Trumka letter sets Obama straight on trade, where labor stands

AFL-CIO President Richard Trumka sent this letter to President Barack Obama on Monday, June 8:

Dear Mr. President:

I have been proud to campaign for you twice and honored to work with you on many issues important to working families — including expanding health care coverage, comprehensive immigration reform, financial reform and infrastructure investment. It is therefore with regret and reluctance that I find myself in the unfortunate position of disagreeing fundamentally with you about your administration’s international trade policy.

I am also writing to correct the record regarding the position of the labor movement with respect to international trade. While I know we will not agree on every issue, I would ask that you not mischaracterize our positions and views — even in the heat of a legislative battle.

As you know, the AFL-CIO has been advocating for fundamental reform to U.S. and global trade policy for more than two decades. Many of these issues came up on the campaign trail in 2008, when you raised similar concems. We have engaged with every administration, including yours, as well as with every Congress, to advocate for new trade rules and complementary domestic policy reform. We have worked with our counterparts in the global labor movement to press the World Trade Organization to balance its global rules to better protect workers’ rights, the environment, and democratic decision-making. Our goal is to ensure that as trade expands, growth is inclusive and prosperity is shared.

Unfortunately, current trade policies have achieved the opposite: while the U.S. economy continues to grow, the share going to working families is shrinking, real wages and incomes have stagnated for the majority of American families, and inequality has grown. As David Rosnick of the Center for Economic and Policy Research has shown, the projected small, positive impact of the Trans-Pacific Partnership (TPP) on U.S. economic growth (0.13% of GDP by 2025) is swamped by a much larger likely negative distributional impact, leaving most workers worse off.’ The U.S. manufacturing sector, which is vital to maintaining an innovation advantage, creating a pathway to the middle class, and safeguarding our national security, continues to shrink. Workforce programs like Trade Adjustment Assistance are wildly inadequate to helping families remain stable and secure when trade disrupts their workplaces. Moreover, the failure to invest in 21st century infrastructure or adequately address unfair trade practices-including currency manipulation and labor abuse-has left America at a competitive disadvantage. We run chronic trade deficits of a half a trillion dollars a year, undermining the economic recovery and a healthy labor market.

I take particular exception to your charge that the labor movement is “opposed to trade on principle.” To the contrary, we have supported trade deals when warranted, such as the U.S.-Jordan trade agreement. More important, we have supported unilateral trade preference programs, such as the African Growth and Opportunity Act (AGOA) and the Generalized System of Preferences (GSP), which promote imports, and — when combined with progressive development policies — can help alleviate poverty and strengthen middle classes abroad. We also strongly support reauthorization of the Export-Import Bank and have advocated for expansion of export-promotion programs. We have engaged with policymakers in both parties and at every level of government to work toward a new generation of trade policies that will create a virtuous cycle of demand-led growth while strengthening our democracy, protecting workers’ rights globally and promoting sustainable global economic development.

What we do not support are trade deals that benefit Wall Street, but decimate Main Street. We don’t support rigged rules that skew the benefits of trade to powerful global corporations, while forcing working families, domestic businesses, small farmers, and countless communities to bear the costs.

Our current trade policies need serious and deep reform — not just tweaks around the edges. While it is crucial that we work to dramatically strengthen labor and environmental provisions and to enforce them more effectively, that is by no means sufficient to achieving the needed overhaul of the trade agreement ”template.” Current trade rules — including those in the TPP — were designed to free global businesses from the limitations of national laws and regulations — the very regulations that you and I fight for every day: the ones that protect working people and their families from a variety of workplace and consumer dangers and abuse.

You have charged that our opposition to TPP means that we aren’t interested in rewriting global trade rules, and that we are satisfied with the status quo. We do want to rewrite the global rules, Mr. President — but if the draft TPP on the table now is your version of new rules, we are sorry to say that it falls short. And the undemocratic fast track process that you are fighting so hard for just exacerbates all the shortcomings In the draft text. Rep. Sander Levin has put forward a thoughtful and detailed alternative to the Hatch-Ryan-Wyden bill, but it was blocked from consideration by congressional Republicans, and your administration stood silent. At the same time, your administration has chosen to maintain an unwarranted degree of secrecy, inhibiting debate and thwarting constructive input.

Fast track does not allow public scrutiny of trade deals until they are finalized. Trade deals contain numerous provisions that cannot withstand the light of day and would fail if voted on separately. These controversial elements include provisions that
dilute “Buy American” policies; impose inadequate rules of origin; and create separate, parallel justice systems that allow foreign investors to opt out of the American court system and sue U.S. taxpayers for damages in private tribunals. Opposition to these and similar policies isn’t opposition to “trade in principle”; it’s opposition to bad policies.

We were optimistic early in your administration that we would be able to support the TPP. To that end, we have been working with your staff for more than five years to try to shape the TPP so that it would benefit not only America’s workers, but also workers in every TPP country. Our efforts have been largely rebuffed. Rather than engaging in a real dialogue with us about reforming the trade model and making changes to reflect our concems, USTR’s primary response has been to change its talking points. This is not engagement, it is public relations spin. Until we succeed in reforming the rules that continue to promote special benefits for global corporations at the expense of good jobs, decent wages, and sound environmental and consumer
protections, we will continue to oppose them.

The secrecy of the TPP in this regard is counterproductive. You have said that “there is nothing secret about [the TPP],” yet citizens who have tried to read it have been rebuffed, and your staff has indicated it would be a violation of national security law for me to talk specifically about its contents. Your staff stalled the dissemination to Congress of an analysis of TPP by the Labor Advisory Committee on Trade Negotiations and Trade Policy (LAC) for six weeks — until after the Senate had already voted. For most Americans, then, the TPP is secret. This secrecy inhibits public deliberations and debate. It also tends to promote the policy interests of economic elites, not the broad interests of America.

You have repeatedly isolated and marginalized labor and unions as the only opponents of fast track and TPP. I am sure you are aware, however, that the critics of the current TPP encompass a broad, deep, and intellectually impressive swath of public opinion. Many of the academics, members of Congress, and organizations that oppose fast track and criticize TPP have been supporters of ”free trade” and trade agreements in the past.

Nobel laureates Joseph Stiglitz and Paul Krugman, Columbia University professor Jeffrey Sachs, former International Monetary Fund chief economist Simon Johnson, and president emeritus of the Alfred P. Sloan Foundation Ralph Gomory, among many other respected economists, have raised serious concerns about multiple aspects of the draft TPP, including the controversial investor-state dispute settlement provisions, the lack of enforceable currency protections, the likely impact on income inequality, the overly restrictive monopoly protections for pharmaceutical products, and the unwarranted lack of transparency.

With respect to civil society, an unprecedented array of organizations, advocating for the environment, faith and international development, agriculture and safe food, and consumers, immigrants’, women’s and internet rights, has spoken out against the
flawed TPP and fast track model.

Mr. President, I urge you to make the text of the TPP public, so that we can engage in a more constructive national public debate about its content. I also ask that you not equate criticism of a particular set of trade rules with opposition to all trade.

Sincerely,

Richard Trumka
President, AFL-CIO