‘New’ NAFTA Fails Workers On Both Sides Of Border

Mickey Ray Williams keeps a Goodyear tire in his Gadsden, Ala., conference room. Made in Mexico and imported to Gadsden, that tire induces fear.

unnamed.jpgIt’s an Assurance All-Season tire. Those were developed at Goodyear’s Gadsden factory in 2014. Now some, or possibly all, are built in a brand-new, half-billion-dollar plant in San Luis Potosí, Mexico. And Goodyear is furloughing workers at its tire plant in Gadsden, where Williams is president of the USW local union.

This sad story is as old as NAFTA. That’s a quarter century of pain. An American corporation, GM or Nabisco or Carrier, builds a factory in Mexico. There, NAFTA will protect the company from tariffs when it imports the Mexican-made cars or Oreos or furnaces back into the United States. And in Mexico, the company can pollute freely, pay workers as little as $2 an hour, and establish company-controlled unions so workers can’t bargain for more. It’s a lose-lose for workers. American workers get fired; Mexican workers get exploited.

Goodyear hasn’t closed the Gadsden factory. But the Mexican tire in Williams’ conference room at the local union hall is a symbol of Gadsden workers’ dread that it will. As the new plant in Mexico geared up, Goodyear laid off 175 workers in Gadsden and 60 at its plant in Danville, Va., this year. Meanwhile, Mexican workers protested poor working conditions with a one-day strike not authorized by the company-controlled union. Goodyear solved that problem. It sent its Mexican workers a clear a message by firing 57 of the participants.

This is why the USW, and the rest of organized labor, opposes the proposed new NAFTA. It contains some new language regarding workers’ rights and environmental protection. But it lacks meaningful enforcement provisions. Without them, corporations like Goodyear will continue to invest in Mexico while closing American factories. And workers in both countries will continue to get hurt.

Goodyear announced the layoffs in Danville and Gadsden in February. Many of the workers furloughed in Alabama were just starting out. “We got a young work force in Gadsden,” Williams said, “When you look at them and they have their little kids with them, it is just so sad. They are wondering, ‘Where do we go from here?’ A lot of them want to come back to work.  They don’t understand why an iconic American company would run out from under them.”

The local union searched for jobs in the area for them. “A lot of them took a $10- to $13-an-hour cut in pay,” Williams said, “They are downsizing, selling their cars, even their homes, to get cash.” Some took transfers to other Goodyear plants, but that is wrenching. It means uprooting their whole family, moving far away from relatives and friends, and starting over.

At the local union meetings, Williams said, one question always comes up: What’s going on at the plant in Mexico. “They are not mad at the workers in Mexico,” he said, “They are mad that Goodyear went down there and underpaid those workers. They are mad that Goodyear is taking our work and moving it there.”

And they are afraid. The workers took cuts when labor agreements were negotiated in 2006, 2009 and 2013. But Americans can’t compete with Mexican workers earning $2 to $6 an hour.

The Gadsden workers have good reason to be fearful. They’ve seen corporations close American factories after building in Mexico. Over the past 20 years, the United States lost 5 million manufacturing jobs and nearly 90,000 factories. Some went to China or Vietnam or India. But a lot went to Mexico.

For example, in recent months, GM closed factories in Lordstown, Ohio, and Warren, Mich., as part of its plan to shutter five plants in the United States and Canada and slash 14,000 North American jobs. Its shops in Mexico, however, are going gangbusters. It decided last year to manufacture the revived Blazer model in Mexico and has shifted productionof several cars, SUVs and trucks south of the border. Now, GM is the top carmaker – in Mexico.

That is the legacy of NAFTA. And that’s what Congressional Democrats are committed to terminating with a new NAFTA. House Speaker Nancy Pelosi appointed a committee to work with U.S. Trade Representative Robert Lighthizer to fix the proposed new NAFTA.

Committee members went to Mexico, where Goodyear denied them access to the factory. Afterward, the lawmakers demanded answers from Goodyear.

The lawmakers noted in a letter to Goodyear CEO Richard Kramer that the corporation signed a contract with a “protection” union before the plant had hired a single worker. Real unions are organizations formed by workers who elect leaders to negotiate with companies for better wages and working conditions.

Protection or company unions shield corporations from talks with actual worker representatives. They safeguard the corporation, not the employees. A protection union formed before anyone is hired obviously does not represent the workers.

Less than six months after the Mexican tire plant opened in November 2017, between 600 and 800 of its workers conducted a one-day wildcat strike to demand real union representation, higher wages and safer working conditions.

Safety in a tire plant is a life-and-death matter. After several incidents at the Goodyear plant in Danville in 2015 and 2016, inspectors found more than 100 health and safety violations and fined Goodyear $1.75 million. And that’s in the United States, where standards are higher and Goodyear knew it was subject to regulation and inspection.

The Congressional committee spoke with several of the workers Goodyear fired after the wildcat strike, and the lawmakers reported in their letter to Goodyear that the workers described: “poor working conditions, lack of protective gear and safety and overall training provided to workers, non-reporting of hazards, deductions that are taken from already low wages, and discrimination and harassment.”

The committee, which sent a copy of its letter to Trade Representative Lighthizer, told Goodyear that mistreatment of workers at its Mexican plant undermines any confidence lawmakers might have in labor reforms recently adopted in Mexico.

