PARIS – Union leaders from the U.S. and Europe are questioning the value and safeguards for workers in a proposed “free trade” pact between the world’s two largest trading areas.
The U.S.-European Union agreement is one of several trade pacts the Obama administration is pushing as a continuation of its drive last year to cozy up to business. But because the 27-nation European Union has high labor standards, including for worker rights, the U.S.-EU pact was supposed to be non-controversial.
The U.S.-EU trade pact is important precisely because it would govern half of the world’s trade, far outstripping prior U.S. trade pacts, with Mexico and elsewhere, that are notable for their lack of worker protections and resulting U.S. job losses.
“Increasing trade ties with the EU could be beneficial for both American and European workers but as with all trade agreements, the rules matter,” Trumka and Segol said in a joint statement.
If the proposed pact incorporates the best practices on both sides of the Atlantic, Segol said, it could benefit workers in both nations. That would make it the “gold standard” for future trade pacts, she added. But it must not repeat conditions for a race to the bottom, Trumka said.
“Generally speaking, both regions have advanced economies, high national incomes and well-developed legal and regulatory regimes designed to protect the environment and defend workers’ rights. And in many respects, the European nations’ social programs to protect families and the environment exceed those of U.S. laws and regulations-and any U.S.-EU agreement must not be used as a tool to deregulate or drive down these higher standards. If that is the goal, working families of both regions will pay the price,” he warns.
Before the U.S. and the EU can bargain, there must be “a new approach” to U.S. bargaining of trade pacts, Trumka says – reiterating a stand the AFL-CIO has taken for years. That must include enforceable worker rights, among other protections.
“The status quo approach to trade resulted in increasing income inequality, stagnating or declining wages and unacceptably high trade deficits that are sapping economic growth,” he said.
But even though Europe as a whole has higher labor standards than the U.S., Trumka warned the EU now includes several low-income nations – specifically Romania, Bulgaria, Cyprus, and Slovakia – with little worker protections. “And Poland has been engaging in so-called ‘labor market flexibilities’ for a generation, while Hungary’s current government has likewise been intent on destroying many worker protections,” he added. Multinationals could exploit the workers in those nations by shifting jobs from the U.S. those countries, Trumka said.
While Trumka did not say so, the EU “bailed out” Cyprus, and its conditions for the bailout included mass firings. He mentioned, however, that the EU is imposing stiff conditions for bailouts on two other ailing European economies, Greece, and Spain.
“Trade negotiators must distinguish between activities that will benefit the U.S. economy by supporting U.S. jobs, domestic growth and economic equity and those activities that only benefit shareholder value for certain corporations,” Trumka said. “Actual U.S. job and wage growth that will spur demand and lead the U.S. out of its economic troubles must be the priority of the U.S.-EU FTA discussions (his emphasis).”
Segol said too much of the negotiating has been behind closed doors.
“Considering the enormous implications of the proposed negotiations for workers on both sides of the Atlantic, the European Trade Union Confederation is concerned at the lack of public scrutiny of the EU’s draft negotiating mandate” by European unions, lawmakers and civil society. By contrast, Segol said, the U.S. Congress has had a lot more information – a comment many U.S. lawmakers would dispute. She called the negotiating secrecy “a major challenge to democracy in Europe.
“The ETUC demands the European Commission” – Europe’s executive branch – “submit the draft of the European Union negotiating mandate to the European Parliament and the trade union movement and civil society for information and discussion to allow greater public scrutiny before adoption and the launch of negotiations,” Segol said. That includes public hearings, she added.
“The economic scale of such a transatlantic agreement means there will undoubtedly be significant consequences-potentially positive and/or negative-not only for jobs and their quality in Europe, but for the global regulatory framework and at-tempts to maintain multilateral approaches to trade and investment. A sustainability and employment impact assessment is crucial in advance…Governments must not be prevented from taking any measures to protect the interests of workers and citizens.”
Photo: A European Trade Union rally against austerity measures. Flickr (CC)