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AFL-CIO head Richard Trumka explains why labor unions hate Obama’s trade deal

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Richard Trumka truly hates the Trans-Pacific Partnership. Once you get him talking about the massive trade deal, the head of the AFL-CIO is by turns furious and incredulous that it could soon be in force. Even when he's not talking, he's voicing his opposition — when he shows you photos of his grandson, it's impossible to miss the sticker emblazoned in big letters on the back of his phone: "STOP FAST TRACK," in opposition to the bill the Obama administration wants Congress to pass in order to ease the passage of the trade pact.

The TPP has created some strange bedfellows: the Obama administration has found itself with many GOP allies in promoting the trade deal, while unions and liberals like Elizabeth Warren and Bernie Sanders staunchly oppose it. Vox spoke with Trumka recently about why he opposes the pact and what he thinks needs to be done to fix it.

What unions want from the TPP

The AFL-CIO has a variety of problems with the Trans-Pacific Partnership, problems with both the substance of the agreement and the process by which it is being negotiated. When I asked Trumka to lay out these basics for me, he listed his main concerns:

"One, it fails to address currency manipulation. Currency manipulation ... has or will cost us between 2.3 million and 5.8 million jobs. China leads that group. Twenty countries have been determined to have manipulated their currency. And yet there's nothing in the agreement to stop it. So all of the benefits they claim we could get from TPP, even if you assume every one of the benefits is right, could be wiped out the next day by a country manipulating its currency, to negate all this.

"Two, it has the ISDS [investor-state dispute settlement] secret tribunals that are only available to foreign investors, and it thus encourages people to send jobs and money offshore. Because think about this: people invested here in the past because we had a safe, defined system and a rule of law. If they can now get that in Vietnam because of ISDS, they will send their money to Vietnam and send their products back here. The reason why countries would develop a rule of law is because of the pressure of non-investment. This eliminates that pressure, so it would slow down the migration in these countries to a real rule of law.

"Same with environmental standards. It fails to address climate change in any way, so that encourages people to go outside. Here's why: if it doesn’t have the same targets or the same cooperative agreements that are just as strong as the US-China bilateral deal, it encourages them to go elsewhere so they don’t have to comply with our carbon emissions standards in this country.

"It also fails to help create jobs here because it doesn’t have strong rules of origin," Trumka says. In other words, Trumka fears that Chinese companies could put factories in a TPP country like Vietnam or ship raw materials to a TPP country for assembly, which would give China the preferential access to US markets provided by the TPP without having to follow the TPP itself.

"It prohibits things like Buy American policies. Say the taxpayers in Minneapolis decide they want to use their money to do something and they want to make it a Minnesota product, that violates this trade agreement, and it can be negated.

"And the last thing is transparency. This is an agreement that’s going to cover 40 percent of the world’s GDP. It’s going to be NAFTA and [the US-Korea Free Trade Agreement] on steroids. And yet they want to be able to do it in secret, plunk it down, and have Congress vote up or down with no amendments," says Trumka.

The effort to stop fast-track

The AFL-CIO's PACs recently stopped all donations to Congress members' campaigns as a way to protest Trade Promotion Authority, also known as "fast-track." The legislation would also pledge Congress to only give the pact an up-or-down vote, without amending it, once the 12 countries in the TPP reach a final agreement. The legislation would also establish guidelines the Obama administration would have to follow in negotiating

Trumka explains that the donation freeze is not only about drawing attention to the fight but about making the most of the AFL-CIO's financial power.

"We did it so we could conserve all the resources that we would normally give out for the fight against fast track and against TPP. So whenever the fight’s over, whatever's left, we’ll open our PACs up again," he says, regardless of how Congress ends up voting on TPA.

Trumka adds that he thinks it has been a successful strategy so far: "I think it’s gotten people’s attention that this is a serious issue to us, that we’re taking it seriously and we are going to fight as hard as we can because the stakes are so high and there’s so much for the American worker to lose."

He also says the AFL-CIO is not opposed to all trade liberalization; rather, it's opposed to ones they consider detrimental to workers' interests: "We’re opposed to bad trade deals, not trade deals."

I pushed back on his opposition to fast-track, pointing out that it could be too hard to negotiate a trade deal with other countries if they knew Congress could change the deal after the fact.

"I get the argument. But Bill Clinton didn’t have fast-track. And he negotiated a whole string of agreements," Trumka said.

When Trumka refers to a "string of agreements," he is in fact talking about one agreement: the Jordan Free Trade Agreement, which Congress approved in 2000.

It's true that Clinton didn't have fast-track authority for much of his presidency, but he did have it at the start, and that is when he negotiated (and Congress passed) NAFTA, the biggest trade agreement of his presidency. After fast-track expired in mid-1994, Clinton pushed for TPA to be reapproved, to no avail.

But Trumka's bigger problem with fast-track is that he considers it undemocratic.

"If you can’t get it passed because people get to debate it and amend it, then it’s probably a bad piece of legislation that shouldn’t be passed, because it doesn’t meet the needs of the American people," he said. "[The administration’s] whole theory is that any agreement is better than no agreement. And that’s simply not the truth."