“While we are told that Mexico’s labor reforms and a renewed NAFTA will lead to positive changes in Mexico and in America, what we saw at Goodyear clearly illustrates the entrenched way of doing business in Mexico that is based on exploiting a powerless workforce,” the committee wrote.

The committee asked Goodyear to respond to the workers’ allegations and to tell Congress what percentage of the tire production in Mexico is being exported to the United States, as well as how those imports will affect Goodyear’s U.S. workers, like those in Gadsden.

On Monday, Goodyear sent a letter to the committee denying any and all wrongdoing.  Kramer extended an offer for the committee to visit the plant in Mexico, with no explanation for why it rejected the lawmakers’ earlier request to inspect the facility. The CEO provided no concrete answer to the committee’s question about the percentage of Mexican-made tires that are exported to the United States or how that will affect the corporation’s U.S. manufacturing.

Kramer described the relationship between the corporation and the protection union in Mexico as just hunky-dory – which would be expected since the company controls the union. He said Goodyear intends to comply with Mexico’s new labor law forbidding protection unions, which means, of course, it has not yet.

Safety is a “core value for Goodyear,” Kramer said, and, “Goodyear applies its global safety and environmental standards and practices in Mexico, just as it does in the United States.” That will be of cold comfort to Mexican workers aware of Goodyear’s 100 violations in Danville.

The letter is three pages of double talk that satisfied no one, least of all Mickey Ray Williams and the workers in Gadsden.

Williams’ father worked at Goodyear in Gadsden for 36 years, retiring from a good, family-supporting job in 2002. Williams has worked there 17 years. But he doesn’t think Goodyear will be around for his kids: “I hope that plant is here when my kids get old enough, but I have a feeling we are in trouble.”

That tire in his conference room is a bad omen.


Trumka to LCLAA: Without Changes, New NAFTA Dead on Arrival

AFL-CIO President Richard Trumka delivered the following remarks at the Labor Council For Latin American Advancement National Conference:

ap_17094642440719trumka_wide-a2437a0e0762e2d11dbd553af048312d4676bde5-s800-c85Good morning. Buenos dias. Thank you so much, Sister Yanira for those very kind words. It is an honor to be introduced by the first woman and the first immigrant to head LCLAA. I doubt that I need to tell people in this room what a warrior Yanira is for the cause of working people. Our movement is stronger, and bigger, and more diverse today due to her tireless work and leadership, and I want to thank her sincerely for that.

And I of course want to recognize the outstanding leadership of LCLAA Executive Director Hector Sanchez. Hector is one of the premier labor and civil rights leaders in the country, always pushing us to be clear and bold in our commitment to Latino workers and all vulnerable communities. Thank you, Brother Hector!

It is good to be home in Pennsylvania. And it is great to be here with the leaders and activists of LCLAA.

Earlier this week, President Trump’s top immigration official twisted the inscription on the Statue of Liberty, arguing that working people and people of color aren’t welcome in our country. “Give me your tired and your poor who can stand on their own two feet,” he said. What’s more, in his view, that offer only extends to “people coming from Europe.” These words—and this sentiment—are simply un-American. Standing here, in the birthplace of our great nation, let us be absolutely clear: We are a nation of immigrants. We are a labor movement of immigrants. This country wasn’t built by people who came here with everything. It was built by families who started with nothing…who worked and toiled to build the greatest nation on the planet. We’re not just standing on our own two feet. We’re rising. We’re marching. We’re striking. And we won’t stop until every bigot dies off or goes back into hiding!

Using the Statue of Liberty to batter immigrants is un-American, but it is also unsurprising. Our nation is being poisoned by hateful rhetoric and divisive tactics at the highest levels of government. People of color are being scapegoated, minimized, dehumanized and told to go back where they came from. Racist dog whistles have been replaced with megaphones. Women are openly degraded and discriminated against. And America’s welcome mat, long a beacon of hope for immigrants, refugees and asylum seekers, including my parents, is being bulldozed and paved over, replaced with a clear message: “you’re not welcome here.” The El Paso shooter traveled more than 600 miles to kill Mexican immigrants. Let that sink in for a minute.

President Trump didn’t start this fire, but he’s pouring gas on it every single day. He uses his Twitter account to demean and divide rather than inform and inspire. He routinely picks on the most vulnerable among us—women of color, people with disabilities, transgender Americans, immigrants—even Gold Star families. And just last week in Mississippi, immigration authorities came into OUR house to deport OUR brothers and sisters. These members of the United Food and Commercial Workers put food on America’s table, laboring in dangerous conditions and sacrificing for their families and our communities. Their only crime is working hard for a better life. And we will not rest until each and every one of them can live here and work here freely as a United States citizen.

Under the leadership of Jim Kenney, a pro-worker mayor we helped elect, Philadelphia has proudly established itself as a sanctuary city. Let there be no doubt—we are a sanctuary movement. Our unions must provide safety to immigrants, and our contracts must offer protection where our laws do not. Immigrants can find hope and a home in the labor movement—as they have throughout our history. And all of us—together—can beat back bigotry with solidarity.

Our movement is needed now more than ever. After the El Paso shooting, it was suggested that America is better than this. Sadly, that is not true today. We can be better. We should be better. And if workers have anything to say about it, we will be better.

