Posts Tagged ‘NAFTA’
Wednesday, March 1st, 2017
President Donald Trump met with a bunch of CEOs at the White House last week, prompting the same old, tired and untrue round of assertions that America lost millions of manufacturing jobs because of automation, regulation, illegal immigration and lack of education.
The real culprit is globalization – fostered by a series of bad trade deals. That’s not what the CEOs talked about, though, mainly because a huge portion of them already have moved factories from America to low-wage, high-pollution countries.
Bad trade is, however, what President Trump talked about constantly on the campaign trail. He repeatedly assured cheering crowds he would stop corporations from offshoring factories. A new report from the Information Technology & Innovation Foundation proves his diagnosis was right – bad trade caused the vast majority of the job losses. He was right when he said the proposed Trans-Pacific Partnership (TPP) trade deal and NAFTA had to go. Offshoring CEOs are trying to bamboozle the administration about the cause of job loss to prevent President Trump from keeping his promises to industrial workers.
And those CEOs are wrong about automation. Robots didn’t do it. They didn’t kill 5.7 million manufacturing jobs between 2000 and 2010. That’s the bottom line in research published this month by Adams Nager, an economic policy analyst for the Information Technology & Innovation Foundation and in another report by economists Lawrence Mishel and Heidi Shierholz of the Economic Policy Institute.
If robots were responsible, then manufacturing productivity would have grown substantially during that period, as fewer people would have been needed to perform the same work. But that didn’t happen. Manufacturing productivity actually declined. It was 25.8 percent in the 1990s and dropped slightly to 22.7 percent between 2000 and 2010.
During that decade of lower productivity, manufacturing job losses were 10 times greater than during the 1990s. Those massive losses could be attributed to robots only if productivity had risen dramatically.
Mishel and Shierholz put it this way in their report: “We need to give the robot scare a rest. Robots are not leading to mass joblessness and are not the cause of wage stagnation or growing wage inequality.”
Undocumented immigrants didn’t take those lost manufacturing jobs either. Those jobs disappeared from the United States. No one in America has them, documented or undocumented. In addition, the vast majority of undocumented aliens work in low-paid agricultural, cleaning and food service jobs, and their share of the work force has declined since 2007, according to the Pew Research Center.
Regulation-kills-jobs is another trope CEOs cite incessantly. They brought it up again in their meeting Thursday with President Trump. They want to neglect their duty to protect air and water from toxic industrial pollutants. They want to disregard the health and safety protections established to prevent workers from dying on the job or from job-induced illnesses. And they certainly want to ignore the safeguards that enable workers to organize and collectively bargain for better wages, benefits and working conditions.
The government, they contend for example, has no right to oversee corporate use of toxic chemicals that can kill workers and neighboring community members because those protections cut into profitability. To CEOs, it’s always profits before people.
In addition, CEOs say American workers are just too stupid to work in manufacturing. Some CEOs told Trump there are hundreds of factory job openings, but not enough qualified workers to fill them.
One CEO complained, for example, that most high school graduates lack the math and English skills necessary for his company’s apprenticeship.
These CEOs didn’t offer to provide the remedial skills. They didn’t step forward to pay for the training they say workers don’t have. They want the government – that is taxpayers – to foot the bill. That is the same taxpayers who CEOs say should not get government protection from toxic manufacturing chemicals.
If CEOs would raise the pay for manufacturing work, more workers might be willing to invest in training themselves. Most of those high school graduates who the CEOs derided possess sufficient math skills to perform the cost-benefit analysis on self-training. They have figured out that paying $25,000 to $100,000 in tuition to a technical school to get a low-pay, no-benefits job that a corporation may ship offshore at any time does not add up.
Still, the CEOs called American workers stupid.
These workers, unlike the CEOs, know the truth. They know what killed their jobs. It was bad trade deals and violations by exporting countries like China. They saw the likes of Carrier, Caterpillar and Dana, whose CEOs attended Trump’s manufacturing meeting Thursday, close American factories and open them in other countries. They know that many countries, but particularly China, disregard international trade regulations then dump artificially underpriced products on the American market, killing U.S. manufacturing jobs.
The Information Technology & Innovation Foundation study provides the statistics to back up workers’ experience. “It is important to recognize how global competition contributed to upwards to two-thirds of the manufacturing jobs lost from 2000 to 2010,” the author Adam Nager, wrote. During that time, he said, “China ramped up its mercantilist policies – from currency manipulation to forced intellectual property transfers and government subsidies – all of which hurt U.S. manufacturing employment.” All of which also violate trade rules.
The day after his meeting with CEOs, President Trump repeated the promise he made many times on the campaign trail: “the forgotten men and women of America will be forgotten no more.” This was compelling to manufacturing workers who had lost their jobs and felt their plight was ignored.
But these workers know from bitter experience that CEOs don’t have their best interests in mind. They know the problem with the TPP and NAFTA is that they were drafted by CEOs for the benefit of CEOs and 1 percenter shareholders. Workers never got an equal seat at the negotiating tables.
They know that Donald Trump listened to 24 CEOs on Thursday but not one manufacturing worker.
Just like with TPP and NAFTA, it matters who is giving advice. Just like with bogus trickle-down economics, the advice given by CEOs doesn’t trickle down to benefit workers on the line. It only bubbles up to line executives’ pockets.
Workers need a seat at the table when the new rules for trade and restoring American manufacturing are written.
This post originally appeared on ourfuture.org on February 28, 2017. Reprinted with Permission.
Leo Gerard is the president of the United Steelworkers International union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco’s nickel smelter in Sudbury, Ontario at age 18. For more information about Gerard, visit usw.org.
Monday, February 13th, 2017
President Donald Trump had Harley-Davidson executives and employees over to lunch at the White House last week and reiterated his promise to end wrong-headed trade policies that enable foreign countries to eat American workers’ lunch.
Trump reassured the Harley workers from the United Steelworkers (USW) union and the International Association of Machinists (IAM) that he would renegotiate NAFTA and other trade deals.
“A lot of people [have been] taking advantage of us, a lot of countries [have been] taking advantage of us, really terribly taking advantage of us,” he said as news cameras clicked. “We have to be treated fairly.”
No promise could be more heartening to workers as corporations like Carrier and Rexnord continue to move jobs to Mexico. No news could be better in the same week that the Economic Policy Institute (EPI) released research showing that since 2001, the United States’ massive trade deficit with China cost 3.4 million Americans their jobs.
Workers, families and communities have suffered as trade and tax policy over the past quarter century encouraged corporations to off-shore factories and jobs. Flipping that philosophy to favor American workers and domestic manufacturing is exactly what labor organizations like the USW have long fought for. If Trump actually achieves that, all Americans will benefit.
