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TPP
'Trump Is a Fraud, Exhibit One Billion': Trade Deficit Soars to 12-Year High Despite President's Promises to Wipe It Out
"Trump pledged to eliminate the trade deficit and end job outsourcing, but the overall 2020 deficit is on track to be larger than when he took office, and his Labor Department has certified more than 300,000 American jobs were lost to outsourcing and imports during his presidency."
Sep 04, 2020
Donald Trump promised on the campaign trail in 2016 that, if elected president, he would bring about a rapid and unprecedented decline in the U.S. trade deficit.
But new figures released by the Commerce Department on Thursday--nearly four years after Trump's victory in the 2016 presidential election--show that the trade deficit soared to a 12-year high in July due in large part to a surge in imports, bringing the total negative trade balance in the first seven months of 2020 to $340 billion.
"The unexpectedly large growth in the trade deficit is especially notable given that trade flows have declined overall because of the global Covid-19 crisis."
--Lori Wallach, Public Citizen
"Trump pledged to eliminate the trade deficit and end job outsourcing, but the overall 2020 deficit is on track to be larger than when he took office, and his Labor Department has certified more than 300,000 American jobs were lost to outsourcing and imports during his presidency," Lori Wallach, director of Public Citizen's Global Trade Watch, said in a statement.
Wallach noted that the 300,000 job-loss number is likely an underestimate given that it only "reflects the number of workers whose trade-related job losses were approved for Trade Adjustment Assistance (TAA) retraining and other benefits."
"The July 2020 deficit is the largest monthly deficit since July 2008, during the global financial crisis and related recession," said Wallach. "The unexpectedly large growth in the trade deficit is especially notable given that trade flows have declined overall because of the global Covid-19 crisis."
Democratic presidential nominee Joe Biden--who Trump has hit over his support for the job-killing North American Free Trade Agreement in the 1990s and now-dead Trans-Pacific Partnership under the Obama administration--highlighted the surging trade deficit on Twitter, writing that "American workers can't afford another four years of his failed leadership."
"In 2016, President Trump promised to reduce the trade deficit and said: 'You will see a drop like you've never seen before,'" Biden tweeted. "The reality? It's the highest it's been in 12 years."
Seth Hanlon, a senior fellow at the Center for American Progress, echoed Biden, writing that the new deficit numbers reveal the worthlessness of Trump's lofty campaign-trail promises.
"Trump is a fraud, exhibit one billion," tweeted Hanlon.
As the Associated Pressreported Thursday, the new Commerce Department statistics show that "despite a number of high-profile trade battles and a renegotiation of the North American Free Trade Agreement with Canada and Mexico, America's trade deficits have remained stubbornly high" throughout Trump's presidency.
"For July, the deficit with China in goods totaled $31.6 billion, an 11.5% increase from the June imbalance," AP noted. "The goods deficit with Mexico hit a record high of $10.6 in July... The United States ran a deficit in goods trade of $80.1 billion in July, the highest on record."
\u201cRemember when Trump said his tariffs would lower trade deficit? \n\nU.S. trade deficit surged in July to $63,600,000,000 -- its highest level in 12 years, as imports jumped by record amount.\u201d— Robert Reich (@Robert Reich) 1599149150
The July trade deficit numbers come less than a month after a report by the Economic Policy Institute (EPI) found that despite Trump's repeated vows to "bring back" U.S. manufacturing jobs, the president's first-term trade agenda and disastrous handling of the coronavirus pandemic have "wiped out much of the last decade's job gains in U.S. manufacturing."
"The Trump administration has taken credit for 'reshoring' manufacturing jobs, but the data show that isn't true," said Robert Scott, senior economist and director of trade and manufacturing research at EPI. "Nearly 1,800 factories have disappeared under Trump between 2016 and 2018."
"Additionally, the U.S. trade deficit in manufactured goods rose significantly between 2016 and 2019," Scott added. "In fact, the real U.S. trade deficit has increased in every year since 2016, reducing GDP growth by roughly 0.25% annually over the past three years. Compounded with the devastation left by the coronavirus pandemic, the blue collar manufacturing workers need serious help from policymakers."
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Launch of New NAFTA Marred by Detainment of Mexican Labor Activist, Hundreds of Court Challenges Against New Mexican Labor Law
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Jul 01, 2020
Note: The revised North American Free Trade Agreement (NAFTA) goes into effect today, July 1. The U.S. Senate passed the new NAFTA in January 2020 by a margin of 89 to 10 after the U.S. House of Representatives voted by a margin of 385 to 41 in December 2019.
