Competing Visions on Trade: A Race to the Bottom Vs. Building the Middle Class (with Thea Lee featuring Todd Tucker)

Summary

Podcast Summary

Podcast: Pitchfork Economics with Nick Hanauer
Episode: Competing Visions on Trade: A Race to the Bottom Vs. Building the Middle Class (with Thea Lee, featuring Todd Tucker)
Date: October 28, 2025

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Episode Overview

This episode breaks down how international trade policy shapes labor rights, middle class prosperity, and global economic fairness. Host Nick Hanauer and co-host Goldy invite economist and pro-worker trade advocate Thea Lee to discuss the evolution and challenges of embedding labor protections in trade agreements. Later, Todd Tucker from the Roosevelt Institute joins to explain the Biden administration's middle-out vision for trade and industrial policy.

Key topics include:

• How trade agreements have historically prioritized corporate interests over worker protections
• The battle for enforceable labor rights in international trade
• Successes and setbacks in pro-worker trade policy, with a focus on recent U.S. agreements
• The imbalance in global competition due to weak overseas labor or environmental standards
• The connection between worker dignity, middle-class strength, democracy, and migration
• Paradigm shifts under the Biden administration and recommendations for the future

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Key Discussion Points and Insights

Reframing the Trade Debate: The Role of Workers

• Intro Insight

  • Main theme introduced (00:02–01:35): Recent decades of "trickle-down" economic and trade policy have led to rising inequality and instability. The alternative is "middle-out economics," where growth is driven by a robust middle class, not wealthy capital.
  • Quote:

    “The original sin of economics is that it starts with trade, when in fact what we need to start with are the things that we trade—the things we make. And of course, we don’t make those things without workers.” (B, 00:42)

• Workers Often Left Out of Trade Policy

  • Trade deals have consistently prioritized the protection of intellectual property and capital, while leaving workers’ rights as an afterthought.
  • Quote:

    “We talk a lot about protecting intellectual property. We talk a lot about protecting capital. We don't talk a lot about protecting workers.” (A, 01:39)

Thea Lee on Labor Rights in Trade: The Battle Since NAFTA

• Roots of the Issue (03:38–05:03):

  • Thea Lee explains how she entered the trade debate during NAFTA negotiations. Civil society fought to include labor standards as central to trade, recognizing the dangers of allowing companies to chase weak labor regimes.
  • Memorable moment:

    "When we're moving production around to take advantage of workers whose basic human rights are not respected... it becomes problematic for domestic business and domestic workers who find themselves in competition with workers…who might be beaten up or fired or thrown in jail or murdered for trying to organize a union or asking for a bathroom break or safety goggles." (C, 04:09)

• Establishing a Floor, Not a Ceiling (05:58–07:42):

  • The ILO’s core labor rights—freedom of association, collective bargaining, child and forced labor prohibitions, non-discrimination, and recently, safe workplaces—should be embedded and enforceable in all trade agreements.
  • Insight:

    “There is a floor, not necessarily a ceiling... the basic human rights that workers deserve, according to the ILO…should be connected to our trade agreements.” (C, 06:29)

• Corporate Protections vs. Labor Protections

  • Historically, trade agreements have been written for corporations to avoid “unfair competition,” not for worker welfare.
  • Quote:

    “For a long time, it was just sort of considered [that] trade agreements are for corporations that want to move jobs around... what is fair competition and what is unfair competition [was] narrowly defined.” (C, 07:46)

Global Supply Chains and Corporate Responsibility

• Disconnection Between Brands and Working Conditions (09:26–12:35):
  • Companies have shifted risk and responsibility down the supply chain, resisting transparency and accountability.
  • Quote:

    "We've created a global economy where corporations have divorced themselves from responsibility for working conditions throughout their supply chain." (C, 11:19)

  • Lee emphasizes the importance of reconnecting multinational brands to their supply chains, so taking responsibility for quality should extend to working conditions.

Trade’s Broader Impact: Not Just "Good or Bad" (13:26–15:46)

• Modernizing the Conversation
  • Trade is dynamic and brings benefits, but must be governed by values: labor rights, environmental protections, consumer safety.
  • Quote:

    "Trade is a reality... what we need is a set of rules for trade [that] are about centering our values whether they are worker rights, environmental protections, [or] consumer safety.” (C, 13:48)

  • Advocates for a harmonized multilateral trade regime instead of fragmented, country-by-country rules.

Strong Dollar Policy: Double-Edged Sword

• Effect on Producers and Workers (15:46–17:50):
  • A strong dollar helps consumers by making imports cheap, but undermines U.S. producers and workers.
  • Quote:

    “Having a strong dollar is not so good for domestic producers... multinational corporations were perfectly happy with a strong dollar because they just move stuff overseas.” (C, 16:12)

Success Story: The US-Mexico-Canada Agreement (USMCA)

• Breakthrough Labor Chapter (17:58–20:23):

  • USMCA pioneered enforceable labor protections, supported reforms in Mexico, and included mechanisms like the Rapid Response Mechanism for swift dispute resolution.
  • Quote:

    “The strongest labor chapter of any trade agreement is in the US Mexico, Canada Agreement (USMCA)... workers... were able to choose a new union, kick out the protection union they’d had for decades, and negotiate a new collective bargaining contract.” (C, 18:02)

  • U.S. technical assistance funded substantial capacity-building for labor reform in Mexico.

