As a member of the Ways and Means Committee’s Trade Subcommittee, Rep. Neal has compiled an extremely corporatist record by supporting policies that have caused massive job losses in our district and state due to trade deals that did not include enforceable provisions against currency manipulation and lacked strong safeguards for workers, consumers and the environment. Conversely, Neal has often not used his leadership to back legislation to promote fair trade and workers’ rights by failing to co-sponsor key bills and sign onto letters urging the executive branch to take needed actions.
The recent news by the Commerce Department on February 6, 2018 that the U.S. bilateral goods deficit with China climbed 8.1 % in 2017 to a stunning new record of $375 billion is very disturbing. How did we get here?
We got here because of the votes of Mr. Neal who 20 times between 1990 and 2001 supported Most Favored Nation status for the products of the People’s Republic of China. These votes upheld former President’s George H.W. Bush and Bill Clinton’s policy of preferential terms including the lowest U.S. tariffs on imports from China and to stop linking trade policy to human rights abuses, military actions and nuclear exports by the Chinese.
China is a currency cheater in that they artificially devalue their currency to gain an unfair advantage over U.S. farmers and manufacturers. And China engages in “dumping,” a method of predatory pricing used by foreign companies to undercut local markets and drive away competition.
Thanks to Rep. Neal, our state and congressional district have suffered huge losses of jobs because of his China trade votes. According to data compiled by the Economic Policy Institute, between 2001-2013, Massachusetts had 97,200 net jobs displaced due to our goods trade deficit with China, the ninth-most job losses among the 50 states. In Neal’s congressional district, the job loss was 14,200 placing it 24th among all 435 House districts. This data is for Neal’s old MA-2 district which he represented until 2013. (24% of the old MA-2 congressional district is now part of the current MA-1 district).
The economic casualties in our communities due to shifts in production to China or imports from China are numerous and include:
* Danaher Tool Group in Springfield where 350 workers who made hand tools were laid off in February 2004.
* W.E. Wrights Co. in West Warren where 87 workers who produced textiles lost their jobs in December 2004.
* Janna Ugone Associates in Easthampton where 32 employees who made decorative lamps got pink-slipped in August 2005.
* Alsco Industries, Inc. in Sturbridge where 40 workers who made dental flossers and plastic hardware were shown the door in May 2006.
There would be many more sad examples such as these across central and western Massachusetts.
In March 2010, Neal declined to sign onto a letter to Treasury Secretary Geithner and Commerce Secretary Locke that asked the Obama administration to take action against China’s currency policy. Among the 130 House members of both parties who did sign were Rep. Olver, Rep. McGovern and Rep. Lynch from the Massachusetts delegation.
Neal’s name was also missing from this January 2011 letter to President Obama asking him to address China’s unfair trade practices during the official visit of Chinese President Hu Jintao. Among the 83 House members who signed this bi-partisan missive were Rep. Capuano, Rep. Frank, Rep. Lynch and Rep. McGovern of the Bay State delegation.
Korea and Panama
In a January 21, 2011 op-ed in The Washington Times (‘Free trade with Korea: Renegotiated treaty should be approved now’) Neal boasted that passage of the Korea Free Trade Agreement would lead to new export opportunities and thousands of American jobs that would contribute to our economic recovery.
Then on October 12, 2011, Neal, voted for the Korea FTA. He was the lone member of the Massachusetts House delegation to support the pact. But in the first four years of the pact, the U.S. goods trade deficit with Korea increased 99% or $5.4 billion (resulting in more than 95,000 lost U.S. jobs) and American exports to Korea of agricultural goods have fallen 19% or $1.4 billion.
The U.S. trade deficit with Korea in the top 10 products that Massachusetts exports to Korea including everything from machinery to transportation equipment increased 45 percent in the FTA’s first three years and in the first two years of the Korea FTA, U.S. exports to Korea of dairy products, apples and greenhouse/nursery products – three of Massachusetts’ top agricultural products – fell 92, 8 and 17 percent, respectively. In short, more Kia’s and Hyundai’s are coming in than American products are going to South Korea.
Korea is one of only three countries that our government has labeled a currency manipulator. The Korea FTA has no provisions to counter cheating such as currency devaluations which would totally eliminate the purported tariff cut benefits and make our exports more expensive to Koreans than they are now.
