Why Does Labor Oppose the Trans-Pacific Partnership?
Congress will not vote on the Trans-Pacific Partnership (TPP) until 2016, but in the meantime, presidential candidates have taken positions on the massive free trade deal. Republican candidates are split on the merits of the deal, while the Democratic candidates, at this point in the campaign, oppose it.
Yet there is one bloc of voters who stand the most to gain -- or lose -- from the agreement, yet have mostly been ignored: American workers.
Currently, many of the country's largest unions oppose the TPP. On October 5, 2015, the day the member nations finalized the agreement in Atlanta, the presidents of five of the most powerful unions – the Teamsters (IBT), United Steelworkers (USW), Food and Commercial Workers (UFCW), Machinists (IAM), and Communication Workers (CWA) – issued statements declaring their opposition to the trade deal.
So, why is organized labor against the TPP?
Jobs and Trade Adjustment Assistance
One reason is the prospect of further deindustrialization and the continued outsourcing of American manufacturing and service jobs to low-wage countries like Vietnam, where the minimum wage is 28 cents per hour.
Since the TPP includes 12 countries whose collective GDP amounts to 40 percent of the world's total economy activity, unions fear that passing the TPP will accelerate a "race to the bottom" in terms of the wages of American workers, who will be competing against comparatively cheaper labor.
To justify their opposition, union leaders point to the economic effects of free trade agreements implemented within the last several decades. According to the Economic Policy Institute, trade liberalization has coincided with the loss of millions of jobs in the United States since the 1990s. It estimates that between 1993 and 2013, NAFTA led to a net loss of 850,000 American jobs.
The EPI also estimates that the free trade deal with South Korea cost 75,000 jobs since its implementation in 2012 and that the U.S. shed 3.2 million jobs as the result of a trade deficit with China since its entry into the World Trade Organization (WTO) in 2001.
It is for these economic reasons that labor unions, led by the largest union federation in the country, the AFL-CIO, blitzed Capitol Hill in March 2015 to persuade lawmakers to oppose trade promotion authority (TPA) for the TPP.
TPA, also known as fast track authority, prevents Congress from amending the final version of the TPP and limits Congress to deciding to either ratify or reject the free trade deal in a straight "yes" or "no" vote.
In mid-June, organized labor pressured Democrats to defeat the fast track bill by voting against sister legislation that would have expanded funding for trade adjustment assistance, or TAA. This federal program pays to re-train and support workers who have demonstrably lost their jobs as a result of the country's trade policies.
While counter-intuitive on its surface, unions and Democrats opposed the TAA legislation for several reasons.
First, they criticized its exclusion of public-sector workers from being able to participate in the program. Second, they objected to a major source of funding for this assistance: $700 million in cuts to certain Medicare payments through 2025.Moreover, they believed the $450 million in support was insufficient and pointed to more robust funding proposals, such as the $575 million advocated by U.S. Reps. Sander Levin (D-Mich.) and Adam Smith (D-Wash.).
Finally, they recognized that sinking the TAA bill was the only way to prevent TPA – whose passage was inevitable under the Republican-led House – from being sent to the president's desk.
House Democrats surprised President Obama on June 12 when they voted overwhelming to defeat TAA, thus stalling the progress of the fast track bill.
After the vote, AFL-CIO President Richard Trumka praised the House minority leader.
“Nancy Pelosi has always fought for working families," he said, "and today her leadership on the trade package vote was instrumental in the House voting against another bad trade deal.”
Later that month, however, Congress revisited TAA as part of a vote on an African trade bill. Assuaged by improvements in the terms of the trade adjustment assistance – including an expansion of eligibility requirements and more generous coverage – organized labor took a more neutral stance on TAA.
“We do not have confidence that the White House would hold out for a stronger TAA bill if this one were to fail,” Trumka wrote to lawmakers before the vote. “Therefore we urge you to vote your conscience, and we will respect your decision, whatever it may be.”
This time, Congress passed TAA – and, by extension – allowed the fast track bill to proceed to the White House. President Obama signed both TAA and TPA into law on June 29.
However, the TPP's forward momentum – facilitated by federal assistance to displaced workers – has not changed organized labor's overall position on the free trade agreement. In addition to concerns about the fate of millions of American jobs, domestic labor unions are also concerned – out of old-fashioned solidarity – about the rights of workers in other TPP member countries.
