Rep. Levin opposes Asia Pacific trade deal over workers’ rights, currency manipulation
Washington — After expressing concerns for months about the 12-nation Asia Pacific free trade deal, Rep. Sander Levin said Thursday he opposes the pact because it has weak provisions about workers’ rights and currency manipulation.
The Trans Pacific Partnership “as negotiated falls short of an acceptable outcome, and I cannot support it,” the Royal Oak Democrat told reporters at the Christian Science Monitor Breakfast.
“We cannot afford to lock in weak standards, uncompetitive practices and a system that does not spread the benefits of trade.”
The United States and 11 other nations signed the Trans Pacific Partnership in New Zealand on Wednesday, but it cannot take effect in America unless Congress approves it.
Levin, ranking member of the House Ways and Means Committee, criticized how the trade pact defines how much content of an automobile or auto part from participating countries can be included in what is known as the “rules of origin.”
Such rules are in place to bar China or other lower-wage countries from producing the majority of parts for vehicles and export them without paying taxes.
Under the North American Free Trade Agreement, at least 62.5 percent of a passenger car or light truck’s net cost must originate in North America to be considered free from tariffs. Levin said it appears the rule of origin under TPP is “considerably below 50 percent.”
As automakers and others construct new plants and expand production in Mexico to take advantage of low wages, the Asian trade deal could mean greater opportunities for automakers there to meet the tariff preference with “more and more parts” coming from other nations, Levin said.
“U.S. consumers could find themselves driving TPP cars or trucks with over half of their parts by value made in China or elsewhere, and the vehicle itself assembled in Mexico,” he said. “This model comes with job loss as standard equipment.”
Levin lamented that, despite ongoing talks, there’s “no plan no plan that we know of that will change the circumstances that today prevail in Mexico,” referring to the lack of workers’ protections and unions. The consequence will be lost jobs.
“As long as workers make one-fifth or one-sixth less, there is a strong inclination to move production (to Mexico) to lower costs,” Levin said. “Our government needs to face up to the fact that Mexico is essentially suppressing its workers. ... We need to effectively address that equation and this TPP, as negotiated today, fails to do that.”
Levin said the agreement should include enforceable rules requiring each participant to avoid manipulating exchange rates to gain unfair competitive advantage in international trade.
He told the story of a woman he met in Vietnam who had been imprisoned for four years for attempting to organize workers. He said he is disappointed that the trade pact does not oblige nations to adopt or enforce labor laws.
Levin weighed in on comments about Mexico and China made by Republican presidential candidate Donald Trump.
“I don’t give any credibility to anything Donald Trump says,” Levin said. “He says ‘Mexico’ and ‘China,’ and if you pushed him as to why, I suspect he would have trouble spelling out the problems.”
Given the disagreement on the trade pact within parties on both sides of the aisle, Levin was asked whether the deal is salvageable. Levin didn’t address the question directly but predicted that the debate would intensify in the coming weeks.
A spokesman for U.S. Trade Representative Michael Froman said he was “disappointed but not surprised” given Levin’s votes against enhancing President Barack Obama’s trade authority and the recent trade enforcement bill.
“In TPP, we’ve made historic progress on issues important to House Democrats and look forward to continuing to work on a bipartisan basis to move legislation forward,” said the spokesman, Matt McAlvanah.
House Speaker Paul Ryan, R-Wisconsin, has said he’d like to vote as soon as possible this year on the TPP, but Senate Majority Mitch McConnell of Kentucky has said Obama should not send the trade deal to Congress for a vote before the presidential elections.