[ Issues ]

Trade

Extension of Fast Track

When fast-track negotiating authority was approved in 2002, it opened the door to the negotiation of a string of trade agreements by the Bush administration that was built on the rotten foundation of NAFTA and failed to address the interests of workers in fair, balanced, sustainable trade. That fast track authority expires in July. It is likely that the Bush administration will push Congress to renew this fast track authority so it can negotiate more trade agreements that speed up the global race to the bottom.

The Bush Administration has demonstrated its hostility to the issues that UAW members want to see successfully addressed in trade rules – workers’ rights, environmental protections and maintaining the ability of governments to promote public health and safety through laws and regulations. There is overwhelming evidence that any extension of fast-track authority would give the Bush administration more time to negotiate the same kinds of unacceptable agreements it has already reached. The fast-track procedures that set the rules for Congress to consider trade agreements – preventing any amendments and limiting time for debate – only ease the way for flawed agreements to win approval.

In light of our experience with the Bush administration’s manipulation of fast-track trade negotiating authority, the UAW strongly opposes any extension of that authority.

Action

U.S. - Thailand Trade Deal

The Bush administration’s negotiations with Thailand on a free-trade agreement nearly reached a conclusion in 2005. Since then, political turmoil in Thailand, including a military coup in September 2006, has stopped the negotiations in their tracks. It will be some time before an elected government will be restored and democratically chosen economic and social policies for Thailand, including trade policies, can be put in place. Despite this situation, it is possible that that the Bush administration will resume negotiations with Thailand this year.

When the talks were suspended, the 25 percent U.S. tariff on pickup trucks, which is of great importance to the UAW, was one of the sensitive issues that had been set aside for resolution in the final stage of negotiations. Because Thailand is the second-leading producer of pickup trucks in the world, an agreement that eliminated or substantially reduced the 25 percent U.S. tariff could produce a massive surge in imported pickup trucks from Thailand. This would jeopardize the jobs of 40,000 UAW members who work in plants that assemble pickup trucks and an even larger number of members who make parts for those pickups.

In 2004 and 2005 the UAW mounted campaigns to educate members of Congress about this key trade issue. With the delay in the negotiations and with many newly elected members in the Congress, there is a critical need for another education effort on this important issue. Because the Bush administration may want to re-start the negotiations this year, we need to raise our concerns again to ensure that any trade deal with Thailand does not jeopardize pickup truck production and jobs in the United States.

Action

U.S. - Korea Trade Negotiations

The Bush administration decided to pursue free-trade negotiations with South Korea early in 2006. The talks began in May and have gone through four rounds. Since Korea is the seventh-largest U.S. trading partner, and total trade reached about $85 billion last year, the U.S.-Korea trading relationship is complex, with many sensitive products on each side.

For the UAW, the already large U.S. deficit in automotive trade with Korea is a serious concern. The elimination of tariffs would lead to a significant increase in U.S. imports of Korean-built automotive products. This would be an especially serious problem if an agreement eliminated or significantly reduced the 25 percent tariff on imports of pickup trucks. Meanwhile, the Korean auto market is effectively closed to imports from the United States, and it is unlikely to be opened by the terms of a Bush administration-negotiated free trade agreement. The Korean government has protected the domestic auto market successfully for many years through a variety of policies and we don’t expect that to change.

The UAW has made our concerns about a free-trade agreement with Korea clear to the Bush administration and to members of Congress. We have also discussed these issues with our union counterparts in Korea – the Korean Metal Workers’ Federation (KMWF). They are worried that an agreement would prevent the Korean government from implementing industrial policies that promote employment and production in Korea and that social programs would be undermined. They have also noted that Korea’s labor laws fail to meet the standards of the International Labor Organization (ILO) and that many union leaders have been arrested unfairly and are serving time in prison. The weak labor provisions of Bush administration-negotiated free-trade agreements would not protect the rights of Korean or American workers. As a result, the KMWF and other Korean unions have joined with many other citizen groups in Korea to strongly oppose the free-trade negotiations with the United States The UAW has expressed similar concerns about the absence of effective protections in Bush administration-negotiated free-trade deals for worker rights, the environment and the ability of governments to promote development and public health and safety through laws and regulations

The Bush administration will push to conclude the negotiations with South Korea as quickly as possible. To prevent the conclusion of an unacceptable agreement that would put the jobs of tens of thousands of UAW members at risk, we will have to put considerable pressure on the negotiators directly. We also need to convince members of Congress that a free-trade agreement with South Korea would cause serious job losses for U.S. autoworkers and other American workers.