In the meantime, Rexnord Corp. has finalized plans to uproot its bearings manufacturing machines in Indianapolis, transport the equipment to Mexico and throw 300 skilled and dedicated workers, members of my union, the USW, into the street. Terminations begin Feb. 13.
Automation did not take these workers’ jobs. The lure of dirt-cheap wages in Mexico and tax breaks awarded for the costs of moving jobs and machinery stole them.
Trump talked to the Harley workers and executives about changing tax policy. Ending all special tax deals and loopholes that corporations like Rexnord and Carrier use for shuttering American factories and shipping them to other countries would be a good first step. U.S. policy shouldn’t reward corporations like Rexnord and Carrier that profit from exploiting the international wage race to the bottom and the wretched environmental regulation of emerging nations.
Caption: Photo by Vlad/Flickr
The next logical step would be establishing consequences for those corporations — like requiring them to pay substantial economic penalties if they want access to the U.S. market for their once-domestic and now foreign-made products.
In addition, American policy must be — just as Trump promised in his campaign — to stop trade law violators who are trampling all over American workers.
The EPI study detailed the devastation caused by the worst violator — China. American workers and companies can compete on a level playing field with any counterpart in the world. But the EPI study shows just how much American workers and their employers suffer when the United States fails to strictly enforce international trade law.
Of the 3.4 million jobs lost between 2001 and 2015 because of the U.S. trade deficit with China, EPI found that nearly three-quarters of them, 2.6 million, were manufacturing jobs. Every state and every congressional district was hit. These are jobs fabricating computer and electronic parts, textiles, apparel and furniture.
Manufacturing jobs such as these provide family-supporting wages and benefits such as health insurance and pensions. As these jobs went overseas, American workers’ income stagnated while those at the top — executives, 1 percenters and corporate stockholders — benefited.
As the rich got richer, the EPI researchers found, all non-college educated workers lost a total of $180 billion a year in income.
When the United States agreed to allow China into the World Trade Organization (WTO) in 2001, former President Bill Clinton said the access that the deal provided American companies to the gigantic Chinese market would create jobs. Promises, promises.
It’s possible no one guessed just how massively China would violate the trade rules it agreed to abide by under the WTO pact. Numerous investigations by the Department of Commerce have found China improperly subsidizes its exports by providing artificially cheap loans, free land, and discounted raw materials and utilities. To keep its workers employed, China helps finance overproduction in industries like steel and aluminum, then dumps the excess at below-market prices in the United States, bankrupting mills and factories here.
China pirates innovation, software and technology from foreign producers. To steal trade secrets, its military hacked into the computers of American corporations and the USW. In addition, China has manipulated the value of its currency so that its exports are artificially cheap and imports from the United States are artificially expensive.
Even if the scale of violation was underestimated, when it occurred, the American government had a responsibility to take action, to file trade cases, to take issues before the WTO, to negotiate to bring China in line with international standards and protect American jobs and preserve domestic manufacturing, which is crucial to national defense.
Precious little of that occurred. The trade deficit with China exploded, obliterating American jobs — a quarter million on average every year since China joined the WTO in 2001. China exports to the United States its overproduced aluminum, steel and other commodities, but also its unemployment.
After that lunch, Trump thanked Harley-Davidson for assembling its iconic motorcycles in America. He extended his hand in aid, saying, “We are going to help you, too. We are going to make it really great for business, not just for you, but for everybody. We are going to be competitive with anybody in the world.”
American workers and domestic manufacturers already are competitive. What they need is a government that doesn’t require them to compete with a handicap so huge that it’s like asking Evel Knievel to jump his Harley-Davidson XR 750 over 19 cars without a ramp. What they need is tough action against corporations that renounce their birthplace for profit and against flagrant, job-stealing trade violators like China.
Friday, December 30th, 2016
Today we released a blueprint for how to rewrite NAFTA to benefit working families. This past election there was much-needed discussion on the impact of corporate trade deals on our manufacturing sector and on working-class communities. The outline below puts forward real solutions that should garner bipartisan support if lawmakers are truly serious about realigning our trade policies to help workers.
We need a different direction on trade. This movement has been largely driven by working people. As we approach the inauguration of a new president, it is important that everyday working people’s perspectives lead the debate, starting with how to rewrite NAFTA.
The AFL-CIO has long supported rewriting the rules of NAFTA to provide more equitable outcomes for working families. To date, the biggest beneficiaries of NAFTA have been multinational corporations, which have gained by destroying middle-class jobs in the U.S. and Canada and replacing them with exploitative, sweatshop jobs in Mexico. It doesn’t have to be this way. With different rules, NAFTA could become a tool to raise wages and working conditions in all three North American countries, rather than to lower them.
Key Areas for Improvement
1. Eliminate the private justice system for foreign investors.
NAFTA established a private justice system for foreign investors, thereby prioritizing corporate rights over citizens’ rights, giving corporations even more influence over our economy than they already have. This private justice system, known as investor-state dispute settlement, or ISDS, allows foreign investors to challenge local, state and federal laws before private panels of corporate lawyers. Although these lawyers are not accountable to the public, they are empowered to decide cases and award vast sums of taxpayer money to foreign businesses. Under NAFTA, these panels have awarded millions of dollars to corporations when local and state governments exercise their jurisdictional power to deny things such as municipal building permits for toxic waste processing facilities. ISDS gives foreign investors enormous leverage to sway public policies in their favor. Scrapping the entire system would help level the playing field for small domestic producers and their employees.
2. Strengthen the labor and environment obligations (the North American Agreement on Labor Cooperation and the North American Agreement on Environmental Cooperation), include them in the agreement, and ensure they are enforced.
The NAFTA labor and environment side agreements were not designed to effectively raise standards for workers or to ensure clean air and water. Instead, they were hastily patched together to quiet NAFTA’s critics. These agreements should be scrapped and replaced with provisions that effectively and robustly protect international labor and environmental standards. Violators should be subject to trade sanctions when necessary—so that we stop the race to the bottom that has resulted from NAFTA. Without stronger provisions, environmental abuses and worker exploitation will continue unchecked.
3. Address currency manipulation by creating binding rules subject to enforcement and possible sanctions.
Within months after NAFTA’s approval by Congress, Mexico devalued the peso, wiping out overnight potential gains from NAFTA’s tariff reductions. This devaluation made imports from Mexico far cheaper than they otherwise would have been and priced many U.S. exports out of reach for average Mexican consumers. Countries should not use currency policies to gain trade advantages—something China, Japan and others have done for many years. All U.S. trade agreements, including NAFTA, should be upgraded to create binding rules, subject to trade sanctions, to prevent such game playing.
4. Upgrade NAFTA’s rules of origin, particularly on autos and auto parts, to reinforce auto sector jobs in North America.
