The Missed Opportunity On Trade – And What We Must Do Next
The candidates discussed “trade” for a few minutes during the first presidential debate on Monday. Once again the opportunity for a meaningful dialogue on an important issue slipped away. Where do we go from here?
That was the subject of a teleconference Wednesday night between activists from around the country and Sen. Jeff Merkley (D-Ore.). The call was titled “Defeat the Trans-Pacific Partnership: bad for workers, bad for democracy, bad for People and the Planet.”
On the call, Sen. Merkley said that we have to “stop this gigantic trade deal, we have to stop it dead in its tracks.”
Merkley said to the activists on the call that they “have to be incredibly attentive during this period,” because even though the TPP is now opposed by top congressional leadership as well as both major presidential candidates, the tremendous pressure from multinational corporations on Congress could change that and tilt key members toward passage.
“We have to have a force inside the Congress and a grassroots force outside creating pressure and you all are that outside grassroots force. Because it is only with that attention and pressure that the swing votes will move,” he said.
Trump On Trade
Republican candidate Donald Trump senses opportunity in the despair of millions of blue-collar workers who have either lost jobs, seen their wages cut or seen no wage increase in decades thanks to our country’s “trade” policies. So even as he describes himself as a “free-trader”, he tells blue-collar audiences that he opposes our free-trade deals.
The following summary of Trump’s statements on trade during Monday’s debate skips around a bit, because Trump did.
During the debate Trump said that “jobs are fleeing the country,” and “they’re all leaving” because “we don’t know what we’re doing when it comes to devaluations and all of these countries all over the world, especially China. They’re the best, the best ever at it. What they’re doing to us is a very, very sad thing.”
Some time later, he said, “You go to New England, you go to Ohio, Pennsylvania, you go anywhere you want, Secretary [Hillary] Clinton, and you will see devastation where manufacture is down 30, 40, sometimes 50 percent. NAFTA is the worst trade deal maybe ever signed anywhere, but certainly ever signed in this country.” (In fact, most of these job losses are the result of “trade” with China, not NAFTA.)
On Clinton’s trade positions, he said, “She’s been doing this for 30 years. And why hasn’t she made the agreements better? The NAFTA agreement is defective,” and, “she’s been doing this for 30 years. And why hasn’t she made the agreements better?” (In fact, Clinton became a senator in 2000, which was 16 years ago, not 30.)
“And now you want to approve Trans-Pacific Partnership. You were totally in favor of it. Then you heard what I was saying, how bad it is, and you said, I can’t win that debate. But you know that if you did win, you would approve that, and that will be almost as bad as NAFTA. Nothing will ever top NAFTA.” (In fact Clinton opposes the Trans-Pacific Partnership (TPP). In fact, TPP tops NAFTA for potential to harm jobs, wages and our economy.)
He also said, “Your husband signed NAFTA, which was one of the worst things that ever happened to the manufacturing industry.” (In fact, Clinton’s predecessor George H.W. Bush signed NAFTA. Bill Clinton pushed for Congressional approval and it was approved in the House with support from 132 Republicans and 102 Democrats and in the Senate from 34 Republicans and 27 Democrats. Clinton signed this ratification, not the treaty.)
Trump said his solution to the trade problems is, “I’ll be reducing taxes tremendously, from 35 percent to 15 percent for companies.” He also promised to “renegotiate our trade deals, and we have to stop these countries from stealing our companies and our jobs.” (In fact, corporate tax rates have nothing to do with trade deals.)
Later, he said, “if you think you’re going to make your air conditioners or your cars or your cookies or whatever you make and bring them into our country without a tax, you’re wrong. (In fact, “tariffs” not “taxes” apply to goods coming into the country. In fact, Trump earlier said he would be cutting taxes not raising them.)
“And once you say you’re going to have to tax them coming in, and our politicians never do this, because they have special interests and the special interests want those companies to leave, because in many cases, they own the companies. So what I’m saying is, we can stop them from leaving.” (In fact, taxing “them” coming in doesn’t stop “them” from leaving.)
Clinton On Trade
Democratic candidate Hillary Clinton largely avoided discussing trade when she could, saying at one point, “let’s not assume that trade is the only challenge we have in the economy” and shifting to a critique of Trump’s tax and other policies.
She did say, “Well, I think that trade is an important issue. Of course, we are 5 percent of the world’s population; we have to trade with the other 95 percent.” But this statement leaves an impression that our country’s ability to trade with the rest of the world depends on trade deals. This is not correct.
Clinton defended her trade record as a senator, saying, “When I was in the Senate, I had a number of trade deals that came before me, and I held them all to the same test. Will they create jobs in America? Will they raise incomes in America? And are they good for our national security? Some of them I voted for. The biggest one, a multinational one known as CAFTA, I voted against. And because I hold the same standards as I look at all of these trade deals.”
Clinton offered one trade proposal: “I’m going to have a special prosecutor. We’re going to enforce the trade deals we have, and we’re going to hold people accountable.”
Consensus On Trade Has Turned
Voters have turned against “trade deals” and politicians know it. This opposition by both candidates to trade deals like TPP is a shift from the previous “elite” consensus that anything described by the word “trade” is good. But the word “trade” has come to mean one thing in discussions about our current economy: moving American jobs to low-wage countries so investors and executives can pocket the wage differential while also using threats to move even more jobs as a mechanism to drive down wages inside this country. And the trade deals have been exposed as a mechanism for increasing corporate over government’s ability to regulate.
Trump has been able to create an impression that he is on the side of blue-collar workers when it comes to trade and its effect on jobs and wages. This is the basis of much of his support in the “rust belt” states.
