In the early 1990s, Harvard-educated trade lawyer Lori Wallach convinced her bosses at Public Citizen that the food safety issues she was working on were being jeopardized by international trade agreements. She went off to Geneva, Switzerland, to straighten things out.
She was not welcomed with open arms. For two years, as she recalled during a lengthy interview with PBS in 2001, she tried to present textual changes that would improve the food provisions to trade officials. “To say that I was dismissed would be a gentle description of the treatment that I received," she reflected.
After, “smashing my head against the wall,” she says, she came to realize that the drafters of the trade rules knew what they were doing. “This is not a legal problem,” she concluded. “This is a power problem.”
For more than 25 years, Wallach has been making the case for a progressive critique on trade, charging that corporations have been rigging the rules to protect their profits at the expense of workers, consumers and the environment. That message has been steadily gaining political credibility.
But whether the progressive message on trade has enough credibility with the new Biden administration depends a great deal on the person the president-elect chooses as U.S. Trade Representative. Will it be someone in the pro-corporate mold of Michael Froman, the Obama USTR or a progressive pro-labor candidate that people like Wallach can get behind?
Wallach leads Public Citizen’s Global Trade Watch and speaks for a diverse coalition of nonprofits and labor unions. Active partners, Wallach says, include the Communications Workers of America, the International Association of Machinists and Aerospace Workers, Food & Water Watch and NETWORK, the social justice lobby led by Catholic nuns. Citizens Trade Campaign, which Wallach helped found in 1992, mobilizes and educates grassroots activists on trade issues.
Once considered a wonky outsider, in 2016, Wallach was named one of Politico’s 50 “thinkers, doers and visionaries, transforming American politics.” In 2017, after being ignored in Geneva more than two decades before, she was one of three civil society representatives to meet with Angela Merkel before the annual summit of the G20, comprising the E.U. plus the world’s 19 richest industrial nations. These days, Wallach’s views are sought by mainstream media.
It’s been slow, tough work. Even the late Sen. Ted Kennedy (D-MA), a liberal icon, was resistant to any curbs on what Democrats of the time viewed as free trade. Wallach was in the room when Public Citizen founder Ralph Nader tried to tell Kennedy that the North American Free Trade Agreement (NAFTA) contained provisions that would extend brand-name drug companies’ patents on prescription drugs. “Ralph you’ve become a protectionist,” Wallach recalls Kennedy saying. “‘That’s absurd. It’s not in there. Don’t be ridiculous. We’re for free trade. We’re smart people.’”
Kennedy ultimately found the text that Nader had urged him to read. Over time, variations of that argument played out in the offices of many Democrats, Wallach says.
Other members changed their views when issues they cared about—such as fuel efficiency standards or the protection of marine mammals—were jeopardized by trade deals, Wallach says.
Farm-state members were ultimately converted when the World Trade Organization declared a U.S. meat labeling law illegal, she adds: “Pretty conservative agricultural state members ... suddenly said, ‘Wait. Consumers can’t know that domestic farmers and ranchers produced this? It’s not discriminatory. It’s consumer information.’”
Other pro-trade incumbents found themselves challenged in Democratic primaries and out of office, she adds.
And the impact of bad trade deals has become increasingly apparent. According to Public Citizen’s research, NAFTA alone cut at least 1 million American manufacturing jobs. About 40,000 U.S. factories have shut down.
That’s a reality that no politician has been able to escape, she adds. It’s part of their “lived experience. Every member knows of the 500 workers here, 300 workers there, 1,000 there” in their districts.
“As is usually the case, the public understood this was a problem before elected officials. And it has trickled its way back up,” she adds. “You see people who’ve traditionally been on the wrong side of these issues, like Biden realizing at least politically that you just can’t go there.”
“Donald Trump in 2016 exploited very real public grievances with corporate rigged trade policies,” Wallach says. “He has had four years to really effectively change things, and the outcomes have not really directly shifted in people’s lives.”
But that inaction has only strengthened the hand of trade progressives. In 2019, Public Citizen and its coalition partners showed their muscle when they pushed for significant changes to NAFTA, which the Trump White House renegotiated.
“They signed a deal that added new giveaways for big PhRMA that would have locked in high medical prices and exported our bad system [of extended periods of market exclusivity] to Mexico and Canada and raised prices there,” Wallach adds. “The Democrats forced them to take that stuff out.”
And the agreement contains a major reform: it almost completely eliminates Investor State Dispute Settlement (ISDS), phasing it out completely for deals with Canada, and substantially restricting its use in Mexico. ISDS permits foreign corporations to sue nations for damages if a policy or regulation harms their investment. The suits are heard by an extra-national tribunal, composed of corporate lawyers. There is no appeal.
The U.S. had been “the No. 1 pusher of ISDS on other countries,” so for the U.S. to actually “remove” ISDS from an existing agreement was “a huge change,” Wallach says.
Democrats began to oppose ISDS, wary of corporate threats to environmental and other protective policies and regulations. Some Republicans resented the infringement on national sovereignty, Wallach says. Even the libertarian Cato Institute called the provision “unnecessary, unreasonable and unwise.”
Essentially, ISDS went from “an issue no one understood or cared about” to one that was “much better understood” to one that is no longer politically viable in Congress. “On a personal note, it’s 20 years of campaigning.”
The final version of the pact, now known as the United States-Mexico-Canada Agreement also has stronger labor protections, but ‘they still need a lot of work,” Wallach says, and the agreement fails to improve the language on food safety and financial services. USMCA is “not a model” trade deal, she observes, “but it’s the new floor from which we’ll build.”
Wallach is bullish about growing public support for progressive trade policies that encourage competition, and give trade benefits only to those companies and countries that adhere to a set of rigorous and mutually agreed upon labor, environmental, human rights, and public health and safety standards.
Global Trade Watch now has a staff of 10. Public Citizen has offices in Washington, D.C., and Texas; it reported net assets of more than $28 million in 2019.
Nevertheless, the victory on USMCA hardly registered with the public. More than half of Americans polled last February either had not followed it at all, or not too closely. That same poll showed Americans were more likely to value trade as good for the economy than to consider it to be harmful. That poll, of course, predates Americans’ experience of COVID-19.
And it is the pandemic, Wallach says, that has dramatized the downsides of bad trade deals. It’s “really been transformative for a lot of people,” she says. The loss of manufacturing plants means that “when we decide we suddenly need to gear up production of masks, of medicine, of ventilators, we no longer actually have the capacity.”
“The supply chains are so extended that 100 key parts in a ventilator are coming from 30 different countries” she notes. One country loses too many workers to COVID-19, she says, and “no one can make ventilators… We have no resilience in the global economy. We can’t get or make key products we need to fight the pandemic.”
The public understands the failure of current trade policies and the need for change, Wallach insists. For most Americans, she contends, the global economy is not working. It has meant “outsourcing, downward pressure on wages, and not being able to get a damn mask.”
