Talks to renegotiate the North American Free Trade Agreement began Aug. 16 in Washington, but the White House objectives, released in July, have critics griping that the “new” plan looks a lot like the Trans-Pacific Partnership trade deal that Donald Trump – and the IBEW – opposed last year
“NAFTA needs to be fundamentally rewritten, not merely tweaked,” said AFL-CIO President Richard Trumka. “Working people are united in our demand to rewrite NAFTA.”
The 1994 trade pact between the U.S., Canada and Mexico eased restrictions on cross-border trade between the three countries, but mainly enriched U.S. companies while working people paid the price. The deal has been responsible for the loss of more than 700,000 jobs in the U.S., primarily in manufacturing, as American companies packed up and moved south of the border, leaving entire communities in economic collapse.
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Over the course of the NAFTA agreement, U.S. exports to Mexico have shrunk while imports from Mexico into the U.S. have risen.
The green line shows the
steady climb of the U.S.-Mexico trade deficit from -$2 billion in 1994 to more than $64 billion today. American companies have sent hundreds of
thousands of manufacturing jobs south of the border during that time.
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NAFTA has had a depressing effect on U.S. wages as well, with companies needing little more than the threat of moving operations to Mexico to force American workers to accept lower pay. And a $2 billion trade surplus for the U.S. with Mexico at the time of NAFTA’s signing has turned into a staggering $64 billion deficit between the two countries in 2016.
During the 2016 campaign, Trump regularly promised to pull out of the agreement. But he has changed course since assuming office. His allies in the corporate world, many of whom have benefited greatly from offshoring American jobs, have cautioned against scrapping it entirely.
Despite Trump’s rhetoric, his negotiators are expected to try to thread the needle required to appease both his blue-collar supporters and the big business interests that funded his campaign and the campaigns of his Republican allies in Congress.
“NAFTA’s adoption led to a dramatic collapse in American manufacturing,” said International President Lonnie R. Stephenson. “But if Donald Trump is serious about finding a better deal for American workers, he should stop listening to the giant corporations who have made billions off this awful deal and start listening to the workers whose lives and communities were turned upside down when the jobs left town.
“It’s time for the president to make a choice, not try to play both sides,” Stephenson said. “Either he’s for workers in these negotiations or he’s for corporate interests. There’s not a lot of middle ground.”
In testimony to Congress, AFL-CIO Trade and Globalization Specialist Celeste Drake said any renegotiation should include binding, enforceable rules on labor standards in the core text of the agreement. “Specifically,” she said, “NAFTA should permit cross-border negotiating, establish floor wages and allow border adjustments to prevent environmental degradation and human exploitation to be used for trade advantage.”
Like the Trans-Pacific Partnership, which was abandoned by the U.S. under criticism from both Trump and Democrats in Congress, the administration’s public objectives include support for the anti-worker private justice system for foreign investors known as investor-to-state dispute settlement. The ISDS process, which allows foreign investors to challenge local, state and federal laws in front of panels of corporate lawyers, puts corporate rights ahead of workers’ rights.
“It’s a subsidy for companies that choose to offshore, paid by North American families whose taxes fund the arbitrators and winnings awarded,” Drake told the U.S. House Ways and Means committee on July 18. “[ISDS] amounts to little more than crony capitalism,” she said, adding that scrapping the provision would help level the playing field for small domestic producers and their employees.
For IBEW members in Canada, the negotiations are being viewed through a slightly different lens. NAFTA is generally viewed more favorably by Canadians, largely thanks to the 75 percent of Canadian exports that travel to U.S. consumers. By contrast, just 18 percent of U.S. exports go to Canada, though that still makes them the single largest importer of U.S.-produced goods.
Canadian officials point to a much smaller trade deficit between themselves and the U.S. than the one with Mexico – just $12 billion, even shifting in favor of the U.S. when services are factored in. One agenda item for Prime Minister Justin Trudeau’s government includes cross-border labor mobility, something that could be especially beneficial to IBEW members who’d benefit when large construction projects near the border need extra manpower.
On that particular issue, the Trump administration is silent.
“The truth is, the document released by the Trump administration is awfully short on specifics,” said Director of Political and Legislative Affairs Austin Keyser. “We don’t know what the administration’s plans are, but we know there are some red flags for working people, and we plan to keep a close eye on the negotiations as they start in Washington and continue in Mexico in September.”