In fact, Trumka says the AFL-CIO wouldn't accept fast-track under any circumstances. When I asked him if his organization would approve of TPA if the pact contained everything that unions wanted, he gave an emphatic no:

"We’re opposed to fast track. It’s too important a decision and it affects too many lives of too many people for too long to be done in the dark and then plunk something out of the dark, a thousand-page treaty, and say, 'Vote it up or down with no amendments.' We think that’s the most undemocratic thing you can do. We think that’s dangerous."

What about China?

One of the administration's biggest selling points on the TPP has to do with a country that's not even a part of the pact: China. The argument is that if the US doesn't act first, China will "write the rules" for trade in the eastern Asia region.

When I asked Trumka about this argument, he described it as "almost laughable."

"It gives China an entrée into our market, because there are bad rules of origin," Trumka said. "So China can get all the benefits of an agreement without doing anything.

"So this isn’t going to change the way [Asian countries] do business. China’s market of proximity is closer to them than we are. They’re still going to do everything the same way."

China is negotiating its own trade pact in Asia, the Regional Comprehensive Economic Partnership. The Obama administration's argument for TPP is this: one way or another, there will soon be a big trade deal that integrates all of these Asian nations together — either TPP or RCEP. The question is which economic superpower will be driving it, as my colleague Ezra Klein wrote recently. If the US is, it will force smaller countries like Vietnam to adopt higher labor standards. If China is, those standards could be lower. But when I asked Trumka about this, he argued that higher wages in Vietnam are a matter for Vietnam to decide.

"This agreement won’t change that. Vietnam's minimum wage is still 65 cents an hour. They don’t have to increase it at all. They have to comply with what they currently have," he said. (In fact, Vietnam's minimum wage is set at $11.80 to $18.90 a month, which can be as low as 7 cents an hour for a worker putting in 40 hours a week.)

His biggest problem is with the administration framing the trade agreement as an anti-China foreign policy.

"Look, if you want to do a geopolitical agreement to circumvent China, do it. But call it geopolitical. Don’t call it a trade agreement," he says.

TPP protestors

Labor groups have been opposed to TPP for years. (Getty Images)

Should currency manipulation be in the TPP?

Trumka had earlier framed his opposition to currency manipulation in terms of China. I asked him how this agreement could change things if China is not in the TPP.

"It’s not just them," he responded. "There are 19 other countries, including the ones in this agreement."

He added, "We could stop China. We gave them permanent normal trade relations with us. We could take that away and say, 'Until you agree with us on a currency manipulation provision, we’re not going to do that.' And we didn’t even propose one in this agreement."

One recent argument made about currency manipulation right now is that it’s a "poison pill," and that including it now would scuttle the entire deal. Trumka laughed at this argument.

"Wait a second. That’s the most spurious argument of all. We raised this two years ago. We raised it 23 months ago, 22 months ago, 21 months ago, 20 months ago. [Froman’s] the one who didn’t advance it. So now to say 'It’s too late in the game to advance it now'? That’s laughable."

Is the AFL-CIO worrying too much?

The argument over TPP isn't just between those who are for and against it. It's also an argument over how beneficial (or detrimental) it will really be to the economy. The Brookings Institution's David Wessel has written that he thinks the AFL-CIO's TPP opposition seems unnecessarily strong, considering that the pact will, in his opinion, have only a modest economic impact. Trumka believes that analysis is wrong, and that the pact will in fact rob US workers of jobs and wages.

"We’re going into [trade] deficit after deficit. Each one of those billions [of dollars] takes jobs out of this country. It hasn’t raised our wages or the wages of our trading partners. It stagnated them or lowered them," he says.

"We’ve lost 60,000 factories since the year 2000. Here’s what happens: when you lose industries, you lose the R&D that go along with those. You lose the cutting edge, we’re no longer the leader in anything. That’s the danger.

"And so when David Wessel says he doesn’t get it, of course he doesn’t get it. He hasn’t been affected. He’s still making the same salary. His standard of living hasn’t been lowered. He hasn’t seen the tax base of his community get destroyed because of trade deals."

There is some evidence that TPP could boost the economy — one Peterson Institute study, for example, suggests the economy would grow slightly with this deal. But Trumka says that doesn't mean much for workers.

"If GDP improves 20 percent and wages stay flat, so what?" Trumka responded. "That doesn’t help the American worker. We’ve seen GDP go up, but wages have been flat. Why are wages flat?"

I pointed out that one could attribute these middle-class wage declines more to other factors, like automation.

"That’s only a small portion of it. Do you actually believe that automation has stagnated wages?" he responded. "We had automation since the turn of the century, at a much faster rate than we have it now. Did it stagnate wages? No. In fact, from 1946 to 1973, productivity in the country doubled, and so did wages ... despite the technology. Not because of it; despite it."

What happens now?

The US has been in TPP negotiations for years, and the Senate appears close to an agreement on a fast-track deal. With a potential end to the TPP saga in sight, I asked Trumka how hopeful he is for how the pact will turn out.

"I started off almost two years ago very hopeful," he says. "We spent literally hours and hundreds of thousands of dollars developing ways to make TPP work for working people. We gave [US Trade Rep. Michael Froman] over 200 of those suggested changes — some little, some big, some medium-sized. Collectively they would have made a great agreement.

"So far, only four or five have only made their way onto the bargaining table. Now, they’re about to close out negotiations. I don’t expect that Froman is going to lay down 195 of those changes right now and say, 'I want these as well.' So as each day goes on and they agree to each new chapter, my level of hope wanes."

This interview has been edited for length and clarity.

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