• Setbacks under Current Administration (20:27–21:04):

  • Many of these programs have since been defunded or halted, threatening continued progress.

• Clarification on Trade Agreements:

  • Trade deals ensure rights (not set wages), enabling workers to bargain for better terms.

    “We talk about the core rights... if workers can actually organize a union... they should be able to bargain for their fair share.” (C, 21:26)

Global Hotspots for Labor Abuses (22:36–23:59)

• Worst Offenders:
  • North Korea, Burma, Xinjiang (China), especially regarding forced labor and oppression of groups like the Uyghurs.
  • Example: Recent New York Times coverage shows Uyghur forced labor entering global supply chains.
  • Quote:

    “Xinjiang is the Muslim area of China... the US Government has called it genocide... forced labor practices as a way of furthering that goal.” (C, 23:12)

Are Things Getting Better? Reasons for Cautious Hope (24:00–26:16)

• Progress and Bipartisan Potential
  • Growing consensus among U.S. policymakers—including some Republicans—and businesses that products made with forced labor should be banned.
  • Challenge:

    “It’s very hard for [companies] to be the one good guy... it’s our job in government to create a market that does not reward exploitation.” (C, 24:55)

  • Recent chaos in trade policy seen as a distraction, but possibility remains for renewed progress if coalitions and funding recover.

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Todd Tucker: Institutionalizing Middle-Out Economics in Trade

(26:16–31:15)

• Biden’s Middle-Out Economics and Trade Policy

  • Tucker summarizes a Roosevelt Institute report on the Biden administration’s rethink of trade policy: public investment, worker empowerment, and pro-competition priorities drive trade deals, not vice versa.
  • Quote:

    “Biden comes into office and tries to go in a different direction... we have a different theory of economic growth and we want trade policy to be servicing that theory.” (D, 26:25)

• Industrial Policy and Strategic Sectors

  • Biden’s approach to tariffs and subsidies focused on specific, strategic products (e.g., clean energy, semiconductors), rather than blanket protectionism.
  • Advocates for industrial strategy where government prioritizes what matters for economic resilience, security, and innovation:

    “Instead of the neoliberal model... we’re instead saying, no, it’s actually really important that every economy produces clean energy products.” (D, 28:19)

• Cross-Party Alignment?

  • Middle-out trade policy should be bipartisan; some Republican support for the Chips Act and infrastructure, but tax cuts for the rich remain GOP priority.
  • Quote:

    “No, in theory this should be a bipartisan project... it should just be kind of a red, white and blue issue.” (D, 31:15)

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Vision for the Future: If Thea Lee Were In Charge

(31:37–34:02)

• Multilateral Approach and Domestic Investment
  • Thea Lee advocates for a harmonized, multilateral system with trade agreements embedding labor standards, supported by investments in infrastructure, technology, training, social safety nets, and apprenticeships.
  • Quote:

    “If we center workers rights, there’s a synergy... you strengthen democracy, you strengthen the middle class, you strengthen buying power.” (C, 33:30)
    “If we have a more reciprocal trade relationship... that's a much healthier kind of global economy, and that's attainable. But we need to work together.” (C, 33:42)

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Motivations and Reflections

(34:02–35:06)

• Why Thea Lee Does This Work
  • Personal family history of migration, combined with belief in America’s capacity for both welcoming and creating fair, vibrant economic connections through trade.
  • Quote:

    “What’s great about the United States of America... is that we do welcome people from all over the world, but also that the trading system can be a source of energy and dynamism and international connection if we do it right and if we get the rules right.” (C, 34:36)

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Big Picture Takeaways: Middle Class, Democracy, and Migration

(35:14–39:45)

• The Virtuous Cycle of Worker Rights

  • Developing nations cannot build robust middle classes or democracies without strong worker protections; this, in turn, benefits U.S. workers and creates fairer competition and larger export markets.
  • Quotes:

    “Developing countries cannot build a strong and robust middle class unless these workers have rights and are well paid... and they cannot build a strong and robust democracy unless they have a strong and robust middle class.” (B, 35:14) "You don’t see Canadians flooding across the border... to work in our meat packing plants." (B, 37:30)
    "Imagine if Mexico was as developed economically and politically as Canada." (A, 38:20)

• Fair Trade as Migration Policy

  • Better labor conditions abroad reduce the desperation that leads to mass migration; a strategic, values-driven approach produces stability, not just economic gain.

