse and discrimination.

Per the USMCA, Mexico’s enforcement of these new rules will be subject to monitoring by an “inter-agency committee,” informed by watchdog “labor attachés.” If it appears Mexico isn’t following through on its end of the deal, “enforcement action” could kick in, though it’s unclear what that would look like. The idea is that boosting working conditions in Mexico will stop the “race to the bottom” in North America.

That’s certainly a laudable goal, and Mexico’s labor reforms probably wouldn’t have been passed without the threat of losing access to the US market. It must be said, however, that working conditions in Mexico have deteriorated as a direct result of NAFTA — US companies (as well as firms from Canada, Europe, and Asia) have facilitated and reproduced Mexico’s dreadful labor environment. If the lives of Mexican workers are to improve, corporations’ abusive relationships with their suppliers must also be addressed.

The second major improvement supporters are touting relates to changes in auto industry regulation. When Trump vowed to get rid of NAFTA, he bemoaned America’s trade deficit with Mexico, the vast majority of which comes from the automotive sector. He promised to renegotiate NAFTA to bring auto jobs and investment back to the United States.

The USMCA raises the North American content requirements for cars and parts from 62.5 percent to 75 percent and mandates that roughly 40 percent of vehicle contents originate in factories where workers are paid an average of $16 an hour (or risk a 2.5 percent tariff).

Unfortunately, these mandates are unlikely to boost auto jobs in the United States. As Sam Gindin explains:

Most of the assembly plants that operate under NAFTA (now USMCA) are close to the 75 percent target, and, though this may increase parts purchases in North America somewhat, it will not dramatically change industry employment numbers. Moreover, the additional content under this rule doesn’t have to be in the United States; it can locate in Mexico or Canada.

In addition, because North American supply chains are highly integrated, most of the vehicles coming from Mexico already meet the 40 percent requirement since many of their parts originated in the United States and Canada. And even if they don’t clear the new hurdle, it will be cheaper for the assemblers to pay the 2.5 percent penalty than hike wages in Mexico.

It’s not just auto. Despite this week’s intensive back-patting, the truth is that the manufacturing jobs that have been lost to both trade and technological advancements over the past few decades won’t be brought back by trickle-down trade agreements, whether with Mexico and Canada, China, or the European Union.

Small gains aside, the primary upshot of the Democrats’ and labor executives’ eagerness to take ownership of USMCA is to cement the status quo — to give their seal of approval to a pro-corporate framework that will continue to hurt working people in Mexico, Canada, and the United States.

Taken From: https://jacobinmag.com

Trump’s trade taxes add up to $7B in costs to Americans

American companies paid a record $7.2 billion in import taxes in October, or more than twice the average monthly amount before President Donald Trump began imposing tariffs on Chinese goods and foreign steel and aluminum in 2018.

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New figures from the Tariffs Hurt the Heartland campaign also show that Trump’s tariffs have slapped on $42 billion in added costs since they began.

“This trade war has lasted long enough and done enough damage,” said Jonathan Gold, a spokesperson for Americans for Free Trade. “It’s time the administration finalize a deal with China to end the trade war and remove all tariffs.”

When Digre’s father ran the company, it bought components from suppliers in the United States. But that production moved to China and other countries two decades ago, and chances appear slim of the jobs moving back.

“The center of the loudspeaker universe is in China now. So for us to be able to build products and be competitive, we have to buy parts from China,” Digre said. “That’s just the reality. There’s really nobody in the U.S. to buy this stuff from.”

Because of Trump’s tariffs, Misco is paying a 25 percent tax on the Chinese components it needs to make its speaker products. But in an odd twist, finished speakers face only a 15 percent tariff, so Trump has put Misco at a price disadvantage to companies that manufacture in China, Digre said.

In addition to increased tariff costs, Digre also faces unplanned expenses stemming from his search for a new supplier for the speaker components. “It takes a lot of time. You have to find the companies. You have to vet the companies. You have to get samples,” he said last week, before flying off to the Philippines to talk to companies there.

Trump has also imposed duties on steel, aluminum, washing machines and solar products from around the world, using different trade remedy laws. That has provoked trade retaliation from a number of trading partners, including China and the EU, on U.S. agricultural goods and other products.

Americans for Free Trade has teamed up with another group, Farmers for Free Trade, to back the Tariffs Hurt the Heartland campaign. Together, they worked over the past year to highlight the harm the duties are having on American businesses and farmers.

Both groups teamed up with The Trade Partnership, an economic research firm, to compile the latest data based on information published by the Commerce Department.

Duties aren’t just affecting imports but also take toll on U.S. exports, causing further losses for American firms. For the 12 months ending in October, exports of U.S. goods subject to retaliation fell 25 percent below their 2017 levels, said Dan Anthony, vice president of The Trade Partnership. That’s $30 billion in lost sales.

U.S. exports to Canada and Mexico also have not returned to pre-retaliation levels, even though Trump lifted his steel and aluminum tariffs on those countries this summer. That suggests there could be permanent economic losses even when tariff wars are over, Anthony said.