But there is no denying that America is falling far short of her promise. Two years ago this week, I resigned from the White House American Manufacturing Council after President Trump couldn’t find the words to condemn white supremacy and murder in Charlottesville, Virginia.

And what has happened in the two years since? There have been massacres at music festivals and schools and stores and synagogues. Children are being separated from parents at our border…as families are cruelly imprisoned for profit…after fleeing the poverty and violence made worse by the Central America Free Trade Agreement.

The free press is under vicious attack. Wall Street got another windfall tax cut. Workplace safety regulations have been gutted. And in 2018, the U.S. spent $24 billion on immigration enforcement and only $2 billion enforcing our labor laws.That’s 12 times more to hunt down immigrants than protect workers. Brothers and sisters, America is on fire. And the labor movement is ready to extinguish the flames.

I believe there is no better place to start than our decades-long economic policies, perpetrated by both political parties, that have deliberately torn America apart, all to line the pockets of big corporations. NAFTA is one of the worst offenders.

The beneficiaries of the current trade model want to pit us against each other in their never ending quest to leave us poor, divided and weak. But we know better. We know our enemies are the global corporations who twist the rules to benefit themselves. The enemies are not American, Canadian or Mexican workers. Workers are never the enemy!

Trade itself is also not the enemy. We support trade. For too long, if you opposed a trade agreement for any reason, you were belittled as a protectionist…a dinosaur…as not understanding the complex reality of a global economy. Even some of our friends told us we were fighting yesterday’s war.

But our movement is trying to shape globalization, not stop it. We don’t question whether we should open up new markets for our products and do business with people all over the world. We question the trade rules—written by the largest and most powerful multinational companies—that leave too many of us behind. That’s not trade. It’s greed!

The record is clear. NAFTA has gutted American manufacturing. Earlier this summer, I hosted a series of town halls on this disastrous agreement. We drove from Pittsburgh to Cleveland to Detroit. We had real, honest and powerful conversations about the damage NAFTA has caused over the past 25 years. Nearly a million jobs have been lost across America, and many of our undocumented brothers and sisters came here after their livelihoods were crushed by the same raw deal. Entire communities are being devastated. Some may never fully recover. But we recognize that the human suffering does not stop at the southern border.

Just look at Mexico under NAFTA. Workers at new, state of the art tire plants report making $1.87 per hour. That’s one American dollar, brothers and sisters. Not pesos. These workers don’t make enough to buy the cars they’re producing…and the companies aren’t even selling the tires at a discount. They are pocketing the entire margin. It’s textbook exploitation.

No wonder more than 40% of Mexicans live in poverty. There are still hundreds of thousands of protection contracts that prevent workers from having a real voice on the job. A more progressive president and recently passed labor law reforms provide reason for hope, but the Mexican government has yet to demonstrate it has the resources or infrastructure to enforce these new mandates. And because of President Trump’s ill-advised threats, Mexico is diverting troops and money to its southern border with Guatemala, routinely violating the human rights of citizens and migrants alike, instead of working to ensure workers can raise wages through free and independent unions.

Brothers and sisters, any NAFTA agreement that leaves Mexican workers poor and vulnerable is dead on arrival at the AFL-CIO. The U.S. and Mexican labor movements are in lockstep on this. I am in constant communication with Brother Napoleón Gómez and Los Mineros about the importance of winning a new NAFTA that lifts up working people in all three countries.

Simply put, the current proposal falls short. First and foremost, it is unenforceable. As I stated earlier, Mexico has yet to demonstrate the capacity to enforce labor law reform and eliminate protection contracts. In addition, the current text allows an accused party to unilaterally block the formation of a dispute settlement panel. That’s crazy! And finally, workers have no way to enforce the agreement, such as the right to stop products at the border if they are produced in violation of labor or environmental standards.

The Trump Administration wants a vote on the new NAFTA ASAP. We are not going to let that happen without the changes working people across North America deserve. It is time for negotiators to go back to the table and hammer out an agreement that is good for working people across the continent.

Bring us a deal like that, and we’ll support it. But if the president insists on a premature vote, we will have no choice but to oppose it.

It boils down to this: some parts of the new NAFTA are better than the original and some are worse. But no matter what, any new NAFTA that doesn’t ensure that all workers in Mexico, Canada and the United States can freely exercise our fundamental labor rights isn’t worth the paper it’s written on. It won’t be new, it won’t be different and it sure won’t help rebalance our economy or empower working people.

Workers are fed up with a race to the bottom. We’re fired up. And, we’re not gonna take it anymore! We reject those who tell us the NAFTA model is “inevitable.” We reject a world of obscene inequality and choose a world of broadly shared prosperity.

We deserve better. We demand better. We’re fighting for better. And, we’re going to win better—for all of us!

Brothers and sisters, even with all the darkness in America today, I have hope. Hope in a labor movement on the rise. Hope in the nearly 1,000 union members elected to public office in 2018 alone. Hope in the 20,000 public sector workers in Nevada and 100,000 farmworkers in New York that now have the right to bargain collectively. Hope in the strength and solidarity of our North American labor movement. No one can shake us and no one can break us.

We’re going to fight for higher pay.

We’re going to fight for better health care.