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Notable Quotes and Timestamps

• “The original sin of economics is that it starts with trade, when in fact what we need to start with are the things that we trade—the things we make.” (B, 00:42)
• “If workers can actually organize a union without being fired or beaten up... they should be able to bargain for their fair share of the wealth they create.” (C, 21:26)
• “The vision of the kind of global economy we live in is not one that we have now, which is kind of like, you build, we buy. Yeah, that’s not sustainable.” (C, 33:38)
• “You don’t see Canadians flooding across the border... to work in our meat packing plants... Imagine if Mexico was as developed economically and politically as Canada.” (B/A, 37:30–38:20)

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Conclusion

The episode provides a rich exploration of how embedding labor rights in trade policy creates a foundation for global middle-class prosperity, fairer competition, and stronger democracies. While recent years have yielded encouraging progress—especially with the USMCA—current political volatility and funding cuts threaten to unravel gains. Both guests stress the need for multilateralism and society-centered economic rules to avoid a global "race to the bottom." The ultimate vision is a system that protects workers everywhere, builds global middle classes, and delivers shared growth.

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[End of Summary]

Transcript

[A]

The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.

[B]

The last five decades of trickle down economics haven't worked. But what's the alternative?

[A]

Middle out economics is the answer.

[B]

Because the middle class is the source of growth, not its consequence.

[A]

That's right.

[C]

This is Pitchfork Economics with Nick Hanauer.

[B]

A podcast about how to build the.

[C]

Economy from the middle out. Welcome to the show.

[B]

One of our first guests on Pitchfork Economics, Nick, was the physicist Cesar Hidalgo. And he made this statement, I know you've repeated it in the past, that the original sin of economics is that it starts with trade.

[A]

Yeah.

[B]

When in fact, what we need to start with are the things that we trade, the things we make. And of course, we don't make those things without workers.

[A]

Yeah.

[B]

So it's really hard to talk about trade, international trade, without considering the rights and conditions and wages of. Of those workers making the things we're importing and exporting.

[A]

And yet you say that, but we have kind of ignored it.

[B]

That's right. It's often missing from the conversation.

[A]

Weird. That's so weird. Yeah. We talk a lot about protecting intellectual property. We talk a lot about protecting capital. We don't talk a lot about protecting workers. But today we get to talk to one of the nation's experts on sort of international labor protections, our old friend Thea Lee, who has been kind of at the forefront of a lot of these conversations for a super long time. She's an economist and longtime advocate of pro worker trade policy, served as the Deputy Undersecretary for International affairs at the U.S. department of labor, and just been working on this stuff forever. And given how relevant trade is in the current moment, we thought it'd be fun to talk to her about what she thinks about what's going on and what we might do as a country if the craziness ever passes, to secure international labor rights a little bit better. And by doing that, helping American workers too.

[C]

I am Thea Lee. I am a retired economist, and at the moment, I am doing whatever I feel like doing.

[A]

That's great. Well, do you feel like talking about the labor movement?

[C]

I always feel like talking about the labor movement. Okay.

[B]

Particularly for this episode, talking about labor and trade.

[A]

Absolutely. So you've done so many things, Thea. You're a woman of many talents. Your career has spanned the labor movement, think tanks, Biden administration, et cetera. But you've had a big focus on sort of international labor rights enforcement as a part of trade policy. So for our listeners Just create some context. What does that even mean? And why do we care?

[C]

Sure, that's my favorite question. I got involved in the trade debate back in the early 1990s in Washington when the North American Free Trade Agreement came in. And at that time there really was the. This debate about like, we need these trade agreements so that companies can move jobs around and what could possibly go wrong. At that time we created this multinational coalition and a multisectoral coalition to say, sure, let's have trade, let's have trade policy, but let's make sure that we don't leave workers behind and that this is actually a really important part of how we think about what's good and what's bad about trade policy. That sure, we can get pineapples from other places or coffee that have different climates, but when we're moving production around to take advantage of workers whose basic human rights are not respected, then that can become problematic. It becomes problematic for domestic business and domestic workers who find themselves in competition with workers in other parts of the world, maybe very far away, who might be beaten up or fired or thrown in jail or murdered for trying to organize a union or asking for a bathroom break or safety goggles. And so labor rights becomes a really crucial piece of the trade debate. What does trade policy need to address? What should it address? And that battle has been raging for about 30 years.

[A]

I mean, I think that trade is so complicated, right. Cause there's good parts and bad parts. But definitely, I think that American having to compete with foreign workers who operate in regimes without any protections is. It's not actually different than environmental standards too. Right. It's very difficult to be an American manufacturer that isn't allowed to dump effluent directly into rivers, competing directly with a manufacturer who is allowed to dump effluent directly into rivers. Obviously it's much cheaper in the latter case, so your prices are lower and so on and so forth. To what extent is it realistic to extend? Like how do we in practice, how does this work? What do we do to try to level the playing field for workers in this respect?

