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    ‘Zombie-like’: the US trade agreement that still haunts Democrats

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    More than 30 years have passed since President Bill Clinton persuaded Congress to ratify the North American Free Trade Agreement (Nafta) and yet the trade agreement still infuriates many voters and hangs over Kamala Harris’s – and the Democrats’ – chances in this year’s elections.Zombie-like, Nafta just keeps coming back, decades after many Democrats believe it should have died. At the Republican convention, Donald Trump attacked Nafta, calling it “the worst trade agreement ever”. In speech after speech, Nafta is a topic Trump turns to as he seeks to woo the voters in the pivotal blue-collar communities of Michigan, Pennsylvania and Wisconsin – many of whom remain angry about the job losses it caused.There were early warning signs. “A lot of people were saying Nafta was going to be a disaster economically,” said David Bonior, a former Democratic congressman from Michigan who led the congressional fight to defeat Clinton’s push for Nafta. “I could see it was going to be a disaster politically, too.”Nafta acted like a slow-motion poison for Democrats. After Congress ratified it in 1993, year by year more factories closed and more jobs disappeared as manufacturers moved operations to Mexico to take advantage of that country’s lower wages. The Economic Policy Institute, a progressive thinktank, estimates that the US lost 682,000 jobs due to Nafta, which largely eliminated tariffs between the US, Mexico and Canada.“It’s a lingering issue in Michigan,” said Ron Bieber, president of the Michigan AFL-CIO, the US’s largest federation of unions. “Everyone knows someone here in Michigan who lost their job due to Nafta. The door was cracked open to outsourcing before Nafta, but Nafta threw the door open after it was passed.”JJ Jewell, who works at a Ford axle plant in Sterling Heights, Michigan, was born two years before Nafta was ratified. The trade pact has been part of the background of his life, he says. Jewell said he often discussed trade problems with other auto workers, even when they didn’t directly discuss Nafta. “It’s an issue,” he said. “Nafta helped expedite the loss of jobs from our country to a country where wages are cheaper. I have friends, family members, neighbors who lost their jobs as a direct result of Nafta. It still affects things decades later.”While Trump talks tough on trade and protecting factory jobs, Jewell said that Trump, while president, fell badly short in his vows to bring back manufacturing jobs. “It’s empty promises,” he said.Liz Shuler, the president of the AFL-CIO, the country’s main labor federation, agreed, saying that Trump’s tough words on trade have done little for workers. “This is an example of Trump’s rhetoric not matching reality,” Shuler said. “He talks a good game, but there’s no action to back it up. When he had the ability to make a difference, when he was president, he went to different places and pretended to be a savior, and you followed up and you saw that those plants closed and jobs were moved to Mexico. He did nothing to fix it.”Seeing all the lingering discontent about Nafta, many Democrats say it’s unfair for Trump and others to blame their party for the agreement. The idea for Nafta arose under Ronald Reagan, they say, and George HW Bush negotiated the deal, both Republicans. More Republicans in Congress voted to ratify Nafta than Democrats. The vast majority of Senate Republicans also voted for it, while most Democratic senators voted against ratification.Still, Bonior said that Clinton and his administration “get the blame because their top guy was for it”, he said. “Clinton was instrumental in making it happen.”Many workers who lost jobs due to Nafta were able to find other jobs, said Bonior, but their pay was 20% less on average. “Lifestyles were enormously downgraded in my district,” said Bonior, who served as House majority whip. “Clinton bought into Nafta, but a lot of working-class people saw that as a betrayal.”On Nafta, Clinton won strong backing from economists and corporate America. Brushing aside labor’s warnings that Nafta would speed the loss of jobs to Mexico, nearly 300 economists on the right and the left, including several Nobel Prize winners, signed a pro-Nafta letter, saying: “The assertions that Nafta will spur an exodus of US jobs to Mexico are without basis.”Many economists argued that Nafta would increase the number of manufacturing jobs in the US because the nation had a higher-skilled, more productive workforce than Mexico and would thus, in theory, gain factory jobs in an expanded