NAFTA’s rules require that automobiles be 62.5% “made in North America” to qualify for duty-free treatment under NAFTA. Even though 62.5% seems high compared with the Trans-Pacific Partnership’s inadequate 45%, it still allows for nearly 40% of a car to be made in China, Thailand or elsewhere. The auto rule of origin should be upgraded to eliminate loopholes (through products “deemed originating” in North America) and to provide additional incentives to produce in North America. This, combined with improved labor standards, will contribute to a more robust labor market and help North American workers gain from trade.
5. Delete the procurement chapter that undermines “Buy American” laws (Chapter 10).
NAFTA contains provisions that require the U.S. government to treat Canadian and Mexican goods and services as “American” for many purchasing decisions, including purchases by the departments of Commerce, Defense, Education, Veterans Affairs and Transportation. This means that efforts to create jobs for America’s working families by investing in infrastructure or other projects, including after the financial crisis of 2008, could be ineffective. This entire chapter should be deleted.
6. Upgrade the trade enforcement chapter (Chapter 19).
NAFTA allows for a final review of a domestic anti-dumping or countervailing duty case by a binational panel instead of by a competent domestic court. This rule, omitted from subsequent trade deals, has hampered trade enforcement, hurting U.S. firms and their employees. It should be improved or omitted.
This blog originally appeared at aflcio.org on December 20, 2016. Reprinted with permission.
Jackie Tortora is the blog editor and social media manager at AFL-CIO.
Friday, August 5th, 2016
Few issues are receiving a more insipid—and thus more harmful—treatment in our public discourse than world trade. Along with immigration, “free trade” is now the foremost symbol of a supposed either/or choice between globalism and nationalism.
“Globalists” generally hail the liberal marketplace as the engine of economic prosperity and assail its critics as uneducated and irrational isolationists, while “nationalists” instinctively identify trade with economic decline (or at least the loss of good working-class jobs), rising inequality and a general loss of control over the future.
As CNN host Fareed Zakaria put it after Britain voted to leave the EU, “the new politics of our age will be not be left versus right, but open versus closed.”
This framework risks closing off our best possibilities for building a progressive economic future. We need a new paradigm.
Some historical perspective is first in order. That is the only way to account for the fact that those forces—call them white working class— today most deeply resentful of the open market were among its loudest champions during the first three decades after World War II.
The wartime Bretton Woods agreement together with the immediate post-war Marshall Plan reintegrated the Western-plus-Japanese economies on the basis of stable currencies, expanding markets and political democracy. After the catastrophe of Nazi-era cartels and hyper-nationalism—including the United States’ own notorious Smoot-Hawley Tariff Act, which set barriers of up to 59 percent on imported goods—Western workers, generally well-organized in trade unions, felt as much stake in the rising tide of economic growth as did their bosses. A slick pamphlet designed for mass distribution by the American Federation of Labor in 1947 heralded “The Promise of Bretton Woods—5,000,000 Jobs in World Trade.”
In these early years of globalization, what we today call the Global South mattered mainly as sources of cheap raw materials or as markets for Western-produced goods. In hindsight it is easy to see how the global system that so long fed American middle-class prosperity came back to bite it, once poor countries (in alliance with multinational corporations) developed their own manufacturing platforms.
In an age of transportation and communication revolutions, geography proved less and less a haven for higher-cost home producers against distant competitors—and, to be sure, not even that distant. By the NAFTA era of the mid-1990s, U.S. workers were making ten times the average wage of their Mexican counterparts. If placed in direct competition, how could they possibly hold onto their jobs?
The question remains, however, how best to tackle the negative effects of globalization without upsetting the entire applecart of world trade? Oddly, most other problems of world economic integration have found solutions through compromise, whereas trade has remained the province of extreme either/or.
In finance and currency crises, for example, the International Monetary Fund and/or World Bank regularly intervene to protect a national currency from abrupt free falls. In oceanic mining and fishing, worldwide agreements limit territorial overreach to prevent the exhaustion of vital resources or whole species. However inadequately, even on the climate crisis, world powers have accepted the principle of limits and the need to discipline fuel consumption and carbon output.
Yet, there is no such movement towards an adoption of mutually-agreed international principles on matters of trade. In a politically suffocating manner, one is either pro-free trade (most big business and most Clinton-Bush-Obama policies), anti-free trade (Donald Trump with a proposed 45% tariff on China) or stumbling in the middle (pro-then-anti-TPP Hillary Clinton). The Trans-Pacific Partnership, in particular, attempts to overcome First World skepticism with side agreements on labor, affecting workers in Vietnam, Malaysia, and Brunei, but the record of enforcement for such guarantees is spotty at best.
The options here present a silly, self-defeating set of choices and one that both workers and consumers in the United States and Europe need quickly to transcend.
Interestingly, as early as the time of Bretton Woods, there were voices calling for a better international architecture when it came to world economic integration. The left-of-center Congress of Industrial Organizations (CIO) even got initial support from the administration of Harry Truman for the creation of an International Trade Organization (alongside the IMF) that would coordinate further bilateral or multilateral trade openings with tangible commitments regarding employment, development, and investment. Hopes for the ITO collapsed when conservative Republicans captured the Congress in 1950. No similar idea has been seriously considered since.
In the spirit of the ITO, we need a return to the quest for a new world order as undertaken at Bretton Woods, but this time with a more encompassing agenda. Not just financial stability, but the regulation of trade and debt must be on the agenda. Global exchanges should yield equitable employment as well as enhanced bottom lines.
In the case of proposed NAFTA or TPP-type agreements, one could imagine an actualized ITO insisting on a step ladder of wage increases in the cheaper-labor countries as well as plans for displaced workers in the higher-wage countries before approving massive shake ups. In return, poor countries could count on significant debt relief.
Absent a move towards what we might call progressive internationalism, we are forced to choose between “globalists,” heedless of the consequences of development for those outside the professional and financial classes, or “nationalists,” suspicious of and hostile towards the world beyond our borders. Neither posture holds out much prospect for economic renewal, either at home or abroad.
This post originally appeared at Inthesetimes.com on August 2, 2016. Reprinted with permission.
Leon Fink is Distinguished Professor of History at the University of Illinois at Chicago and editor of the journal Labor: Studies in Working-Class History of the Americas.
Friday, February 12th, 2016
In this video, workers at the Carrier plant in Indianapolis react to the company announcing that it will ship 1,400 local jobs to Mexico in what they described as “strictly a business decision.” You can hear the heartbreak and outrage in the voices of the workers who must now scramble to figure out how to take care of their families. Carrier makes heating, air conditioning, ventilation and other systems. The layoffs are scheduled to begin in 2017.
