By Brooklyn Reader

March 28, 2018, 4:17 pm

 

The stakes are high for working families in New York.

NAFTA, local voices, BK Reader, Mexico, Canada, USA, international trade agreements, job outsourcing, job loss, US economy, New York economy

Photo credit: CNN

By Bart DeCoursis

Many Americans are rightly anxious about the outsourcing of middle-class jobs and the widening gap between their earnings and expenses. Two issues at the top of the national agenda could make the situation considerably worse.

First, the Republican tax legislation creates new incentives for job outsourcing while failing to close the loophole that lets companies deduct the expenses of relocating to another country. Large multinational corporations should not be rewarded with tax cuts for abandoning their American workers and raking in extra profits by exploiting dollar-an-hour wages in poor countries.

NAFTA was negotiated behind closed doors with 500 corporate advisors calling the shots, and the public and Congress shut out.

Second, the administration’s renegotiation of the North American Free Trade Agreement (NAFTA) must eliminate NAFTA’s incentives to outsource American jobs and level the playing field by adding strong labor and environmental provisions with swift and certain enforcement to raise wages for all workers. Otherwise, companies will continue to move U.S. jobs to Mexico to pay workers poverty wages, dump toxins and then import those products back for sale here.

NAFTA was negotiated behind closed doors with 500 corporate advisors calling the shots, and the public and Congress shut out. At its heart are special corporate protections that make it less risky and costly to outsource jobs; they also empower firms to attack domestic policies by going before tribunals of three corporate lawyers who can order unlimited compensation be paid to the firms by taxpayers.

Washington, D.C. is swarming with lobbyists who want to preserve these corporate protections. They use the renegotiations to add to NAFTA new limits on food safety and labeling, and new monopoly rights for pharmaceutical firms to raise medicine prices.

The stakes are high for working families in New York.

New York has lost more than 384,000 of its manufacturing jobs since NAFTA and other similar trade deals went into effect.

New York has lost more than 384,000 of its manufacturing jobs since NAFTA and other similar trade deals went into effect. More than 120,000 specific New York jobs have been certified as lost to outsourcing or imports under just one narrow government program under NAFTA. These numbers represent a significant undercount of the actual jobs lost, given the program only covers certain types of jobs.

Overall, more than 930,000 American jobs already have been certified by the U.S. government as lost due to NAFTA. Every week, NAFTA helps corporations outsource more middle-class jobs to Canada and Mexico including recently at GE, Carrier and Nabisco. The effect of this manufacturing job loss hits us all in the form of lower wages across the economy, especially for the 65 percent of American workers without college degrees. As prices rise, it’s no wonder many Americans struggle to make ends meet.

According to the Department of Labor, manufacturing workers who lose jobs to trade and find reemployment are typically forced to take pay cuts. In 2016, two of every five rehired were paid less in their new jobs. One in four lost greater than 20 percent of their income. That means a $7,700 pay cut for the median wage manufacturing worker earning $38,000.

As prices rise, it’s no wonder many Americans struggle to make ends meet.

American workers are not the only ones getting a pay cut from NAFTA. Mexican wages have dropped from pre-NAFTA levels and are now lower than coastal China.

This is opposite of what NAFTA boosters promised 23 years ago when the deal was debated by Congress. They promised that NAFTA would improve the U.S. trade balance with Mexico and Canada, and create 200,000 new jobs each of NAFTA’s first five years. Instead, we’ve lost almost one million jobs as a small surplus with Mexico and small deficit with Canada became a massive 176 billion NAFTA goods trade deficit in 2016. The rate of our service sector exports even slowed.

We have even shifted from a $2.5 billion dollar agriculture trade surplus with the NAFTA countries before the deal to a $6.4 billion deficit as floods of imported beef and vegetables swamped increased corn exports.

Meanwhile, corporations have collected more than $392 million in taxpayer money using NAFTA’s “investor-state” tribunals where corporations can sue governments before panels of three private lawyers to demand unlimited sums of taxpayer funds over our environmental and health laws that they claim violate the corporations’ NAFTA rights.

As a candidate, President Donald Trump pledged that he would make NAFTA “a lot better” for working people. To accomplish that, NAFTA needs a major rewrite.

As a candidate, President Donald Trump pledged that he would make NAFTA “a lot better” for working people. To accomplish that, NAFTA needs a major rewrite.

To start with, the American people must be able to see what’s being negotiated in their names. NAFTA negotiations do not involve the nuclear codes. Yet, the negotiations are happening under the same secretive, corporate-influenced process that hatched the original NAFTA. That will make it difficult to get the right major changes.

That includes eliminating NAFTA’s investor outsourcing protections. NAFTA’s limits on ‘Buy American” policies, that offshore U.S. tax dollars rather than investing them at home to create jobs, also must go. Tough and strongly enforced labor, wage and environmental standards must be added. And the loopholes that now allow goods with significant Chinese value to get NAFTA’s benefits need to be closed.

A good NAFTA replacement must ensure that imported food, goods and services meet U.S. consumer and environmental standards.

A good NAFTA replacement must ensure that imported food, goods and services meet U.S. consumer and environmental standards; it also must eliminate NAFTA’s existing terms that drive up the price of lifesaving medicines by giving pharmaceutical companies extended monopolies to avoid generic competition. With this new approach to trade agreements, we can harness the benefits of expanded trade while halting NAFTA’s job outsourcing, lowering of wages and attacks on environmental and health safeguards.

New York can clearly benefit from trade with NAFTA countries. But a tweak to NAFTA won’t cut it. We want a NAFTA replacement we can support, meaning one that raises wages and creates good jobs for people in New York and across the nation.

Bart DeCoursy is the owner of the Sidecar Brooklyn Restaurant. He is also a member of the International Trade Education Squad.

 


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