“This data shows that farmers in America’s heartland — the very places where the 2020 campaign will turn — are paying a steep price because of the trade war,” said Brian Kuehl, co-executive director of Farmers for Free Trade. “The president needs to show he can close not just a phase one deal, but a comprehensive deal that rolls back the tariffs and ends the trade war.”

Businesses in Florida, a key presidential swing state, have paid an additional $1.3 billion in taxes because of Trump’s tariffs, the latest data shows.

Companies in other states that could play a key role in Trump’s reelection or ouster are also facing increased tariffs: Michigan, $1.8 billion; Ohio, $1.5 billion; Pennsylvania, $1.2 billion; Wisconsin, $827 million; and Minnesota, $797 million.

Pro-business supporters of the president are acutely feeling the costs. Angela Carr, co-founder of Turbie Twist, a small business based outside Pittsburgh, said the duties are making her reconsider her decision to vote for Trump in 2016.

The company, which sells towels and headbands specializing in quickly drying hair after showers, worked hard to expand since it started in 2006. Its products are now in retail stores like Target, Walmart and CVS, and the company just celebrated 30 million units sold. Any added tariffs on consumer products are not easily passed on to customers.

“We’re not selling Rolexes to millionaires. These are hair towels,” Carr said. “They retail for $9.99, $19.99. Twenty-five percent [tariffs] to us is a huge number.”

Not only have the company’s Chinese suppliers refused to cut their prices in response to the tariffs, they tried to raise them. “We had to negotiate just to keep prices where they are,” Carr said.

“We’re a seven-person show,” Carr said. “We’re just two sisters selling hair towels. For us to pick up and move to Vietnam and qualify a factory, all of that thing, I mean the time and money wouldn’t even be worth it.”

Despite Trump’s anti-China rhetoric during the 2016 campaign, Carr said she assumed he would follow business-friendly policies once in office. But looking ahead to the 2020 election, the costs of his trade policies are making Carr question her allegiance to the Republican Party.

“It would break my heart to have to make a change, but this is my livelihood,” Carr said. “I have to make choices that are best for my family and the families of our team.”

Pelosi pushes to keep tech’s legal shield out of trade agreement with Mexico and Canada

House Speaker Nancy Pelosi, D-Calif., is pushing to keep a key legal shield for tech companies out of a new trade agreement with Mexico and Canada. The Wall Street Journal first reported the news on Thursday.

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The effort could throw a wrench into progress Congress seemed to be making on the pact and would be a blow to tech companies who already fear losing the legal protection within the U.S. Just last week, Pelosi said House Democrats were “within range” of reaching a pact they can support for the United States-Mexico-Canada Agreement, or USMCA, which would replace NAFTA.

Language in the proposed trade agreement echoes that of Section 230 of the Communications Decency Act, a hotly debated portion of the law that protects online platforms from liability for their users’ content. Having such language included in the agreement would be a boon for tech companies and would ensure certain legal protections for them abroad. But lawmakers have repeatedly questioned the wisdom of the law at home as disinformation spread freely on platforms such as Facebook, Twitter and Google’s YouTube leading up to the 2016 election and violent content has continued to crop up.

“There are concerns in the House about enshrining the increasingly controversial Section 230 liability shield in our trade agreements, particularly at a time when Congress is considering whether changes need to be made in U.S. law,” a spokesperson for Pelosi told CNBC.

On Twitter, Rep. Frank Pallone, D-N.J., said he agreed with Pelosi’s push to remove the legal protections from the agreement. Pallone is the chairman of the House Energy and Commerce Committee, which held a hearing on Section 230 in October where representatives from tech companies including Google and Reddit testified on the importance of the law for their businesses.

Pallone and the top Republican on the Energy and Commerce Committee, Rep. Greg Walden of Oregon, wrote a letter to U.S. Trade Representative Robert Lighthizer in August saying it was “inappropriate for the United States to export language mirroring Section 230 while such serious policy discussions are ongoing. For that reason, we do not believe any provision regarding intermediary liability protections of the type created by Article 19.17 are ripe for inclusion in any trade deal going forward. Given that our committee closely oversees Section 230 and all portions of the Telecommunications Act of 1996, we also hope in the future the Office of the United States Trade Representative will consult our Committee in advance of negotiating on these issues.”

But even after that letter, it’s unclear if Pelosi will receive support from her Republican colleagues on keeping such language out of the USMCA. A spokesperson for the Energy and Commerce Republicans said the letter to Lighthizer and Walden’s position are focused specifically on future trade deals, rather than ongoing ones such as the USMCA.

Fear of tying Congress’ hands

At the October hearing, Reddit CEO Steve Huffman testified that Section 230 gives his company the leeway to adapt “to meet new challenges” with their policies. Lawmakers at the hearing expressed support for a nuanced approach to any potential changes to the law, recognizing that it often allows tech platforms to remain nimble and take down negative content with impunity as well. Experts on the panel, like Boston University School of Law professor Danielle Citron, suggested tying the liability shield to companies’ demonstrating “reasonable” content moderation rather than giving it to tech companies for free.

