Tag: nafta
USMCA

Without Rigorous Enforcement, Improving NAFTA Means Nothing

Reprinted with permission from Alternet

When thugs gunned down Óscar Ontiveros Martínez in May, they did more than silence a promising figure in Mexico's beleaguered labor movement.

The 29-year-old's killing sent a warning to anyone still thinking about organizing the mine where Ontiveros once helped to lead a strike.

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How Trump’s New NAFTA Shafts Workers And Consumers Again

How Trump’s New NAFTA Shafts Workers And Consumers Again

“Keep your eye on the ball” is a core principle not only for baseball players but also for us commoners trying to assess exactly what the spinmeisters of global trade are hurling at us. Their deals are and always have been large-scale hustles, filled with hypocrisy, deceit and greed. Promoted as fair and good for all, they’re invariably rigged with profiteering schemes that lock into law advantages for corporations over the common good of consumers, the environment, labor, independent businesses, governments and all other democratic forces.

Further, they are works of deliberate deception, drafted in strict secrecy and couched in page after page of arcane legalese that intentionally obscures the corporate thievery so We the People don’t know that we’ve been had until it’s too late. They hide the ball to keep you, me and even Congress from seeing specifically who’ll profit and who’ll pay. So, heads up, for here comes another sucker pitch.

“A historic transaction,” Trump grandiloquently hailed his Afta-NAFTA handiwork in an April tweet, lauding the 1,809-page United States-Mexico-Canada Agreement as “the most important trade deal we’ve ever made by far.” Backed by a coalition of some 200 corporate and Wall Street powerhouses, Trump demanded that Congress quickly ratify the USMCA “so we can bring back our manufacturing jobs in even greater numbers, expanding American agriculture, protecting intellectual property.” “Once again,” swooned Fox personality Laura Ingraham, “Trump delivers.”

Yes, but what … and for whom?

Big Pharma: If the USMCA passes as currently drafted, it would require the governments of the U.S., Mexico and Canada to guarantee — and even extend — Big Pharma’s monopoly price-setting power. Specifically, the deal gives drugmakers 10 years of exclusive marketing for critical “biologic” meds that millions of people need — in addition to the 20-year monopoly that U.S. patent laws already grant. Trump’s deal would prevent generic competitors from offering cheaper versions for an extra decade while also shackling Canadians and Mexicans to the pricing racket that Pharma already runs in the U.S.

Big Oil: Although the USMCA largely eliminates the anti-democratic and unjust system of dispute-deciding corporate-run “courts,” seven oil behemoths (including Shell, ExxonMobil and Chevron) would retain their NAFTA-granted access to these odious tribunals. One particular concern is that the giants will use these kangaroo courts to block Mexican efforts to strengthen environment and health protections and address the climate crisis.

Big Bosses: The USMCA would finally outlaw Mexico’s notorious company-run “unions” that allow workers no control or even participation. While the deal prohibits these fraudulent labor units, it provides no way to monitor, much less enforce, corporate compliance.

Big Food: The original NAFTA included a literal gag rule. It allowed cheaply produced Mexican beef and other meat to be sold in the U.S. — even if it didn’t meet our food safety standards. Trump’s “fantastic” redo of NAFTA keeps this rule prohibiting our supposedly sovereign government from setting our own health standards for meat sold to our consumers.

Congress must obviously kill this thing, right?

Hmmm … not so fast. Even with all the uglies and absurdities in the USMCA, progressive strategists see enough pretties and potential for fixes that it could become one of the only positives to emerge from Trump Hell. As Lori Wallach, head of Public Citizen’s savvy band of trade jujitsu artists puts it, “Improbably, things are going quite well.” Prettiest of all is the USMCA’s whacking down of NAFTA’s most repugnant component: “investor-state dispute settlement” tribunals. These autocratic, plutocratic, corporate-controlled “courts” empower multinational corporations to obtain unlimited taxpayer dollars through specious lawsuits claiming that their special NAFTA privileges are restricted by the people’s democratically enacted laws — laws intended to protect consumers, workers, the environment and other social/economic interests. The investor-state dispute settlement provision is an anti-democratic abomination, and gutting it would truly be a huge step forward — one worth taking while we can.

