A Left Vision for Trade

A Left Vision for Trade

Globalization is not going away, with or without landmark trade deals like the TPP and NAFTA. So how can we make it fairer?

President Obama leads a meeting on the TPP with the leaders of Brunei, Malaysia, New Zealand, Singapore, Vietnam, and Australia, Phnom Penh, November 2012. Official White House photo.

The 2016 election displayed unprecedented political opposition to globalization. While President Obama made passing the Trans-Pacific Partnership (TPP) a top priority, Hillary Clinton and Donald Trump both came out against it in their campaigns for president. And Trump, who made rejection of the trade deal a pillar of his platform, won.

For Trump, talking about trade served a nativist function: he blamed Mexican and Chinese workers for stealing American manufacturing jobs but ignored the policies corporations have used to exploit cheap labor around the world and crush unions in the United States. On the Democratic side, Bernie Sanders’s sharp call against the TPP pushed Clinton, a longtime supporter of trade agreements, to change her mind.

Both Trump and Clinton explained their objection to the TPP in terms of the very real threat it posed to American jobs. But globalization is not going away, with or without the TPP. So how can we make it fairer?

Like previous trade deals such as NAFTA, the key problem with the TPP is the way it supports capital mobility by allowing corporations to move around the globe in a never-ending search for cheaper labor. Current trade policies encourage corporations to pursue a race to the bottom for the lowest wages and weakest pollution standards, meaning workers never have the time or stability to organize for better conditions. This is why the fortunes of workers in the United States and other developed nations are tied up with the fate of workers in the global South. As long as corporations can easily move their factories across borders, workers in the United States, the United Kingdom, and Canada will not be able to maintain dignified lives, nor will workers in Bangladesh, Sri Lanka, and Honduras ever be able to create them.

There are ways to reduce the incentive for capitalists to move their manufacturing to countries with the laxest labor and environmental standards. Instead of simply rejecting trade deals or succumbing to Trump’s rhetoric that foreign workers have “stolen American jobs,” the left should use the political momentum around the TPP to call for policies that would ensure corporate accountability and empower the workers who produce goods for U.S. companies, wherever those companies site their factories. Trump’s election will pose enormous challenges for workers—we should anticipate direct attacks upon union rights. It is also a time when the left cannot cede debates on trade to conservatives.

Rather, we must seek to appeal to the concerns of working-class people who either voted for Trump or were so unmotivated by Clinton that they did not vote at all. Articulating a progressive line on trade policy, following the lead of politicians such as Elizabeth Warren, Sherrod Brown, Bernie Sanders, and Keith Ellison, while also seeking to guide those politicians with new ideas need to be major goals for the labor left. Ultimately, we must spend the next four years advancing a positive agenda for global labor that both rejects the neoliberalism that has dominated national debate for the past four decades and empowers workers around the world to fight for their rights.

Ensuring corporate accountability

The United States already has rules on the books about global labor standards. For example, the U.S. Trade Act of 1974 gave the president the authority to eliminate unfair foreign trade practices that violate “acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health.” But foreign policy aims typically supersede concern for labor standards, and enforcement is poor. The effectiveness of such domestic laws and policies has therefore been limited so far.

The first step in addressing these deficiencies would be to pass a new law that I call the Corporate Accountability Act, which would bind U.S. companies wherever they operate, whether at home or abroad. Such a law would need to include a regulatory function to monitor and punish recalcitrant corporations, set basic pollution and workplace standards, mandate living wages based upon the location of the factory, and ban the physical punishment of workers and violence against union organizers, among other things. Perhaps most importantly, it would seek to make corporations legally responsible for their supply chains, forcing companies like Walmart and Target to be accountable for conditions in their factories, wherever they are located.

Of course, another law does not solve the problem of enforcement. One way to do this is to open American courts for workers and citizens overseas to demand the enforcement of American treaties and laws. Specifically, activists should argue for the use of the Alien Tort Claims Act (ATCA) of 1789, which would allow corporations who violate the human rights of their workers abroad to be tried in U.S courts. Under the provisions of this law, U.S. district courts have the right to hear claims from foreign citizens if they have suffered from actions “in violation of the law of nations or a treaty of the United States.” In Filártiga v. Peña-Irala in 1980, a U.S. court ruled that a Paraguayan national could use the ATCA to sue another Paraguayan living in the United States for torturing him during that nation’s dictatorship. This opened the door to a series of cases being tried in U.S. courts for crimes committed abroad.

In 2013 in Kiobel v. Royal Dutch Petroleum Co., when Nigerians sued foreign oil companies for aiding their government in torturing and killing civilians protesting oil exploration, the U.S. Supreme Court sided with the oil companies, claiming the suit did not involve U.S. companies and therefore had no place in U.S. courts. But there is nothing in that decision closing the door to suits against American companies operating overseas, although legally it remains unclear whether this would also enable suing companies within supply chains. There are significant possibilities here for using this law to shape a global regulatory regime for companies who want to sell their goods in the United States.