We’re going to fight for a secure retirement.

We’re going to fight for immigration reform that protects workers, unites families and invests more in citizenship than cages.

We’re going to fight for trade that lifts up workers in the United States and Mexico and every single country.

And, we’re going to fight for an economy where every worker…from Philadelphia to Reynosa, Mexico…has the freedom to form a union and bargain collectively.

We’ve earned it, brothers and sisters. We teach, heal and make. We package, print and bake. We clean the rooms and pick the crops. We fight the fires and lift the loads. We serve our nation with dignity and pride. We stand tall. We don’t run and hide.

This is our time! This is our moment!

WE are the North American labor movement…and we will not…WE WILL NOT…be denied!

Thank you, brothers and sisters! God bless you!

Democrats struggle to present a united front on Trump’s trade war

Democrats are divided over President Trump’s increasingly confrontational approach to trade with China, a surprising lack of unity for a party that has stood starkly against most of the president’s positions.

warrenelizabeth_sandersbernie_harriskamala_080919gettySeveral of the party’s leading presidential hopefuls have railed against Trump’s trade war, accusing the president of confronting China erratically while causing needless economic pain. But they are also arguing that they would prove tougher on China than Trump, a message that may be hard to reconcile with their vows to ease or reverse the damage caused by the widening trade war.

And some top Democratic lawmakers have only egged him on, as Trump took an action this week — deeming China a “currency manipulator” — that they have long advocated.

“They’re stuck. They want to say the dramatic steps taken by the Trump administration haven’t been effective, but they also say we need to renegotiate with China,” said Ernie Tedeschi, who served as a Treasury Department economist in the Obama administration. “With trade wars, there’s a tension between helping domestic manufacturers and keeping pain away from consumers. That’s their dilemma.”

On other issues, such as immigration, tax cuts or sustaining the Affordable Care Act, Democrats have been able to demonstrate a broad consensus against Trump’s policies, even if they have differences among themselves about the best way forward. But as trade becomes a bigger and potentially more calamitous issue going into the election year, with the stock market seesawing and the economy slowing, Democrats could face louder calls to better define their plans and how they differ from Trump.

The tension in part reflects the disparate impact of Trump’s trade war on key voting blocs, analysts and experts say. Union steelworkers, for instance, want the next Democratic president to maintain Trump’s tariffs on imported Chinese steel, which have made the steel business more profitable.

But Midwest farmers are pushing for what amounts to the opposite, demanding that the next Democratic presidential candidate resolve the trade conflict so they can resume exporting their products to China.

The Democratic presidential campaigns say they can overcome internal conflicts by arguing that Trump’s trade moves have proved largely unsuccessful, noting that the trade deficit has only risen under his administration and pointing to studies suggesting outsourcing has increased, as well. They say they’ll do it better, though exactly how they would accomplish this remains unclear.

“The problem is that, if you’re not listening carefully, Trump correctly identifies the symptom of the trade problem, and the data is the data,” said a trade adviser to Democratic presidential campaigns who spoke on the condition of anonymity and was not authorized to speak publicly. “The challenge is making people understand his solution is not the real one.”

The economic battle between the United States and China flared again last week, when the Trump administration vowed to slap 10 percent tariffs on $300 billion in Chinese imports in September after negotiations had faltered.

China responded by allowing its tightly controlled currency to depreciate in value, which could hurt U.S. producers by raising the cost of the dollar. The Trump administration retaliated on Monday afternoon by labeling China a “currency manipulator.”

An international trade war raising costs for U.S. consumers and imperiling economic growth may appear to be perfect fodder for an opposition party heading into a presidential election cycle.

Part of Democrats’ challenge is that Trump has taken some actions long demanded by labor unions and the party’s liberals, who have for years called for the government to take stricter action to curb Chinese trade practices. Many of the Democratic candidates have offered few concrete pledges to undo specific trade enforcement actions taken by the president, and some of their policy prescriptions would be difficult to enact.

As a result, the party’s presidential hopefuls have sometimes appeared unable to exploit what has consistently proved to be one of Trump’s most risky gambits in the White House.

On Monday, the U.S. stock market sustained its worst losses of the year amid global investor uncertainty about Trump’s next move. None of the top 10 Democratic presidential candidates, as measured by Quinnipiac’s latest polling, commented on the issue on their Twitter accounts that day.

“They are conflicted. On the one hand, they oppose the harm from Trump’s trade war and how he has waged it,” said Steven Kyle, an associate professor of economics at Cornell. “On the other hand, they used to be on his side of this and, in some cases, have long supported using tariffs to confront China. It is a tension.”

The Democratic campaigns argue they will try to draw a difference with Trump on trade.

On Friday, former vice president Joe Biden slammed Trump’s “irresponsible tariff war” for hurting farmers, workers, and consumers. Biden has argued the U.S. should instead work with Europe and other Asian countries to form a coalition that would exert stronger pressure on China, an approach similar in theory to the Trans-Pacific Partnership proposed under President Obama but later scuttled amid Democratic opposition. Biden has said he would renegotiate the TPP if elected.

“We do need to get tough with China,” Biden said in a July speech, after blasting the president’s tariffs as causing severe pain and “pointless.”