Aside from corporate greed, the main reason that Carrier can get away with something like this is the major flaws that have been built into international trade deals like North American Free Trade Agreement and the Trans-Pacific Partnership. These kinds of deals make sure that these types of tragic moments happen more frequently.
First off, these deals provide companies that want to offshore to trading partners with extraordinary powers and legal rights they do not have under U.S. law–powers and rights that shift the balance of power further away from working people. Second, these deals put U.S. manufacturers in closer competition with foreign companies that pay low wages and don’t respect labor rights. This encourages U.S. companies to offshore in order to keep up with those foreign companies.
The third reason these deals encourage outsourcing is that they fail to level the playing field in terms of taxes. Such a deal could set a minimum level for corporate tax rates or create rules to prevent companies from gaming the tax system and pitting countries against each other. With those options left off the table, a race to the bottom is encouraged, where companies shift jobs to countries with lower tax rates, which, in turn, encourages higher-tax rate countries to lower taxes and the ripple effect those lower rates have on the economy and the government’s goods and services. A trade deal meant to create U.S. jobs would address this.
And lastly, of course, these trade deals eliminate tariffs in the trade zone, further encouraging companies to shift jobs to trade partners because corporations know they can ship goods back into the United States without paying tariffs, thus using the tariff cuts to increase U.S. imports instead of increasing U.S. exports.
This blog originally appeared in aflcio.org on February 11, 2016. Reprinted with permission.
Kenneth Quinnell is a long time blogger, campaign staffer, and political activist. Prior to joining AFL-CIO in 2012, he worked as a labor reporter for the blog Crooks and Liars. He was the past Communications Director for Darcy Burner and New Media Director for Kendrick Meek. He has over ten years as a college instructor teaching political science and American history.
Monday, March 31st, 2014
The North American Free Trade Agreement (NAFTA) turns 20 this year. Some 700,000 jobs have been lost, income inequality, the U.S. trade deficit and environmental and other problems have grown because of NAFTA in the past two decades. On Thursday, a panel of trade experts will hold a Capitol Hill briefing on NAFTA’s failed trade model and how to avoid the mistakes of the past in the Trans-Pacific Partnership Agreement (TPP) and the Transatlantic Trade and Investment Partnership.
The 11 a.m. meeting in the U.S. Capitol Visitor Center, Room 201, is open to congressional staffers. If you wish to attend but don’t have a congressional ID, you may RSVP to Andrew.firstname.lastname@example.org.
The briefing is sponsored by the AFL-CIO, the Institute for Policy Studies, Public Citizen’s Global Trade Watch and the Sierra Club.
Read “NAFTA at 20” here.
This article was originally printed on AFL-CIO on March 31, 2014. Reprinted with permission.
About the Author: Mike Hall is a former West Virginia newspaper reporter, staff writer for the United Mine Workers Journaland managing editor of the Seafarers Log. He came to the AFL- CIO in 1989 and has written for several federation publications, focusing on legislation and politics, especially grassroots mobilization and workplace safety.
Tuesday, July 19th, 2011
United Steelworkers and Mexico’s Los Mineros union could develop a unification proposal as soon as this August
In Mexico, few independent union exist that are not effectively controlled by the Mexican government. According to United Steelworkers International Affairs Director Ben Davis, fewer than 1 percent of Mexico’s unions are truly independent unions. As a result of the lack of independent unions in Mexico, Mexican workers have had a very hard time advocating for higher wages. Further, those unions that are independent in Mexico—like the National Union of Mine, Metal, Steel and Related Workers of the Mexican Republic, aka Los Mineros—have faced severe oppression at the hands of government-affiliated unions.
In 2006, Los Mineros President Napoleon Gomez Urrutia was forced to flee to Canada after the Mexican government charged him with what union officials characterize as trumped-up charges of embezzlement. A federal Mexican court has dismissed the charges against Gomez Urrutia, but the charges against him remain pending at the state level. Supporters of the exiled labor leader says that he was only charged with crimes after he demanded an investigation of 2006 mine explosion that killed 65 workers at the Pasta de Conchos. Gomez Urrutia has been running the 180,000-member Los Mineros union out of the Steelworkers’ District 3 offices in Burnaby, British Columbia.
Despite the charges against Gomez Urrutia and his forced exile, his continued relevance was demonstrated late last week when officials for the Mexican operations of steel corporation ArcelorMittal traveled to Toronto to negotiate with the exiled Mexican labor leader. The trip was made possible in part through the assistance of the United Steelworkers (USW), who may merge with Los Mineros later this year.
Last month, In These Times Contributing Editor Kari Lydersen profiled how the unique cross-border solidarity emerged between USW and Los Mineros. In 2005, steelworkers went out on strike at an Asarco owned copper mining and smelting mill in Arizona in 2005. Many Mineros members who work at the Grupo Mexico company, which owns Asarco, went out on strike and performed other solidarity actions in support of striking miners in Arizona.
As a result of that strike, a solidarity agreement was formed between those two unions in 2005. In 2010, USW and Los Mineros formed a joint commission to look at merging their two unions. According to United Steelworkers Public Affairs Director Gary Hubbard, the joint commission is working toward a unification proposal for discussion at the Steelworkers’ convention in August in Las Vegas.
As Kari Lydersen noted, “If the merger occurs, the new USW-Mineros union would represent more than 1 million workers—the USW has 850,000 members, while the Mineros has 180,000.”
If the USW/Los Mineros merger passes, as many expect it will, it would be the first between a Mexican-based union, an American affiliate of a union and a Canadian affiliate of a union—marking a new phase of cross-border solidarity. The merger has the potential to reshape labor markets in both countries.
“We are directly affected everyday by the low-wage competition from Mexico. The reason that competition is low-wage is because Mexican government keeps wages low by busting unions,” says USW International Affairs Director Ben Davis. “It’s a matter of survival for us to have democratic unions that support workers’ rights and raise wages. It’s really about closing the gap the right way by bringing Mexican wages up, not our wages down, through strengthening alliances between workers who quite often have the same employers.”
Correction: The original version of this article stated that members of both USW and Los Mineros would vote on a unification proposal if it were part of USW’s August convention. In fact, only USW members can vote on proposals presented at the convention.
This article originally appeared on the Working In These Times blog on July 15, 2011. Reprinted with permission.
About the Author: Mike Elk is a third-generation union organizer who has worked for the United Electrical, Radio, and Machine Workers, the Campaign for America’s Future, and the Obama-Biden campaign. Based in Washington D.C., he has appeared as a commentator on CNN, Fox News, and NPR, and writes frequently for In These Times as well as Alternet, The Nation, The Atlantic and The American Prospect.
Friday, December 10th, 2010
So-called “free trade” is part of the relentless class warfare under way in America. And the so-called “free trade” deal with South Korea is no exception. That said, a lot of the shallow criticism of the UAW’s support for the deal is–well, shallow. Here’s my view about how we should engage the UAW–my union–via an open letter to the union’s president.