[C]

Well, that's a great question because countries are sovereign nations. They have their own preferences and priorities and rules. So really the challenge of globalization is finding that balance between saying, yes, we want to open our market to you, but we don't want to do so if you're going to have five year old kids chained to looms and if you're going to use slave labor and really be egregious. So what we've come to in the labor rights world is actually pretty sensible, which is taking the internationally recognized labor rights that the International Labor Organization said. These are basic human rights that every worker in the world deserves, no matter whether they're in a rich country or a poor country, in the formal sector, the informal sector, and then connect those to our trade agreements. So basically saying there is a floor, not necessarily a ceiling, like we don't have to have identical wages, we don't have to have identical safety and health protections, but the basic human rights that workers deserve, according to the ILO Declaration on fundamental principles and rights at work were freedom of association, the right to form a union if you want to, right to collective bargaining, and then also prohibitions against child labor, forced labor, discrimination in employment. And then in the last two years, we've added a safe and healthy workplace. So those are the core labor rights. And that what we've done is try to embed those into our trade agreements and to make them enforceable. And then we've added one more thing to that, which is to say, and countries should also effectively enforce their own domestic labor laws. So those two things together are actually very powerful. And that is kind of the battle of the last 30 years is to say that labor rights in trade agreements are just as important as the market access and the investment protections and the intellectual property rights.

[A]

Yeah, those things are routinely pretty well protected, aren't they?

[C]

Yeah, the corporate. Corporate interests and trade agreements, that was sort of.

[A]

Somehow they get a lot of attention. It's amazing.

[C]

They get a lot of attention. And for a long time it was just sort of considered. That's what trade agreements are for. They're for corporations that want to move jobs around and they don't want to face other forms of unfair competition. And so really it's defining what is fair competition and what is unfair competition. And then being able to use the mechanisms of free trade agreements or the World Trade Organization to enforce it. But it's been a big battle, and there is not always consensus.

[B]

But historically, abusing workers and workers rights really has been the corporate interest in trade. I mean, we talk about the past 30 years where we've been. We've had all this wage arbitrage where we've been moving jobs around in order to. I guess they would use the word efficiency. It's more efficient to pay somebody less money. But there's two types of products. Yes, there are those things where you can move jobs around and shift production overseas, but there's also products which we can't really produce here. And I guess the great historical example is bananas. And that is an industry with this long history of abusing their workers and the local environment where the bananas were grown and overthrowing governments. Just a brutal, brutal industry in order to deliver Americans their favorite fruit. Has there been any progress in terms of the way US and global corporations treat workers overseas?

[C]

Yes and no. Yes, there has. I mean, there's certainly been a recognition that labor rights are a legitimate concern for trade policy. And you know, certainly in the United States, we've in some ways won that intellectual battle after the last 30 years. We have really succeeded in saying any trade agreement the United States does, and we have bipartisan consensus, should include enforceable workers rights as well as some of these other things. On the other hand, it's also true, as you, as you mentioned, a lot of the reason that corporations move production overseas is to take advantage not just of cheap labor. And I think you really have to make a distinction and use the word efficiency. Cheap labor is one thing. Sometimes labor is cheap because people are poor, because there's lower standard of living and so on. And then other times labor is cheap because a government has taken a deliberate decision to repress wages. They have busted unions, they have beaten people up and thrown them in jail. They have deliberately kept the minimum wage low. And so to make a distinction between those two things and also between an advanced industrial nation is going to produce, you know, that there going to be more capital intensive production in a wealthy country. That's natural. You know, you're not going to do.

[B]

The tiny little, the millions of people putting screws into phones that the current administration sees as the ideal.

[C]

Right. I mean, manufacturing has changed and that's a good thing. Manufacturing has become more productive. So there's, you know, there are a lot of things that can be done by robots don't need to be done by human beings. You know, repetitive, boring, uncomfortable, dangerous work. But I think when you say, like, are things getting better? I think the problem is that we've created a global economy where corporations have divorced themselves from responsibility for working conditions throughout their supply chain. And that is a problem because we are ultimately connected. We all live on the same earth. We are all human beings. And if workers need to suffer in human conditions, whether it's on a fishing boat on the high seas or it's in a jasmine farm in Egypt, or it's in cocoa production in Ghana and Cote d', Ivoire, it's our business. It's our business because we are complicit. We buy the stuff and A lot of American consumers would say they're willing to pay a higher price for products that are not made in egregiously unsafe and inhumane working conditions. And yet there's not enough transparency. And companies have outsourced and subcontracted out a lot of that work, and so they're trying not to take responsibility. Our job in the trade policy front, those of us who've been working on labor rights, is to reconnect multinational corporations and big brands to their entire supply chain, because at the end of the day, they buy it, they put their name on it, hopefully they're taking responsibility for quality control, and therefore, they should also take responsibility for working conditions through the entirety of their supply chains.

[A]

DIA obviously, trade is top of the news right now for good and bad reasons. And we'd love to know what your broader perspective is on American trade policy. I mean, put aside the sort of insanity of the current administration's approach while simultaneously acknowledging, for example, that we have indeed let China take advantage of us in some very unconstructive ways. And so a certain amount of pushback I think is logical and valid in that case in particular. But how do you think about global trade with respect to workers here, workers overseas, consumers here, consumers overseas? As we internally talk about trade, what's your broader view? How do you think about it?

