Trump Trade Deals Could Appeal to Labor Unions

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By Tyrone Richardson and Chris Opfer

Dec. 13 — The Trump administration is expected to pepper foreign trade agreements with job-saving measures like those that labor unions have said should be a part of any deal.

“Trump has criticized other agreements because they’ve given large job losses,” Robert Lawrence, a professor of international trade and investment at Harvard’s Kennedy School, told Bloomberg BNA Dec. 12. “He claims his agreements will solve that problem, and that is in line with what labor unions want. The more he emphasizes jobs and less about what companies want, the more that labor will be happy.”

President-elect Donald Trump and labor unions have criticized existing trade pacts such as the North American Free Trade Agreement. The deals have shifted manufacturing overseas and placed limits on enforcement of laws including those that cover labor and currency manipulation, critics say. That criticism also includes the Trans-Pacific Partnership, a proposed 12-nation deal much-ballyhooed by President Barack Obama but which Trump has vowed to scrap when he takes office.

Removal of the TPP would create opportunities for alternate multinational trade deals or bilateral pacts with individual countries.

Lawmakers on both sides of the aisle have voiced mixed views about trade deals under a Trump administration. Some Democrats fear the pacts would exclude protections of certain worker rights.

Unions Have to Convince Congress

Any trade agreements that the Trump administration negotiates will require approval from Congress. That means labor unions will have to lobby both Democrats and Republicans for the provisions they want to see in those deals, Lawrence said.

“Ultimately a trade agreement will have to be passed by Congress, so any trade agreement in a sense requires enough support in Congress and to a degree there has to be some Republicans,” Lawrence said. “There are some Republicans who do not support trade” and could mirror support of Democrats who have championed for trade deals that include labor standards.

Many Democrats have been in lockstep with unions in calling for minimum wage, collective bargaining and other labor protections in trade agreements. Republican lawmakers have been more willing to compromise on such issues in NAFTA and other trade deals, Lawrence said.

“Generally Republicans have compromised on labor to get what they want with regards to issues such as market access and intellectual property protections,” he said.

Labor unions have also been outspoken critics of fast-track authority, which gives the White House the power to close trade deals with limited congressional oversight.

The trade promotion authority law passed in 2015, for instance, requires only a simple majority vote from Congress and doesn’t allow lawmakers to offer amendments to pending agreements. The law covers all trade deals through July 2018.

“The president does have fast-track authority that allows him to get through the Senate without a filibuster,” Lawrence said. “That means he could pass a trade agreement without any Democrats.”

It’s not ultimately clear if Trump will lean on labor unions for guidance in sculpting trade pacts. Trump is no stranger to unions. The mogul’s business owns properties employing workers represented by unions, including the Trump International Hotel in Las Vegas.

Tax Incentives to Retain U.S. Workforce?

While Trump hasn’t completely outlined how he’ll approach trade deals, jobs retention is expected to be an important factor, House Ways and Means Committee Chairman Kevin Brady (R-Texas) told Bloomberg BNA Dec. 7.

“I think the first big step on fair trade is to make sure tax code incentives keep the jobs here in America and eliminate incentives to move overseas. I think that is critical and trade often bears the brunt for our noncompetitive tax code today and it favors imports over exports,” he said.

Trump’s negotiation skills should help the U.S. retain jobs because he’ll look at what hasn’t worked with past deals, Brady said.

“My recommendation to him is take a look at our existing agreements and the new ones and keep what works for America and fix what doesn’t, but keep our companies competing in those regions because those are the customers we have to have,” Brady said. “We want strong economic growth and we have to have access to those customers.”

Officials at Trump’s transition team didn’t respond to Bloomberg BNA’s request for comment Dec. 12.

Unions Ready to Work With Trump?

Unions such as the United Steelworkers are voicing support for Trump’s campaign promise to renegotiate trade deals such as NAFTA and the granting to China of permanent normal trade relations (PNTR) status.

