If President Trump is serious about bringing back manufacturing jobs through renegotiated free trade deals, he may find some surprising allies.
Progressive Democrats and labor unions have long criticized treaties like the North American Free Trade Agreement, which, according to government accounting, has resulted in the loss of 1 million U.S. jobs and driven down wages. Trump has taken a stab at renegotiating NAFTA, which he has re-branded as the United States, Mexico and Canada Agreement, taking out some of the bad features of the original treaty while leaving some of the worst ones intact.
Before the new agreement can take effect, it will need to be ratified by Congress, and in order to do that, Trump will need votes from Democrats. This is an opportunity to improve the lives of workers in Maine. If a new NAFTA can do that, Democrats should not shy away from working with the president, even though they have so many other areas of disagreement.
It was good to hear Maine’s new congressman, 2nd District Rep. Jared Golden, say that he would be open to support the right kind of revision.
“I agree with the president that NAFTA has failed working Mainers, but his NAFTA 2.0 proposal needs significant changes to ensure we don’t repeat the same disastrous trade policies that have led to closed mills, outsourced jobs, and stagnant wages,” Golden said in a statement released after the State of the Union address Tuesday. “If the president can follow through on his bipartisan talk with bipartisan leadership, I’ll work with him to improve these proposals so they deliver results for Maine people.”
UNEQUAL BENEFITS
Negotiated in the 1990s and promoted by President Bill Clinton, NAFTA was the first in a series of trade deals that enabled the emergence of a global economy. It was supposed to fuel broad economic prosperity, but it hasn’t worked for everyone. Corporations have been able to avoid union contracts as well as labor and environmental laws – while still taking advantage of the world’s biggest consumer market – by setting up shop across the border.
The big winners have been corporate investors, who have reaped the profits that come from lower production costs. NAFTA was supposed to create new markets for American-made goods by raising the standard of living in Mexico, but the benefits have not been well distributed. A little over half of cross-border trading has been between divisions of the same corporations, adding to the company’s bottom line but not necessarily creating wealth for anyone else.
U.S. consumers have taken advantage of low prices for cars and appliances, but have also seen communities hollowed out when plants shut down and good-paying jobs disappear. Workers paid the biggest price, either by losing their jobs, or having their wages suppressed by the credible threat that their employer could move the work south of the border.
TRUMP’S IMPROVEMENTS
Trump’s new agreement improves on the original NAFTA in some important ways. For the first time, it sets a minimum wage for autoworkers, requiring 30 percent of the content of vehicles sold here to be made by workers who earn at least $16 per hour, growing to 40 percent over time. That’s three times what Mexican manufacturing workers get now – poverty wages for what used to be middle-class jobs. The agreement also requires that workers have rights to form unions, something not guaranteed under Mexican law.
But the enforcement mechanisms are weak, leaving all the incentives in place for the manufacturers to continue their race to the bottom of the pay scale. The same is true for the environmental protections for manufacturers, and the agreement has no mention of climate change, a crisis that does not recognize borders.
And the agreement would create new monopoly protections for pharmaceutical drugs, driving up prices across the continent without benefiting the public.
International trade is intensely complex, and many Maine jobs depend on relatively frictionless trade with Canada. Those workers would not benefit from the trade war that could be started by throwing out the agreement entirely.
Golden and the Democrats should find a way to work with the administration to address the defects in the president’s new NAFTA agreement, regardless of the hostile political climate.
Negotiating a “win” for American workers would be worth it, even if that meant giving one to President Trump.
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