U.S. can't afford more free trade

[Acebass]

I got this from one of the Democratic newsletters I get. I had no web address so I posted the whole thing. It's worth the read!...


U.S. can't afford more free trade
Soaring trade deficit kills auto jobs; new deals promise more of the same

Amid all the coverage over Dubai Port World operating major U.S. ports, here's a story you might have missed: In 2005, the U.S. trade deficit in goods and services soared to a record high $725.8 billion, or nearly $2 billion a day.

Yet the Bush administration's reaction to the fourth straight record-busting trade deficit on its watch is essentially, "What's the problem?"

The problem is our nation's ever-widening trade imbalance is wiping out jobs by the thousands and intensifying downward pressure on wages and benefits of America 's working families.

Let's look at the auto industry. Toyota , Nissan, Honda, Hyundai, Mercedes and BMW produce vehicles in the United States -- and, in some cases, are rapidly expanding their U.S. manufacturing presence.

Why Americans should care

So who cares if General Motors, Ford and traditional domestic parts suppliers are shedding jobs?

While the foreign automakers' U.S. production has increased, so have their imports. In 2005, 3.4 million imported light vehicles were sold in the United States , accounting for 20.1 percent of the market. That's up from 3.1 million imports and an 18 percent market share in 2001. (This does not include vehicles assembled in Mexico and Canada .)

What's more, imports of auto parts have increased nearly 50 percent since 2001. Add it up and the United States posted a record $139.4 billion automotive trade deficit in 2005.

What's the impact? Since President Bush took office in January 2001, the United States has suffered a net loss of 200,000 auto jobs, mostly among parts makers. And this doesn't include planned job cuts announced by GM and Ford, or the potential impact of bankruptcy restructurings at Delphi , Tower, Collins & Aikman and other suppliers.

In short, the new investment and job creation in the United States by Japanese, South Korean and German automakers and their suppliers are not fully replacing jobs lost at the traditional domestic automotive companies.

Trade policies hurt nation

The United Auto Workers doesn't pretend all job losses in the U.S. auto industry are attributable to our nation's failed trade policies. But the reality is trade policies have encouraged manufacturers to shift production and jobs to other countries, and allowed foreign competitors to gain unfair competitive advantages.

Two cases in point: Since the North American Free Trade Agreement was enacted in 1993, the U.S. auto trade deficit with Mexico has surged from $3.6 billion to $27.3 billion. Since the United States granted China permanent normal trade relations status in 2001, the U.S. auto trade deficit with China has tripled from $1.5 billion in 2001 to $4.5 billion in 2005.

In addition, trade deals have failed to require our trading partners to abide by internationally recognized worker rights or decent environmental standards. As a result, we're trapped in an accelerating race to the bottom, as China , Thailand , Mexico and other countries compete on low wages and weak or nonexistent labor and environmental standards.

Foreign trade barriers

The Bush administration also has failed to combat currency manipulation. It's estimated that Japan 's yen and China 's yuan are undervalued by as much as 40 percent. That translates into a price advantage of thousands of dollars for cars imported from Japan , enabling Japanese automakers to gain market share by undercutting domestic automakers. And China is exploiting its undervalued currency to dramatically expand auto parts exports and begin preparations to export vehicles to the United States .

Meanwhile, Japanese, Chinese, South Korean, Indian and other markets remain effectively closed to U.S.-built vehicles and parts by the use of various tariff and nontariff barriers.

U.S. trade policy urgently needs an overhaul. But all we see is more of the same.

For example, the administration is working on a Thailand free-trade deal that could eliminate or substantially reduce the longstanding 25 percent tariff on pickups imported from Thailand , the world's second-biggest producer of pickups.

More losses can be expected

Reducing that tariff would enable foreign automakers to use facilities in Thailand as a back door to gain duty-free access to the U.S. market, jeopardizing the jobs of some 42,000 UAW members who assemble pickups and another 50,000 who produce engines, transmissions and stampings for these trucks. The ripple effect would hurt thousands more American workers.

The administration also recently initiated negotiations with South Korea on a free trade agreement and is continuing negotiations on the Free Trade Area of the Americas , which would expand NAFTA to the rest of the Western Hemisphere, and the Doha round of World Trade Organization negotiations.

If U.S. trade negotiators simply stay the course, we're in for more job losses in auto and other vital American industries -- and year after year of record-shattering trade deficits. That's a path we can't afford to take.



Ron Gettelfinger is president of the UAW. This op-ed appeared on March 3, 2006, in the Detroit News' Labor Voices.

