Trade Subcommittee Hears From Witnesses Who Call for Reopening NAFTA 2.0 Negotiations
While a few Democrats on the House Ways and Means Trade Subcommittee defended NAFTA's benefits, the largest segment of the Democrats at a March 26 hearing on trade and labor rules enforcement -- including the chairman -- agreed with union witnesses' arguments that the new NAFTA cannot help American workers unless negotiations are reopened. Shane Larson, the political director for the Communications Workers of America, talked about the job losses his members face when call centers go to Mexico and the Philippines. "The labor chapter is an improvement on the current NAFTA," he acknowledged, where it is a side letter. But, he said, "The enforcement piece is not there and that’s why we have to go back to the table. I know the administration has said, 'We can’t do that. We can’t do that.'
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"We heard that with Peru. We heard that with Korea. Once they realized the votes weren’t here on the Hill they went back and renegotiated."
Larson was responding to Rep. Ron Kind, D-Wis., a leader among Democrats who support free trade, who told the unions he agrees enforcement is not where it should be in the new NAFTA. "You're asking for that agreement to be renegotiated, and opened up," he said to Larson, and the Trump administration, Canada and Mexico are all telling him: "That ain't going to happen." He had then asked Larson if Mexico passes the labor law currently under consideration in its Senate, would he prefer the new NAFTA or sticking with the current NAFTA.
Trade Subcommittee Chairman Rep. Earl Blumenauer, D-Ore., said in his opening statement, according to prepared remarks: "Since 1998, there were 39 submissions alleging non-compliance with NAFTA Labor Obligations, not a single case led to a formal arbitration or any penalty." He asked Celeste Drake, the trade expert at the AFL-CIO, to describe why a labor case against Guatemala, brought under the Central America Free Trade Agreement (CAFTA), failed (see 08062505 and 1706270087). Drake said the AFL-CIO warned trade negotiators that including a phrase that says labor violations must occur in a manner affecting trade would be problematic, and that's what lost the case. She said that unions asked the U.S. trade representative to change the slow and, in their view, ineffective prosecution of labor violations in any of a number of ways -- by requiring that imports be certified as coming from companies with adequate labor standards; by funding an independent labor secretariat to adjudicate complaints; by giving citizens a legal course of action to force the federal government to prosecute complaints; by creating "automatic penalties" for exporting companies that have verified labor violations. She said none of them were adopted in the new NAFTA.
Rep. Don Beyer, a member of the New Democrats from Virginia, homed in on the problem of countries being able to block the formation of panels in the state-to-state dispute process. Drake, in her written testimony, had pointed to that as a weakness in enforcement. Beyer asked if it could be resolved by a side letter, and Drake replied, "that’s written into the agreement, so it’s baked into the cake." A Canadian diplomat has claimed the panel blocking problem was solved (see 1903080033).
Rep. Jimmy Panetta, a Democratic free-trade advocate from an agriculture-heavy district in California, told the union representatives that if President Donald Trump withdraws from NAFTA to force a vote on its replacement, it would devastate his region. He asked if any of them would support getting rid of NAFTA. While many pivoted to talking about how Congress has leverage to improve the new NAFTA, Thea Lee, a longtime AFL-CIO representative who now is president of the left-leaning Economic Policy Institute, said: "I don’t think it’s an ideal outcome for anyone to have an exit from NAFTA."
Susan Monteverde, an American Association of Port Authorities executive who emphasized the high-paying union jobs at the nation's deepwater ports that are supported by trade, was invited to testify by the Republican ranking member of the Trade Subcommittee. But even that Republican, Vern Buchanan of Florida, said he grew up in Detroit, and agreed with union witnesses that NAFTA killed many U.S. manufacturing jobs. But he said that while he has concerns about how trading with low-wage countries like Vietnam or China affects U.S. manufacturing, there are other considerations for Mexico. He said his sister lives in El Paso, Texas, and he knows it's in the U.S.'s interest to promote stability for its southern neighbor, because when there's not enough opportunity there, "those problems flow into our country."