Bernie Sanders on Free Trade
Democratic primary challenger; Independent VT Senator; previously Representative (VT-At-Large)
FACT-CHECK: One analysis of the Clinton-era North American Free Trade Agreement (NAFTA) found that about 851,700 U.S. jobs were displaced by the U.S. trade deficit with Mexico between 1993 (shortly before NAFTA was implemented) and 2014. That's a data point that was cited by Bernie Sanders during his 2016 campaign, when he frequently decried job losses due to NAFTA.
A 2014 study found that while NAFTA has caused about 203,000 jobs to be displaced by NAFTA-related imports annually, imports support 188,000 new jobs, leading to a net loss of only about 15,000 annually.
And the nonpartisan Congressional Research Service wrote in 2017 that "in reality, NAFTA did not cause the huge job losses feared by the critics... because trade with Canada & Mexico accounts for a small percentage of U.S. GDP."
And some of the worst offenders are the big Wall Street banks. In 2008, Congress passed a $700 billion bailout, paid for by American taxpayers. And the Federal Reserve gave the financial institutions $16 trillion in virtually zero-interest loans.
But just two years later, at a time when the nation was suffering from a huge deficit--largely created by the recession that Wall Street caused--the major financial institutions did everything they could to avoid paying American taxes by, among other things, establishing shell corporations in the Cayman Islands and other tax havens.
We have got to turn this around/ American jobs must no longer be our number one export. We must not only defeat the TPP, we must fundamentally renegotiate our failed trade agreements--including NAFTA, PNTR with China, and other existing trade pacts.
SANDERS: I do not believe in unfettered free trade. I believe in fair trade which works for the middle class and working families, not just large multinational corporations. I was on the picket line in opposition to NAFTA. We heard people tell us how many jobs would be created. I didn't believe that for a second because I understood what the function of NAFTA, CAFTA, PNTR with China, and the TPP is, it's to say to American workers, hey, you are now competing against people in Vietnam who make 56 cents an hour minimum wage. This is an area where the secretary and I have disagreements
SANDERS: If we remember where this country was seven years ago, 800,000 jobs lost monthly, $1.4 trillion dollar deficit, the financial system on the verge of collapse. I think that President Obama has done a fantastic job. Do I think President Obama is a progressive? Yes, but I disagree with him on issues including the trade agreement, but I think he has done an excellent job.
A: Time and time again, Bernie has voted against free trade deals with China. In 1999, Bernie voted in the House against granting China "Most Favored Nation" status. In 2000, Bernie voted against Permanent Normal Trade Relations with China which aimed to create jobs, but instead lead to the loss of more than 3 million jobs for Americans.
Q: Maybe these trade agreements aren't all great for Americans, but don't they provide millions of jobs for Chinese workers?
A: Bernie firmly rejects the idea that America's standard of living must drop in order to see a raise in the standard of living in China.
Q: So what does Bernie propose we do?
A: Instead of passing such trade deals again and again, Bernie argues we must "develop trade policies which demand that American corporations create jobs here, and not abroad."
SANDERS: I have been hearing that argument for the last 25 years. I heard it about NAFTA. I heard it about CAFTA. I heard it about permanent normal trade relations with China. Here is the fact. Since 2001, we have lost almost 60,000 factories and millions of good-paying jobs. I'm not saying trade is the only reason, but it is a significant reason why Americans are working longer hours for low wages and why we are seeing our jobs go to China and other low-wage countries. And, finally, what you're seeing in Congress are Democrats and some Republicans beginning to stand up and say, maybe we should have a trade policy which represents the working families of this country, that rebuilds our manufacturing base, not than just representing the CEOs of large multinational corporations.
SANDERS: In the House and Senate, I voted against all of these terrible trade agreements, NAFTA, CAFTA, permanent normal trades relations with China. Republicans and Democrats, they say, "oh, we'll create all these jobs by having a trade agreement with China." Well, the answer is, they were wrong, wrong, wrong. Over the years, we have lost millions of decent paying jobs. These trade agreements have forced wages down in America so the average worker in America today is working longer hours for lower wages.
Q: So, is that a litmus test for you, to see whether or not Clinton is going to come out against the TPP?
SANDERS: I hope very much the secretary comes out against it. I think we do not need to send more jobs to low wage countries. I think corporate America has to start investing in this country and create decent paying jobs here.
[We should also] sign the petition to stop the Trans-Pacific Partnership--another trade deal disaster.
I asked the guy who was in charge of all the Walmarts in Asia--I asked him a simple question: Tell me, how many of these American company products are actually manufactured in the United States?
He was a little bit sheepish and a little bit hesitant and he said: Well, about 1 percent. Obviously, what everybody knew, it is a lot cheaper for the American companies to set up plants in China, hire Chinese workers at 50 cents an hour, 75 cents an hour, whatever it is, and have them build the product for the Chinese markets than it is to pay American workers $15 an hour, $20 an hour, provide health insurance, deal with the union, deal with the environment. That is not a great revelation. I think anybody could have figured that one out. But the big money interests around here pushed it and Congress and President Clinton, at that time, signed it and we were off and running.