Some lawmakers worried about the implication of including language from Section 230 in trade agreements, fearing that it would make the law harder to revise in the future.

“Trying to fit it into the regulatory structure of other countries at this time is inappropriate,” said Rep. Jan Schakowsky, D-Ill.

Gretchen Peters, executive director of the Alliance to Counter Crime Online, testified that including such language in trade agreements is “problematic because it potentially is going to tie Congress’ hands from reforming the bill down the line, and that’s precisely why industry is pushing to have it inside the trade deals.”

But Katherine Oyama, global head of intellectual property policy at Google, argued this isn’t the case.

“There’s no language in the trade deals that binds Congress’ hands,” Oyama testified to lawmakers. “There’s nothing in the current USMCA or the U.S.-Japan FTA that would limit your ability to later look at 230 and decide that it needs tweaks later on.”

Taken From: https://www.cnbc.com/2019/12/05/pelosi-pushes-to-keep-section-230-out-of-usmca-trade-agreement.html

New NAFTA deal improved, but still fundamentally flawed

“We have a long way to go before we get a deal that is ambitious enough to serve the needs of the planet and the rest of us.

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OTTAWA — After months of negotiations, a new NAFTA deal was reached between the U.S. Congress, Mexico and Canada. While the deal is still under wraps, it appears that some key positive changes have been made. However, the deal is more of the same, says the Council of Canadians.

“We have a long way to go before we get a deal that is ambitious enough to serve the needs of the planet and the rest of us. And with the climate crisis, we have so little time,” said Sujata Dey, Trade Campaigner for the Council of Canadians. “The changes to this deal show that while we are up against unprecedented corporate power, we are able to make a difference when we work together.”

Major changes to the deal include:

  • the removal of biologic drug provisions which lock-in profits for Big Pharma. (The Council of Canadians opposed this provision which could jeopardize a future Pharmacare program.)
  • more enforceable labour standards
  • the inclusion of more multilateral environmental agreements in the agreement.

The Council of Canadians welcomes these changes to the deal.

In addition, the Council advocated for removing the Investor State Dispute Settlement (ISDS) provisions which allow corporations to sue governments over public policy changes when they affect profit. The Council of Canadians also challenged the energy proportionality provisions which mandate Canada to export energy to the U.S. Both of those provisions have been removed for Canada in the deal.

“Thanks to people power, we have pushed for a better deal. However, it is still a deal based on a flawed pro-multinational blueprint. The deal empowers corporations and is ineffective at challenging the essential issues of our time—climate change and rampant inequality—which are amplified by unregulated globalization,” said Maude Barlow, Honorary Chairperson of the Council of Canadians. “What we can rejoice in is this: ISDS, the corporate courts are on the run. Chapter 11 will not apply to Canada in the new deal. Finally, all over the world, these provisions are being seen for what they are, an attack on the commons, and a grab bag for rich multinationals.”

At the same time, new toxic provisions were introduced into the new deal; a binding regulatory cooperation chapter which seats corporations at the table where regulations are made, giving them the power to modify and challenge them; the erosion of the supply managed markets and sovereignty for Canadian farmers; and ineffective protections for water. The agreement does not mention the Paris climate agreement and still has provisions which encourage the further privatization and deregulation of the economy.

The Council of Canadians is available to comment on the new NAFTA.

Taken from: https://canadians.org/media/new-nafta-deal-improved-still-fundamentally-flawed

Redo of USMCA Better Than Original NAFTA After Yearlong Effort to Improve Trump’s 2018 Deal

Unions, Consumer Groups and Congressional Democrats Achieve Removal of Big Pharma Giveaways and Strengthening of Labor, Environmental Standards and Enforcement

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WASHINGTON – Today, the administration and U.S. House Democrats announced they had reached an agreement on a redo of the U.S.-Mexico-Canada Agreement (USMCA) that Donald Trump signed last year. Lori Wallach, director of Public Citizen’s Global Trade Watch, issued the following preliminary statement about the revised revised North American Free Trade Agreement (NAFTA):

Thanks to congressional Democrats, unions and consumer groups fighting to remove Big Pharma giveaways and improve labor and environmental terms, the redo of Trump’s 2018 NAFTA 2.0 is better than the original NAFTA and could improve peoples’ lives, although it still includes problematic terms.

Trump failed to fix NAFTA with the deal he signed last year, betraying his promise to working people. It included new Big Pharma giveaways that lock in high drug prices and labor and environmental terms that were too weak to stop NAFTA’s original sin of job outsourcing.

Working people are the winners in the yearlong battle to force Trump to fix his NAFTA 2.0: The changes Trump was forced to make mean the final deal could counter some of NAFTA’s ongoing damage to working people and the environment. Although many NAFTA flaws were not fixed, the alternative is status quo NAFTA, not a more improved deal.

