Eight years ago, Charlie Rangel and I worked with our House Democratic colleagues to co-author what became known as the "May 10th Agreement" on labor and environmental standards in trade agreements. For the first time, fully enforceable labor and environmental standards would be placed into our trade agreements on equal footing with every other commercial provision. May 10th also included important provisions on medicines, investment, and government procurement. U.S. trade agreements with Peru, Panama, Colombia, and Korea were re-negotiated to include May 10th.
After decades of leading the fight to include worker rights provisions in trade agreements, I considered at the time, and still do today, May 10th to be a major breakthrough. House Democrats brought about these historic changes, so we have some standing to evaluate their implementation.
So I have deep concern -- and some dismay -- when the president says that "we are just wrong," or we are "satisfied with the status quo," or worse, we are "making this stuff up" when we express concerns about the status of the Trans-Pacific Partnership (TPP) trade negotiations.
House Democrats know a progressive trade agreement when we see it because we are the ones who built the foundation. We think the TPP agreement, as it stands today, falls short of what is needed. And we don't want to give up our leverage by granting "fast-track" authority until we know that TPP is on the right track.
Since the May 10th provisions are the basis for which the administration declares TPP to be "the most progressive trade agreement in history," let me give you a few examples of how TPP is still falling short:
Vietnam is different. It is a command economy where the only labor union is an organ of the communist Party. It is naïve not to acknowledge that allowing workers to organize and form independent unions -- freedom of association, a central and basic international right -- is in direct opposition to the Vietnam regime and will therefore be very difficult to make real. On a recent trip to Vietnam, I met a woman who had been thrown in jail for four years for trying to organize workers. We cannot simply have the right written obligation in the Agreement and expect that some future dispute settlement panel is going to ensure meaningful changes on the ground for workers. The administration refuses to make available to Members of Congress the recent "consistency plan" they are discussing with Vietnam so that we can evaluate the changes to Vietnamese laws and practices they are seeking. But, from what I understand, the plan will fall far short of bringing Vietnam into compliance with basic ILO standards, as required under the May 10th Agreement. For example, the plan will not explicitly provide that Vietnam must allow industry-wide unions to form -- because Vietnam refuses to acknowledge that fundamental right. Our negotiators also refused to accept our suggestion that an independent panel be established from the beginning to ensure compliance with the labor obligations and expedite a dispute. Without such a structure, future cases will need to be built from scratch by outside groups and submitted to the U.S. government, a process which has taken several years for the Department of Labor to act on in Honduras and Guatemala. The president said recently that Vietnam "would even have to protect workers' freedom to form unions -- for the first time." But the TPP that USTR is negotiating is far from ensuring that those words are real.
Mexico has a long way to go. The administration likes to say that TPP will re-negotiate NAFTA. I'm all for that. But, again, words in the Agreement are not enough. Mexico has to change their laws and practices. For example, they have to get rid of the "protection contracts" that serve to block real representation in the workplace, and they need to fundamentally reform or replace the Conciliation and Arbitration Boards that are responsible for resolving disputes over workplace representation and other labor issues. This is vitally important because U.S. workers compete directly with Mexican workers in critical manufacturing and other sectors. While I understand the administration has started conversations with Mexico, I am not informed of any "consistency plan" that would detail the changes Mexico needs to make to their laws.
The TPP negotiations are taking a different approach on environment than we did on May 10th, where we stated simply that each country was obligated to implement seven multilateral environmental agreements. TPP negotiators are trying to build the same obligations from scratch, and we still do not know if they have succeeded. Words like "endeavor" and "take steps to" are not going to lead to the revolutionary changes we have been told to expect. The president said at Nike last week that the TPP environmental chapter would "help us do things that haven't been done before." Actually, we have done these things before. In addition to May 10th, Peru included a special annex on deforestation (that, by the way, we are having a difficult time enforcing). We established the foundation so we are in position to evaluate whether it is being built on or eroded.