Action

NAFTA, PNTR, Trade Deficits –
need for different trade policies

The trade deficit set yet another new record in 2006, the fifth record year in a row. The overall trade deficit reached about $775 billion, while the deficit in goods alone was about $840 billion. The deficit with our NAFTA partners, Mexico and Canada, reached $140 billion. And the trade deficits with China and Japan climbed to more than $220 billion and $85 billion respectively, while the deficit with the European Union hit $125 billion. The North American Free Trade Agreement (NAFTA), which went into effect in 1994, and Permanent Normal Trade Relations (PNTR) with China, adopted in 2001, have contributed to these ballooning deficits. So have the trade policies of the Bush administration, which have focused on negotiating free-trade deals, based on the NAFTA model, with relatively small trading partners while ignoring, or downplaying, numerous trade problems with our largest trade partners, such as China, the European Union and Japan.

Millions of American workers in the manufacturing sector and in service industries have lost their jobs due to the soaring trade deficit, as a growing range of products and services has been outsourced abroad. In the face of these destructive trade deficits, President Bush and Republican congressional leaders remained committed to free-trade policies that benefit multinational corporations, at the expense of working families and their communities.

The trade policies that have led to these results can be traced back to the bruising fight over NAFTA in 1993. During the 12 years that NAFTA has been in place, U.S. trade deficits with Canada and Mexico have soared and the auto trade deficit has more than tripled. Many profitable corporations, including Electrolux, have shifted production to Mexico at the cost of hundreds of thousands of U.S. jobs, and many more companies have squeezed concessions from their U.S. workers just by threatening to move there. NAFTA’s side agreements on labor and environment have not improved conditions for workers or respect for environmental laws and policies in the region. The ability of corporations to use NAFTA rules on investment to challenge government laws, regulations and policies that interfere with their profits has weakened protections for public health and safety and undermined economic development programs.

The UAW has advocated the renegotiation of NAFTA to fix its problems and establish a mutually beneficial basis for trade and broader ties between the United States, Canada and Mexico. In particular, we need to improve the provisions on investment, labor and the environment, as well as address controls on capital, exchange rates, financial speculation and debt relief.

Passing Permanent Normal Trade Relations (PNTR) with China in 2001 was supposed to strengthen the hand of the administration in resolving trade problems with China by winning China’s commitment to abide by WTO rules and shifting dispute resolution to the WTO. Yet the Bush administration has refused to file cases against China in the WTO and failed to take actions that would enforce China’s commitments to follow WTO rules. The Bush administration has even rejected cases under U.S. trade laws that identified China’s denial of worker rights and its manipulation of its currency as unfair trade practices.

Following a national automotive industrial policy, which conflicts with many of its WTO commitments, China is well on its way to becoming the world’s largest automobile manufacturer and a producer of its own brands of vehicles and parts for the world market by 2010. Because demand for vehicles in China has not kept pace with increasing Chinese automotive production capacity, we expect the excess capacity to lead to production for export, with much of it headed to the United States.

The Bush administration has made PNTR into the disaster we predicted during the debate in Congress. It has taken away the ability of the United States to impose trade sanctions on China directly and the Bush administration has refused to use the WTO process to address China’s unfair practices. As a result, China is free to ignore its WTO commitments without suffering any consequences, while American workers lose their jobs and face intense downward pressure on their wages, benefits and working conditions because of increased imports from China.

The disastrous trade policies of the Bush administration are on further display in the trade negotiations it has pursued. In 2006 Congress approved trade agreements with the Middle East countries of Bahrain and Oman. The Bush administration has also negotiated agreements with the Andean countries of Colombia and Peru, and it is still negotiating with Panama and Malaysia and holds out hope for re-energizing negotiations on a Western Hemisphere-wide Free Trade Area of the Americas. The absence of strong worker rights protections in the Andean agreements is especially disturbing because more trade union leaders have been killed in Colombia in recent years than anywhere in the world. All of these agreements and negotiations follow the flawed model of the North American Free Trade Agreement (NAFTA).

It is likely that some of these already-reached agreements and soon-to-be-concluded negotiations will be presented to Congress this year by the Bush administration. The UAW continues to oppose these deals because they ignore the interests of workers in the United States and in the affected countries, while advancing the interests of multinational corporations and the wealthy elites in the nations involved.

The reliance on free-trade agreements that protect the profits, investments and intellectual property of multinational corporations, while paying only lip service to workers’ rights and environmental protections, is the hallmark of the Bush administration’s trade policies. This agenda has eliminated American jobs while failing to advance the interests of workers at home or in other countries.

During the coming year the UAW and our allies need to intensify the pressure on Congress and the Bush administration to reverse the loss of jobs and the massive trade deficit that have been created by U.S. trade policies. Nothing less than a fundamental change in these policies is needed.

Action

Currency Manipulation

Even the best rules of international trade would not lead to higher living standards for workers in all countries if some governments manipulate their currencies to artificially pump up their exports and hold down their imports. Unfortunately, important trading countries are using currency manipulation to gain an unfair trade advantage.

The most extreme example of this is China. On top of the widespread violation of workers’ rights, which unfairly depresses the cost of products made in China, the Chinese government controls the value of its currency to provide a further, significant advantage for exports and disadvantage for imports. Most estimates of the undervaluation of China’s currency, and the advantage for Chinese products over those made in the United States, fall into a range of 25-40 percent.