The best feature of the new NAFTA is the gutting of Investor-State Dispute Settlement (ISDS). Using this regime, corporations have extracted almost $400 million from North American taxpayers after attacks on environmental and health policies before tribunals of three corporate lawyers. That a U.S. pact largely eliminates extreme ISDS protections for foreign investors and anti-democratic tribunals sends a signal worldwide about the illegitimacy of the ISDS regime.

Trump’s claim that this new NAFTA will bring back hundreds of thousands of manufacturing jobs is absurd. However, over time, the labor and environmental standards and enhanced enforcement terms may help raise wages in Mexico, and this may also reduce U.S. corporations’ incentives to outsource U.S. jobs to Mexico to pay workers less.

Today’s deal shows that to be politically viable, trade pacts can no longer include extreme corporate rights like ISDS or new monopoly protections for Big Pharma that have been featured in past U.S. trade deals and that they must have enforceable labor and environmental standards. This is a significant shift after decades of U.S. trade pacts expanding corporate rights and Big Pharma monopoly protections.

Fixing the existing, damaging NAFTA is not the same as negotiating a truly progressive trade agreement from scratch, which would additionally require climate provisions, truly enforceable currency disciplines, and the elimination of limits on consumer protections for food, product safety, the service sector and online platforms. The new NAFTA is not the template for future agreements, but establishes the floor from which we will continue to advocate for a new model of trade and globalization that puts people and the planet first.

Taken From: https://www.commondreams.org/newswire/2019/12/10/redo-usmca-better-original-nafta-after-yearlong-effort-improve-trumps-2018-deal

Mexico accepts U.S. steel demand in USMCA trade deal, but with conditions

MEXICO CITY (Reuters) – Mexico would accept a U.S. demand on steel in the United States-Mexico-Canada Agreement if the rule took effect at least five years after the trade pact’s ratification, Mexican Foreign Minister Marcelo Ebrard said on Sunday.

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Mexican lawmakers earlier this year approved the deal, known as USMCA, which would replace the North American Free Trade Agreement. But Democratic lawmakers have held up U.S. ratification over concerns about how labor and environmental provisions would be enforced.

U.S. Trade Representative Robert Lighthizer also made a last-minute demand to restrict the definition of what would constitute North American steel and aluminum under automotive rules of origin, calling for the metals to be “melted and poured” only in North America.

“Mexico has shared that this would bring lots of problems,” Ebrard told reporters, adding that Jesus Seade, Mexico’s top negotiator for USMCA, would travel to Washington within hours to present Mexico’s terms.

“We will tell (the United States) that we will not accept, in any form, for this obligation to take effect the moment the treaty is ratified,” Ebrard said.

Mexico would allow the rule for steel to be enforced after at least five years but not accept the tighter rule for aluminum because the country does not produce the metal’s raw materials, Ebrard said.

U.S. negotiators had also pushed Mexico to impose tougher controls on its labor standards, including allowing U.S. inspectors to supervise their implementation in Mexico.

Ebrard reiterated the Mexican government’s rejection of that proposal, but said Mexico would allow panels composed of experts and a third party to review labor standards.

The USMCA, signed about a year ago, must be passed by lawmakers in all three countries, including the U.S. Congress.

Canada has said it is waiting on ratification in order to move in tandem with the United States.

Taken From: https://www.reuters.com/article/us-usa-trade-mexico-idUSKBN1YC0NA

White House, congressional Democrats on cusp of revised North American trade deal

The White House and House Democrats are on the cusp of finalizing a new trade deal for North America, a major achievement for President Trump and House Speaker Nancy Pelosi that comes even as Democrats prepare to impeach the president.

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President Trump told reporters Monday that “we’re doing very well” in the negotiations, “hearing from unions and others that it’s looking good.”

“A lot of strides over the last 24 hours,” Trump said. “If they put it up for a vote, it’ll pass.”

In a sign that an agreement was imminent, U.S. Trade Representative Robert E. Lighthizer and Trump son-in-law and senior adviser Jared Kushner are expected to be in Mexico on Tuesday to help secure the pact.

Trump could announce the pact with Pelosi as soon as Monday night or Tuesday morning on Twitter, according to a top Republican who was not authorized to speak publicly.

The breakthrough comes after months of back-and-forth between the White House, Canada and Mexico, as well as House Democrats as they crafted the revised trade agreement. Trump has said replacing the 1994 North American Free Trade Agreement is a top priority of his presidency, promising that it will bring manufacturing jobs back to the United States.

He reached an agreement with Canada and Mexico to make changes last year, but the deal could not be finalized until Democrats agreed, as they control the House of Representatives, which must vote to approve the new treaty.

Administration officials have separately indicated to key congressional committees, as well as leadership in both parties, that an agreement is close and could be announced soon, according to people familiar with the message.

White House officials hoped to have the deal secured by this week so that the House could vote on it by Christmas.

