Commentary | Trade and Globalization

U.S. Workers Must Have Fair Trade

Opinion pieces and speeches by EPI staff and associates. 


U.S. Workers Must Have Fair Trade

by Robert E. Scott

The North American Free Trade Agreement is the best example of that damage. In each of its three member nations, the promise of NAFTA has largely failed workers and their families.

Here in the United States, where the trade deficit is huge and growing, NAFTA has destroyed nearly 800,000 actual and potential jobs in our nation’s factories, thus putting downward pressure on wages as workers move into the lower-paying service sector. Employers use their strengthened ability to move across borders as a threatening tool in collective bargaining. Workers wind up with fewer and worse options.

In Canada, during the 1990s, the rich got richer while the poor got poorer. Economic growth was worse, and unemployment was higher, than in any other decade since the 1930s. And free trade’s promise of new jobs in manufacturing for Canadian workers proved false: imports destroyed more jobs than exports created.

Mexico has fared even worse. Imports have continued to outpace exports, leading to a growing global trade deficit in Mexico. The effect on workers has been stark — skyrocketing poverty, sinking real wages, fewer salaried jobs, and as in Canada, growing income inequality.

Agreements like NAFTA have conferred all of the benefits of expanded trade on two groups — those with the very highest incomes, and a small number of giant companies that have exploited workers and dodged safety and environmental regulations to increase profits.

But it doesn’t have to be this way. Setting new rules for fast track is critical to improving the outcome of trade negotiations.

Enforceable labor rights should be a crucial part of any trade agreements negotiated in the future, to encourage workers to bargain collectively and, allow them to reap more of the benefits of globalization. Setting environmental standards, and providing support to poorer countries to help them comply with those standards, should also be a part of any future agreements.

But to make sure these goals are reached, Congress must be more involved in any trade negotiations. The Constitution grants Congress the authority to regulate international commerce. Fast track effectively cedes that authority to the president.

Fast track has resulted in flawed, biased, and damaging agreements in the past. Surely we can do better, and we must. Congress must reassert its rights and responsibilities to regulate international commerce, for the good of all our citizens, not just the lucky few.

Robert Scott is an international economist at the Economic Policy Institute.


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