“President-elect Trump has talked about renegotiating trade deals like NAFTA and PNTR with China. Having opposed these deals when they were under initial consideration, we would support such actions,” USW President Leo W. Gerard told Bloomberg BNA in a Dec. 13 e-mail. “The USW has been fighting bad trade deals for almost 40 years now, including filing some 50 trade cases” with the Commerce Department and International Trade Commission “seeking anti-dumping and countervailing duties to protect American jobs” in sectors “ranging from steel to paper to tire.”

Larry Cohen, who retired in 2015 as president of the 700,000-member Communications Workers of America, told Bloomberg BNA Dec. 7 that labor unions will have to champion their own needs. That includes the investor state dispute settlement, which unions have dubbed as unjust “corporate courts” used to challenge U.S. laws outside court.

“I think a key element is stripping out investor state dispute settlement, which basically has made these deals not about trade at all but about guaranteeing profits for multinational corporations,” Cohen said. “My hope and our continued work will be to fight anything that has that in it, and for enforcement of workers’ and environmental rights. In short, my belief on trade, as on everything else, is we’ll be organizing not collaborating.”

Labor Unions Seek Standards in Trade Pacts

Harvard’s Lawrence said labor unions have a voice in the trade process, including through the U.S. trade representative’s labor advisory committee.

The unions are primarily interested in protecting basic labor standards and securing trade adjustment assistance for laid-off workers. The TAA program provides benefits such as unemployment compensation, wage insurance and training for workers who lose their jobs because of competition from foreign countries.

Rules of origin is another concern expressed by labor union officials, Lawrence said. Those rules dictate how much of a certain product must be made in a participating country to avoid tariffs.

Unions Excluded From Negotiations Table?

So far, the president-elect has shown what he can do without labor’s involvement. That included ushering in a deal in late November that saved some 1,000 Carrier Corp. jobs in Indiana.

Trump and Vice President-elect Mike Pence, who remains governor of Indiana until Jan. 20, touted the $7 million package of state tax and other incentives as a means to keep the furnace plant in Indiana after the air-conditioning and refrigeration manufacturer said it was moving the operation to Mexico.

The deal between Trump and Carrier didn’t include input from leaders of the United Steelworkers, which represents many workers at the plant.

A similar situation could play out with trade talks. Unions could be at the bargaining table or excluded from the process if they’re unable to agree on concessions, Peter Morici, an economic policy professor at the University of Maryland, told Bloomberg BNA Dec. 9.

“If they’re prepared to cooperate and accept what they can get,” unions may have a voice in the negotiations, Morici said. “But if they’re obstructionists, they can’t have a role.”

Morici said trade deals often include insight from many parties, which could provide an opportunity for unions to participate.

“We need both sets of people,” he said, referring to unions and lawmakers. “One can’t be selling out the country to maintain corporate position.”

Exclusion is one of the largest concerns among Democrats such as Rep. Raul M. Grijalva (D-Ariz.). “The concerns we raised about TPP are really not echoed by the Trump administration,” Grijalva told Bloomberg BNA Dec. 8.

“We talked about fair trade, we talked about workers, we talked about environmental concerns, we talked about the role in climate change, and I don’t think you will hear about that from this administration,” said Grijalva, a member of the House Education and the Workforce Committee.

Trump’s administration could promote bilateral trade deals that are “business-to-business and industry-to-industry deals,” Grijalva said.

Such deals could mirror problems in prior trade pacts and “not deal with any of the consequences of a trade deal that does not balance both nations and makes sure the corporations are working responsibly, not shedding jobs here or exploiting there,” he said.

Unions Already Part of Advisory Process

Even though the AFL-CIO and unions such as the USW were involved in the trade representative’s advisory board, they have felt their concerns weren’t included in the proposed TPP, Lawrence said.

Several labor union officials didn’t respond to Bloomberg BNA’s requests for comment from Dec. 9 to 13. That includes Celeste Drake, a trade and globalization policy specialist for the AFL-CIO, which represents 56 member unions.

Drake testified Jan. 13 before the International Trade Commission about how previous trade deals “increased trade globalization of the corporate model” that led to the increased “trade deficits and a corresponding loss of jobs for America’s workers.”

To contact the reporters on this story: Tyrone Richardson in Washington at trichardson@bna.com; Chris Opfer in Washington at copfer@bna.com

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

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