Further, if we can strengthen the USMCA’s labor and environmental standards — and make them strictly enforceable — they might counter corporate America’s race-to-the-bottom outsourcing that converts middle-class U.S. jobs into Mexican sweatshop servitude. And of course, the absurd goodies for Big Pharma must be removed. But the fight, then, is not simply to reject the USMCA but instead to expose its flaws, democratize it and force improvements. That’s not easy, but it’s doable.

Yes, trade fights can be complex and tedious, but pay attention to this one. The USMCA is a momentous battle that’s more about people’s democratic power than trade. It unites folks across the left-right political spectrum, it’s worth the fight, and it’s winnable — if we team up to wrangle our Congress critters to oppose Trump’s corporatized version and add essential democratizing improvements. Let’s do it!

On Trump’s Trade Policy, A Democratic Echo

On Trump’s Trade Policy, A Democratic Echo

If you want to get an unanimous verdict from any gathering of economists, just ask them about Donald Trump’s trade policy. If it were a movie, its Rotten Tomatoes score would be zero. One expert analysis after another has torched it.

A report from the Becker Friedman Institute at the University of Chicago found his tariffs on washing machines cost consumers $1.5 billion, or more than $815,000 per U.S. job saved. A study for the National Bureau of Economic Research concluded that Trump’s trade war has reduced Americans’ real incomes by $1.4 billion per month.

The Tax Foundation says the new tariffs amount to a tax increase of $42 billion on Americans. A team of economists from the University of Chicago, Northwestern and Stanford estimate that tariffs and trade squabbles cut investment in U.S. manufacturing by 4.2 percent last year.

NBER notes that Trump’s tariff hikes “are unprecedented in the post-World War II era in terms of breadth, magnitude and the sizes of the countries involved.” They haven’t worked in the most basic sense. The overall trade deficit in goods, which he promised to eliminate, hit a record high last year, and the imbalance with China.

To the surprise of no economist, his policy of blocking trade, and threatening to do so, turns out to be bad for consumers, producers and the economy. So how are Democrats running for president handling the issue? By offering their own version of protectionism.

On Monday, Bernie Sanders attacked Joe Biden by saying, “I helped lead the fight against NAFTA; he voted for NAFTA.” Like Sanders, Elizabeth Warren opposed the Trans-Pacific Partnership, a mammoth free trade deal among the United States and 11 Pacific Rim nations. Both also oppose the administration’s modest revision of NAFTA, the United States-Mexico-Canada Agreement.

The positions of Sanders and Warren, write Gary Clyde Hufbauer and Euijin Jung of the Peterson Institute for International Economics, “do not differ greatly from President Trump.” Among the other Democratic presidential candidates who opposed the TPP are Kamala Harris, Kirsten Gillibrand, and Amy Klobuchar.

From all this you might forget that the Pacific free trade deal was the proud achievement of Barack Obama — and was described as “the gold standard in trade agreements” by Hillary Clinton. The idea, by the way, originated with Bill Clinton when he was in the White House. You might also forget that it was Clinton who signed NAFTA and Obama who preserved it.

Biden is so far holding firm. In response to Sanders’ broadside, he said he didn’t regret voting for NAFTA. He’s a lonely voice. With the exception of Beto O’Rourke, the other Democrats who lean toward free trade, including Julian Castro, Jay Inslee, and John Hickenlooper, are relative unknowns.

But if the presidential candidates would like to move toward protectionism, their voters are not going with them. A Pew Research Center poll last year found that among Democrats and Democratic-leaning voters, 67 percent think free trade agreements have been a good thing. Only 19 percent take an unfavorable view.

By contrast, Trump has managed to convince a large share of Republicans to abandon their historic allegiance to open global commerce. Pew found that 43 percent endorse free trade deals — down from 57 percent a decade ago. A plurality of Republican and Republican-leaning voters, 46 percent, now regard free trade as a bad thing.

