WASHINGTON — The heads of the U.S. Chamber of Commerce and AFL-CIO squared off over the pros and cons of U.S. trade measures pending before Congress at a Senate hearing Tuesday, setting the stage for contentious trade battles on Capitol Hill.
This story first appeared in the April 22, 2015 issue of WWD. Subscribe Today.
The Senate Finance Committee hearing came at a critical junction on trade as both that panel and the House Committee on Ways and Means prepared to mark up and vote on several trade bills this week. The centerpiece legislation under consideration is presidential Trade Promotion Authority, formerly known as fast track, which allows Congress to set negotiating objectives and consultation requirements for the executive branch, but also limits Congress to an up or down vote on trade deals.
Richard Trumka, president of the AFL-CIO, told senators they would be giving up their leverage on shaping trade deals, especially the massive Trans-Pacific Partnership agreement between the U.S. and 11 countries, if they approve TPA.
“The Trans-Pacific Partnership agreement being negotiated by our government includes 12 countries and about 40 percent of the world’s GDP [gross domestic product],” Trumka said. “The TPP is designed to be infinitely expandable so it could very well be the last trade agreement that we negotiate and it is especially crucial that we get the terms of this one right. The idea that fast track lets Congress set the standards and goals for TPP is an absolute fiction. The [TPP] agreement has been under negotiation for more than five years and is essentially complete….Congress cannot set meaningful negotiating objectives if the administration has already negotiated most of the key provisions.”
He argued for a new TPA bill and said it should include provisions that ensure that Congress approves of trading partners before negotiations begin, creates negotiating objectives that are specific to the trading partners involved, and ensures that Congress, not the executive branch, determines whether congressional trade objectives have been met.
Thomas Donahue, president of the U.S. Chamber of Commerce, supports the proposed TPA legislation, noting that “TPA is a critical tool to help Americans sell their goods and services to the 95 percent of the world’s customers living outside our borders.”
“Without TPA, the United States is relegated to the sidelines as other nations negotiate trade agreements without us,” Donahue said. “The United States cannot afford to stand on the sidelines as foreign governments rewrite the rules of international trade and American companies are placed at a competitive disadvantage in market after market.”
Sen. Orrin Hatch (R., Utah), chairman of the committee and one of the key sponsors of the TPA bill, pointed to statistics from the U.S. Trade Representative’s office showing that every $1 billion in services exports supports an estimated 7,000 American jobs in expanded services trade.
“Close to 12 percent of those employed in a services occupation are represented by unions and the administration tells us the free trade agreement under consideration will expand exports and create more jobs in export intensive industries, including services,” Hatch said. “In turn, that means more jobs in sectors with significant union representation and higher wages….Why do you oppose agreements that can expand your membership and more importantly generate good paying jobs, including many union jobs for middle class workers?” Hatch asked Trumka.
The AFL-CIO chief argued that those statistics only tell one side of the story on the effects of globalization.
“The statistics that you quoted will also tell you that for every billion dollars of trade deficit — and we have about $500 billion in trade deficit every year — there are almost 15,000 jobs lost per billion dollars of trade deficit,” Trumka said. “Each one of the trade agreements we have signed so far has encouraged outsourcing and increased that deficit.”
Donahue countered that the jobs lost in U.S. manufacturing have gone to “two countries — the country called efficiency and the country called productivity. The American business system, which is the most efficient in the world, has taken 40 percent of the jobs out of the manufacturing process because of information technology, robotics, process engineering and supply chain management. Those 40 percent of the jobs are never coming back.”
But Trumka said the proposed TPP “doesn’t address currency, it doesn’t address the investment provisions, it doesn’t address the labor provisions, it doesn’t address the environment provisions and it doesn’t address ‘Buy American’ provisions.”