Labor leaders slam politicians who ignore the real problem with NAFTA

SAN DIEGO, Calif. — As trade issues took center stage in the Democratic primaries March 4, the AFL-CIO Executive Council, meeting here, criticized politicians and the media for handling the trade problem as a “separate and secondary issue that can be treated with small tweaks in trade policy or worker displacement programs.”

“To the contrary,” AFL-CIO President John Sweeney declared, “our struggle to compete successfully in the global economy is intricately connected to the other challenges the U.S. economy and working families are facing.”

Describing those challenges, he said, “Nobody needs to tell workers that the economy is sliding into a second recession in seven years, since they never really recovered from the last recession. America’s workers are struggling with decades of stagnant wages, eroding workplace protections, a collapsing housing market, tight credit and rising prices for everyday essentials such as gas, home heating oil, health care and food.

“In this economic environment,” he continued, “it is all the more urgent that we reform our flawed trade policies to put good jobs at the center of a coherent global economic strategy.”

A report on trade presented by the federation’s legislative and policy committee noted that, starting with the 1993 North American Free Trade Agreement (NAFTA), production and jobs have been shifted out of the U.S. at a faster and faster rate. A high dollar policy, tax breaks for producing overseas, and trade agreements aimed at protecting the profits and flexibility of mobile capital combined to send a powerful signal to business that moving jobs offshore was the right response to tightening global competition, the report said. It blamed Wall Street for encouraging this mindset by balking at financing any expansion of U.S.-based production facilities, instead encouraging “global sourcing.”

Sweeney reminded labor leaders that NAFTA backers said the deal would make the U.S. “competitive” by shifting less capital-intensive production to low-wage countries like Mexico. This was supposed to strengthen the U.S. in its competition with Europe and Asia.

“Fourteen years later,” the AFL-CIO report says, “our global trade deficit has increased more than tenfold — from $70 billion in 1993 to more than $700 billion in 2007. It isn’t just low-wage or labor-intensive production that has moved — we are losing ground in advanced technology products, autos and even aerospace. Tradable services — from call centers to legal research to airline maintenance — are also increasingly being offshored.”

During the first years of NAFTA some economists, and later President Bush, said this was nothing to worry about. They pushed the idea that trade deficits were a sign of American strength, reflecting rapid growth relative to other countries and the attractiveness of the U.S. to foreign investors. Since 1994, $5.6 trillion in international debt has accumulated. The borrowing is necessary to fund consumption of goods and services no longer produced in the U.S.

The report adopted by the Executive Council points to the fact that this hollowing out of U.S. productive capacity has left the country vulnerable in at least three major ways.

First, it has been a significant contributor to eroding real wages for the majority of America’s workers.

“Common sense tells us,” Sweeney said, “that when you put America’s workers in direct competition with low-wage, unprotected workers in other countries, through a combination of lower trade barriers, reduced risk for overseas investors and new technology, then wages for non-college-educated workers in the United States will slide. This ought to be a central concern of every politician.”

Second, according to the unionists, NAFTA encourages assaults on workers’ rights abroad and here at home.

AFL-CIO Organizing Director Stewart Acuff told the World that, “without protection for workers’ rights, the wages and working conditions of the most vulnerable and powerless workers in the world eventually become the standard for workers here. It gives employers the power to face down workers and unions with threats to move production to countries where they don’t have to deal with workers’ demands.” His point is that NAFTA offers companies the choice to produce where they don’t have to worry about employee health, worker safety, wages or the environment.

“We can’t rebuild the middle class here in the United States,” Acuff said, “unless workers have the freedom to choose a union and to bargain collectively for their fair share of the wealth they create. This means passage of the Employee Free Choice Act here in America. But we must also remember that the right to organize in America can’t be adequately protected if the rights of workers worldwide are routinely trampled.”

The third big problem with NAFTA, labor leaders here said, is that as the Bush administration dismantled the nation’s consumer regulatory apparatus, oversight of food and products sent back here by companies that moved overseas was criminally neglected.

The results were unhealthy food, tainted toys, unsafe steel, defective tires and risky pharmaceutical products in our homes and communities. Rather than simply blaming China or other countries, the AFL-CIO report says, “the same unregulated profit drive that leads to violation of workers’ rights and disregard of environmental protections results in companies shirking their responsibility and sending defective products and unsafe food to America’s consumers.”

The resolution approved by the federation lays out a comprehensive solution to the problem of NAFTA and trade agreements in general that goes far beyond anything proposed by any of the candidates now seeking the presidency.

The AFL-CIO’s solution calls for a fight for workers’ rights to form unions and bargain for decent wages and working conditions; universal health care; a secure, universal retirement system, and major investments in education, technology, infrastructure and clean energy.

The resolution also calls for use of tax and investment strategies that will, when coupled with the other measures, rebuild the U.S. manufacturing base as a core element in restoring the economic power of the working class.

Acuff said these and other solutions are realistic and that “we can move in these directions if we change the nature of who sits in the White House and if we can elect larger worker-friendly majorities in the House and Senate. No single action will solve the whole problem but our resolution on trade policy points us in the right direction.”

It was clear to observers here that the nation’s labor leaders are giving U.S. trade policy a lot of thought. They are crafting a strategy that goes way beyond what some pundits describe as a vain hope to hold onto jobs that are gone forever. Their aim is nothing less than creation of a new manufacturing base and millions of good, new jobs for U.S. workers.

jwojcik @ pww.org