Even though Trump and congressional Republicans are unlikely to support a new law such as the one above, interpret the ATCA generously, or appoint justices who will side with workers over oil companies, we must encourage leading politicians on fair trade, like Senator Sherrod Brown, to repeatedly introduce such initiatives, build support for them among Democrats, and dare Republicans to vote them down. Such an exercise would mark clear distinctions between the positions of Democrats and Republicans on trade and the economy. The Trump era will end, and when it does, our organizations and movements must be prepared with a clear vision and proposals for how corporations will be held accountable and workers will be protected, not just in the United States, but abroad too.

Organized labor in this country has often struggled to build international solidarity. Foreign or immigrant workers have frequently served as targets of hate for many American workers for the last two centuries. In 2016, this contributed to the high number of union members who voted for Donald Trump. (Exit polls showed only 51 percent of union households voted for Hillary Clinton, the lowest number for a Democrat since Walter Mondale in 1984.) Looking ahead, the American labor movement will need to see the world’s workers as allies and reject the divisive rhetoric that puts the workers of different nations at loggerheads. Breaking out of the constraints of national frameworks and matching corporations by forming an international movement for a more equitable global economy is an essential part of challenging this nativism. Encouraging foreign workers to seek redress in American courts can be a central part of that strategy.

Better trade deals

The Corporate Accountability Act would not make trade deals impossible. It would simply ensure that U.S. companies made their products in ethical conditions. The U.S. government can in fact do much more to promote fair trade. In 1997, when the House of Representatives initially rejected Bill Clinton’s request for renewed fast-track authority to negotiate new trade deals, the president had to show he took labor’s concerns seriously. So Clinton agreed to a proposal developed by American unions to provide the Cambodian government with incentives to improve conditions for garment workers. The final compromise between the Clinton administration and American labor allowed Cambodian workers to unionize in return for an increased export quota under the Multi-Fibre Arrangement (MFA), the 1974 international agreement regulating garment export quotas from nations around the world. They received $50 per month for a forty-eight-hour week, a significant increase in a nation with a per capita annual income at the time of $350 a year. Workers also received a dozen federal holidays, vacation days, sick leave, and maternity leave. This became the only free-trade agreement with an enforceable labor provision for foreign workers enacted to date.

For a time, the plan worked reasonably well. Overseen by the International Labour Organization (ILO), Cambodian clothing exports and union density grew together. Apparel makers signed union contracts with workers. It was not a perfect system. Factory owners tried to avoid the regulations and coached workers on what to say to ILO inspectors. But it led to significant improvements and showed how government could improve workers’ lives.

The U.S.-Cambodian trade pact ended with the MFA’s demise in 2005. Cambodia now had to compete with the rest of the world without inspections or union contracts. Within weeks of the quota ending in 2005, underground sweatshops emerged with terrible working conditions. Cambodian labor saw its union pacts quickly scuttled and its wages plummet to some of the lowest in the industry. (Wages fell by 17 percent for Cambodian garment workers between 2001 and 2011.) This story starkly demonstrates the differences between a global labor system with and without regulation. But the lesson we should learn is not that such agreements are doomed to failure. Rather, the Cambodian story shows just how much the U.S. government can do to improve labor conditions if we demand it.

It is highly unlikely that a Trump administration—or Trump voters, for that matter—will care about Cambodian workers. But the left can articulate and fight for an alternative vision of trade that builds connections between American workers—including those at soon-to-be shuttered plants like Indiana’s Carrier factory, who voted for Trump because of anger over their jobs moving to Mexico—and workers toiling for American companies overseas. It is up to us to create—and sustain—the pressure that makes politicians on both the political left and right take notice.

Organized labor can play a central role here. As part of its strike against Verizon earlier this year, the Communication Workers of America (CWA) sent investigators to the company’s call centers in the Philippines. They discovered Verizon exploiting scared workers who were forced to work overtime without pay. Verizon responded by sending armed security forces after the CWA investigators. This sort of action by the CWA, however, counters corporate claims about outsourcing American jobs, calls attention to global labor exploitation, and shows a path forward for how the American left can intervene in discussions about trade policy. Such actions are far more valuable to both American and Filipino workers. And building such international solidarity will be central to our broader fight against Trumpism.

Reclaim the ISDS

Much of the left’s opposition to the TPP was directed at provisions that would expand the Investor State Dispute Settlement (ISDS) courts, an extra-national legal system that allows companies to sue national governments for lost profits. The courts are only open to lawsuits from corporations, who often sue foreign governments when they pass new laws or enforce existing measures to protect workers or the environment. In 2010, Philip Morris sued Uruguay for passing anti-smoking legislation the company claimed was detrimental to its bottom line, a case brought to intimidate other nations into not crossing the tobacco company. It took six years of litigation before the suit was finally rejected. In El Salvador, after a local court found a mining company liable for poisoning a village with lead, the World Bank’s International Center for Settlement of Investment Disputes tribunal ruled that the nation’s claim was without merit. In short, ISDS courts have so far been used to the advantage of corporations and the economic elite and simply served as a means to hold nations hostage to corporate interests.

A wide range of critics want to see ISDS courts eliminated. Even Supreme Court Chief Justice John Roberts has stated that they “effectively annul the authoritative acts of [the U.S.] legislature, executive, and judiciary”—in other words, that they could override U.S. law. This may be a site of future cooperation between the left and at least some Republicans to ensure that undemocratic courts do not overturn U.S. law. But regulating international business and trade requires international courts. Rather than calling for the end of these courts, we should call to open them up to citizens to sue companies for violating their rights. This would also help solve one of the major problems with international labor treaties to date, which is the inability to enforce them because of opposition from rich nations with heavy corporate investment in cheap labor in the global South. Efforts to develop a legally binding international treaty to regulate the human rights impact of transnational corporations are currently underway at the UN Human Rights Council.

If the ISDS and related international courts governing trade agreements within agencies like the World Bank were opened up, citizens, unions, and environmental groups could use them to hold Western corporations accountable for the conditions in which their products are made, all along their supply chains. Much as when companies sue states for lost profits, workers and citizens could sue companies for stolen wages, unchecked pollution, and violence against union organizers. Much like the Alien Tort Claims Act or the Cambodian trade deal, but on an international scale, the U.S. could negotiate a democratic ISDS into its trade deals. When corporations violate the laws of the nations in which they operate or international labor and environmental standards, we could use the courts to ensure legal accountability and financial damages.

If unions overseas do not have the power to ask their governments to enforce workplace safety standards, their allies in the United States should be able to do it for them. For example, when the Rana Plaza factory collapsed in Bangladesh in 2013, killing 1,138 apparel workers, Walmart denied any of its clothing was made in the factory. It was later proven that in fact, Rana Plaza did produce clothing for Walmart. The company refused to agree to any enforceable safety reforms after the disaster. While Bangladeshi workers lack recourse to get compensation from Walmart, their allies around the world should have the right to bring suits against Walmart and prosecute them for violations of basic labor safety standards in their supply chains. Using the same mechanisms that currently aid corporations in undermining national law, the courts could instead assist workers in holding those same companies accountable.

Enforcing international labor regulations would not only assist Bangladeshi and Sri Lankan workers but also American workers by undermining the global race to the bottom. And it could help build alliances with policymakers running for office on the agenda of keeping American jobs at home, both Democrats and even some Republicans. It would tap into some Trump voters’ concerns for their economic security and draw people away from a politics of hate and fear and toward a politics of solidarity and security for workers at home and overseas.

Building a better future for global workers

Creating a legal system that empowers global workers producing for the U.S. market is not enough to bring industrial jobs back to the United States. More is needed to create good jobs for Americans—something along the lines of a Green New Deal with major infrastructure investment for a sustainable future, or the revival of something like the 1978 Humphrey-Hawkins Full Employment Act that, before it was eviscerated by the Carter administration, would have made guaranteeing all Americans a job a national priority. But a vigorous international labor rights agenda would at the very least take away the worst motivations for capital flight. It would ensure that no matter where they produce their goods, employers would be subject to the same general standards. That would give U.S. companies incentive to keep jobs in the United States. And if they chose to move their operations abroad, Bangladeshi, Sri Lankan, or Guatemalan workers would then have the means to hold U.S. corporations to account.

I have no illusions about what it would take to get such a program passed. The present system of globalization has been a bipartisan project, with President Bill Clinton working with Republicans to pass NAFTA and President Obama making the TPP a top priority. Yet that seems to be changing, as the bipartisan opposition to the TPP in the 2016 election showed. I have no trust in Donald Trump, his court appointments, or congressional Republicans (and many Democrats) to create and enforce a more egalitarian labor regime. But if organized labor proves itself a central part of the American left, making common cause with other organizations and movements over the Trump administration’s outrages to come, as well as rejecting divisive projects like the Dakota Access Pipeline (currently supported by the AFL-CIO), it can create a movement that shapes a more equitable trade policy in the future. Now is the time to take advantage of the new bipartisan consensus that rejects neoliberal trade. Doing so requires an aggressive agenda to reduce the suffering of workers under a system of global capitalism increasingly unhinged from national frameworks of accountability. The working-class voters who cast a ballot for Trump did so in part because they recognized that neoliberalism did not work for them. The American left must respond, not by capitulating to their worst fears—embracing racism and blaming workers in Mexico and China—but by challenging the corporate agenda that created the conditions for Trumpism to take hold in the first place.

Erik Loomis is Assistant Professor of History at the University of Rhode Island. He is the author of Empire of Timber: Labor Unions and the Pacific Northwest Forests (Cambridge University Press, 2015) and Out of Sight: The Long and Disturbing Story of Corporations Outsourcing Catastrophe (The New Press, 2015).

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