[redwitch]

1. fair trade works great.

free trade is a bit of a mess.

[Deja Q]

3. Pity we can't go back to 1994 and kill NAFTA... or to 1972 and

stop Nixon from going to China... was it really about humanitarian reasons?

[demosincebirth]

6. ...and to think that I backed Clinton on Nafta.

I thought he knew what he was doing.

[neoblues]

8. Yeah... Politics. nt.

[Hippo_Tron]

9. NAFTA is only the tip of the iceberg

When you think about it, a trade agreement just between the countries on the North American continent isn't that damaging. GATT (later the WTO) seems like Clinton's true lapse in judgement.

[Acebass]

7. Was Ross right?...n/t

[fujiyama]

12. Of course not

China was just a geopolitical chess peice. It was gamesmanship against the SU.

Clever at the time, so it seemed (if you believe it was a good idea to get closer to an autocratic regime with a lunatic leader responsible for killing millions of his people).

Looking back at it, half the shit the US did to fight the Eeeeevil commies have come back to bite the US in the ass.

[Deja Q]

2. Convince Libertarians who think all of what you said is okay...

Or maybe they WANT America's economy to disintegrate? (talk about traitors, America's economy is tied into the world's, like it or not.)

[Warpy]

4. FINALLY!!!!!!

The top Democrats were as merrily on the free trade bandwagon as their pubbie counterparts from the Eisenhower administration on down the line to us. That a few of them are waking up at last is GREAT NEWS.

There is no way a US worker can compete on a head to head basis with a worker being paid a living wage in rupees, bhat, sen, pesos, or any other depressed currency. NO WAY.

There is no way US industry won't continue to be raided by developing countries whose workers can be paid in depressed currencies. Not content with manufacturing, they've now started raiding the white collar and engineering jobs we depended on after our retraining.

There is no way the US can now afford to fight a big war. We no longer have the treasury to support one, nor do we have the industrial base.

Free trade as it is practiced by multinational corporations is KILLING OUR COUNTRY. The sooner we recognize this, the sooner we can start to rebuild our country. Only this time, we'll know who our real enemies are.

[brokensymmetry]

5. Kicked & Nominated.

If we want the working men and women of America to have a chance, we've got to end the abomination of free trade.

People say they're against slavery - unless it's the kind practiced in third-world sweatshops that pay a pittance to exploited workers. Then, it's a mad dash for lower prices.

[Acebass]

10. It's still the economy...

[doc03]

11. Here goes some more jobs

Bush came to Wheeling WV last week where he promised to save steel jobs in 2004 and he talked about using coal to end our dependency on foreign oil last week. The following day he signs the legislation below, that will give the Ukraine WTO status. Currently they purchase $531.7 million in our products and we buy $1.1 billion in their products mainly steel and Coke (coal). One billion dollars in trade = 20000 jobs that gives us a 10000 job deficit. When they enter the WTO how many more jobs will we lose?


This is from the March 24,2006 USA Today:

U.S. ends trade restrictions on Ukraine
WASHINGTON (AP) — President Bush signed legislation Thursday that ends Cold War-era trade restrictions on Ukraine, opening the way for the former Soviet republic to join the World Trade Organization.
The measure frees Ukraine from a 1974 law called the Jackson-Vanik Amendment, which links trade benefits to the emigration and human rights policies of former or current communist states.

The new law is "going to strengthen our ties with our good friend Ukraine and create new economic opportunities for our two countries," Bush said at a White House ceremony attended members of Congress who sponsored the legislation.

He said the bill will open new markets for American products and help Ukraine develop its economy and raise the living standards of its people.

Bush said the United States supports Ukraine's goal of joining the 148-nation WTO this year and will help it resolve issues standing in the way of its entry. Removal of the U.S. trade restrictions was a necessary step to gain entry.

"Ukraine is committed to economic freedom, democratic progress and open trade," he said.

Since 1993, the United States has granted Ukraine normal trade relations on a temporary annual basis.

Ukrainian President Viktor Yuschenko, whose pro-Western government was elected in January, has welcomed the U.S. legislation, saying "consistent U.S. steps in support of Ukraine on the way of reform are evidence of strategic partnership between the countries."

U.S. exports to Ukraine, including poultry and agriculture machinery totaled $531.7 million in 2005. Imports from Ukraine, including steel and coke used in making steel, totaled $1.1 billion.
Sen. Richard Lugar, chairman of the Senate Foreign Relations Committee, said Ukraine has demonstrated a commitment to greater freedom and free market principles.