Access to affordable medicines. The May 10th Agreement provided strengthened protections for intellectual property, but also recognized the need for balance, particularly when it comes to access to affordable medicines. It also recognized that while developing countries should strengthen their intellectual property (IP) protections, they should not be expected to provide the same level of protection the United States and other developed countries provide. We have been battling for years now to persuade our negotiators to respect the May 10th Agreement -- and we continue to have concerns that the TPP medicines provisions will fall short.
Investment and Investor-State Dispute Settlement (ISDS). As far back as 2007, when the May 10th Agreement was reached, we recognized growing concerns over investment and ISDS. We insisted that our trade agreements with Peru, Panama, Colombia, and Korea include new preambular language clarifying that the investment obligations in those agreements were not intended to provide foreign investors with greater substantive rights than U.S. investors have under U.S. law. Over the past few years, our concerns over the investment text and ISDS have become even greater. Nevertheless, our negotiators have refused to include the May 10th preambular language in TPP, and have refused to consider other critical changes to the investment text.
Currency manipulation. A progressive trade agreement for workers and the middle class must address currency manipulation, which has caused millions of job losses and contributed to wage stagnation over the past decade. If we fail to do that, we are essentially letting China write the rules and are accepting an unacceptable status quo.
Market access and reciprocity. Our trade deficit with Japan is the second or third largest deficit with any country, and at least two-thirds of that deficit is in automotive products. Japan's automotive market is the most closed automotive market in the industrialized world, and past agreements to open it have repeatedly failed. We need new thinking on how to open that market, which is why I proposed conditioning the elimination of U.S. auto tariffs on a demonstrable opening of the Japanese automotive market. Unfortunately, our negotiators refused. And while there is much talk about agricultural reform as part of the "third arrow" of Abenomics, we are uncertain as to what will be the changes in tariffs on key products, and Japan's negotiators are continuing to refuse to eliminate duties on hundreds of agricultural products. I don't expect that to change as a result of TPA, particularly given that TPA does not even establish as a negotiating "objective" the elimination of agricultural tariffs in TPP.
Other critical issues are at stake, including the treatment of state-owned enterprises (SOE). I am concerned that countries will be able to evade the disciplines in the SOE chapter as currently written, for example.
- In the case of our trade agreements with Peru, Panama, and Colombia, their labor laws were changed to come into compliance with International Labor Organization (ILO) standards before the Congress voted. I know this because we negotiated directly with the countries on the provisions that fell short of international standards. Charlie Rangel, Allyson Schwartz, and I traveled to Peru in the summer before Congress voted to acknowledge the fact that they had brought their laws into compliance. I remember vividly Peruvian President Garcia calling this a "New Deal" for trade agreements. We have no such assurance with Vietnam or Mexico in regards to TPP.
I think my record on trade is pretty clear -- I support trade agreements when they are done right.
I am not "some folks [who] think we should just withdraw and not even try to engage in trade with these countries." I am not someone who wants to let China write the rules, since I authored the amendments to China PNTR that shaped China's entry into the World Trade Organization only to see the Bush administration fail to enforce them. And I am not someone that thinks "we pull up the drawbridge and build a moat around ourselves" or "stand on the beach and stop the global economy at our shores."
Those statements by the president don't describe our work to improve and vote for trade agreements, or the position of the vast majority of House Democrats.
I certainly don't question the president's commitment to the middle class and to strengthening the U.S. economy. I have stood proudly by him as he saved the domestic auto industry, stabilized a collapsing economy, and signed the Affordable Care Act.
I would urge in the coming weeks that the administration not question the commitment of Democrats to build a better trade policy. TPA is in trouble because TPP is not yet on the right track. I, for one, would grant the president the authority to finalize a trade agreement once I am far more certain it is the best deal we can get.
I agree with the president when he says "we've got to make sure that the trade deals that we do shape are ones that allow us to compete fairly."
TPP, as it stands right now, is not yet the most progressive trade agreement in history. We still have work to do. And, I hope we can re-focus our efforts on getting it done right.
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