Labor Enforcement Could Be Priority in Trump Trade Deals

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By Tyrone Richardson

President-elect Donald Trump’s pledge to return jobs to the U.S. could mean heightened reliance on the Labor Department division tasked with promoting worker rights and labor standards overseas.

Trade agreements are multi-faceted deals addressing issues like tax policy and exchange rates. They require a wide range of federal agency input from the Department of Commerce to the Office of the U.S. Trade Representative. The DOL’s Bureau of International Labor Affairs provides analysis to help shape labor provisions, which traditionally do not top trade agreement priority lists.

“If they are able to re-frame the work of ILAB to support their overall trade agenda, I think it will make a substantial contribution,” Andrew Samet, ILAB deputy undersecretary during the Clinton administration told Bloomberg BNA Dec. 22. “I hope that would be the approach taken. That would be pragmatic and consistent with the new administration’s stated priorities.”

Trump campaigned with the promise to renegotiate trade deals he dubbed unfair and said have caused U.S. job losses. That includes criticism of the North American Free Trade Agreement and the Trans-Pacific Partnership, a proposed 12-nation deal praised by President Barack Obama but which Trump has promised to scrap when he takes office.

Elimination of the TPP could create opportunities for alternate multinational trade deals or bilateral pacts with individual countries. That could also create chances for ILAB to make sure the deals include adequate worker protections, helping retain jobs in the U.S.

Changes Coming to ILAB?

Labor unions have criticized some past trade pacts, saying they often feature watered-down worker protections and limit enforcement of labor violations. This results in a competitive disadvantage and loss of U.S. jobs, they say.

ILAB’s role could be limited if the Trump administration aligns priorities with former trade pacts, said Douglas Irwin, a Dartmouth College economics professor, who worked in Ronald Reagan’s administration on trade. Labor provisions have been “weak” in previous trade deals, and ILAB has traditionally focused primarily on securing trade adjustment assistance for laid-off workers, he said.

“Other countries tend to not want to have enforceable labor provisions,” Irwin told Bloomberg BNA Dec. 21. “Even if the U.S. did other countries don’t want that.”

Still, the ILAB could have a heightened role in making sure violations such as slave labor and failure to allow freedom of association are stamped out to ensure U.S. jobs are not threatened.

“I think the decision for the Trump administration when it comes to ILAB and the international labor agenda is whether they will see it as an integrated part of their global trade agenda to address the issues that have impacted U.S. trade outcomes but not been part of trade agreements, such as exchange rates, tax policy and rule of law issues,” said Samet, who is a founding partner of lobbying firm Sorini, Samet & Associates.

Officials at Trump’s transition team did not respond to Bloomberg BNA’s request for comment.

Trump Commits to New Trade Deals

Although the incoming Trump administration has not fully outlined its trade agenda, the office cemented its pledge on trade pacts with the Dec. 21 formation of the National Trade Council. The advisory panel is tasked with helping trade negotiations and coordinating “with other agencies to assess U.S. manufacturing capabilities and the defense industrial base.”

The DOL, like many federal agencies, shifts priorities depending on the new administration, which chooses the agency’s leadership and budget allocations.

That could mean changes for ILAB, which is expected to undergo a leadership shift with a new deputy undersecretary and other political appointees in the division. Those appointees have not been disclosed by the new administration.

Trump’s Labor Department secretary pick offers “mixed” signals, some labor professors told Bloomberg BNA, although ILAB’s marching orders are largely unknown.

The administration chose Hardee’s CEO Andrew Puzder, a vocal opponent of raising minimum wages and advocate of using automation to replace some restaurant workers.

“Trump wants to have trade agreements to prioritize American workers and if he’s serious about that he should be supporting the role of ILAB, but he’s nominated a Labor Secretary who has not supported higher minimum wages” in the U.S., Susan J. Schurman, a professor at Rutgers School of Management and Labor Relations, told Bloomberg BNA Dec. 21.

ILAB Trimmed by Republican Administration?

Republican administrations generally reduce ILAB’s duties, tracking the party’s preference for cutting government regulations, Schurman added.

“Republicans say that the market will push for wages and safety that is required, and Democrats believe that market needs to have supplementary regulations and can’t rely on the market to do it,” she said.

The Obama administration, for example, increased efforts to combat incidents of labor exploitation abroad in nations associated with duty-free trade pacts such as the U.S.-Colombia Trade Promotion Agreement. That enforcement effort included ILAB deploying some senior-level staffers to serve two-year stints as “labor attaches” within U.S. embassies, helping host countries protect workers' rights, stamp out violence against unionists and improve conditions in factories.

As for the Trump administration, ILAB’s capabilities will at least include analysis to aid in the trade talks.

“In term of trade negotiations, ILAB does have some, but not a strong quantitative analytical capability,” Samet said, referring to the agency’s ability to analyze and assess “information on labor laws and labor law implementation” within the trade partners.

To contact the reporter on this story: Tyrone Richardson in Washington at trichardson@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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