Bernie Sanders Has a Message for Trump on Trade
As workers’ rights have become a focus for the 2020 presidential campaigns, Senator Bernie Sanders has called on President Donald Trump to protect those rights in the deal to replace the North American Free Trade Agreement (NAFTA), but whether that can happen and if it will be a boon for agricultural and auto workers in the U.S. remains to be seen.
Sanders was speaking at Macomb Community College in Warren, Mich., at a campaign rally on April 13 when he said “the NAFTA treaty that Trump re-negotiated with Mexico will still allow companies like General Motors to send our jobs to Mexico.”
Sanders issued a challenge to the president: “For once in your life, keep your campaign promises…go back to the drawing board.” He implored the president not to send the U.S.-Mexico-Canada Agreement (USMCA) to Congress without ensuring there are “strong and swift” measures to keep jobs from leaving the country.
In October 2018, Trump announced the new agreement after a year of several rounds of talks between the parties to replace the estimated $24.8 trillion NAFTA. The talks were not without their problems as Trump was publicly tweeting statements like: “Trade Wars are good and easy to win.”
CBC News had even reported at the time that the negotiations were tense, to the point of making the Americans “uncomfortable” with the demands they were being asked to put forward by the administration.
Those tense talks may have played a role in leading to an agreement which would only have a small increase—.35%—to U.S. economy and an even smaller one to the labor market, per a report by the independent International Trade Commission.
Though the report said the new USMCA would “have a positive impact” for manufacturing and services industries and there would be some extra production in the auto industry, U.S. production is set to be more expensive and wages are set to drop. The real opportunity for growth in the agreement would lie in removing “uncertainty” in “cross-border e-commerce, services and investments,” according to the Washington Post.
Part of that involves job security and protections for American workers, particularly those in the agriculture and auto sectors, like those in Michigan which Sanders actually won against Hillary Clinton in the 2016 primary.
However, Trump ultimately won Michigan later that year, partly due to the fervor over the president’s repeated comments labeling the free trade agreement as “unfair” to Americans. He later repeatedly called NAFTA the “worst trade deal ever made.”
Sanders’ comments and his previous statements on the matter appear to be more about holding the president accountable on his many campaign trail promises to bring “hundreds of thousands of jobs” to American workers.
Josh Orton, senior adviser and policy director for the Sanders campaign, told Fortune, “Washington has tried to sell corporate-written trade deals like NAFTA to American workers, making false promises of jobs and economic growth for all” for decades and the candidate wants to end that with the USMCA.
He said Trump has only “pretended to be a fighter for workers…and his attempts to renegotiate NAFTA, which contains giveaways to pharmaceutical corporations and still lacks real enforcement of worker protections, shows that he’s rolled over to corporate outsourcers and pharmaceutical corporations.”
But there may be procedural limitations to take into account.
Eric Farnsworth, vice president of the Washington, D.C.-based think tank Council of the Americas and Americas Society, told Fortune Sanders’ call may not even matter. Canada, Mexico, and the U.S. Trade Representative (USTR) have said “publicly and repeatedly that the negotiated text is closed.”
Farnsworth noted there may be some room to change the way the legislation is implemented or to amend with certain “side understandings…but efforts to re-open the text itself would be strongly resisted and likely end in frustration.”
Karen Hansen-Kuhn, director of trade and global governance at the Institute for Agricultural and Trade Policy, told Fortune it is actually possible to re-open the USMCA negotiations and that Sanders’ call out of the president “echoes” that of labor unions, environmentalists, and members of Congress.
She contended the changes these groups and lawmakers have asked for would not just protect American workers but also those in Mexico and would “raise environmental standards and ensure that the new agreement doesn’t lock in high prices for biologic medicines.”
Coupled with changes lobbied for by consumer protection activists on labeling meat products falling within the agreement, Hansen-Kuhn said “these changes would reduce incentives for companies to outsource jobs.”
However, she also noted none of the push for changes in labor protection language mean anything if strong enforcement of the terms are not built in as well. Both she and Dr. Shannon K. O’Neil, vice president and senior fellow for Latin America Studies at the Council on Foreign Relations, agreed: Mexico has been setting a good example for that.
“The best way forward is the labor reform Mexico is in the process of passing through their legislature,” O’Neil told Fortune. “It will do much of what Democrats have been demanding. And it has a high chance of happening as it fits with President [Andres Manuel] Lopez Obrador’s own domestic plans and priorities.”
She said the most effective way for Sanders and others to really protect American jobs and the worker is to make U.S. companies more competitive through investments in infrastructure, education, and research and development, citing the independent report showed the real advantages in the new USMCA only occur when there is confidence and certainty in American companies’ competitiveness around the world.
But Hansen-Kuhn said there need to be more significant changes to the new USMCA if Americans do not want to see “transnational businesses continue to pit workers in each country against each other—as they have during the 25 years since the original NAFTA was passed.”
She argued changes to sections on patents of medications, “giveaways to the fossil fuel sector,” and increasing consumer protections across the board are continuing to be called for as well.
Alyshia Gálvez, Ph.D, a Latin American studies professor at City University of New York, said she is not very optimistic about having these changes taken into account for a more “human-scaled trade deal that takes into consideration the needs of families and communities,” particularly for farmers in all three countries.
But she said there is some hope, since Democrats, who control the U.S. House of Representatives, seem unwilling to put the agreement up for a vote without these changes.
It may just be a question of timing.
Should the USMCA negotiations be re-opened for better job protections and other matters, Farnsworth said it could push ratification of the agreement well into 2020 and possibly too close to the November elections—“never an optimal time to pass any trade legislation much less any as politically complicated as USMCA.”