Pascrell Testifies Before International Trade Commission

Top trade Democrat calls for U.S-Canada-Mexico deal that protects workers and raises wages

WASHINGTON, DC – U.S. Representative Bill Pascrell, Jr. (D-NJ-09), the Ranking Member of the House Ways and Means Subcommittee on Trade, testified this morning urging the U.S. International Trade Commission to complete a robust study on the likely impacts of a renegotiated NAFTA agreement on the United States economy, on jobs and wages, and on specific American industry sectors.

A copy of Rep. Pascrell’s prepared opening remarks is below.

“Thank you for inviting me to provide comments today regarding the likely economic impact of the renegotiated NAFTA.

“Last June, I sat before this commission and laid out my priorities and objectives for a renegotiated NAFTA. All of my objectives were meant to serve a common purpose: improving the prospects for American workers, businesses, and consumers. In that respect, the original NAFTA failed to deliver.

“I laid out then the necessity for strong, enforceable labor provisions that can be implemented and monitored meaningfully. That includes reforms to the system of suppressing wages and blocking labor organizing in Mexico.

“Environmental standards are also a necessity to lifting all boats, and not allowing another country to benefit from an unfair subsidy because they let their companies dump in waterways or pollute the air we breathe.

“Third, I called for reforms to the investment chapter to ensure public welfare measures and the rights of sovereign governments would not be unfairly undermined by international tribunals.

“I also called for strong currency manipulation disciplines and revised rules of origin; and for the addition of provisions addressing digital trade and proper protections for intellectual property.

“On September 30^th, the Office of the USTR published the text of the United States-Mexico-Canada Agreement (USMCA). I am in the process of reviewing the agreement and consulting with stakeholders. We are collecting feedback and awaiting economic analysis like this Commission’s report to inform our analysis.

“There are certainly some improvements in the USMCA over the previous NAFTA, but the jury is still out as to whether this deal meets my standard for a better deal for American workers.

“The Commission’s report on the potential economic impact of the USMCA is a critical component in assessing the merits or flaws of the new deal. Any new deal will not be a success unless it eliminates the incentives for outsourcing in the original NAFTA and boosts jobs and wages in a meaningful way in the United States.

“For these reasons, we need a comprehensive and meaningful ITC report to determine whether all of the Administration’s rhetoric around transforming and rebalancing U.S. trade policy will actually carry the day.

“Trump promised a trade revolution that would bring manufacturing jobs back to the U.S. and eliminate the trade deficit with Mexico.

“In October, Commerce Secretary Wilbur Ross said we would see tens of thousands of jobs flowing back into the U.S. auto industry as a result of this agreement. He has said that the “vast majority” of the 250,000 auto parts jobs lost in the U.S. would return under the USMCA.

“U.S. auto parts assembly jobs have dropped to about 577,000 from about 850,000 in the year 2000 due to a mix of outsourcing and automation. What about manufacturing jobs outside of the automotive industry? Will the USMCA truly return these lost jobs to the United States?

“After trade agreements are negotiated, administrations turn to selling the deal. The deals are almost always oversold, no matter whose administration it is. In fact, when the original NAFTA was signed, predictions were made that the pact would create a million jobs in the first few years. That didn’t happen. As claims start to be made about the miracles that the new NAFTA will bring, we are relying on you, the International Trade Commission, to tell it like it really is.

“I look forward to seeing the ITC’s analysis of the employment impacts this deal will have on the auto and auto parts sectors, and all sectors.

“But the most pressing issue facing our economy today is growing and historic inequality and stagnant wages for the vast majority of Americans. The rich continue to get richer and everyone else seems to be left behind. We cannot attribute all of these problems, nor can we solve them, solely through trade or trade agreements. We need stronger policies here at home like investments in worker training, better labor policies, and changes to our tax code, among other things.

“But trade has certainly contributed to the inequality and stagnant wages we now face. Where possible, any new trade agreement must at a minimum not worsen these trends. And, where possible, trade agreements must combat them.

“For this reason, I urge the Commission to consider the USMCA’s impacts, both short- and long-term, on wages and inequality. For instance, if someone’s job is displaced by trade, will they easily find a similar job in its place? Your analysis should not assume a completely fluid and mobile labor market that can simply retrain and move around to find work elsewhere when so often that is not the case.

“In addition to the mandated subjects you must examine under TPA, like GDP and consumer benefits, it would also be helpful to hear which sectors will gain and which will lose, not only in overall growth, but in actual jobs and wages gained or lost to their workers. I would also like to see the Commission examine the following:

• What impact will the USMCA have on the manufacturing sector and on the integrated supply chains therein?
• Will companies continue to be incentivized to offshore jobs in search of lower-wage labor under the new agreement?
• What new export opportunities can be identified for U.S. businesses, and what, if any, imports can be expected to increase as a result of this agreement? What will the impacts be on trade in agriculture? What will the impact be to our trade deficit with Canada and Mexico?

“Previous ITC studies on trade agreements have lacked such comprehensive analysis on employment, wages, and the distributional effects of the new trade deal. Trade undoubtedly has a role to play in our growing inequality and should have a role in fixing it. That means a robust analysis on these factors.

“The previous NAFTA failed to deliver for American workers. The USMCA must result in higher wages and better jobs for Americans in the final analysis to gain the support of the American people.”

As the House’s top Democrat on the Trade Subcommittee, Rep. Pascrell has been a leader in Congress on trade issues. Pascrell has been involved in the NAFTA renegotiations, traveling to talks in both Montreal and Mexico City and working with the U.S. Trade Representative to ensure the perspectives of American workers and businesses are heard and accounted for.

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