In a meeting with GOP aides on Capitol Hill, White House deputy communications director Jessica Ditto also spoke about labor protections — a key priority for Democrats and unions — and stressed that the revised NAFTA includes the strongest labor provisions of any trade deal, according to several people present who spoke on the condition of anonymity because they were not authorized to discuss the talks publicly.

She also stressed that Republicans need to continue promoting the trade agreement — which would be one of Trump’s most significant policy achievements — well after it’s ratified.

One point that is likely to bolster support among Democrats: Top officials at the AFL-CIO planned to meet to discuss the near-agreement later Monday, union president Richard Trumka said.

Support from the AFL-CIO, which opposes the existing NAFTA and blames it for destroying millions of good-paying manufacturing jobs, would likely ensure backing from a majority of House Democrats when the deal is brought up for a vote.

Backing from the AFL-CIO would also indicate that Democrats had succeeded in negotiating stronger enforcement mechanisms and protections for labor than existed in the agreement signed by Trump and the leaders of Mexico and Canada a year ago.

“The USMCA they signed in 2018 is not going to be the same as the USMCA we see in 2019,” said Dan Ujczo, a trade lawyer with Dickinson Wright. “There are going to be significant differences.”

The pact must be ratified by the legislatures in all three countries before it can take effect.

“I got reason to believe — but there’s no concrete information I can give you — that it’s finalized,” Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) said. “But I can’t — you really won’t know that for 24 hours. You’ve got three countries involved.”

Pelosi (D-Calif.) has said she wants the deal to be transformative and a blueprint for future trade deals and hopes to pass it by year’s end. A Senate vote may not occur until early next year, according to several business executives following the process.

Secretive negotiations between Lighthizer and House Ways and Means Chairman Richard E. Neal (D-Mass.) have moved forward even with impeachment proceedings underway. In recent days, there have been a flurry of meetings between Lighthizer and Mexican and Canadian leaders as parties to the deal sought to iron out final sticking points.

These included provisions related to steel, iron and pharmaceutical drugs.

A spokesman for Pelosi declined to comment.

The trade agreement would replace the 25-year old NAFTA, which Trump has reviled as “the worst trade deal ever” and mark a major political win for the president.

The administration has been pushing for a House vote on the new U.S.-Mexico-Canada Agreement before the end of this year to avoid seeing the deal swallowed by 2020 campaign pressures.

Congress is expected to approve the revised agreement with overwhelming Republican support in both chambers. Pelosi has been working to secure a significant number of Democratic votes.

Amid the ongoing House impeachment inquiry, many moderate Democrats were reluctant to return to their districts without having voted on the trade deal. Trump, Vice President Pence and other top Republicans in recent days have lambasted Pelosi and House Democrats for failing to act on the USMCA.

Taken From: https://www.washingtonpost.com/business/economy/white-house-congressional-democrats-on-cusp-of-revised-north-american-trade-deal-trumka-says/2019/12/09/096c4f3c-1a8f-11ea-87f7-f2e91143c60d_story.html

GOP lawmakers lament proposed scale-back of biologics protections in USMCA

Republican lawmakers on Wednesday expressed concern about reports the Trump administration is willing to give up language on protections for biologic drugs in the U.S.-Mexico-Canada Agreement, but one ardent supporter of strong data exclusivity provisions in trade deals suggested the move would not affect his support for USMCA.

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Photo by Pixabay on Pexels.com

Rep. George Holding (R-NC), a member of the House Ways & Means trade subcommittee, told Inside U.S. Trade the reports were disappointing. He called strong biologics protections in trade deals critical and pointed to his stance throughout the Trans-Pacific Partnership talks, when he backed 12 years of protection.

“I have read those press reports and would be very disappointed if that’s the case,” Holding told Inside U.S. Trade. “We fought hard for the data-exclusivity provisions in [Trans-Pacific Partnership] and my arguments for those remain just as valid today in this arrangement.”

Congressional Republicans cited TPP’s too-short data exclusivity term for biologics as one provision the Obama administration had to fix before it submitted a TPP implementing bill. The trade pact was never voted on.

But Holding said he would not withhold his support for USMCA if the biologics protections were cut or removed.

“USMCA is an incredible agreement. I certainly would be disappointed with less data exclusivity, but I anticipate voting for USMCA,” Holding asserted.

The Office of the U.S. Trade Representative has proposed scaling back protections for biologic drugs in the deal, The Wall Street Journalreported this week. Bloomberg later reported that Mexico was considering a U.S. proposal to remove biologics protections entirely.

The USMCA text approved by the three parties would protect biologic drugs from competition from generic versions for 10 years. U.S. law protects biologic drugs for 12 years. During the Trans-Pacific Partnership negotiations, the 12 parties to the deal — including the U.S. — agreed to a data exclusivity period for biologics of at least eight years, or to provide five years of exclusivity while undertaking additional regulatory measures.