Biden’s campaign would not address directly whether he would roll back tariffs if elected president, but a campaign aide, speaking on the condition of anonymity because he was not authorized to speak publicly, said: “You would be safe extrapolating his approach would be significantly different.”

Sen. Kamala D. Harris (D-Calif.) has similarly repeatedly assailed Trump’s tariffs as a “trade tax,” arguing that the “so-called trade policy” has led to billions in additional spending by American families on necessary household items. Harris in August 2018 joined Sen. Dianne Feinstein (D-Calif.) in urging Trump to “rethink its escalating tariffs and instead urgently convene negotiations with China,” but has not appeared to release a more detailed policy since.

Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) have spoken favorably about Trump applying tariffs to China, as many labor unions have been supportive of the president’s efforts. But the candidates have also argued they would do more for American workers in negotiations with China, in particular vowing to promote union rights and curb environmental damage.

That matches the approach of many of their Senate colleagues, including more moderate members. Senate Minority Leader Charles E. Schumer (D-N.Y.) has long called on the Trump administration to label China a currency manipulator. Sen. Sherrod Brown (D-Ohio), who won reelection in 2018 in a state won by Trump, has spoken positively about the tariffs and helped block a Republican-led effort in 2018 to weaken them.

Sanders has emphasized that he would sign an executive order ending federal contracts for companies that outsource, while also pushing to end tax breaks for those corporations. Sanders has also pushed Democrats to target companies like General Motors and United Technologies over outsourcing, and tried contrasting his record with that of Biden, who voted for the North American Free Trade Agreement. (Trump has targeted those companies over outsourcing.)

Warren recently released a trade policy to impose significantly stricter environmental and labor standards on trade deals, calling for trade deals to be negotiated by environmentalists, farmers, workers and small businesses, while using the United States’ “leverage to boost American workers and raise the standard of living across the globe.” Warren said in a post on Medium that “while I think tariffs are an important tool, they are not by themselves a long-term solution to our failed trade agenda and must be part of a broader strategy that this Administration clearly lacks.”

Sanders appeared to benefit in the 2016 presidential election for hammering former secretary of state Hillary Clinton over her support for free trade deals, winning Rust Belt states such as Wisconsin in the party’s primary.

But Democratic voters also have a complicated set of views on trade, with some opinion polling suggesting support for free trade rising despite the leftward drift of the party. Polling also suggests Democrats may oppose Trump’s trade policies because of their distrust of him personally, rather than because of the underlying policies he has pursued, said Celinda Lake, a Democratic pollster.

At the same time, majorities of voters, including Democrats, are also very worried about Trump’s latest tariffs and the economic pain they could inflict.

“Democratic voters are really of a mixed mind on trade,” Lake said. “It seems sometimes that they are responding more to political cues than trade cues.”

But that may be more true in some parts of the country than others. In Indiana, some labor unions such as the Alliance for American Manufacturing, which represents steelmakers, cheered when the president imposed tariffs to curb the dumping of Chinese steel into foreign markets.

“A lot of steelworkers who lost their jobs are going to credit Trump for getting tough on China,” said Chuck Jones, a former union leader at the Indiana Carrier factory who opposes the president and wants to see a Democrat elected. “I’m worried about it. Depending on who the nominee is, it could be a major problem.”

But other Democrats are pushing for the immediate resumption of sales of U.S. agricultural products to China, a market in free-fall since the trade war began.

J.D. Scholten, the Iowa Democrat who recently announced a campaign against Rep. Steve King (R-Iowa), said he worries that the presidential candidates are throwing away a key political opportunity in battleground states.

“Democrats absolutely need to be talking about this more,” Scholten said in a phone interview from an RV on the road to a rural farming community in the southeast part of the state. “This is drastically affecting us as Iowans. If we’re not out there talking about this, we loss.

NY Assembly GOP Pushes Approval Of USMCA Trade Deal

Republican lawmakers in the state Assembly last week sent a letter to congressional leaders and President Donald Trump urging the approval of a new North American trade pact they say will be a boon to upstate farmers.

cq5dam.thumbnail.767.431.marginThe U.S.-Mexico-Canda trade deal will especially provide support to the state’s struggling dairy industry, they wrote.

New York exports more than $18.5 billion in products to Mexico and Canada a year.

In the letter, the state lawmakers write the USMCA is an improvement from the North American Freed Trade Agreement.

“Specifically, the agricultural industry in NewYork will secure much greater access to the Canadian market if this agreement is ratified by Congress,” they wrote.

“This is especially important for our dairy farmers, who previously were unable to access the Canadian market due to the Canadian milk pricing program. During this time of hardship for our dairy farmers, expanding the market could revitalize the industry and save many farms from closure.”

The new proposed trade pact has also been endorsed by the New York Farm Bureau and the Business Council.

“Undoubtedly, this agreement would be a tremendous victory for New York State and the entire nation,” the letter states. “Long term, uninterrupted trade with Mexico and Canada is critical for the economic vitality of our country.”

From Spectrum News

Lobby groups want USMCA decision as soon as Congress reconvenes

Trade Works for America is a non-profit founded by Vice President Mike Pence’s current chief of staff Marc Short and Phil Cox, a former executive director of the Republican Governors Association.



The group has deep pockets that Cox says it’ll use to get the U.S.-Mexico-Canada Agreement, or USMCA, pushed through Congress.