Labor Protections and Enforcement
Observers note, for instance, that Vietnam does not allow for the organization of independent labor unions and recognizes only those affiliated with the ruling communist party. The country also subjects tens of thousands of drug offenders to forced labor through what it calls "labor therapy."
Brunei, another TPP member country, also violates workers' rights by outlawing strikes and not recognizing collective bargaining. Moreover, there is only one labor union in the entire country.
Labor supporters observe that these practices are in violation of the International Labor Organization's 1998 Declaration on Fundamental Principles and Rights at Work, which, according to the Office of the United States Trade Representative (USTR), sets the standard for labor-related matters under the TPP pact.
While the USTR claims that the TPP will promote "enhanced labor protections," critics contend that the Obama administration is compromising on this particular pledge in order to have the trade deal approved.
For example, when Congress passed the fast track bill, it stipulated that no member country rated as Tier 3 in the State Department's assessment of a country's record of human trafficking can join the TPP.
Shortly after this vote, the State Department promoted Malaysia from Tier 3 to Tier 2 despite evidence – corroborated by an investigation by the Wall Street Journal into the country's palm oil industry – that Malaysia has not taken adequate steps to curtail the incidence of human trafficking, forced labor, and other violations of workers' rights.
As with the mismatch between promises that free trade agreements will be a boon to the American economy and the actual results, critics contend that there is a historical mismatch between the promises of labor protections in free trade agreements and the actual enforcement of those protections.
U.S. Senator Elizabeth Warren, for instance, issued a report chronicling the "broken promises" to promote and enforce these protections since the adoption of NAFTA. Citing a study by the Government Accountability Office (GAO), she pointed out that the Department of Labor (DOL) has accepted only five formal complaints – called submissions – from America's free trade partners regarding violations of workers' rights.Warren also reiterated the GAO's finding that only one complaint was resolved (with Peru in 2012) and that the response by the DOL in investigating and reporting on these five complaints exceeded the six-month deadline by an average of 9 months.
Labor watchers point to Guatemala as an example of the U.S.'s delayed and weak commitment to enforcing workers' rights, in this case, as enshrined in the free trade agreement with Central America and the Dominican Republican, called CAFTA-DR.
In 2005, U.S. Trade Representative Rob Portman said the agreement had "the strongest labor and environmental provisions of any trade agreement ever negotiated" by the United States, but workers groups contend that the U.S. government's enforcement measures reveal how toothless these enforcement mechanisms are.
In 2008, the AFL-CIO joined six Guatemalan labor unions in filing a complaint with the DOL, citing the Guatemalan government's failure to protect the rights of its workers and to punish those who have abused, intimidated, and even assassinated labor activists in the county.
In 2009, the DOL issued a report acknowledging Guatemala's failure to protect workers' rights and made a series of recommendations. When the government showed no signs of improvement, the DOL began consultations with Guatemala in 2010.
In 2011, the DOL threatened to take the country to an arbitration panel but instead decided to take the next step: they agreed to negotiate an Enforcement Plan, which was finalized in 2013 – the same year that a survey of workers' rights around the globe determined that Guatemala was the "most dangerous place in the world to be a trade unionist."
When it was revealed the Guatemala was not adequately abiding by the Enforcement Plan, the AFL-CIO and Guatemalan trade unions requested that the DOL take the matter to an arbitration panel, but the DOL instead gave the country another six months to comply.
In 2015, a panel was finally convened to settle the issue, seven years after the first complaint was filed. Yet union supporters note that even the most severe punishment against Guatemala would come in the form of a $15 million annual fine.
As Cassandra Waters, a Global Workers Rights Fellow at the AFL-CIO put it, "The best-case scenario is that Guatemala pays a fine to itself." The fine would ultimately be paid by Guatemalan taxpayers.
Defenders of the TPP point out that if some countries fail to comply with the TPP's labor standards, then trade barriers could be reinstated. Side agreements with Malaysia, Vietnam, and Brunei have allegedly been brokered that allow the U.S. to increase tariffs on these countries if they do not enforce labor protections.
Nevertheless, it is for these reasons – the threat to Americans' jobs, the meager commitment to training displaced workers, and the concerns over the lives of workers in member countries – that organized labor is still opposed to the passage of the TPP.