[C]

Thanks, Nick. I love that question, because the point isn't that trade is good or bad. Trade is a reality. You know, we live in a big world, and there are a lot of things that are exciting about trade policy or investment policy. There's dynamism, innovation. There is getting things from other countries that we don't or can't produce ourselves learning from, from other countries and other people. And so what we need is a set of rules for trade policy, for both trade and investment and immigration that are about centering our values, whether it is worker rights, environmental protections, consumer safety, all of those things are legitimate. That's what we have a domestic regulatory system for. But as we moved into a global economy and people just started acting as though there were no difficult decisions there, that this is obvious, that free trade is good, it's good for everybody all the time, and we just need to barrel ahead with a corporate agenda, we lost a lot of things. And there are consequences for climate change. There are consequences for the way workers are treated. There's consequences for migration, that if you have terrible jobs where workers are working long hours for terrible pay under unsafe conditions, some of them may try to come to another country for a better life. So it really is about what are the rules for the trading system. And I think taking a different perspective, where you say it isn't just about what allows multinational corporations to make a lot of money money, but it is about what we as a society value. I think we actually could move in a different direction. Right now we have kind of a spaghetti bowl of trade agreements. We have free trade agreements, we have regional, we have unilateral measures. The one that doesn't really work right now is the multilateral, the World Trade Organization, which is kind of paralyzed and hasn't done much. But that is ideally where we would have a single set of rules, not a million different rules. And so a company for now has to think, well, am I selling to the EU or am I selling to Canada, Am I selling to Australia, am I selling to the United States? And have to come up with a whole different set of standards for each of those places. So I think that's the ideal that we should move towards. And it isn't about saying we shouldn't trade because I think trade has the potential for tremendous dynamism and innovation, but it is about making sure that we are setting our priorities straight.

[B]

Can I go off on a. It's not really, it's not a tangent. I'd like to talk about money for a moment. About the dollar. We've had a strong, I don't know if it's been a strong dollar policy, but we've had a strong dollar. Obviously that advantages American consumers and that it's cheaper to buy things from abroad. But I'm wondering how much the strong dollar has really disadvantaged American workers.

[C]

That's a really good question. And I think it's one where it's a double sided knife that having a strong dollar is not so good for domestic producers. So also companies that are located in the United States and domestic workers. And I think in the early 2000s there was a lot of dispute around China was manipulating its currency to keep its currency weak and the dollar strong. That was very disadvantageous for American producers on American soil, not American companies that produced all over the world. And so I think that was one of things that was interesting that the corporate community was divided. Multinational corporations were perfectly happy with a strong dollar because they just move stuff overseas. And those companies and workers who were trying to make a living on American soil found it very disadvantageous. But I think you also don't want to see precipitous movements in the value of the currency because that is going to be very destabilizing.

[A]

Yeah, and sometimes a strong dollar is very, very handy. And sometimes it's not well, for you.

[B]

Nick, because you own a lot of them.

[A]

Okay, okay.

[C]

But.

[A]

But, you know, no matter whether you have a lot of dollars or a little dollars, strong dollar can be helpful.

[C]

It also, you know, affects if you're buying inputs, having a strong dollar is good. You're buying inputs from other countries, and then it can be good. But you're trying to sell your product made in the United States. It's actually a disadvantage. I mean, strong dollars sounds good because strong sounds better than weak. But it is important to remember that it has the two aspects, two sides.

[A]

So what's your favorite example of a success in this space? Where do you think we really went? Right.

[C]

Well, when we talk about worker rights and trade agreements, the strongest labor chapter of any trade agreement is in the US Mexico, Canada Agreement, which is the renegotiated nafta. Interestingly, negotiate in the first Trump administration by US Trade Representative Bob Lighthizer, but with a lot of input from people like at the time, Ohio Senator Sherrod Brown and a lot of labor leaders like Rich Trumka and other union leaders. So that is a very strong labor chapter. It encompasses protections for migrant workers as well as all the core labor rights. But it also involved the Mexican government agreeing to reform its labor laws and its labor system to make sure that workers really had an opportunity to join an independent democratic union and to be able to bargain collectively for the first time in really 60 years. So USMCA actually had a lot of successes. When I was at the Department of Labor heading ilab, the International Labor Affairs Bureau, we did a ton of work in Mexico because Congress also had given iLab about $180 million to do technical assistance in Mexico, working with the government, with business, with unions, to ensure that this new labor law reform was really viable. We also had a really strong dispute settlement mechanism called the Rapid response mechanism. We call it swift, surgical, and effective because it allowed you to act quickly, which was one of the problems that we had noticed with previous labor chapters that they could drag on sometimes as long as nine years before being resolved. This one had a lot of very short time frames built into it. And what it meant was that workers, for example, the General Motors workers in the Silao plant, which is maybe 6,000 workers, one of the very first cases brought under the Rapid Response Mechanism, were able to choose a new union, kick out the protection union they'd had for decades, and negotiate a new collective bargain contract. They got a nine and a Half percent raise workers who had been unfairly fired for union organized and were reinstated. And so we actually saw really concrete, tangible benefits throughout a lot of Mexico, particularly in the auto sector under the USMCA labor chapter. So to me, that was a good example of a labor chapter that we negotiated with a trading partner and then really implemented full throatedly and got good results.