Mexican Under Secretary for North America Jesús Seade, in a column in the Mexican newspaper El Universal, on Wednesday said “very high protection” for biologic drugs would be “eased dramatically,” according to reports. Seade met with U.S. Trade Representative Robert Lighthizer on Wednesday to discuss proposed changes to USMCA negotiated between the USTR and a group of House Democrats.

In a July 26 progress report delivered to House Speaker Nancy Pelosi (D-CA) by the USMCA working group, the members proposed improvements to the deal aimed at preserving “Congress’s freedom to legislate to improve access to affordable medicines, particularly for some of the most expensive drugs on the market;” enhancing “standards for access to affordable medicines” established in the so-called May 10 agreement; and improving “opportunities for competition to improve access to affordable medicines.”

Sen. Thom Tillis (R-NC) said on Wednesday that he had been updated by USTR officials this week on the biologics issue, though he declined to provide details.

“We have gotten an update particularly on some of the biologics provisions; there are some proposals on the House side we are sorting through it now but we need to get [USMCA] passed,” he told Inside U.S. Trade. On the biologics move, he said “I’ve got some concerns with it, but I need to look at the bigger package before I make a decision.”

Rep. Dan Kildee (D-MI), a member of the House Ways & Means trade subcommittee, confirmed that the biologics threshold was up for reduction.

“Unfortunately, the way it’s been discussed is nothing is agreed until everything is agreed to, but that seems to be where we are,” he told Inside U.S. Trade. Kildee is a not a member of the USMCA working group.

House Ways & Means Committee Chairman Richard Neal (D-MA) said on Wednesday the USMCA talks were on the two-and-a-half-yard line, according to Bloomberg.

But House Ways & Means trade subcommittee Chairman Earl Blumenauer (D-OR) said a deal with USTR was unlikely to be reached this week, as some USMCA advocates had hoped. “I don’t know about this week,” he told Inside U.S. Trade on Wednesday. USMCA backers are growing restive about a dwindling number of legislative days in 2019, fearing the deal will founder if pushed into the thick of an election year.

Mexican President Andrés Manuel López Obrador and a key Mexican business group this week gave USMCA backers further cause for concern, against a U.S. proposal  hammered out by House Democrats and USTR officials — to send inspectors to Mexico to ensure the country complies with labor provisions in the deal.

Asked if USTR, Mexico and the USMCA working group, comprised of House Democrats, would have to further address Mexican concerns, Blumenauer told Inside U.S. Trade “I don’t think they are going to have to.”

Kildee said the objections from officials in Mexico were “coming from the people that we hope are going to object to it.”

“If Mexican business interests actually like the agreement, I would have some real questions about it,” Kildee told Inside U.S. Trade. “They are the ones that are going to have to change their behavior,” he said, calling the reaction an “indication that we are getting close to where we need to be because they have been the problem.”

Taken From: https://insidetrade.com/daily-news/gop-lawmakers-lament-proposed-scale-back-biologics-protections-usmca

The World Trade Organization Is Dying. What Should Replace It?

Two decades after Seattle, it has failed to deliver on its promises.

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Twenty years ago this weekend, 50,000 people converged on Seattle to protest the World Trade Organization, which was holding a ministerial-level meeting in the city, and a plan championed by the world’s largest corporations to increase the organization’s authority over even more facets of people’s lives.

The epic protests, televised worldwide, revealed that Americans were united with millions of people protesting the organization in other countries, who demanded new rules for the global economy to make it benefit more people.

Those protests, and subsequent protests and activism around the world, bolstered developing-country negotiators who derailed the W.T.O.’s plans for expansion. But the W.T.O.’s underlying principles still shape the global economy. And the stubborn refusal to alter that model of globalization has fostered a global backlash against “trade” and, in recent years, brought the organization to near collapse.

The dirty little secret is that the World Trade Organization is not mainly about trade. Rather the organization has the primary task of carrying out what the Harvard economist Dani Rodrik calls hyperglobalization — the worldwide imposition of one-size-fits-all rules, favored by global financial markets, which constrain democratic governments’ ability to address their societies’ needs.

The W.T.O. asserts expansive power to set binding rules over a wide range of non-trade issues; countries are required to “ensure the conformity of its laws, regulations and administrative procedures” with W.T.O. rules — and, in turn, corporate financial interests. This includes limits on energy policy, financial regulation and food and product safety, as well as new monopoly protections for pharmaceutical firms to charge consumers more.

If countries do not comply, they are subject to millions of dollars in trade penalties. Of the 242 completed W.T.O. cases, in only 22 did the domestic policies, many unrelated to trade, survive challenged.

Thus, the country-of-origin labels on meat that we relied on in American grocery stores were eliminated after the W.T.O. classified them as “illegal trade barriers” and authorized $1 billion in sanctions. The United States was also forced to weaken regulations under the Clean Air Act, dolphin protection laws and Endangered Species Act rules.

Given the role played by the United States in pushing the W.T.O., there is a certain irony that more than a third of challenges decided by the organization have targeted American policies — which have been found to violate W.T.O. rules 90 percent of the time. Developing countries have fared yet worse, losing 95 percent of 87 challenges.