I remember there was one CEO of a large, one of our largest American corporations, and he said: "When I look at the future of General Electric, I see China, China, China, and China." By the way, we ended up bailing out that particular corporation. He didn't look to China to get bailed out, he looked to the taxpayers of this country.
But the word has to get out to corporate America, they are going to have to start reinvesting in the United States of America. They are going to have to start building the products and the goods the American people need rather than run all over in search of cheap labor.
Yet, without enthusiasm, I've decided to support Bill Clinton for president. If Bob Dole were to be elected president, there would be an unparalleled war against working people.
The US currently has a trade deficit of $114 billion. Economists tell us that $1 billion of investment equates to about 18,000 (often decent-paying) jobs. Connect the dots. Our current trade deficit is causing the loss of over 2 million jobs. Over the last 20 years, while the US has run up over a trillion dollars in trade deficits, millions of American workers have been thrown into the streets.
The function of trade agreements like NAFTA is to make it easier for American companies to move abroad, and to force our workers to compete against desperate people in the Third World.
We need to address the issue of trade forthrightly and understand that our current trade policy is an unmitigated disaster. Our current record-breaking merchandise trade deficit of $112 billion is costing us over 2 million decent paying jobs. NAFTA, GATT, and Most Favored Nation status with China must be repealed, and a new trade policy developed.
Let's look at some of the components of a sensible trade policy. First, we must recognize that trade is not an end in itself. The function of American trade policy must be to improve the standard of living of the American people. America's trade policy must be radically changed, by committing ourselves to a "fair" rather than "free" trade policy.
SANDERS: I voted against NAFTA, CAFTA, PNTR with China. I think they have been a disaster for the American worker. A lot of corporations that shut down here move abroad. Working people understand that after NAFTA, CAFTA, PNTR with China we have lost millions of decent paying jobs. Since 2001, 60,000 factories in America have been shut down. We're in a race to the bottom, where our wages are going down. Is all of that attributable to trade? No. Is a lot of it? Yes. TPP was written by corporate America and the pharmaceutical industry and Wall Street. That's what this trade agreement is about. I do not want American workers to competing against people in Vietnam who make 56 cents an hour for a minimum wage.
Q: So basically, there's never been a single trade agreement this country's negotiated that you've been comfortable with?
SANDERS: That's correct.
Proponents support voting YES because:
Rep. RANGEL: It's absolutely ridiculous to believe that we can create jobs without trade. I had the opportunity to travel to Peru recently. I saw firsthand how important this agreement is to Peru and how this agreement will strengthen an important ally of ours in that region. Peru is resisting the efforts of Venezuela's authoritarian President Hugo Chavez to wage a war of words and ideas in Latin America against the US. Congress should acknowledge the support of the people of Peru and pass this legislation by a strong margin.
Opponents recommend voting NO because:
Rep. WU: I regret that I cannot vote for this bill tonight because it does not put human rights on an equal footing with environmental and labor protections.
Rep. KILDEE: All trade agreements suffer from the same fundamental flaw: They are not self-enforcing. Trade agreements depend upon vigorous enforcement, which requires official complaints be made when violations occur. I have no faith in President Bush to show any enthusiasm to enforce this agreement. Congress should not hand this administration yet another trade agreement because past agreements have been more efficient at exporting jobs than goods and services. I appeal to all Members of Congress to vote NO on this. But I appeal especially to my fellow Democrats not to turn their backs on those American workers who suffer from the export of their jobs. They want a paycheck, not an unemployment check.
The mission of the Cato Institute Center for Trade Policy Studies is to increase public understanding of the benefits of free trade and the costs of protectionism.
The Cato Trade Center focuses not only on U.S. protectionism, but also on trade barriers around the world. Cato scholars examine how the negotiation of multilateral, regional, and bilateral trade agreements can reduce trade barriers and provide institutional support for open markets. Not all trade agreements, however, lead to genuine liberalization. In this regard, Trade Center studies scrutinize whether purportedly market-opening accords actually seek to dictate marketplace results, or increase bureaucratic interference in the economy as a condition of market access.
Studies by Cato Trade Center scholars show that the United States is most effective in encouraging open markets abroad when it leads by example. The relative openness and consequent strength of the U.S. economy already lend powerful support to the worldwide trend toward embracing open markets. Consistent adherence by the United States to free trade principles would give this trend even greater momentum. Thus, Cato scholars have found that unilateral liberalization supports rather than undermines productive trade negotiations.
Scholars at the Cato Trade Center aim at nothing less than changing the terms of the trade policy debate: away from the current mercantilist preoccupation with trade balances, and toward a recognition that open markets are their own reward.
The following ratings are based on the votes the organization considered most important; the numbers reflect the percentage of time the representative voted the organization's preferred position.
A joint resolution approving the renewal of import restrictions contained in the Burmese Freedom and Democracy Act of 2003. The original act sanctioned the ruling military junta, and recognized the National League of Democracy as the legitimate representative of the Burmese people.
Legislative Outcome: Related bills: H.J.RES.44, H.J.RES.93, S.J.RES.41; became Public Law 110-52.