December 9th 2010
8000 East Jefferson
Detroit, MI 48214
Over the past few weeks, I keep coming back to one question: where do we draw the line to oppose the unrelenting class warfare now under way in our country, and the rest of the world?
From listening to the rhetoric and watching the back-slapping among members of the deficit commission, Democrats and Republicans, we have a bi-partisan agreement, apparently, that working Americans have to “share the pain” for an economic crisis that they had no hand in creating; our president buys into the mantra of a phony debt “crisis” and, then promptly turns around and stands ready to treat the already-staggeringly wealthy top one percent to hundreds of billions of dollars of the U.S. Treasury’s bank account; Wall Street bonuses are back in bullish amounts; and corporate profits are at record levels, partly because of a plague of slashing jobs that will not come back.
When do we say finally: no more, enough is enough.
And, then, there is the South Korean Free Trade Agreement (KORUS). In my view, this deal is another disaster for the working people of this country, and for the world. I hope that you, and others, read the concerns I raise about this deal in the spirit in which they were written.
First, we’ve known each other a very long time. As a proud UAW member, I think of you not only as one of the most progressive and visionary leaders in the labor movement but also as a person of enormous integrity. When you took office this year, you said, “We are one union. We are one society, and we are one world. If we don’t stand up and fight for our own membership in every sector and if we don’t stand up and fight for all workers in the world to get fair wages and benefits, we will never have the power we need to win back the things we’ve given up.” [emphasis added]
And you want our union to live those words. You just spearheaded a rally in Michigan on December 6th to support Hyundai workers who are engaged in a bitter strike in South Korea because you understand the nature of global solidarity. As you said at the rally, “Bosses around the world, even at tremendously profitable corporations like Hyundai, are trying to reduce the number of permanent workers and expand the number of temporary workers, weakening the middle class. We want permanent, middle-class standard of living jobs for every person working in the world.”
Second, I also understand that, while it is easy for liberal/progressive observers to sit back in the comfort of their offices or homes and pontificate from hundreds of miles away about “fighting” and “not selling out”, you have to fulfill your mission to protect the livelihoods of UAW members, livelihoods that have been under brutal assault from transnational auto companies for the past two decades. While I understand both intellectually and emotionally what our sisters and brothers face, I know you grapple with this every day you walk into the office.
Almost two decades ago, I remember exactly where I was standing when NAFTA passed: Mazey’s bar at the union’s Black Lake education center. We had just finished the day working to build coalitions between the UAW and non-UAW activists—the mission that our Region 9A leadership, under then-Director Phil Wheeler, had dedicated the week to. We gathered around the television bracketed on the wall to watch the vote. At the end, when the vote was announced, I remember thinking: this is the end of the American middle class.
NAFTA was a disaster. Not just because it ruined the lives of millions of American, Mexican and Canadian workers. As important, it became the model for all future so-called “free trade” agreements: protect capital and investors. In my view, the South Korea deal is baked in the same NAFTA mold.
People are going to argue about whether the concessions given to the UAW in the KORUS were sufficient in terms of significant changes in tariffs or rules of origin and other similar issues. I’m going to stay away from those points in part because I think that whether X or Y cars will be allowed into Korea gets us down into the weeds and misses some crucial points:
- Is This Deal Worth The Paper It Is Written On When It Comes To Enforcement?
- Can The President Be Trusted?
- Does This Transform The Debate About Global Fairness?
A quick observation about why I use the term so-called “free trade”. There simply is no such thing as “free trade”, at least not if we are talking about the NAFTA model. “Free trade” is as real as the phony government deficit-debt “crisis”, as real as the Wall Street “reforms” (that left mostly the same people in charge of the financial system, making it almost a certainty we will have another financial calamity) and as real as Robert Reich’s promise that if we all just get smarter and get a college education, we’ll be fine (no one uses the absurd term “symbolic analyst” anymore and thank god for that).
I could write a “free trade” agreement in 10 pages, okay, maybe 20. But, these deals are hundreds and thousands of pages long because they are very much managed and tightly controlled corporate trade—-they set forth very specific, detailed protections for capital and investor rights (particularly, the Chapter 11 rules).
And the sooner we stop repeating the term “free trade”—which is a great marketing phrase because who isn’t for something “free” and who doesn’t want to trade—the better for the American people and our understanding of what is really afoot here: we are being robbed by these trade deals. Not simply because of the off-shoring of jobs. But because NAFTA-style trade is based on one thing and one thing only: wage and regulation arbitrage.
Every NAFTA-style deal essentially sets up a framework that allows companies to move production in search of low wages and/or undermine regulations that protect people and communities. That is what trade is about today.
You were right when you said that if “we don’t stand up and fight for all workers in the world to get fair wages and benefits, we will never have the power we need to win back the things we’ve given up.”
Respectfully, every NAFTA-style so-called “free trade” deal pushes us further from the vision that you so passionately and powerfully speak of.
They are playing us. People against people. Worker against worker. Community against community.
Enforcement: A Sham
In the past, the UAW initially made clear, in its own testimony, that the “KORUS FTA has inadequate protections and enforcement mechanisms to enforce either the spirit or the letter of the law.”
Now, the UAW’s statement in support of the South Koreal deal says that the language of the agreement “includes labor and environmental commitments”. It goes on to say: “This agreement is an important step toward a global rule-based trade system, an important step in giving labor a real voice in trade negotiations. We look forward to working with the Obama Administration on the issue of global rights for workers — especially the right to organize and bargain collectively.”
I don’t see the progress.
As I understand it, the deal keeps in the very same NAFTA-style, Bush Administration language that prevents the deal from living up to the conventions of the International Labor Conventions (ILO). To be sure, the ILO’s conventions lack much in the way of enforcement power. But, when these NAFTA-style trade deals try to even keep high-minded ILO rhetoric from muddying the waters, what are we to think?
That enforcement is a sham.
In February 2008, I posed a challenge to then-candidates Hillary Clinton and Barack Obama who were both pledging to renegotiate NAFTA in order to enhance enforcement of labor and environmental enforcement. As you recall, the labor and environmental provisions were added on to NAFTA because that was the only way to buy a handful of Democratic votes to ram through the agreement.
NAFTA enforcement was supposed to have been under the purview of the Commission for Labor Cooperation (CLC). The CLC was supposed to be funded, partly by the U.S., via a $2 million-a year appropriation, which would have meant that, over the period between 1993 and 2005, the CLC would have had $22 million from the U.S.
But, as Public Citizen found:
In another example of the gap between promised authorizations and actual funds appropriated to such programs, the CLC has only been granted $7.2 million of the $22 million it was authorized to receive from the United States as of 2005, or less than a third of the promised amount.