And the Korea FTA erodes American sovereignty by allowing foreign corporations to skirt our U.S. courts and directly challenge our laws before the United Nations and other tribunals to demand financial compensation from our tax dollars for claimed violations of the trade pact. America shouldn’t be signing trade deals that put taxpayers on the line for payouts we can’t afford to corporations that offshore jobs.
Neal also voted for the Panama Free Trade Agreement the same day he voted for the Korea deal. During floor debate, Neal said “the U.S.-Panama Free Trade Agreement is an example of how to do a trade agreement right. This agreement will improve the U.S. trade surplus, emphasis on the word surplus, with Panama, and help with U.S. job creation and economic growth.” Now, according to data from the U.S. International Trade Commission, the U.S. trade deficit with Panama increased by $1.1 billion between 2012 and 2015.
After a February 2, 2017 meeting with President Trump on trade issues Rep. Neal was quoted by Inside U.S. Trade as telling the president “the one thing there’s broad agreement on is enforcement,” and that “all future trade agreements must include strong enforceable rules to address currency manipulation, as well as labor and environmental provisions, consistent with the May 10 Agreement of 2007.” However, Neal voted for the Peru Free Trade Agreement in November 2007. The day before the vote, as the House debated the rule for the bill, Rep. Neal took the floor and said “This legislation before us not only makes significant steps in the right direction, but it also moves aggressively in stopping illegal logging.” Alas, Neal’s words proved rotten as a 2015 investigation by the Environmental Investigation Agency found rampant illegal logging in that Andean nation including foresters responsible for submitting more than 1,100 false annual operating plans for concessions – used for money laundering in illegal timber – that had not been sanctioned. In addition, the U.S. -based Renco Company tried to avoid paying compensations to families affected by abnormally high pollution levels in the area of La Oroya.
In 2004, Rep. Neal voted for the Morocco Free Trade Agreement that was pushed by President George W. Bush. The bill was criticised as yet another trade deal crafted on the model of NAFTA and CAFTA. Among the many flaws was a failure of the agreement to provide strong labor standards but Rep. Neal took to the House floor to speak in favor of the legislation saying “my chief disappointment with the agreement is that, once again, the administration refused to specifically require our trading partner to abide by the five most basic internationally recognized labor standards,” and later adding “The labor provisions of this agreement are not perfect, but they represent a workable starting point.” (pp. H6637-H6638).
OPIC and Ex-Im
Neal voted against an amendment to the Export Enhancement Act of 1999 for a tighter congressional leash on the Overseas Private Investment Corporation (OPIC). The amendment sought to reauthorize OPIC for one year, not four years. The agency provides blue-chip corporations such as Coca-Cola, Anheuser Busch, and ITT with taxpayer-backed insurance to help them do business in unstable political environments. Critics call it corporate welfare that puts public funds at risk and ships American jobs abroad.
Neal also voted against an amendment by then-Rep. Sanders (I-VT) to the Export-Import Bank Reauthorization Act of 2002 to prohibit American companies from receiving future Export-Import Bank assistance if they lay off a greater percentage of workers in the U.S. than they lay off in foreign countries. The amendment was offered to a bill reauthorizing the Ex-Im Bank, which uses taxpayer subsidies to help U.S. firms compete overseas against government-subsidized foreign firms. At the time of the vote, the bank was providing more than $13 billion in loans, loan guarantees and insurance to companies such as General Electric and Enron.
Failing to Lead on Progressive Trade Policy
During the 111th Congress in 2009-2010, Democrats controlled both the House and Senate as well as the White House. Two key pieces of legislation were introduced during this session of Congress to move American trade policy in a more progressive direction. The Trade Reform, Accountability, and Development Act (TRADE) of 2010 had 148 co-sponsors including six from the Massachusetts delegation. Rep. Neal was not one of them. Neal also declined to co-sponsor the Reciprocal Market Access Act of 2009. In the preceding 110th Congress, where Democrats recaptured the House in 2007, Neal chose not to join 77 of his colleagues in co-sponsoring the Currency Reform for Fair Trade Act of 2007 which was backed by Rep. Olver, Rep. McGovern and Rep. Lynch from Massachusetts. Rep. Neal also declined to co-sponsor this legislation during the 113th Congress in 2013-2014 while six Massachusetts representatives did add their names to the bill.