POLITICS

Companies Backing NAFTA Overhaul Outsourced Hundreds Of Thousands Of Jobs

An analysis by the nonprofit Public Citizen raises questions about Donald Trump’s plans for a revised trade deal.

Multinational corporations pressing Congress to adopt an updated version of the North America Free Trade Agreement shed over half a million U.S. jobs for trade-related reasons since NAFTA took effect, according to a new analysis of government data.

The analysis, conducted by Public Citizen’s Global Trade Watch, a liberal nonprofit critical of recent trade agreements, found that 182 U.S. companies pushing for “NAFTA 2.0” ― either directly or through groups representing them ― had outsourced 225,527 jobs to countries with cheaper labor since 1994. The companies lost 284,489 more jobs due to heightened competition from cheaper foreign imports or other unspecified trade-related reasons, Public Citizen concluded.

Public Citizen’s research aims to cast doubt on President Donald Trump’s contention that the revised trade agreement he negotiated, officially known as the United States-Mexico-Canada Agreement, or USMCA, fixes the flaws in NAFTA that cost American workers jobs.

“Having corporate coalitions packed with chronic outsourcers of American jobs spending millions to pass NAFTA 2.0 certainly eviscerates Trump’s claim to have replaced NAFTA with a totally different deal that is good for working people,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.

Public Citizen identified 90 companies that are members of either the USMCA Coalition, a group convened by the U.S. Chamber of Commerce and other big business coalitions, or the Pass USMCA Coalition, which has taken the lead on public efforts. Pass USMCA is run by former Trump deputy chief of staff Rick Dearborn and co-chaired by former Rep. Joe Crowley (D-N.Y.) and former Obama administration Commerce Secretary Gary Locke.

Public Citizen counted an additional 92 companies that belong to business trade groups like the Business Roundtable, the National Association of Manufacturers or the U.S. Council for International Business, which are members of either or both pro-USMCA coalitions.

The nonprofit then looked at the number of trade-related job losses the companies reported to the federal government as part of the Department of Labor’s Trade Adjustment Assistance program, which provides educational benefits to workers displaced by trade agreements.

The companies in the group that outsourced the most jobs were V.F. Corp., which makes clothing brands including Timberland and Vans; the automotive parts manufacturer Delphi; General Electric; General Motors; and Hewlett Packard. 

Spokespeople for the USMCA Coalition, as well as V.F. Corp. and Delphi, did not immediately respond to requests for comment on Public Citizen’s analysis.

Trade policy is peculiar terrain for congressional Democrats, many of whom disagree with past Democratic presidents’ support for corporate-backed trade agreements.

Dearborn, the former Trump aide running the Pass USMCA Coalition, referred to an April report by the U.S. International Trade Commission that concluded that the new deal would result in a net increase of 176,000 jobs ― a 0.12% increase―over six years.

“Mexico and Canada are America’s two largest export markets. That’s a big reason why trade with Canada and Mexico already supports 12 million American jobs ― and why more than 120,000 small and medium-sized U.S. businesses sell their goods and services to our North American neighbors,” Dearborn said in a statement. “USMCA will undoubtedly boost this number.”

The White House referred an inquiry to the office of the U.S. trade representative, which likewise pointed to the International Trade Commission’s April report.

Some progressive economists dispute the estimate, however. Robert Scott, of the liberal Economic Policy Institute, which receives some labor union funding, questioned the report’s assumptions that new protections for Mexican workers would both come to fruition and produce the projected gains for U.S. workers.

The jobs gains would also be a relatively small fraction of the nearly 1 million manufacturing jobs that the federal government estimates were lost due to NAFTA. 

“The minuscule projected gains in this long-awaited official government assessment contradict Donald Trump’s grandiose claims that it will lead to ‘cash and jobs pouring into the U.S.,’” Wallach said in response to the ITC’s report.

Although the Trump administration negotiated the USMCA, the updated trade agreement requires approval in both congressional chambers before it becomes law. That means that Democrats, who control the U.S. House, exercise unusual power over one of Trump’s policy priorities. 

Trade policy is peculiar terrain for congressional Democrats, many of whom, like their allies in organized labor, disagree with past Democratic presidents’ support for corporate-backed trade agreements.

Trump’s professed commitment to transform NAFTA into an accord that favored American workers sparked some cautious optimism among progressive NAFTA critics. These progressives count Trump’s virtual elimination of an international court that allowed corporations to challenge individual country’s domestic regulations as an improvement on the status quo.

President Donald Trump greets supporters in Pittsburgh in January 2018. Trump's promises to reverse trade-related job losses
President Donald Trump greets supporters in Pittsburgh in January 2018. Trump's promises to reverse trade-related job losses contributed to his 2016 election appeal in industrial states.

But they have been disappointed by the current draft of the USMCA.

Specifically, they argue that the agreement lacks mechanisms to enforce new labor standards that aim to boost Mexican manufacturing workers’ wages.

They also object to a provision guaranteeing 10-year patents for biologics ― drugs made of living organisms, which have recently been a source of expensive new cancer treatments.

Rep. Earl Blumenauer (D-Ore.), chair of the House Ways and Means Committee’s panel on trade, has been relatively supportive of recent international trade deals. As a result, several labor unions affected by trade policy unsuccessfully opposed his bid to head the panel.

But Blumenauer said in March that the prescription drug provisions of USMCA, in particular, made the current draft a non-starter.

“The American public is fed up with what’s going on with drug pricing,” he said.

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