Just more than two decades after lobbying unsuccessfully against the North American Free Trade Agreement (NAFTA), US labor unions are again voicing strong reservations to a proposed major trade-liberalization deal.
At issue now is the Trans-Pacific Partnership (TPP), a measure expected to call for lowering or eliminating most trade barriers between the US and 11 other Pacific Rim nations. The pact is still being hammered out in closed-door negotiations.
Union leaders and other critics say that the proposed pact would prompt US companies to funnel manufacturing jobs to lower-wage countries. Environmental and human rights groups are also voicing strong opposition.
It is a familiar theme. After all, former independent US presidential candidate Ross Perot warned that NAFTA would create “a giant sucking sound” as jobs left the US for Mexico.
So far, the economic consequences of NAFTA have seemed mixed — not as dire as Perot predicted nor as positive as former US president Bill Clinton forecast.
The current Pacific Rim free-trade debate pits many fellow Democrats against US President Barack Obama. Some Democratic critics have depicted the Pacific free-trade deal, and a companion trans-Atlantic pact expected to follow, as “NAFTA on steroids.”
As with NAFTA, which linked the economies of the US, Mexico and Canada, and created what is now the world’s largest free-trade zone, the Pacific free-trade proposal generally has stronger support among Republicans in the US Congress than Democrats.
Up to now, Congress has shown little inclination to grant Obama trade promotion authority powers — called “fast track” — that allow only yes-or-no votes on trade agreements with no amendments permitted. Fast-track authority had been routinely granted by Congress to presidents in past major trade negotiations, including NAFTA.
Now, with Republicans in control of Congress, chances might seem to be stronger for free-trade legislation. However, Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, predicted that Obama “is going to have a harder time bringing over Democrats than Clinton did back in that era.”
Obama told a gathering of business leaders last month that he recognizes differences within his own party on free-trade agreements and understands how some fellow Democrats might have “legitimate complaints” about possible adverse consequences. It adds up to “tough politics,” he said.
Democratic Senator Elizabeth Warren, a rising voice in the party and usually a close ally of the president, is among the skeptics.
“We cannot afford a trade deal that undermines the government’s ability to protect the American economy,” she wrote in a recent letter to US Trade Representative Michael Froman.
The TPP would link 12 countries accounting for 38 percent of total global economic activity: the US, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Taiwan has also expressed an interest in participating.
The trade negotiations have magnified existing business-labor differences.
“A world where goods and services trade freely is a more fascinating — and prosperous — place to live,” says David Abney, CEO of United Parcel Service, a company that would benefit from the proposed new free-trade agreements.
AFL-CIO labor federation president Richard Trumka calls the proposed Pacific and Atlantic free-trade agreements deeply flawed economic policies.
“We cannot enact new trade agreements modeled on NAFTA,” Trumka said.
Teamsters president James Hoffa warns of looming US job losses.
Major trade pacts entered into by the US should “contribute to democratic global economic governance and ... promote good jobs, full employment and rising wages,” Hoffa said. “A key element, of course, is strong labor rights protections so that every worker in every country can exercise fundamental human rights on the job without fear.”
“Our experience in the past on free-trade agreements has not been encouraging,” said Robert Scott, director of trade and manufacturing at the Economic Policy Institute, a Washington-based think tank that gets much of its financing from labor organizations.
Free-trade proponents and opponents cite different sets of figures to bolster their rival claims.
The US Chamber of Commerce says NAFTA “has generated vast new opportunities for US workers, farmers, consumers and businesses” and that trade with Canada and Mexico “supports tens of thousands of jobs in each of the 50 states.”
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