Gritty Trade Negotiations

Leo W. Gerard

Leo W. Gerard USW President Emeriti

Gritty Trade Negotiations
Robert Lighthizer by Flickr

It took grit to get this far. U.S. Trade Representative Robert Lighthizer explained that to Congress yesterday.

So, he said, no one in the administration is backing down now.

They’ve managed to confront Beijing, a trade renegade, and do it with a powerful tool that previous negotiators lacked – tariffs. They launched the penalties last spring with charges on all imported steel and aluminum, then increased the pain with levies specifically on $50 billion in Chinese imports in July, followed by duties on $200 billion in Chinese imports in September.

China retaliated, particularly with tariffs on agricultural goods. Some American businesses, farmers and workers suffered. And they complained. But the tariffs brought China to the table to discuss its violations – abuses that have damaged American industries and destroyed millions of American jobs for nearly two decades.

Lighthizer told Congress yesterday he doesn’t have a deal yet, but he’s made progress. None of it would be possible, he said, without the leverage of the tariffs and the grit of the administration to stick with them through tough times.

In the Congressional hearing, U.S. Rep. John R. Lewis, a Democrat representing Georgia, described devastation caused by China’s trade law defiance.

“There is no way to compete in a race to the bottom,” Lewis said, “I grew up in Alabama, in rural Alabama. I watched American jobs disappear throughout my life and career. In my home state, many manufacturing workers continue to struggle to find good livable-wage jobs. Many of those businesses moved overseas in search of cheap labor and lower environmental protections.”

Members of the union I lead, the United Steelworkers (USW), have experienced this pain. Beijing and local Chinese governments illegally subsidize industries, so that when they export products, they’re artificially cheap, which depresses prices worldwide. That bankrupts U.S., Canadian and European manufacturers that operate on free market principles.

This is particularly true in steel and aluminum, where China’s government subsidies ramped up production quickly since the turn of the century. China, which produced little aluminum in 2001, became the world’s largest producer by 2011, and then increased that output by 50 percent as of 2015.

The excess metal that China dumped on the international market at bargain-basement prices – a decline of 30 percent between 2011 and 2015 – shuttered 18 of 23 U.S. smelters.

Those were good, family-supporting USW jobs, in an industry vital to national security. Now they’re gone forever.

In addition to subsidies, Beijing forces U.S. companies that want to operate there to transfer intellectual property, while at the same time engaging in cyber theft of corporate trade secrets. The U.S. attorney for the Western District of Pennsylvania has charged five Chinese military officers with economic espionage for hacking into U.S. aluminum and steel company computers.

“China plays by its own rules,” Rep. Lewis said. “We need a level playing field, and we do not have it.”

That is what Lighthizer is trying to get. He promised he would not accept the easy “soybean solution” but would instead continue pressing for the more elusive structural change.

The administration could just swallow a promise from China to buy a bunch more U.S. agricultural products, like soybeans. That would solve two problems. One is that China retaliated by placing high tariffs on U.S. agricultural goods, so if China bought more soybeans, farmers would get relief.  The other is that if China bought more soybeans, the trade deficit might decline.

The U.S. trade deficit with China has ballooned since Beijing gained entrance to the World Trade Organization in 2001. Despite all the tariffs last year, the deficit in goods rose 10 percent to $79.5 billion, as U.S. exports to China fell 0.3 percent and imports from China rose 3.2 percent.

Previous U.S. trade negotiators have been lulled by promises from China, only to watch them go unfulfilled. Lighthizer refuses to fall for that ploy again. And more soybeans does not resolve the serious underlying structural trade problems like deliberate commodity overproduction, technology theft and currency manipulation.

“Technology will determine who rules the future,” Lighthizer told Congress yesterday. “We are negotiating provisions that will, if enforced, restate and make more specific commitments against cyber theft, physical theft and using investments to get technology.” 

At this point, he said, there are 27 or 28 pages regarding intellectual property protection. And, he said, negotiators have spent a great deal of time creating enforceable standards to prevent currency manipulation, which China uses to lower the prices of its exports and increase those of imports.

Several lawmakers told Lighthizer that their constituents, particularly farmers, are suffering because of China’s retaliatory tariffs. U.S. Rep. Ron Kind of Wisconsin said family farms there are being hammered and, as a result, filing a record number of bankruptcies. U.S. Rep. Jodey Arrington of Texas said these are desperate times for farmers and ranchers in his district, with agricultural income declining at the steepest rate since the Great Depression and suicides skyrocketing.

Lighthizer made it clear he understood the urgency of reaching a settlement so that farmers get tariff relief. But, he said, after talking to business groups, agricultural representatives, labor unions and members of Congress, he felt obligated to produce an agreement that was specific, measureable and enforceable on all levels of Chinese government.

In addition, he said, it must be a deal that enables the United States to unilaterally counteract violations that China refuses to resolve. Otherwise, all the pain suffered by American farmers and ranchers and the tenaciousness of the administration will be for nothing.

***

Image of Robert Lighthizer on Flickr

Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama appointed him to the President’s Advisory Committee on Trade Policy and Negotiation and the President's Advanced Manufacturing Partnership Steering Committee 2.0. He serves as co-chairman of the BlueGreen Alliance and on the boards of Campaign for America’s Future and the Economic Policy Institute.  He is a member of the executive committee for IndustriALL Global Labor federation and was instrumental in creating Workers Uniting, the first global union. Follow @USWBlogger

Posted In: From the USW International President

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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