free-trade zone. Pro-Nafta forces also argued that the closer economic integration of the US, Mexico and Canada would create a North American powerhouse to counter China’s fast-growing economic power.Jeff Faux, a former president of the Economic Policy Institute, said many economists failed to realize something important that was happening when Nafta was negotiated: “The US was losing its manufacturing base. It was deindustrializing.”Faux, one of the most outspoken economists against Nafta, said Clinton embraced Nafta because he was eager to present himself as a different type of Democrat and “was trying to ingratiate himself with the business community”. “Clinton saw Nafta as an opportunity to present himself as not just another liberal Democrat,” Faux said. “It was the beginning of the notion that came to dominate the Democratic party that its future is not in working people, that it’s in professionals, in women, in minorities and various ethnic groups. They wanted to put together a new coalition, and labor would be a thing of the past.”Michael Podhorzer, a former AFL-CIO political director, said many blue-collar workers remain angry about Nafta because it was such a departure from President Franklin Roosevelt’s emphatically pro-worker Democratic party. Podhorzer said: “Nafta is the catchall for a series of things that Democrats did that showed they had a greater concern for business interests and a kind of insensitivity to the consequences that accelerating deindustrialization would have on people’s lives.”Trump was shrewd to seize on Nafta, he said: “It’s a way for him to sort of wave a flag, but it doesn’t actually mean he’s on the workers’ side. It channels pretty effectively the frustration that many Americans feel in seeing their jobs go offshore or to Mexico or seeing their communities hollowed out or seeing fewer economics prospects for their kids.”In the view of many labor leaders and workers, the Democrats doubled down on misguided trade policy when Clinton successfully pushed Congress in 2000 to approve normal trade relations with China. That move encouraged many US corporations to outsource operations to lower-wage China, with one study finding that the country lost 2m jobs, including 985,000 factory jobs, because of the normalized trade relations with China. The number of factories in the US also declined by 45,000 from 1997 to 2008, with many workers blaming Nafta and the China trade deal.What’s more, many unions faulted Barack Obama for pushing for another free trade agreement: the Trans-Pacific Partnership (TPP), a pact with 12 Pacific Rim countries. TPP’s supporters said the deal would increase US exports and build a powerful economic bloc to counter China. TPP was signed in 2016 under Obama’s presidency, but soon after Trump became president, he withdrew the US from TPP, preventing it from taking force.“Obama wasn’t great shakes on trade either,” Bonior said. “A lot of working people said they had enough. They decided we’re not going to be with the Democrats any more, and Trump came along and filled the void. That was very smart for Trump to do.”In a 2016 campaign appearance in Pittsburgh, Trump made a major speech on trade that denounced Nafta and cited several Economic Policy Institute studies that criticized the trade pact. Lawrence Mishel, who was the institute’s president at the time, said: “Trump never really explained what he would do about Nafta or trade. He ended his speech with a call for deregulation and tax cuts for the rich, which was far more pro-Chamber of Commerce than pro-worker.”While Joe Biden voted to ratify Nafta when he was a senator, labor leaders say the president’s current pro-worker stance on trade shows that he recognizes his Nafta vote was a mistake. For Bonior, it might be too little too late.“Biden has been very good on working-class issues. Biden is trying to make up for his vote on Nafta,” Bonior said. “But a lot of working-class people are turned off so much to the Democrats that they’re not hearing of the things Biden and Harris have done for them. They’re not listening. They’re gone. I don’t know if we’ll ever get them back.“They’re to some degree mesmerized by Trump even though Trump has never been for working people,” Bonior continued. “Those plants he said he would restore – he never did any of that.”Many union leaders slam Trump for a speech he gave in Youngstown in which he told thousands of workers that he would bring back all the factory jobs that Ohio had lost. “They’re all coming back,” he said. They didn’t. And when General Motors closed its huge assembly plant in nearby Lordstown, Ohio, in 2019, Trump did little to stop the plant closing or bring back the lost jobs.