International trade is central to the United States’ economy and has created economic opportunities for millions of people around the world. Today about one fourth of total global production is exported. The U.S. is both the world's largest national economy and the leading global trader.
But in order to fully harness the benefits of trade, the United States must work to ensure that global trade rules promote high labor standards and economic security for working people and protect the environment and consumer safety.
The United States led efforts to open up global markets and expand trade in 1934 and renewed these efforts after the end of the Second World War. From 1948 to 1994, the General Agreement on Tariffs and Trade (GATT) served as the the rules of world trade, reducing or eliminating trade barriers. In 1995, the World Trade Organization was established, governing not just trade in goods but also services and intellectual property, as well as establishing new procedures for the settlement of disputes. Critics argue that the WTO turned the GATT into an enforceable global commerce agency with one-size-fits-all binding rules that override domestic policies. The WTO has been a controversial organization since its inception: efforts to expand the WTO in 1999 it resulted in what is known as “the battle in Seattle”, where 50,000 protestors went to Seattle and succeeded in shutting down trade talks in demand of a more democratic, socially just, and environmentally sustainable global economy. Today, more than 41 million American jobs depend on trade, and trade is critical to the success of many sectors of the U.S. economy.
President Trump has made skepticism of U.S. trading patterns a centerpiece of his presidency. He withdrew the Trans Pacific Partnership agreement that was negotiated by the Obama Administration, and has attacked U.S. allies Canada, Germany, Japan, and South Korea for perceived trade imbalances. He entered a trade war with China that has done significant harm to American farmers, but so far has done little to nothing to address Chinese corporate espionage or the terms of U.S.-China trade.
After two years of negotiating and threats to withdraw from the North American Free Trade Agreement (NAFTA) altogether, President Trump announced in October of 2018 that the United States, Canada, and Mexico had agreed in principle to an updated agreement, the “United States-Mexico-Canada Agreement (USMCA).” In his speech announcing the new deal, President Trump claimed “this new deal will be the most modern, up-to-date and balanced trade agreement in the history of our country, with the most advanced protections for workers ever developed.”
So far, that has not come to pass. But the USMCA does have some important changes, including: better provisions protecting workers in the all three countries, limited the ability of investors the ability to sue governments over changes to policies that they believe harm future profits, and increased protections for certain types of drugs that extends the period that a drug can be protected from generic competition. The USMCA must still be approved by Congress, where it currently faces bipartisan opposition. The agreement fails to adequately address environmental concerns, labor concerns, and the potential of the drug provisions to increase the costs medicine.
WHAT YOU CAN DO
We strongly support trade agreements that promote prosperity and inclusive growth for all and effectively protect workers and the environment. As Congress takes up USMCA, call your Representative at (202) 224-3121 and ask them to carefully weigh any trade agreements based on these standards:
Does it effectively protect workers?
Does it effectively protect the environment?
Does it include strong enforcement provision?
Does it include fair and open means of resolving disputes?
The History and Future of International Trade - U.S. Embassy in Germany
Impacts on Global Trade and Income of Current Trade Disputes - The World Bank
Growing World Trade: Causes and Consequences - Brookings Institution
The Renegotiation of NAFTA Is a Relief. But It Is Not a Success - The Economist
How Trump's New Trade Deal Could Prolong His Pollution Legacy - Inside Climate News