Among the electorate as a whole, however, 56 percent favor free trade and 30 percent oppose it. With his belligerent and destructive trade war, Trump has actually dried up support for protectionism, except in his own party.

Why are so many Democratic candidates advocating policies that are a loser not only with the public in general but with their own party faithful? The harm done by Trump’s import barriers ought to work to the advantage of the opposition. But Democrats may end up with a nominee who, on the topic of trade, is largely indistinguishable from Trump.

At best, a Sanders, Warren, or Klobuchar would be giving him a pass on one of his big vulnerabilities. At worst, they could force many moderate, independent voters to decide that on economic matters, Trump is the lesser of two evils.

Free trade should be a good fit for a party that favors liberal immigration policies, friendly relations with our neighbors, and constructive engagement with the world. Trump has done his best to hand Democrats a winning issue for 2020 and beyond. But that doesn’t mean they’ll take it.

 

The NAFTA Report That Could Do More Damage Than Mueller

The NAFTA Report That Could Do More Damage Than Mueller

With all the coverage of Special Counsel Robert Mueller’s investigaiton and still-confidential report, President Donald Trump’s political future does not appear to be closely tied to the Russia investigation. Without ground-shaking conclusions that completely reframed his presidency for the Republican Party and is leadership, there’s never been much chance that the report could lead to him being removed from office.

But there’s another forthcoming report that really could do serious damage to the president, even if there’s been almost no coverage of it so far. It’s a report from the International Trade Commission on the future effects of Trump renegotiated version of NAFTA, which the president calls the USMCA

As the Toronto Star’s Daniel Dale reported, the ITC report is set to come out on April 19. And few expect it to show much of an upside for the United States or Trump.

Dale wrote:

At best, experts say, the ITC report expected by April 19 is likely to show a very small positive impact.

‘“He’s been touting this as moving from the worst trade agreement ever to the biggest, best agreement, and there is no way the results of the USITC can be spun to say that the USMCA is anything other than a small change from the status quo,” said Jennifer Hillman, a Georgetown Law professor and a former senior official with the U.S. trade representative’s office.

“The debate in Congress is whether that small change is still worth doing

A negative or mediocre conclusion from the ITC could make it harder to convince skeptical Democrats that it is worth taking the political risk of voting for a top Trump priority. Such a conclusion could give members “cover” if they are already predisposed to vote no, said Robert Fisher, a U.S. negotiator for the original NAFTA and now managing director of Hills and Co.

If this is right, it could deal a significant blow to Trump’s support and become a drag on him in the run-up to the 2016 election.

It may seem a distant memory now, but trade was a major theme of Trump’s 2016 campaign. He insisted that the country was getting ripped off in its trade deals — none of which were worse than NAFTA, in his view. And this wasn’t a mere throw-away line at rallies. His central message was that American leaders had been stupid and reckless in agreeing to these deals, and that he was the only brilliant dealmaker who could storm into office and fix the problem.

How much this message really helped lead Trump to victory in 2016 is up for debate, but he clearly thought it was important, and it may have been key to his winning the crucial midwestern swing states that gave him an electoral college majority.

But if the pending report shows that Trump’s attempt to renegotiate NAFTA was a dud, he could likewise pay for it in 2020. The deal, already facing headwinds in the House of Representatives, will likely never be approved by Congress if the report is negative. Were the report to show the deal would be a resounding win for the United States and Congress rejected it anyway, Trump might be able to turn this to his advantaged. But if Democrats can rightly say that the most comprehensive report suggests the deal would be a loser for the United States, Trump’s support could take a hit where he can least afford to fall behind.

Dale noted that some observers are critical of the methodology the USITC is expected to use in crafting the report, arguing that it doesn’t necessarily account for all the agreement’s benefits. But these details may not matter much if Trump’s main goal is looking like a winner.

One sign that Trump’s allies are nervous about the issue is that supporters of the deal are already downplaying the report.

“It’s just a report,” Rick Dearborn, executive director of the Pass USMCA Coalitiontold Dale.