A Veritable Worker-Centered Trade Policy

Comments by Steve Charnovitz

Docket Number USTR-2023-0004-0003 (Advancing Inclusive, Worker-Centered Trade Policy)

15 June 2023

National trade policy is used to undertake both industrial and foreign policy objectives. Often those objectives will be in tension. In shaping and rebalancing trade policy, governments may consider the impact of trade policy decisions on three main domestic private sector interests: (1) exporters and imports, (2) consumers, and (3) workers. None of these three interests are more virtuous than the others.

US trade policy has long given short shrift to the labor force, both domestically and in foreign lands. Over the decades, I have called attention to these deficiencies. See, for example, Steve Charnovitz, "Worker Adjustment: The Missing Ingredient in U.S. Trade Policy," California Management Review, Winter 1986; The Human Rights of Foreign Labor," Worldview, January 1985. But I have also consistently pointed out that nostrums of US protectionism are counterproductive toward improving employment conditions in any country. For example, see "Resist US Protectionism: The Top Trade Priority for the G20" in Rebuilding Global Trade: Proposals for a Fairer, More Sustainable Future, (ICTSD, 2009).

Although trade policy can be one piece of better US policies toward workers, labor policy is far more efficacious for improving worker conditions. Weak US labor policies are unlikely to be correctable by tangential instruments such as trade policies or investment policies.

Used properly, US trade policy leverage can help to negotiate foreign commitments to improving working conditions. For example, see Steve Charnovitz, "Caribbean Basin Initiative: Setting Labor Standards," Monthly Labor Review, November 1984. Yet when US leverage is used improperly, the costs to US foreign policy goals and to US consumers and producers can exceed whatever benefits redound to foreign workers.

Based on the normative orientation in the introduction above, this paper provides responses to USTR's request for comments on "Advancing Inclusive, Worker-Centered Trade Policy" as indicated below.

 

• What meaningful and substantive trade policies, actions, or provisions should policy and decision makers consider that would advance racial and gender equity, equality, and empowerment in U.S. trade and investment policy?

1. One longtime US inaction is failing to ratify the most relevant International Labour Organization (ILO) Conventions such as the Freedom of Association Convention, 1948 (No. 87), the Equal Remuneration Convention, 1951 (No. 100), the Discrimination Convention, 1958 (No. 111), and the Social Policy Convention, 1962 (No. 117). Ratifying these Conventions would improve their effectiveness and would legally commit the US to fulfilling the terms of these ILO conventions so important to a worker-centered economic policy.  The US failure to ratify these Conventions is just one indicator of how the US has long missed the opportunity to offer constructive leadership in the ILO. The US should ratify those Conventions and seek to better use the ILO to achieve its unique international mission of promoting social justice in the world economy.

• What new and innovative tools, structures, and capacity should the U.S. Government adopt to advance inclusive trade and investment policy

2. As I pointed out in 1984, US adjustment assistance for workers has been carried out dismally.   See Steve Charnovitz, "Trade Adjustment Assistance: What Went Wrong," The Journal of the Institute of Socioeconomic Studies, Spring 1984. Unfortunately, the last 39 years has seen little improvement to give workers confidence that they will be included in the beneficiaries of trade liberalization.  Last July 2022, the Congress made US trade policy even less inclusive by allowing trade adjustment assistance programs expire. The Biden Administration should be lobbying hard in Congress for improving and renewing worker training programs.

• How can trade and investment policy address multiple, intersecting barriers to advancing equity for underserved persons (e.g., rural communities, race/ethnicity, gender, and persons with disabilities)?

3. The US should ratify the ILO Right to Organise and Collective Bargaining Convention, 1949 (No. 98), the ILO Rural Workers' Organisations Convention, 1975 (No. 141), and the UN Convention on the Rights of Persons with Disabilities, 2006. 19 USC §4201(a)(6) makes the pursuit of worker rights a US trade negotiating objective.

• What best practices should USTR consider to ensure that advancing equity, equality, and economic empowerment is standardized in community and stakeholder engagement regardingthe development and implementation of U.S. trade and investment policy?

4. Poor USTR practices on advisory committees should be corrected. One example is the distorted membership of the USTR Labor Advisory That Committee represents only labor unions. Given that the unionization rate in the US economy is only about ten percent, the membership on the committee is grossly out of proportion to economic realities of contemporary US employment and self-employment. Thus, most workplace stakeholders are unrepresented on that Committee or on other USTR committees. In pointing out how the Committee represents only a narrow swath of special interests, I should state that the quality of the reports from the Labor Advisory Committee has been well above average for USTR public advisory committees.

• Are there specific engagement and consultation considerations and/or processes that policymakers should consider in incorporating equity into U.S. trade and investment policy?

5. The USTR posting is unclear as to whether the term "equity" includes the condition of individuals in other countries who suffer US trade policy discrimination. If so, I would recommend that foreign governments and nongovernmental organizations be given more opportunity for consultation and engagement before the US issues trade policy edicts that hurt workers in other countries.
   
   

• What key actions should the US Government pursue with trade partners and allies to ensure that the benefits from trade and investment policy reach underserved communities?

6. When US trade policy means open and free trade, then the benefits of such policies will serve the entire economy. By contrast, protectionist US trade policy will disproportionately hurt underserved communities by raising prices and reducing sources of supply.  The original WTO rules had a provision attentive to the needs of underserved communities (SCM Art. 8.2(b)). But the lack of a WTO consensus (reportedly objections by the US government) caused that provision to expire. Still, there is much that the WTO can do to extend the benefits of trade to underserved communities, especially in a worker-centered context. Back in 1995, I urged the WTO to establish a Committee on Trade and Employment. See Steve Charnovitz, "Strengthening the International Employment Regime," Intereconomics, September/October 1995. If the WTO had taken that step 28 years ago, perhaps the WTO might not have gotten so unpopular in the 2009-2021 period.  Happily, WTO Director-General Ngozi Okonjo-Iweala has improved the WTO's reputation in the world community.
   
   

• Are there trade policies, provisions, or actions which are detrimental to advancing racial and gender equity, equality, and economic empowerment?

7. Yes, Gender equity is abridged when US tariffs discriminate on the basis of gender (e.g., HTS 6102.20.05).