On paper the new NAFTA--with improved labor terms added and extreme Big Pharma monopolies and ISDS investor rights removed -- is better than the original, but it won't benefit people unless it's effectively enforced.
It's a terrible start that on Day One of a deal Trump said would transform trade, a leading Mexican labor lawyer has spent weeks in jail on trumped up charges for helping workers use USMCA's labor rights and Mexico's new USMCA--compliant labor law is bogged down by hundreds of lawsuits aimed at derailing it.
Maybe Trump hoped to distract from myriad failures by spotlighting the new NAFTA on July 1, but it's also the date that 100 of the 600 legal challenges against the pact's labor rights rise to Mexico's Supreme Court and Susana Prieto, a famous Mexican labor lawyer detained for weeks for helping workers organize a union, has a high visibility hearing.
Meanwhile, Trump's claims that the new NAFTA will restore hundreds of thousands of manufacturing jobs have proved baseless as U.S. auto firms announced plans to increase production in Mexico from Ford's Mustang electric SUV to GM closing U.S. plants and moving popular vehicle lines to Mexico. But the U.S. Department of Labor has certified more than 175,000 Americans as losing jobs to trade during the Trump administration's first years while the NAFTA trade deficit jumped 88% under Trump.
The new NAFTA's greatest impact may be that it began a long overdue rethink of the U.S. trade-pact model. The unusually large, bipartisan congressional votes on the new NAFTA showed that to be viable today, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopolies for Big Pharma and must have enforceable labor and environmental standards. The 2016 Trans-Pacific Partnership, which failed these tests, never got close to majority congressional support.
Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as crafting a good trade deal that creates jobs, raises wages and protects the environment and public health. The new NAFTA is not a template, but rather sets the floor from which we will fight for trade policies that put working people and the planet first. Any new trade deals must include climate standards, stronger rules to stop race-to-the-bottom outsourcing of jobs and pollution, and enforceable rules against currency misvaluation and not limit protections needed to ensure our food and products are safe, our privacy is protected and big banks do not crash the economy.
BACKGROUND INFO
Susana Prieto Terrazas, a well-known Mexican labor lawyer, has been locked up since June 8 for trying to use the core labor right guaranteed by the revised NAFTA and Mexico's new labor law; a July 1 hearing is scheduled after several punitive bail denials. Prieto, a key advocate for exploited workers in border maquiladora factories in Matamoros and Juarez, has been held without bail for three weeks on trumped-up charges of "mutiny, threats and coercion" after trying to register an independent union to replace a corrupt "protection" union in Matamoros. Prieto became well-known in Mexico for helping maquiladora workers win higher wages in factories along the Texas border last year. Recently, she supported workers demanding COVID-19 safety measures after dozens of maquiladora workers died from workplace coronavirus exposure. Wildcat strikes and mass protests have grown throughout the border region as U.S. companies and officials push for plants to reopen without safety measures. Dozens of members of the U.S. House of Representatives sent a letter yesterday demanding Prieto's release. At June 17 hearings, members of Congress raised concerns about Prieto's arrest with the U.S. Trade Representative, who confirmed he was closely following her case and found it a "bad indicator" of compliance with NAFTA's revised labor standards. Prieto livestreamed her arrest as she tried to register the Independent Union of Industrial and Service Workers "Movimiento 20/32," chosen by workers to replace a "protection" union. Last week, Prieto's daughter delivered a letter from U.S. unions and civil society groups to the Mexican National Human Rights Commission seeking help on Prieto's release. U.S. fair trade activists will deliver the letter to Mexican consulates nationwide on July 1. After decades of worker intimidation, Mexican manufacturing wages are now 40% lower than those in China. The Department of Labor has certified more than one million U.S. jobs (1,015,948) as lost to NAFTA just under one narrow retraining program called Trade Adjustment Assistance, which represents a significant undercount of total jobs lost.*
The first 100 of 600 challenges to Mexico's new labor law will hit Mexico's Supreme Court on its July 1 reopening. The new NAFTA requires that "protection" contracts signed by unions not elected by workers all be reviewed and that contracts be approved directly by workers within four years after the revised NAFTA goes into effect. This requirement is at the heart of the reforms to Mexico's labor laws enacted on May 1, 2019. Under the new labor law, workers in Mexico could finally have legal protections to fight to raise abysmally low wages. This would also reduce incentives to outsource U.S. jobs to Mexico, benefiting U.S. workers. Within weeks of the new law's enactment, hundreds of corrupt local "protection" unions and other interests opposed to reform began to file what are now more than 600 lawsuits, which both try to block the law's application to specific union contracts and workplaces and to gut the law altogether on grounds that it is unconstitutional. Mexico's judiciary has been out of session since mid-March for COVID-19 precautions. On July 1, the court system goes back into operation, with the first 100 challenges hitting Mexico's Supreme Court. If the court rules against the challenged terms, Mexico will be in violation of NAFTA labor obligations that are essential if the new deal is to slow U.S. job outsourcing. This memo has the latest updates on the cases.
