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Elizabeth Warren Sees Broken Promises in Obama's Trade Agenda

Win McNamee/Getty Images

President Barack Obama and his associates have responded to every attack on their trade agenda from Senator Elizabeth Warren by claiming she throws around empty rhetoric, disconnected to the realities of the world. Monday morning, Warren’s office released a report that reverses the positions. In Warren’s view, the president is the one spinning the facts.

The report from the Massachusetts Democrat, “Broken Promises,” looks at labor standards in two decades’ worth of free trade agreements (FTAs). Almost all of them were touted as granting unique protections to workers abroad. And all of them failed to live up to those commitments because the high standards went unenforced and ignored. The report shows that the sad legacy is this: Our trade partners employ child workers and forced labor, threaten and even kill people for wanting to join a union, and let virtually every perpetrator of worker violence and abuse get away with it.

Warren’s report doesn’t suggest any alternatives to the current broken process. But it’s implicit from the evidence. There’s no way currently for workers to challenge FTA violations in a legitimate way. This directly impairs efforts to balance trade and ensure equal competition. A company that can’t exploit workers in America can move their capital to a trade partner and employ child labor or slaves while still exporting their goods with no tariffs. The lack of enforcement creates a race to the bottom.

Politically, the report speaks directly to a question of trust that has plagued the administration on trade. They have been damaged by the sense that they want to push through a largely secret agreement on the Trans-Pacific Partnership (TPP), and this report suggests the claims made to sell it are unreliable. This likely won’t impact the vote in the Senate, but in the House, where Warren’s opinion matters, it could sway Democrats on the fence who hold the key to passage of the Obama trade agenda. Lyndon Johnson was done in on Vietnam by a credibility gap between his pronouncements and the facts. With this report, Warren has widened the White House’s economic credibility gap.

As I wrote for TNR last month, since NAFTA, leaders pushing trade deals highlighted robust labor safeguards, bringing competition between domestic and foreign workers onto more equal footing. Warren’s staff assembled a collection of eerily similar quotes boasting about labor standards. “The first agreement that ever really got any teeth in what another country had to do with its own workers,” President Bill Clinton said about NAFTA in 1993. “The strongest labor and environmental protections ever negotiated,” said then-U.S. Trade Representative Rob Portman about the Central American Free Trade Agreement (CAFTA) in 2005. President George W. Bush negotiated, and Obama signed FTAs with Peru, Colombia, Panama, and South Korea that had “unprecedented,” “strong,” and “groundbreaking” protections.

Three administrations—Clinton, George W. Bush, and Obama—used this identical language. And three administrations have done little to fulfill these assurances.

“Again and again, proponents of free trade agreements claim that this time, a new trade agreement has strong and meaningful protections; again and again, these protections prove unable to stop the worst abuses,” the report states.

The Warren report uses case studies of countries under active FTAs whose workers still face brutality and mistreatment.

In Peru, the beneficiary of a bilateral FTA with the U.S. in 2007, bricks, cocoa, fireworks, and fish are harvested and manufactured by children; Brazil nuts, timber, and gold are produced by slave labor. Guatemala, signatory to CAFTA, was cited as “the most dangerous country in the world” for trade unionists, with numerous instances of “murder, torture, kidnapping, break-ins, and death threats.” El Salvador, another CAFTA partner, features both child labor and intimidation of union activists, with employers paying off labor federations to stop independent organizing and using gang members to threaten workers, according to a January report from the Center for Global Worker’s Rights and the Worker Rights Consortium.

Colombia’s experience with worker violence exemplifies how spin gets valued above substance in labor standards enforcement. The Colombia FTA included a “Labor Action Plan,” outlining specific steps for the Colombian government to follow to stop worker violence and bring perpetrators to justice. But since implementation began in 2011, the National Union School in Colombia finds 105 union activist deaths and 1,337 death threats. Fines imposed by the Labor Ministry go uncollected, new rules from the government are “largely ignored,” and investigations into prior killings languish. Out of 110 labor-related homicides since 2010, the Colombian government has secured only four convictions.

The U.S. Trade Representative (USTR) has responded to this by explaining that the killing of one Colombian trade unionist every other week is better than before. Not only is this misleading on the facts (USTR had to add in years with hundreds of unionist murders to make it look like dramatic improvement; in reality, the murder rate has scarcely changed), but irrelevant to the goal of prevention and morally dubious.

Data about failed labor standards does not only come from advocacy reports, but U.S. government studies. A 2014 report from the Government Accountability Office shows only minimal progress in honoring labor standards in FTAs. Most trade partners had no capacity to enforce labor laws, GAO found, and weak court systems made accountability nearly impossible. And the Department of Labor and USTR “do not systematically monitor and enforce compliance with free trade agreement labor provisions.” For example, when Peru rolled back workplace health, safety, and environmental laws presented in direct violation of the FTA, USTR only agreed to “monitor” the situation.

Recent Labor Department and State Department reports paint a similarly grim picture. Of the 20 FTA partners around the world, ten countries continue to use forced or child labor and 17 violated human rights laws directly related to labor rights. This includes abuse of foreign domestic workers in Jordan, exploitation of child labor in Mexico, and impunity for labor crimes in Honduras.

The Warren report shows the stark difference in FTA priorities. Corporations worried about violations of the agreement get an extra-judicial tribunal, known as the investor-state dispute settlement process, to win monetary penalties based on “expected future profits” lost. But abused workers have no such appeals process. They must rely on governments to enforce the trade agreement. And the report shows that the United States has failed on this count.

The Labor Department, which processes formal complaints about trade agreement violations, has not resolved any in the 22 years since NAFTA. The only labor enforcement case under any FTA, which sprung from an AFL-CIO complaint against Guatemala in 2008, doesn’t have its first hearing until next month. Many union representatives in partner countries are not even aware how to submit a complaint.

And here's where the Warren Report fails to offer a remedy. The answer is to give workers the same benefit afforded to corporations: their own dispute settlement process to directly enforce trade agreements. This would enforce global labor standards to uplift workers around the world. It turns out that labor groups asked for a variation on this in the TPP, which is currently being negotiated. Shane Larson, legislative director of the Communications Workers of America, said unions asked for the ability to directly press charges against serial FTA violators. “USTR said you don’t understand how the system works,” Larson said.

Perhaps they understand all too well. Corporations get their own court system to protect their investments; workers get no real protections but a lot of words on paper and outsized promises. The Warren report shows systematically how those promises have been broken with grave consequences, not only for workers exploited abroad, but those in America impossibly competing with cheap labor.