[A]

Interesting. Have we thrown that completely out the window now?

[C]

No, it's still there, except a lot of the people who worked on it, who are on my team, you know, have been instructed to resign at the Department of Labor by the Secretary of Labor. And all the programs, the technical assistance programs that were supporting the USMCA have been terminated, even though some of them were almost midway through. And they were being very effective and very popular and delivering good results. So it's still there and it is a Trump administration initiative. So we are still hopeful that we will be able to continue to implement and execute the labor chapter of the usmca.

[A]

Amazing. So embarrassing. So just to clarify, these trade agreements don't affect wages directly. Right. Like when we negotiate a trade agreement, the trade agreement does not say you have to pay a minimum of this much to these people. We've never done that.

[C]

No, we don't do that. We talk about the core rights.

[A]

Yeah.

[C]

So we say, like, if workers can actually organize a union without being fired or, or beaten up or whatever, then they should be able to bargain for their fair share of the wealth they create. So it's more about ensuring that countries are living up to their obligations as members of the ilo, the International Labor Organization. They're already committed to doing that. But this gives an extra economic incentive, an economic consequence for countries that don't live up to their international obligations.

[A]

Okay.

[C]

You know, and it includes forced labor and child labor, as well as safe and healthy workplaces. And so that, that can be very effective. It's a tool. It's a tool for dealing with. You know, countries also sometimes have different priorities and they say, oh, we're just not going to put the resources into enforcing our labor laws. But if we have a trade agreement with that country that commits them to respecting the international labor rights and enforcing their own labor laws, that becomes an avenue for discussion. It's something that we can work on together. And sometimes the Labor Department would have resources that would say, we're going to help you do a better job enforcing your labor laws because we're all in this together.

[A]

Yeah. What countries have the most egregious practices today?

[C]

Well, you would say some of the international scoff laws of North Korea, Burma, and within China, I think both.

[A]

Did we buy anything from North Korea?

[C]

We're not supposed to, but things do come in. And Burma, unfortunately, there still are big American companies that are sourcing from Burma, even though it is a military junta with truly egregious labor conditions. I mean, the other big area that is problematic is Xinjiang in China. And also the workers, the Uyghur workers.

[A]

What's Xinjiang?

[C]

Xinjiang is the Muslim area of China.

[A]

Okay.

[C]

Where the Chinese government has undertaken a policy of. I mean, the US Government has called it genocide, of trying to repress the Uyghur culture, language, religious practices. And they have used forced labor practices as a way of furthering that goal. And some of those workers, now it was in the New York Times this morning, have been transferred to other parts of the country. And they are also probably producing, I think it said, McDonald's chicken nuggets and other products that are entering the global trade. But those workers don't really have the right to speak up or form a union or leave if they choose to do so.

[A]

Interesting.

[B]

Are you hopeful or. I mean, these. Seems like, on many fronts, dark times right now. Are you hopeful in terms of international trade and our impact on workers around the world?

[C]

Well, Goldie, thanks for that question. I think if you'd asked me a year ago, I would have said yes, because I felt like what we were starting to do with the Biden administration, we were really building towards something. We were also working with a lot of trade partners like the European Union, Canada, Mexico, South Africa, Brazil, trying to coordinate around things like banning the import of goods made with forced labor and finding a lot of consensus and also finding a lot of big companies that don't want to be complicit in this. And I actually sympathize a lot with the big companies because if they find themselves in a competitive environment where all of their competitors are violating labor rights.

[A]

Yeah.

[C]

As Nick said, it's very hard for them to be, like, the one good guy. Like, they're not in it for altruism. They're in it to make money. And so it's our job in the government to create a market that does not reward exploitation and egregious violation of labor rights and human rights. And so I feel like we have more understanding than we've ever had before. There was actually certainly a lot of people in the Republican Party and in the business community who were all on board to say we shouldn't be importing goods made with forced labor. We should not be rewarding these egregious practices. And it's good to use our trade policy to do that. So I feel like there's still room for, for progress, but where the chaos of the Trump tariff policies is a distraction right now, I think people are not focused on a coherent scheme of labor rights enforcement and protection. And it will take us a little while to get back to that. And all the players, people like, you know, like organizations like the International Labor Organization, the Solidarity center, that have been out there protecting workers rights globally, they're being defunded. They're under some pressures right now.

[B]

For some further insight into what American.

[A]

Trade policy looked like during the Biden.

[B]

Administration, Pitchfork economics producer Freddie Doss spoke with Todd Tucker.

