January 25, 2018

USA Today Op-Ed: Elizabeth Warren: Trump team isn't negotiating a good NAFTA deal for workers

If Trump is serious about bringing jobs back to this country, he needs to show it. So far, corporate America is still winning in the latest round of talks.

The evidence is in: Donald Trump is the King of Offshoring. Since Trump promised to stop American job outsourcing, company after company has announced its intent to send more jobs overseas. Over 600 Indianapolis Carrier jobs went to Mexico, along with 300 jobs across town at Rexnord, and another 600 at Nabisco. GE. Microsoft. Lowe's. The outsourcing list goes on, and Trump has only made things worse. His administration continues to hand out millions in federal contracting dollars to companies that are sending those American jobs overseas.

Canada, Mexico and the U.S. are back at the negotiating table this week on the North American Free Trade Agreement (NAFTA). Despite months of talks, so far there has been no progress on the kinds of changes that would help American workers.

NAFTA has worked amazingly well for corporations, but it has completely failed working families. Since the agreement was signed, the Department of Labor has certified that more than 930,000 American workers have lost their jobs due to NAFTA. Lower labor and environmental standards in Mexico encouraged companies to ship jobs out of the U.S. Companies also use the threat of offshoring to cut wages and reduce benefits for the jobs that remain in the U.S. It's long past time to renegotiate this broken deal.

But where is the Trump administration? In the first five months of negotiations, the Trump team has failed to make American jobs a priority. In this latest round of talks that ends Monday, U.S. negotiators must take bold actions that will stop the offshoring of American jobs and put working families in a position to succeed.

It's no surprise that NAFTA has bolstered corporate coffers while leaving workers behind - it was designed to do exactly that. The 24-year-old trade deal created special rights exclusively for corporations, included weak labor and environmental standards, and adopted spineless enforcement measures that never stood a chance at protecting the interests of workers.

NAFTA's disdain for workers shows up in its Investor-State Dispute Settlement (ISDS) mechanism that gives corporations their own special court system. If a U.S. corporation doesn't like an action taken by a trade partner, it can bring a case before an ISDS panel made up of friendly corporate lawyers to demand restitution.

This is a special deal: A U.S. company doing business in the U.S. has no access to this special tribunal, but a U.S. company doing business in Mexico or Canada goes straight to the friendly tribunal. It's no wonder U.S. corporations find investment in other countries so attractive.

While corporations get special rights, workers are left with the short end of the NAFTA stick. The treaty relegated its labor provisions to a side agreement, and even then only offered up vague promises. But it didn't much matter, because labor promises weren't going to be enforced anyway. Even if a country clearly violated any labor provision, the agreement made it virtually impossible to bring a successful enforcement action.

Two decades after NAFTA was signed, Mexican wages remain stubbornly low, with the minimum wage still hovering below $5 per day. $100 per week is the high watermark for factory workers. NAFTA has kept Mexican labor standards low, resulting in American companies shipping jobs across the border to make a quick buck at the expense of working families here at home.

If the Trump negotiators are serious about bringing jobs back to this country, they need to show it. A new NAFTA should eliminate ISDS, adopt strict labor requirements in the main text of the agreement, add strong enforcement measures to police labor violations, and raise wages for all workers. So far, Team Trump has struck out.

The failure to deliver a worker-friendly NAFTA makeover reflects the same kind of U-turn that Candidate Trump executed once he became President Trump. Candidate Trump promised to Buy American and Hire American; President Trump issued a vague executive order before giving billions in new government contracts to firms that are notorious for serial American job outsourcing. Candidate Trump committed to cracking down on currency manipulation; President Trump has done a complete reversal, capitulating to countries that harm U.S. workers. And candidate Trump stood before workers at Carrier, assuring them that their jobs would not leave this country. Months later, when Carrier laid off those same employees, President Trump was nowhere to be found.

And after a year of abandoning working families, Republicans capped it off with the ultimate corporate gift: a trillion-dollar tax giveaway to giant corporations that leaves middle-class families to fend for themselves. That bill changed the rules for taxation of American companies' foreign profits, giving corporations more financial incentives to send more factories and more jobs overseas. The law "creates a real incentive to shift real activity offshore," former Treasury official Steven Shay told The Washington Post. Kimberly Clausing, an expert in taxation of multinationals, said the law's overall effects would be "unambiguously bad" for workers. Once again, with the King of Offshoring in the White House, Wall Street wins and Main Street loses.

The administration now has a chance to reverse course and rewrite NAFTA trade rules to help American workers. Candidate Trump promised he would do this. Now it is up to President Trump to follow through.

Read the Op-Ed on the USA Today website here.

By:  Senator Elizabeth Warren
Source: USA Today