“He said all those jobs would be coming back, and then he did nothing,” said Shawn Fain, president of the United Auto Workers (UAW). “The auto industry abandoned Lordstown, and Trump did nothing.”When Trump was running for president in 2016, he vowed to renegotiate Nafta, and he followed through, reaching a new United States-Mexico-Canada Agreement (USMCA) in 2018. Labor leaders had attacked Nafta not only for encouraging companies to move factory jobs to Mexico and but also for failing to effectively protect Mexican workers whose employers had violated their right to unionize or other rights.Union leaders agree that USMCA created a stronger mechanism to crack down on labor violations by Mexican companies, although the Trump administration negotiated that improved enforcement mechanism only after the House speaker, Nancy Pelosi, and House Democrats demanded that Trump go further in the negotiations. But under USMCA, often called “Nafta 2.0”, US companies have continued moving manufacturing operations to Mexico.Even though USMCA made only minor changes to Nafta, Trump called it, “the best trade deal ever made”. For her part, Harris was one of 10 senators to vote against USMCA, saying it didn’t improve Nafta sufficiently.Faux said many workers applaud Trump on trade because “he did something” about it by renegotiating Nafta, while “the Democrats did nothing”.Labor leaders have differing views of USMCA. David McCall, president of the Pittsburgh-based United Steelworkers, said: “I think Nafta 2.0 was helpful. It’s gotten some better labor protections.”But the UAW’s Fain was merciless in attacking USMCA. “I like to call it Trump’s Nafta,” Fain said. “Trump’s Nafta only made problems worse. Trump’s Nafta only gave the billionaires more profits. Trump’s Nafta only killed more American jobs. Trump’s Nafta only shipped more work to Mexico.”Both Harris and Trump say they will renegotiate USMCA if elected. Trump also says he will protect factory jobs by imposing a 20% tariff on all imports, but the Steelworkers’ McCall says that’s a terrible idea. “I don’t think the solution to the problem is to have tariffs for the sake of having tariffs,” McCall said. “That’s protection. I think trade is a good thing. It’s an economic stimulator.” He said the US should use tariffs not in a blunderbuss way, but to “punish cheaters or countries that dump their various products”.McCall said the Biden-Harris administration had had a far better strategy for protecting factory jobs. “It’s the first time in generations that we’ve had an industrial policy in this country,” he said, praising three important laws passed under Biden: the infrastructure law, the green energy law and the Chips Act to encourage semiconductor production. McCall said those laws, along with Biden’s targeted tariffs “against countries that cheat”, give the US “an opportunity to be the most productive producers of many products”.While many blue-collar workers like Trump’s views on trade, McCall said: “He’s not a friend of unions or labor. For Trump it’s all about him, not about the person that’s working on the job: the steelworker, the electrical worker, the teamster or the UAW member.” More

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      No Trade Is Free review: Trump’s man plots an unusually civil course

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      Robert Lighthizer, a veteran trade negotiator and sometime free-trade skeptic, became Donald Trump’s most senior trade official. Unlike the former president and his director of trade and manufacturing policy, Peter Navarro, Lighthizer is not now fending off prosecution. He did not pique the interest of the January 6 committee.But Trump and Lighthizer are still members of a mutual admiration society. No Free Trade, Lighthizer’s first book, comes with Trump’s endorsement. It is “a masterpiece that describes how my administration stood up to China and fought back against the globalists and communists that have been ripping off American workers for decades”, the former president gushed on Truth Social.Lighthizer, Trump added, was “the greatest United States trade representative in American history”.On the page, Lighthizer returns the favor. “Trump was a great boss,” he writes. In return, he recalls Trump saying: “Bob Lighthizer is great; I’ve heard it for years.”In 2016 and 2020, Lighthizer donated an aggregate of $3,950 to Trump’s campaigns. Talk about a return on investment.No Free Trade is replete with intellectual gymnastics. Lighthizer repeatedly delivers hosannas to the “liberal democratic” order and criticizes Vladimir Putin – but keeps mum about January 6 and Trump’s indictments. Nor does he have anything to say about the 45th