[D]

I'm Todd Tucker. I direct the industrial policy and trade work for the Roosevelt Institute and Roosevelt Forward. We're a think tank that works on economic policy. I recently put out a report called the New US Trade Institutionalizing Middle Out Economics and Foreign Commercial Policy. And this was a product of a study group, a study commission that we put together to look at how trade policy had or had not changed during the Biden administration years, what worked and what didn't, and some recommendations for the future. Biden comes into office and tries to go in a different direction and he basically says, we have a different theory of economic growth and we want trade policy to be servicing that theory of economic growth. So the theory of economic growth is that, you know, we're going to use public investment to drive decarbonization, produce the things that matter for the country. We're going to empower workers so that they are able to ensure that, you know, not only are they going to be promised to share in the gain from economic policy, but they will be guaranteed to by virtue of being more powerful. And also that we're going to promote competition so that it's not just big companies, big firms and the richest Americans that are determining how economic growth goes, but it's actually driven by the majority of workers and small businesses and others in the economy. So that's the new theory of growth. And the idea as executed by folks like Ambassador Katherine Tai, who, who was the sort of US Trade policy point person for Biden, the idea was we're going to have trade agreements and trade policy that are really in service of those public investment, worker empowerment and pro competition rules, rather than the other way around, where basically we're just kind of doing trade for its own sake.

[E]

The report also emphasizes producing what matters. How should we structure future trade negotiations to focus on production challenges and spend specific sectors or to promote sustainable economic development.

[D]

So we've seen in recent years that governments, especially the US Government under Biden, but also generally around the world, there's been this turn to something called industrial policy, right, which is using the full suite of government tools, whether that's subsidies, whether that's tariffs, whether that's research and development support, to prioritize certain economic activities over others. So instead of the neoliberal model, which is letting companies decide what and where to produce, we're instead saying, no, it's actually really important that every economy produces clean energy products. And this is what those clean energy products are, this is what they're not. And, you know, we're going to use federal policy to promote one thing over the. Over another. And so, you know, what we saw during the Biden years was an industrial policy that it's very different than Trump's tariffs, right, Where Trump's just kind of putting tariffs on everything, whereas what Biden was doing was putting on specific products that were deemed strategic. So things like clean energy products, things like semiconductors, these are all the inputs that the rest of the economy relies on. Right. So this is what a smart industrial policy looks like. Typically is not sort of saying we need to make every single thing in America right or every single thing in any given country. Clearly there's advantages to trade, clearly there's advantages to division of labor. There's a lot of products that the federal government never really needs to worry about, like, where do we get tables or napkins from? Being able to have access to those inputs domestically is really important because you never know, like, when there's going to be a natural disaster halfway around the world, or a war, God forbid, or some type of other conflict that means you can't get the thing that you need.

[E]

It seems like something that both Democrats and Republicans can get behind because it doesn't seem ideological. There's not really an ideological bend to this.

[D]

There certainly should not be an ideological bend to doing pro worker industrial policy, pro worker trade policy. And I think that we saw that there was a lot of Republicans that supported the Chips and Science act, that supported the bipartisan infrastructure law. I mean, actually, I shouldn't say a lot. I mean, there were some that supported it. It was somewhat bipartisan. And then I think what we especially saw is that after, after these big bills were passed, there was a lot of Republican support for them. So, unfortunately, what we've seen is that they want to cut taxes for the rich more than they want to Preserve clean energy industrial jobs in their own districts. So that's unfortunate. I think Biden was trying to sort of put some policy in place that would appeal to Republicans as well. It was the best shot we could have taken and we took it. But I think in the end it just turns out that cutting taxes for the rich are just so much more, more important to the modern day Republican Party than almost anything else. It kind of trumps everything. So that's unfortunate. But I mean, no, in theory this should be a bipartisan project. This should be something that is about the future of America and future of production in America as a whole. Shouldn't be a red or blue issue. That should just be kind of a red, white and blue issue.

[A]

Well, a couple of final questions. You've answered them. First, to a certain extent, if you were in charge and could do anything you wanted, constraints off, what practices would you employ? I mean, would you limit your approach to the thing that you described, which are these treaties that establish minimum rights, or would you go farther?

[C]

If I were queen of the world, yeah. I mean, I would like to see a multilateral system. Because part of the trouble that we have also is even if the United States in an ideal world had really strong labor rights protections and trade agreements, if our trading partners don't have similar protections, then you're just going to be shuffling the cards around and it's going to take a long time before you can really impress upon. And there's really two audiences here. There's governments and there's companies. And the real goal is to say to both governments and companies, there's no future for you in repressing labor rights. These are internationally recognized human rights every worker deserves. Your job as a government is to have an enforcement scheme in place and to make sure your laws are in line and to say to companies, don't go to countries that violate labor rights. Go to the countries that are trying to do a good job, that are really making an effort. But I think the other thing is that each country has to do what we do domestically too. The trade policy is one piece of it. We also have to make sure that we have a coherent forward looking economic strategy, an industrial policy that is investing at home for the United States. It's not realistic to think that we're going to bring home manufacturing jobs if we're not investing heavily in infrastructure, in technology, in training, in skills and in social safety nets and in support systems. Apprenticeships, registered apprenticeships for workers, those are all the kinds of things we need to do. It's no magic wand, but there is a clear path forward. And I think if we center workers rights, there's a synergy, there's a positive story, which is when you protect workers rights globally, you strengthen democracy, you strengthen the middle class, you strengthen buying power. So that the vision of the kind of global economy we live in is not one that we have now, which is kind of like, you build, we buy. Yeah, that's not sustainable. But if we have a more reciprocal trade relationship where countries that we deal with workers are working in factories, they're able to send their kids to good schools, they're able to join the middle class, they also can buy the stuff that they're making. That's a much healthier kind of global economy, and that's attainable. But we need to work together.

