Edward Alden, a senior fellow at the Council on Foreign Relations, co-directed the council’s Task Force on U.S. Trade and Investment Policy in 2011.
As Congress debates whether to grant President Obama authority to complete the most ambitious trade agenda in a generation, the most important organized voice for America’s workforce is once again in a familiar place — standing outside, screaming for lawmakers to stop. This is the same position the AFL-CIO and most labor unions have been in on trade for 45 years, and it has served neither their own interests nor those of U.S. workers. It is time for labor to become a constructive voice helping the United States adjust to the challenges of a global economy.
It is no small irony that Obama, friendly to labor and hostile to congressional Republicans, must rely almost entirely on GOP support to pass the trade-promotion authority bill he needs to conclude big new trade deals with Asia and Europe. He will be lucky to get 15 or 20 Democratic votes in the House and has lashed back at critics in his own party. “When people say that this trade deal is bad for working families, they don’t know what they’re talking about,” he said. “The Chamber of Commerce didn’t elect me twice — working folks did.”
But while the chamber is quite happy with the president on trade, labor is not. AFL-CIO President Richard Trumka has made opposition to the president’s trade agenda a litmus test for Democrats, warning that “there is no middle ground.” Labor’s criticisms are not without merit. Expanded trade has lowered the cost of consumer goods and food for Americans. It also has clearly hurt U.S. manufacturing, where private-sector union representation is strongest. The ability of U.S. companies to move offshore has held down wages and weakened labor’s bargaining power. China’s entry into the World Trade Organization in 2001 was especially disruptive, both because of the sheer scale of Chinese production and China’s willingness to skirt trade rules by subsidizing exporters and artificially depressing the value of the yuan to boost exports.
Trade deals such as the North American Free Trade Agreement with Mexico and Canada have intensified these challenges. But they would have arisen anyway. Historically, labor understood this. Until the 1960s, labor was a strong voice in favor of freer trade; the AFL-CIO strongly supported President John F. Kennedy’s request for trade authority in 1962. Labor also knew then that trade was critical to national security and that enriching our allies was good for the United States.
But by the early 1970s, in the face of rising imports of steel, televisions, cars and other goods from Asia, unions turned hard in the opposite direction, and they have stayed there ever since. In 1972, the AFL-CIO pushed for a radical piece of legislation known as Burke-Hartke that would have imposed restrictive quotas on most imports and heavily penalized U.S. companies for investing overseas.
The threat of Burke-Hartke generated a massive backlash from business. The big U.S. multinationals — which, hard as it is to imagine today, had previously done little lobbying in Washington — quickly mobilized and quashed Burke-Hartke, with the enthusiastic backing of the Nixon administration. That pattern has persisted since, with both Democratic and Republican administrations working with business and against labor to advance freer trade and stave off protectionist threats.
The absence of labor’s voice has made it impossible for even sympathetic administrations such as Obama’s to craft a more progressive trade agenda. The president has rightly demanded higher labor standards in trade deals, even though it has brought him no support from unions. Imagine instead if unions were prepared to get on board and actually deliver Democratic votes? They could insist, for example, on linking trade to new investments in infrastructure that would help U.S. exports flow to world markets. Or they could demand funding for comprehensive worker retraining programs like those in Europe, rather than the paltry Trade Adjustment Assistance that isn’t available to 99 percent of the unemployed.
The unions have complained — rightly, to my mind — about the absence of provisions in trade deals to restrict currency manipulation, and about rules that allow foreign corporations to sue governments directly. But why would the president tackle either issue, which would be difficult to negotiate and would generate criticism from business and some Republicans, when the AFL-CIO would oppose the deals regardless? The unions claim they will support “good trade deals,” but over the past several decades they have found just one they all liked: the tiny U.S.-Jordan Free Trade Agreement of 2001.
Labor’s bullheaded opposition to trade has not just hurt union workers. It also has meant that there is no organized pressure group at the table, demanding help for the U.S. workforce as it tries to adjust to a far more competitive global economy. Business simply doesn’t care very much — companies will set up shop here or elsewhere depending on the economics. But U.S. workers have no place else to go. They need an organized, powerful voice in the trade debate fighting to make their lives better — not standing aside, shouting as yet another trade deal rushes by without them.