However – and this is important – the post “Trump Trade Position Is Opposite Of What People Think It Is,” pointed out that Trump has said the solution to jobs leaving the U.S. in search of lower wages is to forces wages here to drop to a low enough level that companies won’t seek lower wages elsewhere.
Where From Here?
“What’s good in the race to bottom for multinationals is terrible for workers.” – Senator Jeff Merkley (D-Ore.)
The TPP “trade” agreement is a giant agreement between 12 Pacific-rim countries. It is almost like a wish list of things giant corporations would want. For example, it actually moves multinational corporations beyond the reach of our own legal system with its investor-state-dispute settlement (ISDS) provisions. These set up “corporate courts” that hear lawsuits by corporations upset with things governments do that interferes with their profit. The cases are heard by a panel of corporate attorneys. The rulings cannot be appealed. Recently hundreds of legal and economic scholars signed a letter calling on Congress to “protect the rule of law and our nation’s democratic institutions and sovereignty by rejecting this TPP as long as ISDS is included.”
Giant multinational corporations, lobbying organizations like the Chamber of Commerce, Wall Street and unfortunately President Obama are making a big push to force a vote on TPP in the “lame duck” session of Congress after the election.
But politicians running for office are forced by voters to oppose these “trade” deals.
Campaign for America’s Future has combined its operations with People’s Action, a powerful new force in national politics with 40 grassroots organizations in 32 states, and People’s Action is helping wage the fight against the TPP. It hosted Wednesday’s evening call for activists across the nation.
Preceding Merkley, Matthew Covington of Iowa Citizens for Community Improvement said there is reason for optimism and hope, and a need to organize. The “fast track” trade promotion authority bill that greased the skids for TPP “just narrowly passed,” and said there are three legs to an organizing strategy that can defeat the TPP.
First, we need to pressure the 28 House Democrats who voted for fast track – but not just them, we need to apply pressure in every district. The second leg is urging Hillary Clinton to lobby them, too. The last leg is to raise public awareness of TPP.
The 28 House Democrats “are in places that we [People’s Action] also happen to be in,” he said. So there should be events and demonstrations and questioners at any public appearance or campaign event they make, where we let people know how bad it is and ask “how can you be in favor of this?”
“Clinton has come out against TPP, so we want her to lean especially on those 28 Democrats. She can push her colleagues as she travels around country and at rallies with them. This is not about embarrassing her or disrupting events; we should just send letters to her senior campaign people in each state, asking them to send the word up the chain that we want to have Clinton lobby to whip up no votes.”
Covington pointed out this would be advantageous to her because Trump is opposing TPP for wrong reasons but saying he is anti-TPP, so here is a chance for her to say “I actually did something about it.”
Finally, we need to raise awareness. There is not much about TPP in the major media. We need to break into the mainstream, and can do this with public events and use the megaphone that we have to get the word out now and after election.
Merkley said that the way trade agreements have been sold is by saying, “Those countries with low standards get access to our environment but we get access to theirs.” But what happens is, “jobs migrate from high standard, high wage, high enforcement countries to low standard, low wage, low enforcement countries.”
Saying “we’ve seen this lay out before,” Merkley ticked off the agreements, such as NAFTA and letting China into the World Trade Organization. “Each time we were told it’s OK; they will sell us more stuff but we will sell more to them, so it won’t have an impact on balance of payments. But it’s been wrong in each case; the massive trade imbalance surges, which means jobs migrating overseas, undermining the good paying jobs we have here,” he said.
Merkley also explained the problems with the ISDS “corporate courts” system set up in the TPP: “This agreement gives special rights to foreign companies over American companies. Under the structure of TPP we have to be compensated for what they would have made during over several decades. Those suits are being used effectively around the world, and are perfectly capable of being used here.”
Merkley explained why the multinational corporations want this. “If you have no allegiance to this country, you love this. You want to make stuff in lowest-wage, lowest-standard places and you want to play off these countries against another, so if one raises wages or environmental standards you play the off against a country like Malaysia. TPP has no required minimum wage, one penny per hour would qualify. There is nothing to fight currency manipulation. It has ISDS to undermine environmental and labor laws.”
This results in a “massive worldwide race to bottom, which is great if you are big corporation, but terrible if you care anything about living wages and people – the foundation for successful families.”
Merkley said we “must bring pressure to bear on the swing votes during this period. Because you can be sure the Chamber of Commerce and president are going to do a big push.”
He said each member of Congress has a certain number of companies that are the most visible and influential in their district and state. These are almost always the multinationals. Their real heart is in this international movement of production to the lowest cost places in the world. They carry enormous weight, and elected officials who have these companies in their districts want to make them happy.
“The corporations say their taxes and tariffs would come down under TPP so they would make more money from the things they make in Vietnam, etc. But this is a race to the bottom, making every entity in the world compete to have the lowest wages, standards and enforcement. As a result from 1975 to now, four decades, 100 percent of new income went to the top 10 percent. What’s good in the race to bottom for multinationals is terrible for workers.”
What do we do now? Use the information we’ve published about the TPP to write a letter to the editor, or a social media post that you can share with your friends. Show up at campaign events and get politicians running for Congress to oppose the TPP. Urge Hillary Clinton and her supporters to go beyond their declared opposition to the TPP and put their weight behind opposing a lame-duck vote in Congress.
As Merkley said, we need to make the swing votes in Congress say, “We’ve heard from the president but I have heard from these people and they have been making it clear how badly they will be hurt and I’m with them.”