This week, President Trump is expected to sign into law the new U.S.–Mexico–Canada Trade Agreement (USMCA), fulfilling his campaign promise to replace the North American Free Trade Agreement (NAFTA). The deal, which passed Congress with bipartisan support, became a flash-point in the last Democratic presidential debate, with Senator Elizabeth Warren (D-MA) and Senator Bernie Sanders (I-VT) disagreeing over whether USMCA was a step toward a new and improved trade policy, or whether it was more of the same trade regime responsible for the loss of tens of thousands of manufacturing jobs.
To be sure, USMCA is an improvement over NAFTA. The labor movement and its allies in Congress, including Senator Sherrod Brown (D-OH) and Senator Warren (who, unlike Sanders, both voted for the deal after it was endorsed by the AFL-CIO), fought for and won far better labor standards in the new deal than were contained in any of the recently negotiated agreements, like the free trade agreement with Korea. At the same time, President Trump’s oft-repeated claim that USMCA will bring back hundreds of thousands of manufacturing jobs is “absurd,” as one leading fair trade activist recently put it.
What we can actually do in 2020 to bring back good-paying, sustainable manufacturing jobs?
Still, President Trump is sure to make that case throughout the 2020 race, and for good reason: it has a simple and clear appeal. NAFTA has destroyed thousands of jobs since its passage—many in key swing states in the industrial Midwest—and Trump, to his credit, led its successful repeal. Progressives shouldn’t fall for Trump’s trap, however. They need to refocus the debate on the real issue at stake for manufacturing communities: What we can actually do in 2020 to bring back good-paying, sustainable manufacturing jobs?
What the USMCA Does and Does Not Do for Manufacturing
In order to answer that question, we have to look closely at what the new agreement doesn’t resolve. Even if, for instance, USMCA’s heightened labor standards give Mexican workers a chance to raise their wages and bargaining power, there will still be a wide gap between the cost of American and Mexican labor. And while the USMCA breaks new ground by requiring 40 percent of tariff-free automobiles to be made by workers earning $16 an hour, these rules of origin standards do not apply to other types of goods (as pointed out by one union opposed to USMCA, the International Association of Machinists and Aerospace Workers). And to make matters worse, the president’s other signature policy achievement, the Tax Cuts and Jobs Act of 2017, slashed corporate taxes on foreign profits from 28 percent to 10 percent, giving multinational companies a huge incentive to move production overseas.
Plus, while there has been a recent thaw in trade tensions, there’s little doubt that Trump’s sweeping tariffs have made it harder for many U.S. manufacturers to get the inputs they need to remain competitive globally. The numbers don’t lie: Under Trump, manufacturing job growth has stalled. Key manufacturing states have lost factory jobs in the past year, including Ohio (–1,000 jobs), Michigan (–6,000 jobs), Pennsylvania (–5,000 jobs) and Wisconsin (–7,000 jobs).
We should forge a new international trade policy wherein communities, workers, and the environment are on an equal footing with corporations.
The vast swath of unmet need and unresolved obstacles confronting American manufacturing creates an opening for progressives to jump in and outline a new vision for the future of the industry in the Midwest and across the country. A good place to start would be with taxes—specifically, working to close loopholes that allow companies to gain tax benefits when they outsource jobs. We should forge a new international trade policy wherein communities, workers, and the environment are on an equal footing with corporations. And, if we can “fix the damn roads,” as Michigan Governor Gretchen Whitmer has promised voters, we can drive demand for Made-in-America manufactured goods, everything from construction materials to railroad cars.
Furthermore, the future of U.S. manufacturing lies not in being the cheapest workforce, but the most advanced. We will never be competitive as a manufacturing nation unless we seriously increase our investment in workers and their skills. We need to make the manufacturing workforce more inclusive of women and people of color, and fiercely protect the rights of workers to join a union. We must also level with communities, and be honest that the factories of tomorrow are going to have fewer workers, including fewer workers on the production floor, and that all those workers will need a greater level of skill.
A progressive trade policy would stop simply complaining about the Chinese stealing our technology, and instead invest in the capacity of our universities, companies, and communities to create new American technologies and producers of those technologies. Senator Warren’s green manufacturing institutes are one example of this type of public investment and cross-sector collaboration, as is Senator Kirsten Gillibrand’s (D-NY) Made in America Manufacturing Communities Act.
Time to Take a Stand
One of the biggest challenges for progressives in 2020 is not to cede ground on manufacturing to Trump, a task made difficult both because the president’s pseudo-populist message is appealing to voters and because progressives are typically more comfortable drawing distinctions on issues like health care, where there is a large distance between the positions of progressives and the president. That’d be a huge mistake for the future of the American workforce and economy.
header photo: Paper signs of support are placed on audience members’ chairs before a rally for the passage of the USMCA trade agreement in Washington, DC. Source: Tom Brenner/Getty Images