“We’re going to spend more than $8 million in August, everything from television advertising, broadcast, cable, digital and we’re working with governors for their states,” Cox said.

Some argue Congressional recess is when the real work gets done, when lobbying groups pull out all the stops to get policies passed. Cox is hoping his group can galvanize the public to get in the ears of their representatives and urge them to ratify the agreement.

The U.S. Chamber of Commerce is lobbying along the same lines.

“We’re telling members of Congress: ‘You can’t say that you’re pro-business and not vote in favor of this agreement,’” said John Murphy, head of trade policy at the chamber.

Murphy said members of the manufacturing and agricultural community stand to gain the most, not least because they’d have more certainty over trade conditions.

Dan Ikenson at the Cato Institute agrees something needs to be in place soon, but he says the USMCA is only marginally different from the current NAFTA agreement.

“None of the gains in this agreement justify the contortions that we put our trade partners through, and that we put our domestic polity through,” Ikenson said.

Democratic members of Congress have long argued they want stronger labor standards in the agreement if they’re going to sign on. But economist Ray Perryman in Waco, Texas said that’s not the only thing policymakers are worried about.

“The biggest pushback that I’m hearing from people is not so much what’s in it but the fear that things won’t be enforced,” Perryman said. “That the new labor contract in Mexico won’t be enforced.”

This week, a group of 14 House Democrats sent a letter to Speaker Nancy Pelosi urging her to bring a vote by the end of the year on USMCA.

But Duncan Wood, director of the Woodrow Wilson Center’s Mexico Institute, isn’t confident that’s going to happen.

“To me, it just doesn’t seem to make political sense for the Democrats to accept this deal in its current form,” Wood said. “And it makes a lot of sense for them to wait until after the presidential election in 2020.”

He says this agreement isn’t simply about politics in the United States, either. Every country has local constituents, Wood points out, and those in power will usually do what they can to please them.

“During the USMCA negotiations, we saw how Mexico and Canada adopted a position which was, ‘no deal is better than a bad deal,’” he said.

Mexico has already agreed to the USMCA. Even if the United States ratifies the deal as well, Canada still has to do the same before it becomes a binding agreement.

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Steelmaker that Praised Trump Tariffs Now Suing For Relief

Less than a year after JSW Steel (USA) Inc. lauded U.S. metal tariffs for aiding the steel industry, the company is suing because it’s not exempted from the levies.

Screen Shot 2019-08-06 at 9.22.11 AMThe producer says the Commerce Department wrongfully denied waivers for steel-slab raw materials, forcing the steelmaker to pay tens of millions of dollars in tariffs. It relies on imports of these materials from India and Mexico because the U.S. doesn’t produce steel slab of sufficient quality or quantity, JSW said in its complaint.

The move comes after Chief Executive Officer John Hritz in October credited the Trump administration’s tariffs for helping pave the way for JSW’s $1 billion U.S. expansion plan, which would triple output at its Texas plant and add a facility in Ohio. Hritz said at the time that the administration had helped stem a “reprehensible deterioration” in the industry, and that the tariffs gave the company a cushion to make major investments.

‘Bite The Bullet’

“The point why these guys weren’t given exemptions is to encourage investment in the U.S., and that’s why JSW is building a brand new electric-arc furnace, basically,” Andrew Cosgrove, the senior industry analyst for Bloomberg Intelligence, said in a phone interview. “They’re just going to have to bite the bullet in the interim by importing slabs and paying the tariff.”

A spokesman for JSW didn’t return requests for comment. Kevin Manning, a Commerce Department spokesman, declined to comment.

JSW, a unit of India’s JSW Steel Ltd., says it manufactures “steel plate and pipe for use in critical infrastructure projects” including natural gas and oil pipelines. The Commerce Department is authorized to grant exclusions from tariffs to U.S. businesses that rely on types of steel that aren’t produced in the U.S. in sufficient quantities.

Total U.S. steel slab consumption is about 8.2 million tons, of which 7.2 million was imported from abroad, meaning the domestic industry is 88% dependent on foreign metal, according to Cosgrove.

JSW broke ground for a new electric arc furnace in in Baytown, Texas, the company announced in October 2018, with the company thanking “policies in Washington” as it set out to hire 1,000 new workers and invest as much as $1 billion to expand its U.S. operations.

Dancing on Quicksand. A Retrospective on NAFTA on the Eve of Its Replacement

ON NOVEMBER 30, 2018, THE PRESIDENTS OF THE NORTH AMERICAN nations signed the long-awaited new version of the North American Free Trade Agreement (NAFTA).

AR-309309340Should the majority in the U.S. House of Representatives sign off on the treaty draft this year, it will become binding under its new appellation—the U.S.-Mexico-Canada Agreement (USMCA).To ensure that the USMCA treaty is not just a recommitment to a brutal trajectory that began decades ago, this is the moment to look back at what NAFTA wrought on both sides of the border. NAFTA facilitated the off-shoring of U.S. jobs to Mexico, making the corporate threat to relocate south of the border credible. Industrial growth in Mexico did not improve workers’ lives. NAFTA annihilated peasant agriculture but did not offer these cultivators industrial employment within Mexico. Further, as neoliberal “free market” policies tied to NAFTA slowly took their full effect in the 1990s, millions of poor Mexicans were swept under by forces NAFTA induced and were driven to seek survival in the United States.