The game was rigged from the beginning. For argument’s sake, let’s say the CLC got the full $22 million? Would that have been sufficient?
I like to use this analogy. In the U.S., we have accepted, under Democratic and Republican Administrations alike, that injury, illness and death in the workplace are a cost of living in the wonders of the “free market”. We make a show of enforcement—-the same show that was proposed for NAFTA enforcement—-but the truth is that the system embraced, in a bipartisan way, does very little to ensure a safe workplace.
Here’s what the AFL-CIO found in its 2007 report [the emphasis is mine]:
At its current staffing and inspection levels, it would take federal OSHA 133 years to inspect each workplace under its jurisdiction just once. In seven states (Florida, Delaware, Mississippi, Louisiana, Georgia, Maryland, and South Dakota), it would take more than 150 years for OSHA to pay a single visit to each workplace. In 18 states, it would take between 100 and 149 years to visit each workplace once. Inspection frequency is better in states with OSHA-approved plans, yet still far from satisfactory. In these states, it would now take the state OSHA’s a combined 62 years to inspect each worksite under state jurisdiction once.
The current level of federal and state OSHA inspectors provides one inspector for every 63,670 workers. This compares to a benchmark of one labor inspector for every 10,000 workers recommended by the International Labor Organization for industrialized countries. In the states of Arkansas, Florida, Delaware, Nebraska, Georgia, Illinois, Louisiana, Mississippi and Texas, the ratio of inspectors to employees is greater than 1/100,000 workers.
When the AFL-CIO issued its first report “Death on the Job: The Toll of Neglect” in 1992, federal OSHA could inspect workplaces under its jurisdiction once every 84 years, compared to once every 133 years at the present time. Since the passage of the OSHAct, the number of workplaces and number of workers under OSHA’s jurisdiction has more than doubled, while at the same time the number of OSHA staff and OSHA inspectors has been reduced. In 1975, federal OSHA had a total of 2,405 staff (inspectors and all other OSHA staff) responsible for the safety and health of 67.8 million workers at more than 3.9 million establishments. In 2005, there were 2,208 federal OSHA staff responsible for the safety and health of more than 131.5 million workers at 8.5 million workplaces.
The 2008 OSHA budget proposed $490 million. Yes, that was a Bush budget. But, even in Democratic Administrations, OSHA has always been underfunded given the task described above. The 2010 Obama budget proposed a $559 million—-a significant increase but still inadequate.
So, think about that for a moment: we have an entirely inadequate system in this country just to watch over safety and health in the workplace, funded at a miniscule level of several hundred million dollars—and, yet, we even more ludicrously proposed, in the past, to oversee labor rights enforcement over three countries (the U.S., Mexico and Canada) at a laughingly pathetic and criminal level of a couple of million bucks?
The fact is enforcement is a farce. It was a farce created to buy a few votes to jam NAFTA through a Democratic Congress. It was a farce concocted by a Democratic president and his Labor secretary (Robert Reich), who were both full-throated champions of NAFTA and so-called “free trade”.
It is not clear to me how the agreement with Korea to enforce labor rights is anything but a continuance of the farce. There is simply no way—no way—that these provisions can be enforced. None. Please explain how I am mistaken.
But, here is a larger point: there is no enforcement that can work. Ever.
The problem is not enforcement of NAFTA-like agreements.
It is NAFTA-style trade itself and its very conception and framework. Labor and environmental rights are slapped on as add-ons to deals that are sideshows to the meat of these agreements—protecting capital and investors’ rights. We cannot “fix” NAFTA-style trade deals unless we destroy the fundamental motivation behind them—lower wages and a careful obliteration of every reasonable regulation to protect individuals.
We are being played. People against people. Worker against worker. Community against community.
The President’s Promises
This president cannot be trusted. I don’t mean that in some Tom Delay-Newt Gingrich venal “he will lie” manner. I believe that he is who he is—-and who he has always been: a person who believes in marketing phrases like “free trade” and the “free market”, a person who surrounds himself first and foremost with the Robert Rubins of the world; and, regretfully, a person who does not have the best interests of organized labor as a first and overriding principle.
It is also not clear to me, as a political matter, how he can help. He appears unwilling or unable to fight. Why do we think he will go to the mat for organizing rights when he will cave in and let the raiding of the U.S. Treasury by the richest people in the land continue, even after those richest people have pocketed a king’s ransom in wealth over the past 30 years?
He has promised to aid our organizing efforts, particularly in the South. Why should we believe he has a strategy to do so, beyond rhetoric? If we learned anything from the recent tax fight, it isn’t going to happen. The expiration of the tax breaks for the wealth was something he, and the rest of the Democratic Party, knew was coming from the first day the president took office.
So, a reasonable person could ask: why did he not take that on from the get-go when he was riding high? Why not take that mandate then, when he had the attention of the people (in a good way) and say, “today, we are taking a first step towards ending class warfare in America”.
Because there was no strategy.
So, I am skeptical that there is a winning strategy behind the promises on organizing.
Transforming The Debate
Even if you believe that you could find enough money to deploy inspectors all around the world and even if you are willing to believe that this president—or any president in the current political environment—will fight for the UAW at the cost of alienating large corporate contributors, there is a much bigger challenge:
How do we stop the stupefying, unrelenting class warfare of which so-called “free trade” is an integral piece?
Where do we draw the line?
Sure, each union, for the price of its support, can get a few concessions in any so-called “free trade” deal. We can get jobs some jobs. I certainly can imagine, given the dire predicament of UAW members, that any promise of some jobs is welcome.
But at what price?
Is the price of a hammering down of wages worth it—because that is precisely what will happen if we continue to let the NAFTA-style of trade grown and mutate.
Is it worth letting another NAFTA-style deal pass which is a link in a chain that connects tax cuts for the rich, the growing divide between rich and poor, the decline of union power, and Wall Street greed?
At the end of the day, if the UAW has to support this agreement, I understand the real world: we have very little power to get a better deal right now. In some peoples’ minds, we’ve gotten very little from fighting these NAFTA-style deals over the past two decades. True, nothing good has come from these rancid products.
But, let’s not, to abuse the cliché, put lipstick on a pig. Why not simply say: this deal stinks but it is the best we can get. “Free trade” is a disaster for the working people of the world. But, we have to swallow this bitter pill because of our weakness today.
I am planning on posting this letter on my blog and would also do so for any thoughts you had in response. I think these issues are crucial for labor to consider and I think a lot of people would be interested in your point of view.
This article was originally posted on Working Life.
