We are Working for Better Rules
Buy Wisconsin is not an anti-trade movement. In fact, it’s vitally important that the quality goods and services that Wisconsin workers produce enjoy a fair share of the global market. Wisconsin exporters shipped $22.3 billion worth of products to 200 countries in 2017 alone. Studies show trade supports over 20% of all jobs in the state.
The issue is not trade itself, but how the rules are written. Supporters of so-called free trade agreements say these deals have led to an increase in US exports. That’s true as far as it goes. What they don’t tell you is that US imports from our Free Trade Agreements partners have grown even more. If you subtract the job loss related to those imports from the job gains created by exports, America’s workers come out on the short end by a wide margin.
The problem is supporters of Free Trade Agreements only want to talk about exports, while ignoring imports and the impact on issues like offshoring of jobs, foreign investment, employment, wages, and the distribution of income. Looking at exports alone is like just counting the runs the home team is scoring while ignoring what the other team is doing—it might feel good, but it doesn’t accurately reflect who’s winning the game.
So why do some politicians like Free Trade Agreements so much? Because these agreements make it easier for US corporations to outsource production to countries with weak labor and environmental standards, countries that use currency manipulation, dumping, and other unfair trade practices to undercut production and wages in the United States. This boosts profits enormously, but it also creates a race to the bottom that lowers wages and working conditions for workers in every country involved in the deal.
In a global economy, we can’t afford not to trade with other nations. But we need to negotiate and enforce trade agreements that protect American workers and benefit all our citizens, not just corporate shareholders.
Rewriting NAFTA: Time to Make Trade Work for Workers
The North American Free Trade Agreement (NAFTA), which includes Canada, Mexico and the United States, was passed by Congress in 1993 with the promise it would create hundreds of thousands of U.S. jobs. Unfortunately for American working families, the opposite has occurred. To date, nearly 851,700 U.S. jobs have been lost or displaced since NAFTA took effect in 1994, according to a study by the Economic Policy Institute (EPI). The main reason for the job loss is a skyrocketing U.S. trade deficit with Mexico—reaching $66 billion in 2010.
Nearly 20 years after NAFTA was passed, all 50 states, the District of Columbia and Puerto Rico have seen jobs lost or displaced to Mexico.
In May of 2017, President Donald Trump began the renegotiation of the North American Free Trade Agreement. On November 30, 2018, leaders of the United States, Canada, and Mexico signed the United States-Mexico-Canada Agreement (USMCA) or NAFTA 2.0. The deal needs to be voted on in Congress before it takes effect. As it stands, NAFTA 2.0 has not earned the support of America’s working families. We are calling for no vote until the deal is fixed.
The administration’s current proposal falls short of what working people need. Working people cannot support the revised NAFTA without additional changes to the text and supporting provisions in implementing legislation.
Here are just three reasons why the labor movement is demanding that the deal is improved for working people before any vote occurs:
The proposal doesn’t end the outsourcing of good-paying American jobs to Mexico and other low-wage countries.
Without stronger enforcement provisions and labor reform in Mexico, workers will continue to face poverty wages and anti-union violence.
Monopoly rights for Big Pharma would keep drug prices sky high, and new rules would undermine protections such as workplace safety.
A fair NAFTA deal will raise pay, stop outsourcing and provide a path to the middle class for everybody who works hard and plays by the rules.
Here is how to rewrite NAFTA the right way:
- Open the process and give working people a seat at the table.
- Aggressively enforce workers’ rights and environmental standards.
- Eliminate special privileges for corporations.
- Prioritize good jobs and high wages.
- Safeguard democracy.
High Wages and Good Standards: NAFTA should protect America’s jobs and raise wages and standards across North America.
Open the Process: Working people want new, better rules for NAFTA. Renegotiation could leave workers worse off if it’s done the wrong way, which is why we demand an open process and a seat at the table.
Respect Workers: Our trade deals must respect the right of workers to negotiate with employers. Today, America’s workers are being forced to compete against their counterparts in Mexico, who can’t safely speak out for themselves and who are among the lowest paid in the world.
Eliminate Corporate Privilege: NAFTA gives corporations special courts to get around laws on health and safety, which is just one of the many benefits enjoyed by wealthy interests under our current trade policies.
America’s labor movement is committed to making trade work for working people.
It’s time for America’s trade agreements to level the playing field between workers and corporations by ensuring that all three NAFTA countries abide by basic international labor standards so all workers can form or join unions to negotiate to raise wages.
Working families are fighting to make NAFTA 2.0 benefit working people, not just corporations and the rich.
The Lone Pines Case
One recent example of how trade agreements are used to advance corporate interests over public rights and domestic law is the Lone Pine Resources case. Lone Pines Resources is an energy company based in Calgary, but registered in Delaware. By registering in the US, the company has standing to sue the government of Canada under terms of the NAFTA agreement. When their plans to open a fracking operation were blocked by Quebec’s moratorium on the controversial energy recovery process, they invoked NAFTA’s investor protections clause, suing for $250 million in damages. The suit is currently in litigation.
The Lone Pines case is illustrative. Once in place, so-called free trade agreements, drafted in secret without citizen input and under massive corporate influence, have the power to trump national sovereignty and the public interest. They are designed to give corporations unprecedented power over governments on issues like labor and environmental standards. They are meant to establish a trading system that is far from being “free”. Instead, they re-write the rules in favor of multinational corporations at the expense of the rights of people in the countries where they do business.
Facts and Figures
Manufacturing is present in every state across the nation, including the District of Columbia, and contributes about 12 percent to the U.S. Gross Domestic Product (GDP). An innovative and growing manufacturing sector is vital to America’s economic and national security, as well as to providing good jobs for future generations of workers.
Unfortunately, bad trade policies and corporate greed have led to mass offshoring of millions of American jobs. The economic theory is that offshoring and outsourcing reduce production cost furthering corporate profits, but the economic reality of offshoring on working Americans and local communities has been dire.
According to the Alliance for American Manufacturing, in the last decade alone 50,000 manufacturing sites have been shuttered and over 6 million American jobs have been lost nationwide due to offshoring. Between 2008 and 2009 Wisconsin lost 13% of its manufacturing jobs. Wisconsin’s trade deficit to China alone has cost the state a staggering 54,500 jobs.
The Economist estimates that the impact of offshoring on U.S. jobs is a loss of between 150,000 and 300,000 a year per year from 2004-2015. This represents a whopping 10-15% of U.S. job creation.
When good jobs and steady wages leave a community, the economic impact is devastating. Offshoring and outsourcing do not just impact plant workers or public workers and their families. The ripple effect of the job loss is felt by local communities and the entire state. Wages stagnate, economies contract and our tax base shrinks.