Madam Speaker, I rise in strong opposition to H.R. 3079, the United States-Panama Trade Implementation Act. opposing NAFTA-style trade policies With all the talk this Congress about addressing the deficit, you might think that Democrat and…
Madam Speaker, I rise in strong opposition to H.R. 3079, the United States-Panama Trade Implementation Act.
opposing NAFTA-style trade policies
With all the talk this Congress about addressing the deficit, you might think that Democrat and Republican supporters of these agreements would be even more concerned about a larger deficit that is responsible for the displacement of thousands of American jobs--the trade deficit.
Our rapidly increasing trade deficits with countries like China and Mexico have displaced millions of jobs over the past decade. According to Economic Policy Institute (EPI), the U.S.-China Free Trade Agreement resulted in the displacement of over 2.3 million American workers between 2001 and 2007, as a direct result of the increase in China trade deficits. U.S. producers of apparel, steel and technology (parts) have been the industries most significantly impacted by imports from China. Two-thirds of those jobs displaced were in the manufacturing sector--resulting in the outsourcing of hundreds of thousands of American jobs in the computer and electronic parts, apparel and accessories and fabricated metal production sectors.
It is these same industries that will be further affected by the proposed trade deals with Korea, Panama and Colombia.
Yet today we are considering NAFTA-style free trade agreements that are projected to continue in this tradition. Those of us who were in Congress during the debates on NAFTA and CAFTA have heard the promises of more jobs and economic opportunity from supporters of free trade. These promises have never materialized.
NAFTA's record is clear: it is negative for jobs, negative for democracy and negative for the environment.
Panama Free Trade Agreement: Good for Multinational Corporations, Bad
for the Rule of Law
Madam Speaker, the Panama trade agreement is good for multinational corporations and bad for the rule of law.
An April 2009 report by Public Citizen on the Panama trade agreement found that it would undermine U.S. efforts to stop offshore tax-haven abuse and undermine financial regulations.
Among the key findings: some of the corporations who were the largest recipients of U.S. federal procurement contracts and money under the Troubled Asset Relief Program--including Citigroup--have dozens of subsidiaries in Panama that would be granted expansive new rights under this trade agreement. So firms that were bailed out with U.S. taxpayer dollars, like AIG and Citigroup, are being rewarded with a trade agreement that undermines U.S. efforts to stop offshore tax-haven abuse.
As Public Citizen notes, ``Panama's tiny economy provides no prospects for significant U.S. economic gains. Panama's total annual GDP is about 6 percent of Washington, D.C.'' Like NAFTA, this trade agreement includes provisions that allow investors to challenge the U.S. government in international courts--and demand U.S. taxpayer compensation--for U.S. policies that conflict with their expansive rights under the FTA to ``free transfers'' (i.e.: conflict with their bottom line).
At a time when we should be focusing on strengthening worker's rights and investing in domestic manufacturing and infrastructure and job creation, a trade deal with Panama that is unlikely to have any significant effect at all on creating jobs or increasing imports is the wrong way to go.
It is abundantly clear that this trade agreement is not about expanding opportunity for the American worker, but about expanding opportunity for multinational corporations and their subsidiaries. Just like NAFTA.
Rewarding Panama for its Failure to Abide by International Tax Norms
With the Panama trade agreement, we are rewarding a country for failing to abide by even the minimum transparency standards for tax norms. An April 2009 tax-haven watch list by the Organization of Economic Cooperation and Development (OECD) cites Panama as one of thirty countries that agreed to conform to international tax norms but failed to do so. The OECD reports that Panama made such a commitment in 2002 and has not since completed a single agreement to fulfill its commitment.
According to Public Citizen, Panama is ``one of only 13 countries-- and the only current or prospective FTA partner--that is listed on all of the major tax-haven watchdog lists that does not also have U.S. tax transparency treaties.''
If you're still not convinced to vote against the Panama trade agreement, this laundry list from Public Citizen may help: The Panama trade agreement ``includes extreme foreign investor privileges, and offshoring protections and their private enforcement in international tribunals, limits on financial and other service sector regulation, a ban on Buy America procurement preferences, limits on environmental safeguards and imported food and product safety, and drug patent rules that limit generics.''
The AFL-CIO correctly notes that with this agreement, we are rewarding ``a country that has a history of repressing labor rights and has achieved much of its economic growth by making it easy for money launderers and tax dodgers to hide their income from legitimate authorities.''
I urge my colleagues to join me in opposing the Panama free trade agreement.
Labor Rights in Panama
The rights of workers, which have increasingly come under attack in this country, are
also at risk under these NAFTA-style trade agreements.
In Panama, a 2010 State Department Human Rights report notes that ``the government lacked sufficient mechanisms to ensure that laws prohibiting employer interference in unions and protecting workers from employer reprisals were adequately enforced.''
We should not be entering into a trade agreement with a country that has yet to demonstrate its ability to uphold international standards for labor rights and financial regulation. We cannot afford to reward corporations for offshoring jobs and tax-evasion at a time of historic budget constraints.
Panama's track record on fulfilling its promises is clear: just as it failed to adequately address its status as a tax-haven wonderland; it too has failed in its promise to adequately protect its workers from reprisals due to union activity.
Jobs loss under NAFTA
It is undisputable that NAFTA has led to widespread job loss across this country. In a report titled ``Heading South: U.S.-Mexico trade and job displacement after NAFTA,'' EPI estimates that the U.S. trade deficit with Mexico totaling $97.2 billion has displaced nearly 700,000 U.S. jobs. This number takes into account any jobs that were created through U.S. exports to Mexico. Like NAFTA, the Korea and Colombia FTAs are expected to result in the loss of over 200,000 jobs and increase our trade deficit by $16.9 billion.
The majority of those jobs were in the manufacturing sector. Like Korea, much of our trade with Mexico is in the same industries that took a big hit under NAFTA.
We cannot have a strong economy without a strong manufacturing base. Any investments this Congress makes to rebuild our infrastructure and our domestic manufacturing sector would be significantly undermined by the passage of the three free trade agreements we are considering today. NAFTA-style free trade agreements that rapidly increase our trade deficit and lead to the further diminishment of our manufacturing employment base are not the answer.
``White-Collar Service Jobs'' Vulnerable to being Offshored
NAFTA-style trade policies are not just destructive to our domestic manufacturing and textile sectors. So called ``White-Collar'' service jobs are now some of the jobs most vulnerable to offshoring.
Alan S. Binder, a former Clinton advisor and member of the Board of Governors of the Federal Reserve--and supporter of free trade--came up with a list of the top 100 jobs that are most likely to be offshored over the next 10-20 years as a result of our free trade policies. Those jobs include computer programmers, mathematicians, editors, actuaries and even economists. A 2007 paper by the Economic Policy Institute took the research one step further and found that the demographic most vulnerable to offshoring are persons with at least a four-year college degree.
Since the era of the WTO and NAFTA, U.S. wages have been stagnant and barely increased since 1973. Workers in the manufacturing sector displaced by our trade policies and looking for new work will be forced to go into service fields with even lower wages where jobs are not threatened to be offshored, such as in food service and hospitality.
Our $776 billion trade deficit has already displaced hundreds of thousands of American workers. It is time to end expansion of NAFTA to other countries. We have over a decade of evidence and the evidence is clear: this free trade model is damaging for our economy, our workers, the environment and for global economic security. It is time for fair trade, not free trade.