The United States has filed 49 challenges against other countries, with rulings against Indian policies promoting access to seeds for poor farmers and European limits on genetically modified foods and a ban on artificial growth hormones in meat. The United States has used threats to pressure Thailand, Brazil and South Africa to reverse policies on access to AIDS medication and other lifesaving drugs.

Recently the W.T.O. has facilitated a circular firing squad over climate-change efforts. The European Union and Japan challenged Canadian incentives on renewable energy. The United States won a case against a solar-power program in India. Then India attacked renewable energy programs in several American states. Then China filed a case in 2018 against additional American renewable energy measures.

But the W.T.O.’s overreach could prove to be its undoing. Its ability to decide such cases will effectively end on Dec. 11, when its appellate review board will no longer have a quorum.

After a series of W.T.O. decisions in which tribunals cooked up new standards — never agreed to by member nations — related to anti-dumping and subsidy issues, the Obama administration initiated a protest. Last year, the Trump administration doubled down, blocking the appointment of new appellate adjudicators.

The Seattle protesters who raised concerns about giving too much power to the W.T.O. were dismissed as anti-trade. But it was W.T.O. proponents, those who branded the organization and similar deals as “trade agreements,” who have given trade a bad name.

Since the W.T.O.’s formation in 1995, its proponents have oversold it with grandiose promises of dazzling economic gains. President Bill Clinton said the organization would deliver the average American family $1,700 a year of additional income. It would facilitate open market access that would, in turn, reduce our trade deficit, create new high-paying jobs and bring new riches to farm country.

But the organization’s rules were not designed for those outcomes, which never materialized.

Instead, trade negotiations have been dominated by corporate interests, while labor, consumer, and environmental groups are largely shut out. It’s no shock, then, that the W.T.O. has no labor or environmental requirements to raise wages or limit pollution, or that it sets ceilings but no floors on consumer safety standards. Nor are there rules disciplining monopolistic mega-corporations that now distort global markets or combating currency manipulations that create unfair trade advantages.

No doubt some American workers are bitterly angry and moved by Donald Trump’s trade rhetoric after having repeatedly been promised great gains from “trade” agreements. During the W.T.O. era, developed countries have lost millions of high-paying manufacturing jobs, especially after China joined in 2001. Income inequality between rich and poor countries, and within countries, has increased greatly.

Of course, the W.T.O. isn’t dead yet; the question is, will it see the looming crisis and undertake the reforms necessary to save itself? Unlikely: Its current priority is to set new limits on regulations regarding e-commerce and data privacy at a time when most people are clamoring for some check on the industry.

This is especially perverse, given that the original global trade body, the 1948 International Trade Organization, provides a ready foundation for creating better global trade rules. With a focus on full employment and fair competition coming out of the horrors of World War II, the I.T.O. included labor standards, anti-monopoly provisions and currency-cheating rules to ensure the benefits of trade accrued to more people. But the Senate blocked American participation in the organization, effectively killing it.

That very different vision for a rules-based global trading system remains attainable, once we agree that the system is supposed to work for people around the world, not the world’s largest corporations. Twenty years after Seattle, we still have work to do.

Taken From: https://www.nytimes.com/2019/11/28/opinion/seattle-world-trade-organization.html

NANCY PELOSI PUSHES THE HOUSE TO PASS USMCA, BUT NEGLECTS A BILL WITH BROAD SUPPORT TO STRENGTHEN UNIONS

HOUSE SPEAKER NANCY PELOSI has made no secret of her desire to pass the U.S.-Mexico-Canada Agreement by the end of the year, telling reporters recently that it would be her goal for the House to vote on it before Christmas.

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Centrist Democrats have been insisting privately that a quick passage for the trade deal is necessary for moderate members of Congress to win their competitive reelections in 2020, to show they can “do something.” Unions have made clear, though, that from their perspective, USMCA lacks real labor enforcement mechanisms, which could undermine the whole deal, further drag down wages, and eliminate more jobs.

Meanwhile, a top priority for labor has been sitting quietly on Pelosi’s desk and, unlike USMCA, already commands enough support to get it over the House finish line. The Protecting the Right to Organize Act would be the most comprehensive rewrite of U.S. labor law in decades. It would eliminate right-to-work laws, impose new penalties on employers who retaliate against union organizing, crack down on worker misclassification, and establish new rules so that employers cannot delay negotiating collective bargaining contracts. Introduced by Rep. Bobby Scott, D-Va., in May, it already has 215 co-sponsors in the House and 40 in the Senate.

The PRO Act passed the House Committee on Education and Labor on September 25 on a party-line vote. But two months later, Pelosi has still not moved to bring the bill to the House floor, nor has she given any indication of when she would. Her office did not return requests for comment.

“I don’t know exactly what the holdup is — it is taking longer than it should given the number of co-sponsors that we have,” said Rep. Pramila Jayapal, co-chair of the House Progressive Caucus. “Many other bills have come to the floor with fewer co-sponsors than this one.”