Mexico’s forced migration, in turn, opened the floodgates, releasing a rising tide of nativist hatred for immigrants: U.S. workers faced with decades of wage stagnation found it easy to scapegoat defenseless, transplanted Mexican peasants now in their midst. Mainstream economists concocted fantasy “free trade” models championing NAFTA. The largest U.S. corporations stepped-up and sold the deal to a craven U.S. Congress as chronicled in journalist John R. MacArthur’s book The Selling of “Free Trade:” NAFTA, Washington, and the Subversion of American Democracy. Sleight-of-hand illusions worked—nearly absent from this well-choreographed travesty was any recognition of what NAFTA would predictably accomplish: Plants and equipment
were shifted to Mexico, at-risk manufacturing facilities in the United States closed, the Rustbelt region lost employment and its tax-base and social stability, industrial unions were crushed and the U.S. proletariat slid down into the precariat. NAFTA was private corporate policy masquer- aded as “public policy.” Concerned people in the

United States and Mexico now need to deeply focus on NAFTA’s consequences and redouble our efforts to form cross-border and cross- cultural coalitions to ensure that the USMCA arrangement does not create another bi-national socioeconomic disaster.

Read the whole article from Dollars and Sense here

Beyond the Myth and Through the Mexican Labyrinth Labor under the “New NAFTA,” the U.S.-Mexico-Canada Agreement

PRESIDENT TRUMP HAS DECLARED THAT CONGRESSIONAL APPROVAL of the U.S.-Mexico-Canada Agreement (the USMCA), signed by the three governments in November 2018, is his number one legislative priority for 2019.

Screen Shot 2019-08-06 at 10.46.56 AMFull deployment of the legislative machine pushing for approval of the USMCA was put on hold until April 2019, in anticipation of a U.S. International TradeCommission (USITC) report on the economic impact of the agreement. The report, which was finally released in mid-April, asserted, predictably, that the USMCA would lower the trade deficit with Mexico, raiseU.S. employment by creating 178,000 new jobs—including 76,000 in the auto sector in the next five years—and raise the U.S. GDP by $68 billion. The Office of the US. Trade Representative—which is part of the executive office of the U.S. president—simultaneously issued their own glowing analysis (see the sidebar“Lies, Damn Lies, and Models” for details).

This effectively fired off the starting gun in the high-stakes, corporate-led negotiations intended to bring the USMCA across the finish line in the months to follow.But in the United States, the powers that be had already jumped the gun, forming two vast organizations intended to create a public upsurge of support for ratification of the USMCA—particularly in states that will benefit from the anticipated investment and employment effects from the redesign of NAFTA. Below we analyze this effort to “sell” the USMCA as well as the Mexican oligarchys role in fomenting the agreement. The crux of the new treaty entails a realignment of auto-sector production, particularly in Mexico, as well as facing the challenge that Asian and European auto plants based in Mexico pose to this sector.

Read the whole fascinating paper from Dollars and Sense here


Bill de Blasio: What Trump gets completely wrong in NAFTA rewrite

In 1994, President Bill Clinton inadvertently laid the groundwork for the rise of Donald Trump.

im-88109He may have believed it when he pledged to working people that the gains from the North American Free Trade Agreement “will be your gains, too.” But that’s not what happened. He would have been better off paraphrasing another president, Lyndon Johnson, who said, “We are giving away the working class for a generation.”

The Democratic Party is supposed to be the party that defends and protects working people. But as our country’s manufacturing jobs disappeared, unemployed auto workers in Michigan didn’t feel protected. Working families in Ohio didn’t see any progress. Small family farmers in Iowa didn’t achieve prosperity or stability.

Democrats lost the election in the very places and with the very people who suffered from NAFTA. We lost the hearts and minds of those who saw their jobs leave and their communities hollowed out.

When we talk about trade in this country, we too often debate only the pros and cons of specific trade deals. And the only trade deals we have ever seen were written by and for multinational corporations.

It doesn’t have to be this way.

The current debate is about NAFTA and “NAFTA 2.0” — or the United States-Mexico-Canada Agreement, USMCA — the deal President Trump has proposed to replace NAFTA. Instead of debating whether Trump’s trade deal is better or worse than the original, we should ask why NAFTA should be the starting point for anything. Why are we making minor tweaks to a policy that was never designed to help working people in the first place? The Trump administration wants to build a better mouse trap. Working families are the mice.

Here’s a radical idea: Start over. From scratch. Rewrite the rules of international trade, and give workers the pen.

If trade deals were written by and for working people, they would include enforceable wage standards, a guaranteed right to organize, and the ability to form multinational bargaining units to negotiate with multinational corporations. When a company wants to move a plant or a call center from the US to Mexico to reduce labor costs, it should be required to bargain with workers from both countries.

If trade deals were written by and for working people, they would raise standards on pollution, require trade partners to honor the terms of the Paris Accord, and increase our shared commitment to fight climate change.

If trade deals were written by and for working people, they would encourage competition in pharmaceuticals and speed up the process of getting new and cheaper medications to the global market.