[A]

And one final question. Why do you do this work?

[C]

I love this work and I think it makes a difference. And I think when I look back over my career, over 30 years, we've actually won a lot of our debates. We now have to implement them. But, you know, my dad came to this country from China when he was a little boy, and his ancestors, my great, great grandfather and grandfather and great grandfather all came to the United States to work, but went back to China, back and forth to have families and so on. So I think about trade and immigration, and my mom's family came from Eastern Europe, also fleeing repression earlier. But I think about what's great about the United States of America, which is that we do welcome people from all over the world, but also that the trading system can be a source of energy and dynamism and international connection if we do it right and if we get the rules right. So that's what I'm working towards.

[A]

I love it. Well, thank you so much for being with us and thank you for your work.

[C]

Thank you, Nick. Thank you, Goldie. It's always a pleasure.

[B]

So I think Thea makes a really important connection here, which again, is not talked about much when we talk about international trade. And that is that connection between workers rights and building a middle class and how these developing countries cannot build a strong and robust middle class unless these workers have rights and are well paid and they cannot build a strong and robust democracy unless they have a strong and robust middle class. And how important that is to us here in the United States, to workers here.

[D]

Yes.

[B]

To have these middle classes developing overseas, both because it does level the playing field. You don't have all that wage arbitrage anymore when you have a strong middle class amongst our Trading partners. And because it also creates a larger export market for the goods that American workers are creating because they can not only afford to consume the products they are creating domestically, they can afford to consume products created internationally. Hey, that sounds like one of those virtuous cycles that we talk about in middle out economics.

[A]

Exactly. And bonus, if those workers in other places are not miserable to the point of desperation, you'll have much less of an immigration challenge too. Given that this is a major concern of the current administration. Obviously those people are not fleeing those countries because things are awesome and they're treated well. They're fleeing those countries because they're treated terribly. And all of this stuff fits together in a thoughtful way. If you're a thoughtful person and approaching things a tiny bit strategically.

[C]

Right.

[B]

Look, it's pretty obvious the advantages to having developed nations with, you know, and we can see it right here when we talk about. When we talk about our borders.

[C]

Right.

[B]

You don't see Canadians flooding across the border, sneaking across the border to work in the construction industry and pick our fruits and vegetables and to work in our meat packing plants and in the back of restaurants and domestic work and all that. I mean, yeah, maybe, maybe the sketch comedy industry. But apart from that, you don't see a lot of Canadians.

[A]

Comedy industry has been overrun by those.

[B]

That's right. You don't see them flooding across the border to take our jobs. Except. Except in the sketch industry.

[A]

Yeah.

[B]

Right, right. And you know, imagine if Mexico was as developed economically and politically as Canada.

[A]

Yeah.

[B]

You'd have the same sort of border issues. Right.

[A]

And Americans fleeing the United States.

[B]

Well, I think that's why they really want to shut down the border. It's going to be like East Berlin. They're going to build a wall to keep us in. But when you have that type of reciprocity. Yeah. Canadians do cross the border, obviously, all the time. Right. And then they go back because, you know.

[A]

Because Canada is nicer.

[B]

Canada is.

[C]

Right.

[B]

And in fact. But you know, you see that with Mexican migrant workers. The fact is, historically, they always cross the border because there are seasonal jobs and then they go home. You'd have a lot more of that going home if we didn't make it so hard to cross the border. Yeah, but if you build a large and robust middle class and you have these job opportunities in Mexico, we'll get to the situation where we're trying to incentivize people to cross the borders, to put roofs on our houses and pick our produce and work in those meatpacking plants. And those will become better jobs, higher paying with better conditions. So you know it's a win win for everybody if we have trade policies that actually work out well for the people in other countries as well as for workers in this country.

[A]

Yeah, it just won't work out quite as well for the shareholders of big companies.

[B]

Oh no, Pity the poor shareholders.

[E]

Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow, rate and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram and threads at Pitchfork Economics. Nick's on Twitter and Facebook as well. Ickhanhauer for more content from us, you can subscribe to our weekly newsletter, the Pitch over on Substack. And for links to everything we just mentioned plus transcripts and more, visit our website pitchfork economics.com as always from our team at Civic Ventures, thanks for listening. See you next week.