At the same time, however, some progressive groups are gearing up to fight those deals even harder. Trade agreements, after all, don’t have a good reputation on the left and with labor unions for helping out middle-class working people. Although both business and the administration have made the case that opening foreign markets to U.S. products bolsters local economies, and economists have long argued that removing trade barriers improves welfare overall, more recent research indicates that those gains aren’t evenly distributed. For example, corporations might profit more off high-value exports and investment, but the movement of other kinds of production overseas can make decently-paying jobs disappear back at home.
It’s tempting to see better education as the solution to job losses caused by adjustment to new trade rules. America should lean on its comparative advantage in innovation, the argument goes, and import from developing countries where production is cheaper. That’s proven hard to pull off in practice, though. And even if many families are able to save money on goods from outside the United States, it matters infinitely more to any individual family when its breadwinner can no longer work at all.
“Most workers in the U.S. don’t have stock in Disney or Pfizer,” said Dean Baker, co-director of the Center for Economic and Policy Research. “They do care about their jobs.”
Still, that doesn’t mean trade deals have to hurt the middle class. While blasting the plan to grease the agreements’ path through Congress — which they oppose for a number of elements in the draft texts that have little to do with “trade” in the traditional sense at all — progressive groups have also offered some proactive suggestions for using the agreements to improve labor standards and protect U.S. jobs where possible. Here are the major ways in which trade deals might be part of the solution.
1. Deal with currency manipulation.
Over the years, trade deals have fostered the expansion of U.S. exports. But at the same time, they’ve also allowed for even faster growth in U.S. imports, which means the trade deficit — exports minus imports — has widened significantly since the late 1970s. When Americans are spending so many of their dollars overseas, the argument goes, they’re not spending them here, which is a lost economic opportunity.
Trade liberalization isn’t causing that imbalance by itself, however. American wages and energy costs are comparatively low enough by now to make manufacturing here extremely competitive. Rather, it’s happened in no small part because countries like China have deliberately bought U.S. dollars to keep the value of their own currency low, which makes their products cheaper for other countries to buy. Even scholars at the pro-free-trade Peterson Institute for International Economics have labeled currency manipulation a problem, costing America between 1 million and 5 million jobs, and have laid out steps for prohibiting it through trade agreements.
That’s why solid majorities in the House and Senate — on both sides of the aisle — have pressed the administration to include measures to address currency manipulation in the Trans-Pacific Partnership agreement with Asian countries (the deal doesn’t include China, but may in the future, and currently does include countries like Singapore and Japan that have been accused of using the tactic as well). Despite Congressional prodding, the U.S. Trade Representative hasn’t committed to adding a currency chapter, potentially because doing so would further delay a deal that’s already dragged on for years — but perhaps it’s worth taking a little longer.
2. Staple in international labor standards.
The Trans-Pacific Partnership currently includes more countries than any previous trade agreement that have labor standards far below what the U.S. considers acceptable. That isn’t just bad for workers in Vietnam, for example, who can be forced by economic necessity to work in unsafe conditions and deprived of their right to organize. It also hurts U.S. workers, by giving companies an incentive to source goods in countries where labor is incredibly cheap.
In the last few trade deals it’s signed with countries like Peru and Panama, the United States has insisted on the inclusion of a set of rights outlined by the International Labour Organization, a U.N. agency that has little enforcement authority. The U.S. Trade Representative has also committed to obtaining the same level of protection in the TPP, in the “negotiating objectives” it set forth before everything got started, which would be a pretty big step forward.
Unions tend to recognize that having those rights in the text represents an advance over treaties like the North American Free Trade Agreement, where labor provisions were a sideshow to the actual deal. However, under the current model, countries are still allowed to backslide on their own labor protections as long as they don’t impact trade and investment between the parties. There’s also a tendency to “discourage” bad behavior, rather than banning it outright. That’s why labor groups want to see even stronger language in the labor chapter to keep standards as high as possible.
3. Create actual enforcement mechanisms.
Sometimes — most of the time, even — the problem with trade agreements isn’t so much the rules themselves, but rather the ability to enforce them. And with the labor provisions specifically, the U.S.’s track record has been abysmal.
How abysmal? Last month, a Government Accountability Office report found that across the 14 free trade agreements the United States has signed, since 2008, the Department of Labor has received five complaints of violations. All of the investigations have extended long past their deadlines, and only one has been resolved, allowing practices like human trafficking, child labor, and brutal treatment of union leaders to continue.
Fixing that problem is an institutional question. What type of body should oversee compliance with the agreement, and what kinds of power should it have to mete out punishment? In 2009, Columbia Law Professor Mark Barenberg wrote a long paper describing a kind of commission that would be able to inspect and quickly apply targeted sanctions to companies that violate the labor provisions of trade agreements. To unions, it boils down to what level of authority the commission would have, and the resources it gets to fulfill its mission.
“Right now the labor chapter is complaint-driven, rather than any sense of building up capacity, and pairing that with enforceable commitments,” said Thea Lee, deputy chief of staff at the AFL-CIO who oversees trade issues. “In the case of TPP, you have a large number of countries that could support an institutional setup that could be more proactive in terms of identifying problems and addressing them.”
Progressives have more demands for the Trans-Pacific Partnership agreement — protecting the ability of governments to stabilize their financial systems, for example, and eliminating the rights of foreign corporations to sue governments over regulations they oppose. Those, however, are about avoiding continued harm to American workers. Trade agreements might actually benefit them — if the United States made certain provisions a priority.