About the Author Jonathan Tasini: is the executive director of Labor Research Association. Tasini ran for the Democratic nomination for the U.S. Senate in New York. For the past 25 years, Jonathan has been a union leader and organizer, a social activist, and a commentator and writer on work, labor and the economy. From 1990 to April 2003, he served as president of the National Writers Union (United Auto Workers Local 1981).He was the lead plaintiff in Tasini vs. The New York Times, the landmark electronic rights case that took on the corporate media’s assault on the rights of thousands of freelance authors.
Wednesday, November 24th, 2010
Real men, real human beings, with feelings and families, fought and died at Gettysburg to preserve the Union, to ensure, as their president, Abraham Lincoln, would say later, that “government of the people, by the people, for the people, shall not perish from the earth.”
Perversely, afterwards, non-humans commandeered the constitutional amendment intended to protect the rights of former slaves. Corporations wrested from the U.S. Supreme Court a decision based on the 14th Amendment asserting that corporations are people with rights to be upheld by the government – but with no counterbalancing human responsibilities to the republic. No duty to fight or die in war, for example. Earlier this year, the Supreme Court expanded those rights – ruling that corporations have a First Amendment free speech right to surreptitiously spend unlimited money on political campaigns.
Today, Lincoln would have to say America’s got a government of the people by the corporations, for the corporations.
The proposed trade agreement with South Korea illustrates corporate control of government for profit. It’s the same with efforts to revive the moribund trade schemes former President George W. Bush also negotiated with Panama and Colombia, the world’s most dangerous country by far for trade unionists, with 2,700 assassinated with impunity in the past two decades, 38 slain so far this year.
Nobody likes these trade deals – except corporations. They’re all modeled on the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), both of which killed American jobs while giving corporations new authority to sue governments (read: taxpayers) for regulations – like environmental standards – that corporations contend interfere with their right to make money.
The Economic Policy Institute estimates that the South Korea so-called Free Trade Agreement (FTA) would cost America 159,000 jobs and enlarge its trade deficit by $16.7 billion in its first seven years.
Americans, now suffering though corporate-caused 9.6 percent unemployment, know a deal when they see one – and the South Korea FTA is not one. In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.
Many politicians, particularly Democrats, abhor the schemes as well. In July, just after President Obama announced that he would try to get the South Korea pact passed, 110 House Democrats described their disdain for the deal:
“We oppose specific provisions of the agreement in the financial services, investment, and labor chapters, because they benefit multi-national corporations at the expense of small businesses and workers.”
In addition, during this fall’s midterm election campaign, 205 candidates, Republican and Democrat, ran on platforms condemning job off-shoring and unfair trade, and house Democrats who ran on fair trade were three times as likely to survive the GOP “shellacking” as Democrats who supported so-called free trade schemes.
Significantly, the South Korean public and some South Korean politicians also oppose the trade proposal. In the week leading up to the G-20 meetings in Seoul, trade unionists, farmers, peasants and students filled the streets in marches and candle light vigils to express outrage with the proposed agreement, including its provisions giving U.S. corporations the right to challenge South Korean laws in private tribunals.
In October, 35 South Korean lawmakers joined 20 U.S. Representatives in writing President Obama and Korean President Lee Myunk-bak to protest the proposal.
Despite all that opposition, when Obama and Lee emerged from talks without an agreement, the American press, pundits and “analysts on both sides of the aisle,” described the situation as a major diplomacy failure, “a serious setback for the president.”
They were wrong. It wasn’t a setback for Obama. It was the president refusing to sign a bad deal for American workers.
It was, however, a humiliation for the U.S. Chamber of Commerce, which just spent at least $50 million from secret corporate donors to elect Republicans who will do its bidding. The South Korea deal is a priority for the Chamber. Here’s what Chamber senior vice president for international affairs Myron Brilliant told the New York Times after the South Korean negotiations broke down and Obama pledged to attempt to complete the deal over the following six weeks:
“This will be an early test for this president with the new Congress, particularly the House leadership.”
The “Brilliant” test is whether the president of the United States will comply with Chamber demands to complete trade deals that kill jobs and that Americans despise.
When Obama went to Seoul, Chamber President Thomas J. Donohue was there to, as he put it, help win the trade deal. He also was among 120 executives given exclusive access to international leaders including German Chancellor Angela Merkel and Russian President Dmitri A. Medvedev in a conference before the G-20 meeting.
The international organizers didn’t invite to the trade talks or the conference the students, farmers, environmental groups, organized labor and untold millions of individuals who oppose the so-called free trade deals. The human beings who will be hurt most by the trade deals didn’t get a seat at the table. The corporate-people who stand to gain everything did.
Brilliant’s comments express the corporate sense of entitlement. They spent tens of millions to get what they wanted from politicians to increase profits. Now they expect it to be delivered. It’s their recompense, their corporate reward.
If fatter profits mean fewer American jobs and wider trade deficits, that’s simply not a problem for corporations. That’s among the perks corporations got when the Supreme Court awarded them the privileges of personhood in America but none of the pesky personal and patriotic responsibilities of actual people in American society.
About The Author: Leo Gerard is the United Steelworkers International President. Under his leadership, the USW joined with Unite -the biggest union in the UK and Republic of Ireland – to create Workers Uniting, the first global union. He has also helped pass legislation, including the landmark Canadian Westray Bill, making corporations criminally liable when they kill or seriously injure their employees or members of the public.
Wednesday, May 20th, 2009
People and planet should come before profits, but the proposed Panama trade plan would mean greed rules. The Senate Finance committee is meeting tomorrow to discuss the proposed Panama Trade Promotion Agreement. Top trade negotiator Ron Kirk is trying to ram through this agreement by July 1, when the Panamanian head of state Martin Torrijos leaves office. But this is just another free trade agreement that is bad for the people of Panama, it’s bad for the planet, and it’s no good for people of the US. We should call upon Congress to stop it now.
There’s a rancher that I know who raises cattle in the San Blas mountains of Panama, who I’ll only call Uncle Rickie. I met Uncle Rickie when I traveled to Panama in November of 2008, and I remember him for being a jolly fellow with a big belly who proudly bounced his new granddaughter Antonia, his first grandchild, on his knee.
If the Panama agreement went forward, Uncle Rickie would have to contend with a host of difficulties. The first would be that US cattle ranchers, who enjoy hundreds of millions in subsidies from the US government (US livestock farmers got handouts of about $344 million in 2003, for example,) would suddenly be able to sell duty-free to Panamanians. At the same time, Uncle Rickie will have to compete with a dramatic influx of cheap pork products from the US. Pro-pork lobbyists think that increased sales to Panama will result in $20.6 million in increased revenue. Uncle Rickie will have a lot of trouble making a profit by selling his beef to the Panamanian market, and eventually he may have to sell his land.
