I thought the list of betrayals in the Obama administration’s trade agenda couldn’t swell any further, but a remarkable development this week proved me wrong. Add to those wronged the unfortunates sold to Malaysian slave traders. Hopes that international pressure would force the Malaysian government to protect these victims has been snuffed out, overcome by the White House’s desire to write a trade agreement.
According to Reuters, next week the State Department will release its annual report on human trafficking, which will upgrade Malaysia from a Tier 3 country, the worst of the worst, to Tier 2. This comes just weeks after authorities in Malaysia discovered a mass grave of 139 Rohingya Muslims, who fled discrimination in Burma and were sold into slavery upon their escape.
Last year, the State Department listed Malaysia among the world’s worst human trafficking nations because of “limited efforts to improve its flawed victim protection regime.” The report described a horrendous life for Malaysia’s foreign workers, threatened by large smuggling debts and confiscated passports that put them at the mercy of recruiting companies. Women in particular, recruited for hotel or beauty salon work, are routinely coerced into the commercial sex trade.
The conviction rate for smugglers has actually fallen in Malaysia since last year’s report, suggesting no improvement on fighting human trafficking. One house of Malaysia’s parliament did pass legislation giving more protections to slavery victims, but it further criminalizes something that’s already illegal. The problem has always been sustained enforcement. The U.S. Ambassador to Malaysia, Joseph Yun, criticized the lack of will to defend trafficking victims as recently as this April. Yet an unnamed administration official told Reuters that the U.S. had been working closely with Malaysian leaders to remedy the problem.
The political implications of reclassifying Malaysia suggest another rationale for the upgrade. During the markup of trade promotion authority (aka “fast track”), signed into law by the president last month, Sen. Robert Menendez (D-NJ) passed a provision denying access to fast-track procedures for any trade partner in Tier 3 on the human trafficking report.
Malaysia is one of the 12 countries negotiating the Trans-Pacific Partnership (TPP), the first deal to be finalized under the reauthorized fast track process. If it remained in Tier 3, either TPP would not get the benefits of fast track — meaning that Congress could try to amend the trade agreement or filibuster it, and wouldn’t have to bring it to a vote within 90 days of being signed — or Malaysia would have to leave the agreement.
Upgrading Malaysia to Tier 2 allows the country to stay in TPP. And Menendez is livid about it, saying in a statement, “If true, this manipulation of Malaysia's ranking… would be a perversion of the trafficking list and undermine both the integrity of this important report as well as the very difficult task of confronting states about human trafficking.”
I guess it shouldn’t be surprising that the State Department would, at the bidding of the White House, undermine the integrity of a report that shames countries’ indifference to slavery within their borders. But it’s a complete perversion of the logical steps America normally takes to impact other countries’ human rights records. Instead of hitting them with sanctions until they improve — Tier 3 status can lead to withholding of foreign aid — the administration is instead granting Malaysia trade benefits and then hoping for more influence once they’re inside the trading regime. It looks nakedly political, a reward for Malaysia’s involvement in TPP.
Plus, these slaves produce the very goods that would get duty-free access to U.S. markets under the TPP. Forced labor is reportedly high in the agriculture, electronics and textile industries in Malaysia, yet the United States is apparently willing to overlook that to complete the trade deal. So consumers like you and me who unwittingly buy things made in Malaysia could be implicated in the slave trade as well.
Menendez did previously agree to a modification of his amendment, which would allow Tier 3 countries like Malaysia into fast-tracked trade deals if the State Department wrote a letter documenting their improvements in protecting trafficking victims. But the amendment never got a vote in the Senate, and amid the tumultuous process of passing trade promotion authority, it could not work its way into the final deal.
The modification language does appear in a customs bill that is currently in a House-Senate conference committee. The customs bill included a number of measures designed to woo members of Congress on the left and the right into supporting fast track. For liberals, there were stronger measures to prevent currency manipulation, a trade enforcement trust fund and stronger penalties for violators of environmental trade rules. For conservatives, there was language to prohibit trade deals from expanding access to immigration visas or from dealing with climate change.
But with the administration opting to manipulate the human trafficking report, that trafficking language — the only necessary language in the bill from the White House’s perspective — is no longer needed. So you can probably throw that entire customs bill in the trash. The gaps between the two parties are far too wide, and there’s no compelling reason to reach a compromise. All the representatives who decided to advance fast track because they were promised something in the customs bill can expect those wishes to go unfulfilled. Or if you like, you can say they were lied to.
Why would the administration go this far to accommodate slavery, given all the historical connotations that word dredges up in America? Why would it toss aside its international legitimacy on human rights? Why would it give trade preferences to goods made with forced labor? The answer lies with the geopolitics of global trade.
Malaysia controls parts of a critical oil shipping lane in the Straits of Malacca, where China receives much of its shipments. Keeping Malaysia as an ally allows America, whose Navy controls access to the strait, to habitually pressure China with the implied threat of cutting off its oil. So Malaysia is a key strategic partner, the rampant epidemic of forced labor within its borders notwithstanding.
The episode crystallizes exactly who trade agreements like TPP are really designed for: elites and corporate titans, not ordinary workers. Sometimes you hear the argument that workers in poor countries like Malaysia should be thankful for foreign investment. Working in a sweatshop may be arduous, but it at least improves wages and creates jobs, the argument goes. The high incidence of trade partners that do nothing to stop forced labor obliterates this theory.
Workers in Malaysia have no reason to thank the United States for facilitating their toil as slaves. And manipulating a government report to that end should be called out for what it is: a shameful scandal.
Top Reads from The Fiscal Times: