Gerard to Lawmakers: U.S. Must Put Top Priority on Trade Enforcement

And USTR has left trade enforcement in the hands of the private sector, relying on companies to bring complaints about unfair trade, rather than initiating its own probes, Gerard said.  The Steel Workers, sometimes in tandem with steel companies, but often alone, have led the way among labor in bringing unfair trade complaints.

“There’s a reason that trade agreements and topics like fast track are viewed so negatively by the public. Trade isn’t working for them,” Gerard said.

Gerard presented his views in late June to the Senate Finance Committee, which handles trade legislation and oversees the USTR.  The USTR is bargaining with 12 Pacific Rim nations on yet another controversial, NAFTA-like trade pact that lacks worker rights, the Trans-Pacific Partnership (TPP).  The next TPP bargaining is scheduled for Canada on July 3.  

But enforcement is closely linked with the conditions any trade pacts – new or old – set, Gerard told senators.

One big problem, Gerard said, is that a company or union must show unfair trade hurt it and cost jobs before the government provides relief, such as tariffs.  But trade cases take so long to compile, bring and try that by the time the feds impose the relief, the company or companies involved are hurting or ruined and the jobs are gone.

Another is that when the U.S. removes its retaliation for unfair trade practices, the other nations start cheating again.  Once U.S. tariffs ended on subsidized Chinese tires – which compete with tires produced by Steel Workers – Chinese imports and market share doubled, to 50 million tires, Gerard pointed out.  That costs U.S. workers jobs.

“The Steelworkers have taken action where we can and are proud that we have been the single-leading force in seeking to have trade rules properly enforced and that terms of trade are fair,” Gerard declared.  “Since 2000, we have filed or supported dozens of cases.”

They included the case in the GOP George W. Bush administration that imposed tariffs from 2004-06 on dumped imported steel and cases against dumped coated free sheet paper and another imposing tariffs on Chinese tires.  USW also filed complaints about Chinese currency manipulation, Chinese workers’ rights violations, opposing “protectionist and

predatory actions on green technology” and in auto parts.  Most recently, USW and several steel companies filed a complaint against subsidized imported oil company tubular goods – the tubes that are used for pipes in fracking and in oil lines – from Korea.

“But we do not look at filing trade cases as a sign of success,” Gerard said.  “Far from it. Under our trade laws, there has to be injury, often significant injury or threat of injury, before any relief might be offered.  In essence, we win by losing.”

The paper case was “a perfect example,” he said.  The first time the union filed it, to protect the paper industry and its Paperworkers members, the government ruled there was dumping, but its impact wasn’t significant enough to justify tariffs.

“Several years later, we filed essentially the same case but, by that time, more than 7,000 workers had lost their jobs, capacity was shut down and companies were on the brink.

Relief was provided and many of the remaining workers have their jobs as a result.  But a substantial portion of the industry will never come back.  These cases are difficult to bring and expensive to pursue.

“And what are we doing to reduce the backlog of unfair trade barriers?” he asked.  “That, to me, is a critical issue that Congress should make a priority.  Some have suggested we…put a priority on addressing those actions that will make a real difference in promoting domestic production and employment.  That should be the start, not the end, of the effort.

“When the Steelworkers work on developing new policies to address today’s current challenges facing the manufacturing sector, often the first question we’re asked by leaders here in Washington is: ‘Is it WTO (World Trade Organization) legal?’  I think that policymakers in many other countries ask the question: ‘How long can we get away with it?’

“Under today’s approach, the answer to that question is, all-too-often, a long, long time.”

New Finance Committee Chairman Ron Wyden, D-Ore., appeared to agree with Gerard.  Its top Republican, Orrin Hatch, R-Utah, didn’t, even though Gerard specifically told Hatch former GOP President Ronald Reagan was great on enforcement against unfair trade.

“Without strong enforcement, no trade deal – old or new – is able to live up to its potential for jobs and economic growth,” Wyden said. “ And it becomes extraordinarily difficult to build support for new agreements.  Foreign nations will continue locking American goods and services out of their markets.”  That will drive U.S. firms out of business and workers out of jobs, he added.

“The latest tactics used by foreign nations and companies to skirt our trade rules seem like they’re ripped from the pages of crime and spy novels.  They hide paper trails to make it harder to build cases in trade courts,” Wyden said. 

Hatch claimed “we have a trade system that works,” but said Obama should bring more trade cases against Russia.   Hatch is also willing to leave enforcement to the WTO.