Jayapal told The Intercept that she believes that House leadership remains committed to the bill and that she and the Progressive Caucus have been pressuring them to bring it to the floor. “I think it is really critical for us as Democrats,” she said. “And anyone on the Democratic side who is wary of expanding collective bargaining I think should be thinking really clearly about why that would be.”

Rep. Mark Pocan, the other Progressive Caucus co-chair, said they’re working hard to make sure the bill gets calendared, but acknowledged that “there’s probably somewhat limited bandwidth” for the PRO Act given the intense focus on hashing out labor provisions in the trade deal, and the House’s desire to finish passing the drug-pricing bill.

“Because of that, we’re probably having a more difficult time getting an exact date. There’s a lot of work happening right now,” he said.

Dan Mauer, director of government affairs for the Communications Workers of America, told The Intercept that the delay to bring the vote to the floor has been “very frustrating” and that his union has made it clear to House leadership that members would be “very unhappy” if the House does not prioritize the bill by the end of the year.

“We get it’s hard, there’s a lot of stuff on people’s plates, and at the same time, this bill already has a lot of demonstrated support,” he said.

Randi Weingarten, president of the American Federation of Teachers, told The Intercept over email that her union is also urging Congress to pass the PRO Act before the end of the year. “Currently, employers have carte blanche to abuse their power and dissuade workers from joining a union, but consider the flipside — in cities and states with a strong union presence, wages, benefits, and job security are better across the board,” she said. “Congress can do something concrete to rebalance the ledger, and the time to act is now.”

A repeal of right-to-work would mean that states could no longer impose bans on unions charging private-sector workers mandatory fees for collective bargaining, even if they are not dues-paying union members. In 2018, the Supreme Court effectively nationalized right-to-work in the public sector when it ruled in Janus v. AFSCME that no fee or payment may be deducted from a public-sector worker unless the employee “affirmatively consents” to pay.

While Pelosi has voiced concern that the impeachment against President Donald Trump might distract from advancing the Democrats’ legislative agenda, she is not moving the PRO Act, which is in a strong position for passage. The legislation builds on the House Democrats’ 2017 “Better Deal” agenda, which included many labor commitments also laid out in the PRO Act. “We want to put this out to the public,” Pelosi said at the time. “Public sentiment is everything.”

Aside from having co-sponsors, public sentiment for unions is also at one of its highest points in the last 50 years, according to Gallup’s annual polling. Sixty-four percent of Americans approve of unions, up 16 points since 2009.

While the House did vote to raise the federal minimum wage to $15 an hour this summer, union advocates also felt that House leadership dragged its feet on bringing that bill to a full vote. It passed the House labor committee in March but didn’t come to the floor until July.

Meanwhile, the U.S. Chamber of Commerce, a powerful business lobbying group, is spending thousands of dollars ginning up opposition to the PRO Act, running ads on Facebook and Twitter. The chamber is also spending heavily on ads in support of USMCA, urging viewers to tell Congress to pass the trade deal.

“I do worry that by delaying [on the PRO Act], we just give the chamber and others the opportunity to prevent passing this legislation,” Jayapal said.

The last time Congress was in a position to pass a major rewrite to labor law was in 2009, when Democrats unsuccessfully pushed the Employee Free Choice Act. Labor leaders disagree over why EFCA ultimately failed. Some blamed moderate Democrats, others blamed then-President Barack Obama, and still others chalked it up to a weak ground game from labor and progressives in holding Congress accountable in the face of intense corporate opposition. The death of Sen. Ted Kennedy, D-Mass, who was chair of the Senate labor committee and then succeeded by a Republican, surely didn’t help. Neither did aggressive lobbying by the chamber. “This will be Armageddon,” the vice president for labor policy at the Chamber of Commerce complained at the time.

Some unions appear more resigned to the idea that it’s already too late for the bill to pass this year.

“The Teamsters would love the PRO Act to be considered by the full House as soon as possible, although time is running short for that to happen in 2019,” a spokesperson told The Intercept over email.

AFSCME President Lee Saunders also praised the House for its efforts so far to support workers, but avoided saying that his union expects to see the PRO Act wrapped up by the holidays. “We expect progress to continue” on bills like the PRO Act, and the Public Service Freedom to Negotiate Act, which would bring labor reform to the public-sector workforce, he told The Intercept. “With this political and grassroots landscape, we have every expectation that our elected officials will give working people the freedom to shrink the widening wealth gap and the voice they need to strengthen their communities.”

Mauer of CWA was more direct in raising the potential consequences for not moving swiftly, pointing to the need to galvanize union members before the next election.

“If you want real strong worker excitement that will get union activists excited for 2020, this is what we need to get it; the PRO Act is really it,” he said. “We absolutely think this is a key thing, not just legislatively but politically.”

Taken From: https://theintercept.com/2019/12/02/nancy-pelosi-usmca-pro-act-unions/