president’s relationship with the Russian dictator or his tropism toward despots in general.As is to be expected, not everyone on Trump’s team was enamored with Lighthizer. In his own book, Taking Back Trump’s America, Navarro scolded him for refusing to appear on TV in the run-up to the 2020 election. The “Greta Garbo of the West Wing”, to quote Navarro, Lighthizer possessed savvy and presence – and refused to engage when the election hung in the balance.Back in the day, as a member of the Reagan administration, Lighthizer helped negotiate “voluntary restraints” on imports of Japanese cars and steel. The experience provided valuable knowledge of the trade playbook. After his stint in the executive branch, Lighthizer returned to Bob Dole’s orbit as treasurer to the Kansas Republican’s 1996 presidential campaign. The pair had backed the North America Free Trade Agreement (Nafta), enacted in 1994, when Bill Clinton sat in the White House.Over time, however, Lighthizer became a Nafta critic. He now writes that Ross Perot got it right when he warned of a middle-class job exodus if the agreement became law, of a “great sucking sound”, indeed. Along with the Iraq war and the opioid crisis, the downside of the free trade deal with Canada and Mexico helped drive lunch-bucket voters into Trump’s arms and transform the Democrats into an upstairs-downstairs coalition.Nafta “is no longer an acronym – it’s a noun and a profanity”, Salena Zito and Brad Todd caught an interviewee saying in The Great Revolt, their 2018 book about the forces that helped empower Trump.As a lawyer in private practice, Lighthizer represented the US steel industry. As Trump’s trade representative, he negotiated the United States–Mexico–Canada Agreement, aka the USMCA, to replace Nafta. He also clashed and negotiated with China.He now castigates the Biden administration for being insufficiently tough with Beijing, but observes that Trump’s tariffs against China have been maintained. Lighthizer calls Katherine Tai, his successor as US trade representative, “estimable”, lauding her efforts to protect American industry. He also has kind words for Nancy Pelosi and Richard Neal, Democrats now former House speaker and former chair of the tax and trade committee. Lighthizer was once chief of staff to the Senate finance committee. He maintains respect for Capitol Hill.He testified there recently, about the danger posed by China.“I believe that China is the most dangerous threat that we face as a nation,” he told a House select committee. “Indeed, it may be the most perilous adversary we’ve ever had.”Whatever the danger posed by China, Lighthizer has indirectly invested there himself. His 2019 and 2020 executive branch personnel public financial disclosures show ownership of between $2m and $10m in the Vanguard Total International Stock Index Fund. Tencent, the Chinese technology and entertainment conglomerate, is one of the fund’s largest holdings.Irony abounds. In August 2020, Trump issued an executive order to “address the threat posed by WeChat”, seeking for it to be banned. WeChat is “a messaging, social media and electronic payment application” owned by … Tencent.Predictably, Lighthizer trashes “globalists”, the Koch-funded Cato Institute and other ideological free-traders. He takes aim at Larry Summers, a veteran of the Clinton and Obama administrations and former president of Harvard. Summers called for tariff cuts to reduce the sting of inflation. Lighthizer calls him “China’s favorite former treasury secretary”.Lighthizer neglects to examine how free trade became a Republican orthodoxy – until it wasn’t. In 1962, Milton Friedman, of the University of Chicago, wrote in Capitalism and Freedom, his best-known work, that the US should scrap tariffs.“It would be far better for us to move to free trade unilaterally, as Britain did in the 19th century when it repealed the Corn Laws,” Friedman urged. “We are a great nation, and it ill behooves us to require reciprocal benefits from China, Mexico or Europe before we reduce a tariff on products from those countries.”In August 1980, Friedman repeated that call. A decade later, George HW Bush did the heavy lifting on Nafta. More Republicans than Democrats backed that agreement.In Lighthizer’s eyes, Friedman fairs better than Summers. Lighthizer takes issue with the Nobel-winner’s take on floating exchange rates but ignores his legacy on trade. Likewise, he goes easy on Bush.Beyond all that, No Trade Is Free is an accessible and readable chronicle of US trade history and policy over the past half-century.
      No Trade Is Free: Changing Course, Taking on China, and Helping America’s Workers is published in the US by HarperCollins More