[CTC] ICYMI: Tariffs and Trade Are a Means, Not an End (AFL-CIO)

Fri Aug 10 05:48:28 PDT 2018

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AFL-CIO EXECUTIVE COUNCIL STATEMENT <https://aflcio.org/about/leadership/statements> |  TRADE <https://aflcio.org/issues/trade>
Tariffs and Trade Are a Means, Not an End

July 26, 2018
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For more than a quarter-century, America’s working families have raised our voices for better trade policy. Together with our civil society allies, we have made some progress over the years, improving some trade deals at the margins while completely stopping others (including the Trans-Pacific Partnership, the Free Trade Area of the Americas and the Multilateral Agreement on Investment). But the plain fact is that administration after administration and Congress after Congress have clung stubbornly to trade rules that create profits at the expense of good jobs, when the two should go hand in hand.  Working people continue to bear the pain and costs of bad trade deals promoted by global corporations. Instead of advancing good jobs, high wages, a just society and a better life for working people, U.S. trade rules have been one more tool to dismantle the New Deal.

Given the devastating impact on America’s manufacturing workers, the AFL-CIO welcomes the long overdue effort toward challenging unfair trade practices, including those of China, through trade enforcement actions under Sections 232 of the Trade Act of 1962 (steel and aluminum) and 301 of the Trade Act of 1974 (intellectual property theft).  However, we have serious concerns regarding the administration’s seemingly haphazard approach to the implementation and design of the enforcement efforts and the backlash it has generated. Tariffs are most likely to be effective when they are appropriately targeted to specific trade practices, part of a well-developed strategic plan, and employed in coordination with allies (such as Canada) rather than aimed at them.

Given the lack of clarity on strategy and the apparent inconsistency in implementation of these tariffs, some in Congress are appropriately questioning whether these tariffs will succeed in ending unfair trade practices and boosting good jobs in the U.S. Others in Congress have—unfortunately—joined the chorus of CEOs and pundits trying to scare Americans with talk of a “trade war.” The use of this inflammatory rhetoric is an attempt to delegitimize trade enforcement and maintain the status quo, which enriches outsourcers and those who exploit workers while driving down our wages and devastating our industrial base. It also ignores the very real harm unfair trade has had on millions of Americans. We urge members of Congress to put support for workers ahead of partisan politics and oppose misguided legislation that would undercut the U.S.’s ability to impose trade remedies and combat harmful trade practices.  One example of such misguided legislation is S. 3013, which would undermine the ability of the executive branch to respond to trade threats to our national and economic security.

Judiciously used, tariffs are one way to address unfair trade, but it is critical to recognize that tariffs are merely a tool, not a comprehensive plan for trade reform.   

To that end, we welcome the long overdue renegotiation of the North American Free Trade Agreement (NAFTA). In 2017, we submitted comprehensive recommendations to the administration for replacing NAFTA’s anti-worker rules with pro-worker ones.  So far, Canada and Mexico seem to be rejecting good U.S. proposals, such as those that would eliminate most of the special privileges for outsourcers in NAFTA’s private justice system known as investor-to-state dispute settlement; strengthen Buy American; and require NAFTA to undergo a periodic performance review in order to be renewed.  

On the other hand, the Trump Administration has proposed new rules that working families oppose because they would limit our ability to make prescription medicines more affordable and rein in reckless corporate behavior.  We also have serious reservations about the labor chapter under discussion for the new NAFTA, which reportedly fails to include our fundamental recommendation that the NAFTA parties meet the basic standards of the International Labor Organization’s eight core conventions. Nor does the chapter under discussion reportedly include provisions to ensure swift and certain enforcement.  Even if the final labor provisions do address these critical concerns, the U.S. must not sign any new deal until Mexico abolishes “protection contracts” and ensures its workers have the freedom to join a union and bargain collectively. The AFL-CIO welcomes the commitment by Mexico’s President-elect to raise wages and promote union democracy and is hopeful that the newly elected Mexican Congress will enact a law to fully implement the 2017 Constitutional labor reforms and work with independent labor unions toward a new North American trade deal that will lift up workers across the continent.

But there is so much more to do. All existing U.S. trade agreements need transformation to a people and planet-centered approach. And multilateral institutions, including the World Trade Organization (WTO), must be improved to address overcapacity and currency manipulation and misalignment, and to deter WTO-inconsistent practices by countries such as China, which have created unacceptable pressures and hardships on a broad range of sectors including, but not limited to, steel and aluminum. Trade enforcement, including action on labor and environmental obligations in trade agreements, must become more timely, systematic, strategic and effective, and the President must work with Congress to enact complementary economic policies that will ensure all America’s working families have the freedom to organize and bargain and can enjoy state of the art public infrastructure, from high speed internet and rail to libraries, schools, transportation and drinking water systems.  

While the President often blames other countries, their workers, or even “bad U.S. negotiators” for failed U.S. trade and economic policy, the real culprits are the powerful corporations that seek rules with the clear purpose of lowering wages and the elected officials of both parties who have repeatedly voted for that agenda.  Those officials often do so in the name of “expanding trade,” without ever once explaining to their voters that who benefits from trade depends on what the rules of trade are. Trade is a means to the end of shared prosperity, not an end in itself.

The labor movement totally opposes the idea that we must choose between corporate-dominated trade rules on the one hand and racism and economic isolation on the other hand.  Neither choice is remotely acceptable. It is possible to have trade rules that lift wages and treat all countries fairly. Instead, the U.S.’s current trade policy and ineffective enforcement have increased inequality, reduced wages, weakened workers’ ability to organize, and devastated our manufacturing heartland. In other words, we’re doing trade wrong.

For decades, the AFL-CIO has urged elected officials and trade negotiators to get trade right by putting working families first, not the corporations that are fleeing our shores.  We hope that this administration and Congress will not only listen, but will fight for the changes we have demanded.

Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826

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