By shifting its focus from consumers to workers, American trade policy is now a near-explicit rejection of the “free trade” deals of the 1990s, the Biden Administration’s top trade official said in an interview Friday.
Although those earlier deals — especially the North American Free Trade Agreement — were aggressively promoted by a previous Democratic president, Bill Clinton, the current administration believes they “bled out” manufacturing jobs, said U.S. Trade Representative Katherine Tai.
Efficiency and corporate profits came at the expense of workers, she said, speaking to The Atlanta Journal-Constitution after a visit to a Siemens facility in Gwinnett that works on technology for electric vehicles.
“The kind of trade policies that the United States has pursued for decades has been very effective at creating a lot of wealth, a lot of prosperity, I think on the trickle-down model was meant to trickle down and never really trickled down very far.”
By permitting easier access to foreign producers, the deals lowered costs for the goods and generally meant lower prices for American consumers. But they also encouraged U.S. manufacturers to move their factories overseas to those lower-cost areas.
Tai’s visit, which included a private meeting with Siemens officials, was hosted by U.S. Rep. Lucy McBath (GA-07).
“Investing in American manufacturing is the key to ushering in the next generation of leadership at home and around the world,” McBath said.
The number of manufacturing jobs in Georgia, which had been climbing, hit a peak of 552,100 in May of 1997. During the next decade, that employment plunged 22%, even as the population grew dramatically.
In contrast, inflation during that period was quiescent ,with prices for many consumer goods dropping.
Meanwhile, overseas producers were rarely accountable for violation of worker rights or ecological standards, she said. It was a success in some terms, but it was “an economy that is built on the exploitation of people and that is built on the exploitation of the planet.”
Trade policy is now “workers-centered,” she said. “Our beginning question and our ending question is, ‘but is this good for Americans?’ And Americans, not just as consumers, but Americans as workers.”
That change started under the Trump administration, she said, when he joined Congressional Democrats to revise some elements of NAFTA, especially protections for worker rights in Mexico.
Anything that improves conditions and wages for Mexican workers helps “level the playing field” for their American counterparts, Tai said. [ “Trade can be a force for good if you are willing to use trade tools in a different way.”]
If the new approach is successful, this fall should produce news from her office, she said: There is an October 31 deadline on talks with the European Union on new rules for trade in aluminum and steel.
Her office is also in talks with 14 countries, including India, Australia and Canada, aimed at forging agreements on trade.
“In mid-November, right before Thanksgiving, you will see some announcements from us that will basically show the world what we’ve accomplished and what our path will be.”