The Department of Labor has certified 176,982 trade-related job losses during Trump's presidency, and the manufacturing sector is hurting. Under the narrow Trade Adjustment Assistance worker training program alone, 176,982 workers have been certified as losing jobs to trade since the 2017 start of the Trump administration. The data mainly covers 2017-2018, as there is typically a 12-18 month gap between layoff dates and certification. Whether the new NAFTA can slow ongoing job outsourcing or the 88% increase in the overall NAFTA trade deficit during the Trump administration remains to be seen over time. What is clear now is that the U.S. manufacturing sector has been severely harmed by the ongoing COVID-19 pandemic, with 1.1 million manufacturing jobs lost in May 2020 compared with the same month last year.
*Data Note: The trade data is sourced from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau. We present deficit figures adjusted for inflation to the base month of May 2020. The overall percentage change in the U.S.-NAFTA trade deficit under Donald Trump represent the change in total goods and services trade deficit since 2016, Barack Obama's last year, and 2019, the last full year of data available during the Trump administration. Manufacturing job data is sourced from the U.S. Bureau of Labor Statistics. The government-certified job loss data is sourced from Public Citizen's Trade Adjustment Assistance (TAA) Database. The U.S. Department of Labor certified trade-impacted workplaces under its TAA program. This program provides a list of trade-related job losses and job retraining and extended unemployment benefits to workers who lose jobs to trade. TAA is a narrow program, covering only a subset of workers who lose jobs to trade. It does not provide a comprehensive list of facilities or jobs that have been offshored or lost to import competition. Although the TAA data represent a significant undercount of trade-related job losses, TAA is the only government program that provides information about job losses officially certified by the U.S. government to be trade-related. Public Citizen provides an easily searchable version of the TAA database. Please review our guide on how to interpret the data here and the technical documentation here.
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Pacific Trade Deal Is 'Corporate Powergrab', Say Campaigners, as UK Pledges to Join
Commenting on the Liz Truss's announcement today that Britain will seek to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (known as TPP for short), Nick Dearden, director of Global Justice Now said:
Jun 17, 2020
Commenting on the Liz Truss's announcement today that Britain will seek to accede to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (known as TPP for short), Nick Dearden, director of Global Justice Now said:
"The Transpacific Partnership is an awful deal which fuelled massive protests in Chile and became so toxic that the US withdrew from it. Like its sister deal TTIP, it is a threat to our public services like the NHS, our food standards and our privacy online. The government can't kid us that this isn't a corporate powergrab because unlike the deal they're negotiating with Trump, the TPP exists already, and we can read the provisions for ourselves.
"We know that there is a corporate court system which can be used to bully governments out of taking public health or environmental action that big business doesn't like. We know that the 'right to regulate' provisions are not worth the paper they are written on. We know it contains one of the most extensive sets of privileges for Big Tech corporations which threaten to undermine our rights online.
"What will also strike many people as absurd is that the government seems to think an economic deal with countries thousands of miles away can make up for their failure to negotiate a deal with our biggest trading partners only 20 miles away. Nothing could better demonstrate the ideological crusade which this government has embarked on to strip away our protections, rights, and standards."
Campaigners are particularly concerned that the TPP would:
- Introduce a new corporate court system, allowing corporations from many countries to sue British governments for regulations and laws they dislike, and allowing British corporations to sue other governments in a similar manner
- Undermine food standards by treating food manufactured to lower standards as 'equivalent'
- Undermine public services, which will be subject to liberalisation disciplines unless specifically opted out, and will contain a 'ratchet' clause to expand liberalisation across services
- Includes a digital services chapter which would prevent governments from effectively regulating Big Tech corporations, allowing them to relocate your personal data and keep their source code secret from regulators
- Contain weak and unenforceable 'right to regulate' provisions
- Cover rules to give Big Pharma corporations greater powers to dictate the price of drugs they produce. Although currently suspended, these rules could be re-activated at a future time.
A full background briefing on the TPP is available here:
https://www.globaljustice.org.uk/sites/default/files/files/resources/tpp-briefing_2018_web.pdf
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