Similarly, manipulation of the value of the yen by the Japanese government, and its significant undervaluation, makes automotive and other products made in Japan far more competitive than they would be if the exchange rate were not manipulated. An imported vehicle from Japan can be sold in the United States for several thousand dollars less that its fair value because of the unfair exchange rate.

Efforts to update U.S. trade laws and international trade rules to prevent governments from manipulating their currencies have been stalled. The Bush administration has rejected petitions filed under the U.S. trade law that covers unfair trade that would have led to investigations of the adverse impact on U.S. employment and production caused by currency manipulation.

Because currency manipulation prevents the establishment of a level playing field for American exports and domestic production, a fair trading system must also have rules to prevent currency manipulation from contributing to large and persistent trade imbalances.

Action

Worker Rights

The global trading system will never be truly fair until the rights of workers are given the same protection as the rights of owners of capital. We have been fighting for more than 30 years to establish this fundamental balance in international trade rules and in the agreements negotiated by the U.S. government, but we are still waiting for this basic equity to be established. The goods and services that are traded internationally cannot be considered to be made under acceptable conditions unless the workers who produce them have the rights that are recognized in the Fundamental Principles and Rights at Work of the International Labor Organization (ILO). Workers will be unable to raise their incomes and win a fair share of the value of the goods and services they produce if they are prevented from forming unions and bargaining with their employers. The global race to the bottom, based on companies shifting production to countries where labor costs are lower and the rights of workers are limited, is fed by the denial of workers’ rights.

For two decades, U.S. trade laws covering the Generalized System of Preferences (GSP), the Export-Import Bank and the Overseas Private Investment Corporation (OPIC) have incorporated worker rights provisions that bring respect for international standards into the operations of these programs. But the Bush administration has refused to insist on the inclusion of strong and effective worker rights protections in the free-trade deals it has negotiated, and has failed to insist on the inclusion of worker rights protections in the WTO. It has rejected two petitions filed under U.S. trade law that cited China’s widespread violations of workers’ rights as an unfair trade practice that injures American workers. At the same time, the administration has fought vigorously for the effective enforcement of intellectual property rights for owners of patents, copyrights and trademarks and for protections for the rights of international investors. This inequity between the treatment of the rights of workers and the rights of owners of capital must be eliminated so that workers’ interests are respected in the international economy.

Action

WTO

The nearly 150 countries that are members of the World Trade Organization (WTO) have been engaged in negotiations to revise the rules of international trade since 2001. The negotiations were suspended in July 2006 when governments were not able to agree on the outline of a deal on trade in agricultural products. The negotiations also cover trade rules for industrial products and services. Since July, the Bush administration and other governments have said they want this round of talks, the Doha Development Agenda, to conclude with an agreement, but they haven’t been able to get any momentum going.

Although a stated goal of the negotiations is to promote development, the UAW does not believe that an agreement based on the current negotiating agenda would result in equitable and sustainable development. The UAW strongly objects to any attempt by the Bush administration to undermine U.S. anti-dumping rules and other trade remedies through the WTO negotiations. We also want to keep U.S. tariffs on automotive products in place until there are equivalent opportunities for U.S. exports to Japan, Korea, Europe, China and other countries that have large trade surpluses with the United States.

The Bush administration must insist that worker rights and environmental protections be included in the WTO negotiations. The existing rules of the WTO provide protections for the rights of multinational corporations, but not for the rights of workers. If the negotiations on the Doha Development Agenda reach an agreement, it is likely they would only reinforce this unacceptable imbalance.

Action

Trade Adjustment Assistance

Hundreds of thousands of workers lose their jobs each year due to foreign trade, and become eligible for Trade Adjustment Assistance (TAA) benefits. In 2002 Congress made some modest improvements in the TAA program by adding coverage for workers making parts for goods displaced by imports, making health insurance available to recipients of TAA benefits, initiating a program of wage insurance for older workers, and simplifying procedures for eligibility for benefits. TAA is up for reauthorization in 2007, so there will be an opportunity to make additional changes.

Unlike other programs for dislocated workers, the TAA program is an entitlement, so workers have a right to the promised benefits of training and extended income support. The Bush administration, however, has supported putting a cap on funding for TAA (effectively eliminating the entitlement status of the program) and has proposed numerous changes in the regulations governing the program that would make it harder for workers to qualify for benefits. New proposals that would push workers eligible for TAA benefits into taking any job, even one that pays less than the job lost, have been proposed by some who claim that TAA benefits are already too generous.

In fact, the TAA program needs extensive improvements. Too many workers have seen their jobs disappear due to increased imports, lost exports or foreign investments by their employers, and too many of them have been forced to take lower-paying jobs with worse benefits because they have not been able to receive the full range of the education, training and income support that the TAA program is supposed to provide.

Despite the promises and the recent improvements, the TAA program has a long way to go before it fulfills its goal of ensuring a better future for workers who lose their jobs due to trade.

Action