Text Fwd: The UAW "Maverick" On Free Trade

* Text sent from Steve Zeltzer on Feb. 10, 2011

The UAW "Maverick" On Free Trade
http://autoworkercaravan.org/node/124197

THE UAW – “MAVERICK” ON FREE TRADE
Submitted by Caravan Organizer on Wed, 02/09/2011 - 13:57.

When the South Korea – US Free Trade Agreement (KORUS FTA) was negotiated in 2007, the AFL-CIO unions opposed it and the Korean Metal Workers Union organized a five-day strike. Workers and/or their labor unions in both countries saw the agreement as a threat to jobs, wages and working conditions, and livelihoods.

In December 2010 the Obama Administration renegotiated the agreement, the most critical trade agreement since NAFTA was passed in 1994. He predicted the agreement could result in increasing exports of U.S. goods by $10-11 billion and “support at least 70,000 American jobs.” (White House Press Release, 12/10/10) It will be introduced into 112th Congress early this year, with a possible vote as early as mid-February or as late as June. Congress must vote for or against SK/US FTA (KORUS), it cannot be amended.

The AFL-CIO opposes the renegotiated version because it encourages extraordinary investor rights that promote offshoring, and explicitly forbids reference to the International Labor Organization’s (ILO) core labor standards. Only two of the 57 AFL-CIO unions broke ranks to support it: the United Auto Workers (UAW) and the United Food and Commercial Workers Union (UFCW).

UAW POSITION & GROWING CHORUS OF OPPOSITION

The UAW leadership explains its embrace of this trade deal in a two-page spread with the headline “New agreement gives better protection for our members,” in Solidarity magazine (Jan/Feb 2011). The UAW, according to the article, was consulted and played a “meaningful role” in the negotiations, and claims, “it will protect current American auto jobs and grow more American auto jobs.” A careful read reveals that the gains in the renegotiated language amount to delays in the implementation of the terms of the previously rejected, 2007 Bush version. For example, the 2007 agreement would have required that the United States reduce its 25% tariff on Korean pickups immediately and end it within 10 years; the 2010 agreement maintains the full 25% tariff for eight years, then phases it out over the next two years. That is, it only pushes the timetable back. Thus the anticipated job loss various studies have predicted may be put off a few years, and will not lead to the job growth the article anticipates.

The Economic Policy Institute predicts the 2010 pact will result in a U.S. job loss of 159,000 within the first seven years of the agreement.

The U.S. International Trade Commission (USITC), an independent federal body that analyzes the effects of trade agreements for the legislative and executive branches, found that some jobs would be created by the passage of the SKUS FTA (KORUS) while others would be lost. Job loss would occur primarily in auto and electronics manufacturing where the average hourly wage was $30.38 in 2008 although there would be additional jobs in the meat production industry, where the average hourly wage was $13.69. Currently Korea exports nearly 500,000 vehicles annually to the United States while the United States exports about 6,000 to Korea. In order to bump up the potential U.S. auto exports, South Korea had to agree that U.S. car companies won’t have to meet Korean safety, fuel economy or emission standards.

Another troubling aspect of the KORUS FTA is the 35% domestic content requirement on Korean vehicles. This means that 65% of the parts can be outsourced by So. Korean car companies to countries paying even lower wages (China, possibly even North Korea). South Korea’s agreement with the European Union contains a 55% South Korea domestic content provision. This, of course, leads to job loss in the South Korean auto parts industry.

It should be noted that Leo Gerard, President of the United Steelworkers, was also consulted and involved in discussions involving the renegotiated trade deal and rejected it nevertheless, saying ”while improved, it still does not merit USW support, and we will oppose its passage.”
Much of the UAW’s support hinges on the modifications of the agreement pertaining exclusively to auto production, and ignoring the pact’s many other negative ramifications. It is therefore noteworthy that the International Longshoremen (ILWU) opposes the agreement, even though their members stood to gain more jobs with the increased trade. According to the ILWU website, “The Korea-United States Free Trade Agreement (KORUS FTA) will increase trade between South Korea and the United States, which will result in an increase in cargo movement between the two countries. An increase in cargo movement is good for dockworkers. However, this fact alone is insufficient to overcome the vast deficiencies of the KORUS FTA.”

Although the Free Trade Agreement with Colombia has been waiting in the wings far longer than the proposed pact with South Korea, the KORUS FTA is being ushered through first. If the KORUS FTA is endorsed by Congress, the Obama Administration speculates it will be much easier to overcome the hurdles to passing the Colombia (and Panama) Free Trade Agreements.
The Autoworker Caravan stands with the many unions here and the Korean Metal Workers Union in opposition to this trade pact. The UAW has consistently opposed past “Free Trade” agreements, including NAFTA and CAFTA, in this hemisphere. We see no reason to change course now.

Dianne Feeley, UAW Local 235, Detroit MI
Frank Hammer, President (retired) UAW Local 909, Warren MI

For further reading:

“Free Trade Agreement with Korea will cost U.S. jobs,” July 1, 2010, Robert E. Scott, Economic Policy Institute,
http://www.epi.org/publications/entry/news_from_epi_free_trade_agreement....

“ILWU opposed Korea-United States Free Trade Agreement,”
http://www.ilwu.org/?p=1626.

“Korean Unionists Protest Free Trade Agreement with U.S.”
http://www.labornotes.org/node/1155

“New agreement gives better protection to our members, Legislative Update,”
http://www.uaw.org/story/new-agreement-gives-better-protection-our-membe...

“Survey of Studies on Potential U.S. Economic Effects of Korea Trade Deal Shows Rising Deficits and Job Losses, 2010 ‘Supplemental Deal’ Does not Alter These Outcomes,” Public Citizen, Jan. 6, 2011,
http://www.citizen.org/documents/reporters-memo-on-econ-effects-of-korea...

“With UAW’s King for Cover, Obama Backhands Labor in Korea Trade Deal,”
http://www.labornotes.org/2010/12/uaws-king-cover-obama-backhands-labor-...

“UE Statement on Korea-U.S. Free Trade Agreement,”
http://www.ueunion.org/ueactionupdates.html?news=586

“USW Opposes Passage of Revised US-Korea Trade Agreement”