Nafta 2.0 Needs Upgrading Before Democrats Approve It

(The Washington Post) -

There is no question that the North American Free Trade Agreement and the United States’ failed China trade policies require a complete rewrite. As I have said publicly in the past, I believe that Donald Trump was elected president because he gave voice to the legitimate rage many Americans feel about decades of trade policies that have devastated communities nationwide.

The federal government has certified that almost 1 million American jobs have been lost to NAFTA and millions more have been lost to misguided China trade policies. The Trump administration has promised to bring down massive trade deficits and stop the outsourcing of jobs, but the president’s policies have yet to deliver.

Fixing the trade policies that for decades not only failed to deliver their promised benefits but also undermined the nation’s economic well-being is essential. Doing so will help to sustain and create the good-paying jobs that will rebuild a beleaguered middle class and protect an industrial base that is vital to U.S. national security.

That is why congressional Democrats are insisting on critical improvements to the revised NAFTA that Mr. Trump signed last year. If the United States-Mexico-Canada Agreement, which is more accurately described as NAFTA 2.0, were enacted in its current form, it wouldn’t stop the American job outsourcing that NAFTA incentivizes.

The USMCA’s labor and environmental standards and their enforcement are insufficient to stop corporations from continuing to move jobs to Mexico so they can pay employees less and dump toxins. Today, Mexican workers are paid 40 percent less than manufacturing workers in China and less than before NAFTA 25 years ago.

After decades of Republican and Democratic presidents alike enacting and defending trade policies that harm working families, more than 160,000 jobs in my home state of Michigan already have been government-certified as lost to NAFTA alone. But contrary to conventional wisdom about its impact on manufacturing centers in the Midwest, the greatest concentration of job losses from the pact is in the congressional district around El Paso and in California. Southern states have also been hard-hit.

The race to the bottom, with the outsourcing of jobs and pollution, continues today. A U.S. firm opened a multimillion-dollar tire plant in Mexico recently where they pay workers $2 to $6 per hour to make the exact same tires that the firm’s American workers are paid, on average, $23 per hour to produce. Chevrolet is paying autoworkers in Mexico less than $3 per hour to make Blazers shipped back to the United States for sale. U.S. workers making Blazers a decade ago earned more per hour than these workers make in a day.

This year, Mexico passed labor-law reforms required by the revised NAFTA that are a step in the right direction. Unless the new Mexican labor agencies and inspections this new law requires are funded and staffed, wages for many Mexican workers will remain at sweatshop levels. Reasons to be skeptical: Dozens of lawsuits have been filed to block the new law, and Mexico recently issued a labor-agency budget that doesn’t appear to include the level of funding needed to make the improvements.

Mr. Trump’s NAFTA 2.0 would fail to discourage outsourcing by U.S. companies, but it also would lock in high medicine prices by giving new monopoly protections to pharmaceutical companies. That would allow them to charge North American consumers even more. Even as he talks about lowering drug prices, NAFTA 2.0 would undermine changes that Congress wants to enact to accomplish just that.

These realities explain why congressional Democrats have insisted on further changes. The president must add enforcement of improved labor and environmental standards to counter job outsourcing, and the Mexican government must implement and fund these improvements. And the new monopoly protection for pharmaceutical firms must come out.

China’s unfair trade policies must also be addressed. The president is right about that. The Chinese manipulate their currency, ban independent labor unions so workers are paid wages with which the United States cannot compete, and export billions in products made by political prisoners in work camps while they crush American workers and firms with subsidized exports and steal U.S. intellectual property. But a chaotic White House trade policy doesn’t fix these issues.

The president tweeted about me August 31, accusing me of wanting him to “give up” on his trade war with China. What I want is a coherent strategy that maximizes U.S. leverage behind the right set of demands, not one that makes it easier for U.S. firms to relocate to China.

As for NAFTA, after Americans have endured 25 years of its damage; let’s get the replacement right. The president must decide whether he’ll work with Congress to improve the 2.0 version or keep pushing a flawed agreement that won’t address the country’s problems. Democrats — who deeply care about making good trade deals and fixing bad ones — are prepared to work with him.

Debbie Dingell, a Democrat, represents Michigan in the U.S. House.