If trade deals were written by and for working people, they would raise the bar on corporate taxes and prohibit participating countries from setting up off-shore tax havens that help billionaires and multinational corporations avoid paying their fair share.

The United States is the largest consumer market on the planet and the “consumer of last resort” for every other country. The terms we set to allow access to that market should advance the interests of workers and consumers — not the bottom lines of multinational corporations.

Those who still think “What’s good for General Motors is good for America” should spend some time in Lordstown, Ohio. Trust me: those days are over.

When it comes to trade, it’s time we put working families first.

Bill de Blasio

China’s Currency Moves Escalate Trade War, Rattling Markets

The trade war between the United States and China entered a more dangerous phase on Monday, as Beijing allowed its currency to weaken, Chinese enterprises stopped making new purchases of American farm goods and President Trump’s Treasury Department formally labeled China a currency manipulator.

currencyThe escalation shook world markets as nervous investors looked for safe places to park their money. Wall Street suffered its worst day of the year on Monday, with the S&P 500 closing down nearly 3 percent. Selling was especially heavy in the trade-sensitive technology, consumer discretionary and industrial sectors.

Yields on United States Treasuries, which fall as prices rise, dropped as investors sought safety in government-backed bonds. Benchmark indexes in Asia and Europe also fell.

On Tuesday global markets recovered a bit. Asian stocks opened sharply lower but gained back ground through the day, and European equity indexes were mainly higher. Wall Street futures were predicting a positive opening.

The People’s Bank of China, that country’s central bank, took steps on Sunday to limit the impact of Mr. Trump’s next round of tariffs by letting its currency weaken past the psychologically important point of 7 renminbi to the American dollar for the first time in more than a decade.

A weaker currency can make goods cheaper to sell abroad, allowing businesses and consumers to help offset the additional tariffs Mr. Trump plans to impose on Sept. 1. It also harms American exporters that are trying to compete with China.

Chinese officials said the move came in response to market forces, which have reacted to Mr. Trump’s tariff threats by pushing the value of the currency down. In an unusually blunt statement, the central bank put the blame for the currency fall on Mr. Trump’s “unilateralism and trade protectionism measures and the imposition of increased tariffs on China.”

Chinese enterprises also halted new purchases of American agricultural goods in response to Mr. Trump’s decision to impose more tariffs. China’s state-run Xinhua News Agency called the president’s move a “serious violation” of an agreement reached in June with President Xi Jinping of China.

Late Monday, the Treasury took the unusual step of labeling China a currency manipulator — the first time it has done so since 1994. In a statement, the Treasury said that Steven Mnuchin, the Treasury secretary, “will engage with the International Monetary Fund to eliminate the unfair competitive advantage created by China’s latest actions.”

The move will finally fulfill Mr. Trump’s campaign pledge to designate China a currency manipulator. As a presidential candidate, Mr. Trump was sharply critical of China’s currency practices and promised to label China a manipulator if elected.

Until Monday, Mr. Trump’s Treasury had declined to apply the label to China in the five currency reports it issued since the president took office. Instead, it has said the United States has deep concerns about China’s intervention in its currency.

Economists say that China held down the value of its currency for many years, but it had already ceased that practice by the time Mr. Trump came into office. Ultimately, Mr. Trump was persuaded by his advisers to hold off on the label. In its most recent currency report, in May, the Treasury Department criticized China’s trade and currency practices but still did not conclude that Beijing was improperly devaluing its currency.

The hardened positions underscore the increasingly tough path to resolving the trade dispute, which has begun to inflict damage across the global economy. American and Chinese negotiators met in Shanghai last week, the first face-to-face discussions since trade talks collapsed in May, but made little progress in resolving their differences.

The question now is whether Beijing will allow its currency to weaken further and what Mr. Trump may do in response. The two sides have been locked in an intractable tit-for-tat economic war, with China meeting Mr. Trump’s tariffs with punishment of its own.

The United States has already imposed tariffs on $250 billion worth of Chinese goods, placed tougher restrictions on Chinese investment, banned some Chinese companies from doing business with American companies and begun restricting visas for Chinese graduate students in sensitive research fields like robotics and aviation. Those moves were aimed at getting China to open its markets to American companies, protect American intellectual property and buy more agricultural products, none of which have happened yet.

On Monday, Mr. Trump accused China of manipulating its currency and suggested he would look for ways to retaliate.

“China has always used currency manipulation to steal our businesses and factories, hurt our jobs, depress our workers’ wages and harm our farmers’ prices. Not anymore!” the president wrote. “It should have been stopped many years ago!”

If China allows its currency to fall even more, countries in East and Southeast Asia that compete in similar industries could face market pressure to devalue their own currencies. Such devaluation spirals can lead to higher inflation, pinched household spending and disruptive shifts of money across borders. They can also lead to more tariffs or other restrictive trade measures.

“It’s hugely significant as they are making a clear choice to do this,” said Michael Every, head of financial markets research in Asia for Rabobank, referring to China’s central bank. “This is going to escalate rapidly and badly.”

China on Tuesday signaled it would not let the currency depreciate right away.

C. Fred Bergsten, director emeritus at the Peterson Institute for International Economics, said he thought the label was unjustified. China’s currency has weakened in large part because of larger economic forces, as investors sold the currency in response to Mr. Trump’s tariff threat, he said.


Full article at the New York Times