Farmers should be allowed to sell to their local markets. Local, living economies are good for everyone. If officials pass the harmful agreement, farmers like Uncle Rickie will no longer be able to carry on farming. Who would be there to buy the land of farmers who are forced to sell? Companies from the US and other rich nations, and maybe some wealthy Panamanians who support this agreement. This leads to a consolidation of power and decision-making as fewer people own more and more of planet earth. But people have a right to self-determination and autonomy, and the Panamanian government should respect that right.
Another supporter of the Panama agreement is Caterpillar, maker of heavy machinery used for logging and constructions. They are frothing at the mouth thinking of all the Panamanian trees that they can cut down and the increased heavy machinery sales that will result.
By the time little Antonia is going on her first date, the forests of Panama will probably be decimated, the clean rivers and pristine stands of old growth trees a distant memory. Verdant ecosystems will be forever ruined for incredible species like the blue morpho butterfly, which I first saw shining iridescently as it soared through the rainforest in the Boquete region of Panama. Like all of us, Antonia has a right to intact ecosystems, which Caterpillar seeks to undermine through supporting this trade agreement.
Another group who will be thrown under the bus if this agreement passed would be the Kuna Indians, a Panamanian ethnic group who have preserved their cultural heritage. Traditional farmers and artisans, these indigenous peoples will also face steep competition and many may have to abandon the ecologically sustainable, culturally rich ways of life their ancestors have known for thousands of years.
Will Antonia benefit from a more productive national economy? Probably not. Even looking at the brute economic indicator of gross domestic product, this trade agreement does not promise positive effects.
A similar trade agreement offers foreshadowing of what could happen if the Panama agreement goes through. NAFTA, a 1994 trade agreement between Canada, the US and Mexico, has shown that increased unprotected trade with the US is not likely to promote self-government, support local, living economies, or benefit most people at all.
GDP growth has been unequal after NAFTA, with Canada growing an average of 3.6 percent per year, the US growing 3.3 percent and Mexico growing only 2.7 percent. The average Mexican did not benefit from this growth, as income inequality has risen. Wages of Mexican workers decreased by 18 percent in the first five years. The predominant occupation in Mexico prior to NAFTA was farming, but many farmers, mostly in Central Mexico, were forced to sell or abandon their land after subsidized corn from the US flooded into Mexican markets, leaving the Mexican farmer unable to compete. Corn is indigenous to Mexico, and was farmed mostly sustainably. But now what is left is forced to compete in an atmosphere of industrial agriculture.
After NAFTA, Mexico has maintained a trade deficit with the US, meaning they import more than they export. This leaves the country hemorrhaging money and exports, which isn’t good for anyone in Mexico.
Furthermore, trade agreements like this one are bad for US workers, as we lose jobs here in the US. In just the first seven years, NAFTA had caused the loss of 766,030 jobs in the US. And it will cost us tax dollars, too. By 2002, the US Department of Labor had qualified 408,000 workers extensions on their unemployment benefits because their jobs had moved to Mexico.
Trade between the US and Panama totaled $2.1 billion in 2002 according to the office of the US Trade Representative. US exports account for about $1.8 billion of that amount. This means that for every $10 worth of goods that the US sells to Panama, Panama sells only $1 worth of goods to the US. The exports Panama sells to the US account for a tiny fraction, only 1.4 percent, of its GDP of $21 billion. Yet it is willing to sell its people down the river for this pittance.
The farmers who’ll be forced to sell their land and migrate may be forced to relocate to the city of Colon, where there are jobs in the Colon Free Trade Zone, or Zono Libre. When you picture a free trade zone, picture “Pleasure Island” from the Disney cartoon Pinocchio. For rich companies, a free trade zone represents a lawless area free from tariffs, taxes, or pesky labor or environmental laws. It usually looks like a collection of warehouse-like buildings on the edge of a port city that is protected by barbed wire. Working people (such as ex-farmers) travel into these zones each morning to do the most tedious grunt labor in return for low wages. Corporations like the low wages, while the workers are usually just desperate for any work they can get. Ships pull up to the buildings, unload raw materials like T-shirt fabric or radio parts, workers assemble them, and the finished goods get shipped to rich countries where people can afford them.
In his 2008 State of the Union address, Bush asked Congress to approve the Panama trade agreement, gleefully stating that the agreement “will support good jobs for the finest workers in the world: those whose products say ‘Made in the USA.’” That sentiment is perplexing to anyone familiar to Zono Libre, where low-paid workers work in unsafe work conditions to sew together textiles bound for the US valued at $400 million per year for companies like Orotex, with offices in Farmington Hills, Michigan. Textiles and clothing account for about 24 percent of the work done in Zono Libre. This happens as US workers lose more and more textiles jobs (stat), yet purchase more and more clothing (stat).
For all the celebrated freedom that free trade measures like the Colon Free Trade Zone has received, you would think that Panamanians would be better off, however the average Panamanian is not better off. Income inequality has risen, placing Panama among some of the most unequal countries in Latin America. Panama’s index for income inequality is 60, according to a World Bank report. As the report says, “[Inequality] is more obvious in urban areas like Colon, where the close, physical juxtaposition of the modern, dynamic wealthy sector with poor city slums accentuates the perceived gap between rich and poor.”
I have never seen Colon since my Panamanian friends have insisted that if I were to travel there I would become a certain victim of a mugging or kidnapping. But the real Panamanian danger isn’t really frustrated urban poor who see wealth all around them but can’t touch it. The real danger is the Panama trade agreement.
Some are arguing that this trade agreement is needed to rescue the US economy. But Panama’s entire economy is 0.15 percent the size of the US economy. The US has one hundred times more people than Panama. That’s right, I’m saying the country is tiny. For US officials to undermine people’s basic rights in order to do business with this small country in the hopes that its tiny economy will deliver us from certain economic death is a mistake.
If passed, this agreement will harm Panamanians like Uncle Rickie. It will negatively impact little Antonia and make her economic future less certain. It will not benefit the average Panamanian but is likely to lead to a decrease in self-government and a spike in income inequality, as NAFTA did. And it will not benefit people in the US. Our Congress should vote an emphatic “no” on the Panama Trade Promotion Agreement.
About the Author: Lacy MacAuley is a global justice activist, antiwar activist, and environmentalist with a passion for amplifying the voices of those who otherwise would not be heard. With a BA in International Relations specializing in World Development Studies, she is committed to promoting local, living economies that place people, planet, and principle before profit. She ignited a creative fire while working as news editor for her college newspaper, and has kept the flame burning through intensive grassroots organizing and Lacy has done media relations work with groups such as Project Vote and ACORN, Global Justice Action, United for Peace and Justice, Jubilee USA, Mountain Justice Summer, and Working America (community affiliate of the AFL-CIO). Lacy is currently working on the Global Justice Media Project, and doing progressive communications work with Massey Media LLC.