[Explanatory note from Wikipedia.com "Exchange Rate"]:
Between 1994 and 2005, the Chinese yuan renminbi was pegged to the US dollar at RMB 8.28 to $1. Countries may gain an advantage in international trade if they manipulate the value of their currency by artificially keeping its value low. It is argued that China has succeeded in doing this over a long period of time. However, a 2005 appreciation of the Yuan by 22% was followed by a 39% increase in Chinese imports to the US. In 2010, other nations, including Japan & Brazil, attempted to devalue their currency in the hopes of subsidizing cheap exports and bolstering their ailing economies. A low exchange rate lowers the price of a country's goods for consumers in other countries but raises the price of imported goods for consumers in the manipulating country.
Excerpts from Letter from 31 Senators to the Secretary of Commerce: We are writing in strong support of the Department's decision to initiate antidumping and countervailing duty investigations of passenger vehicle and light truck tires from China.
China has targeted the tire sector for development and there are several hundred tire manufacturing facilities now operating in that country. In 2009, the United Steelworkers (USW) sought relief from a flood of similar tires from China that were injuring our producers and their workers.
Unfortunately, shortly after relief expired in 2012, imports of these tires from China once again skyrocketed. In June 2014, the USW alleged dumping and subsidies, identifying dumping margins as high as 87%. Our laws need to be fairly and faithfully enforced to ensure that workers can be confident that, when they work hard and play by the rules, their government will stand by their side to fight foreign predatory trade practices.
America's laws against unfair trade are a critical underpinning of our economic policies and economic prosperity. Given the chance, American workers can out-compete anyone. But, in the face of China's continual targeting of our manufacturing base, we need to enforce our laws.
Opposing argument: (Cato Institute, "Burning Rubber", Sept. 11, 2009) USW and the unions feel that they have earned the president's support. The president is presumed to owe Big Labor for his election last November. Will the president do what is overwhelmingly in the best interest of the country? Or will he do what he thinks is best for himself politically? The president should reject the recommendations of the USITC and deny import restrictions altogether. A decision to reject trade restraints in the tires case would be reassuring to a world that is struggling to grow out of recession. The costs of any protectionism under these circumstances could unleash a protectionist backlash in the US an
Heritage Action summary of vote# S206: The Senate voted to table (kill) an amendment by Sen. Kirk to reauthorize the Export-Import Bank. Sen. Kirk recommends voting NO. Heritage Foundation recommends voting YES because the "Ex-Im Bank is little more than a $140 billion slush fund for corporate welfare."
OnTheIssues explanation: Voting NO would allow a vote on reauthorization of the Ex-Im Bank. Voting YES would kill the bill for reauthorizing the Ex-Im Bank.
Cato Institute reason for voting YES to kill the bill:The Ex-Im Bank's reauthorization buffs contend that Ex-Im fills a void left by private sector lenders unwilling to provide financing for certain transactions. Ex-Im's critics [say that] by effectively superseding risk-based decision-making with the choices of a handful of bureaucrats pursuing political objectives, Ex-Im risks taxpayer dollars. It turns out that for nearly every Ex-Im financing authorization that might advance the fortunes of a single US company, there is at least one US industry whose firms are put at a competitive disadvantage. These are the unseen consequences of Ex-Im's mission.
Ratings by USA*Engage indicate support for trade engagement or trade sanctions. The organization's self-description: "USA*Engage is concerned about the proliferation of unilateral foreign policy sanctions at the federal, state and local level. Despite the fact that broad trade-based unilateral sanctions rarely achieve our foreign policy goals, they continue to have political appeal. Unilateral sanctions give the impression that the United States is 'doing something,' while American workers, farmers and businesses absorb the costs."
VoteMatch scoring for the USA*Engage ratings is as follows :
The Progressive Caucus opposes awarding China permanent Most Favored Nation trading status at this time. We believe that it would be a serious setback for the protection and expansion of worker rights, human rights and religious rights. We also believe it will harm the US economy. We favor continuing to review on an annual basis China’s trading status, and we believe it is both legal and consistent with US WTO obligations to do so. The Progressive Caucus believes that trade relations with the US should be conditioned on the protection of worker rights, human rights and religious rights. If Congress gives China permanent MFN status, the US will lose the best leverage we have to influence China to enact those rights and protections. At the current time, the US buys about 40% of China’s exports, making it a consumer with a lot of potential clout. So long as the US annually continues to review China’s trade status, we have the ability to debate achievement of basic worker and human rights and to condition access to the US market on the achievement of gains in worker and human rights, if necessary. But once China is given permanent MFN, it permanently receives unconditional access to the US market and we lose that leverage. China will be free to attract multinational capital on the promise of super low wages, unsafe workplace conditions and prison labor and permanent access to the US market.
Furthermore, giving China permanent MFN will be harmful to the US economy, since the record trade deficit with China (and attendant problems such as loss of US jobs, and lower average wages in the US) will worsen. For 1999, the trade deficit is likely to be nearly $70 billion. Once China is awarded permanent MFN and WTO membership, the trade deficit will worsen.
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