United Steelworkers Oppose Passage of Obama’s NAFTA-Style Free Trade Agreement
USW Opposes Passage of Revised US-Korea Trade Agreement
(Pittsburgh) – The United Steelworkers (USW) issued the following statement by its International Executive Board today after concluding an extensive examination of the terms of the proposed agreement:
“The Obama Administration has now concluded negotiations with the government of South Korea on the revised terms of the US-Korea Free Trade Agreement. The revisions fought for by the President, United States Trade Representative Ron Kirk, Chairman Sander Levin and the team of officials working on the negotiations are important improvements on the terms agreed to by the Bush Administration and deserve recognition. Since the conclusion of negotiations last week, the United Steelworkers (USW) union has carefully examined the terms of the agreement, the underlying trade relationship between our two countries and the competitive postures of our economies. After thorough review, the USW Executive Board views the agreement as falling far short of what is necessary to ensure that U.S. workers and businesses have a fair deal.
This was not an easy decision as the Obama Administration has made effective implementation and enforcement of trade laws and agreements a priority. Their efforts have advanced the interests of USW members in the steel, tire, green technology and other important sectors. Their record in these areas represents a fundamental change in the administration of trade policy and is deeply appreciated.
Over the past several months, since President Obama announced his intention to conclude negotiations on an FTA with South Korea, the USW has been deeply involved in discussions and consultations with the Administration, Congressional leaders and others regarding how the Bush FTA could be improved to ensure that workers would truly share in the benefits of an enhanced trade relationship. We have not only provided specific proposals but also have discussed those terms and alternative approaches to achieve our goals. The President’s team showed a true willingness to discuss our concerns, and their open consultations with us are truly appreciated.
In recent weeks, the public focus has been on two areas: autos and beef. The auto sector is of vital importance to our members who make the glass, tires, steel, plastics and countless other products that are part of the supply chain in the auto and auto parts sector. Before the recent talks that occurred in Seoul, South Korea, we worked with the Administration and others in the preparation of a negotiating approach in the auto sector that we could support. Regrettably, the South Koreans showed little willingness to move off of their positions at those talks.
Last week’s negotiations resulted in an agreement. Unfortunately, the provisions that have been agreed to fall far short of the proposals the USW identified as the minimum approach necessary to secure the union’s support. The final agreement will result in increased access to the U.S. market for Korean producers with insufficient assurance that the closed South Korean market will sufficiently open up to our auto exports and other manufactured goods, such as steel. In addition, provisions were not included in the FTA to reduce the flood of products that could be shipped from China and other countries to Korea to be assembled into South Korean exports that will benefit from the terms of the FTA. The lack of strong rule of origin provisions as well as duty drawback will directly and adversely impact USW members in a number of industrial sectors. The delays in tariff phase-outs will only defer, not reverse, the negative consequences of the proposed FTA.
At any time, but certainly at this time, as our nation’s economy and our workers continue to wrestle with economic problems, we must not risk our future for ideological goals. As a recent study shows, the rate of U.S. exports to current FTA partners lags behind that of countries where we have no FTA in place. Promises made by previous Administrations as to the enormous benefits of free trade agreements have simply not come to pass for American workers. Indeed, our trade deficit continues to sap our nation’s economic strength and the existing FTAs have not provided the benefits that were promised.
In the auto sector, imports of vehicles and parts from Korea have exceeded exports by 14-to-1 or more for the last decade. Korean transplant auto production here in the United States, while providing welcome jobs, continues to act as a magnet for foreign components as their domestic content averages only about 40%. And, while Korean workers at these companies in their home market benefit from union representation, their operations here in the United States actively and aggressively fight to deny workers their most basic labor rights.
Other sectors represented by the USW — auto parts, petroleum products, tires and iron and steel, for example — have contended with fast-growing imports from Korea this year, and the FTA will only ensure a continuation of the negative impact of this import flood on domestic production and employment.
The USW looks at trade as but one component of a broader economic policy. But discussions about how we can develop a broader economic strategy that will enhance the rights and interests of working people to ensure that they truly share in the benefits of globalization have not been successful. Our nation fails to have a comprehensive strategy to enhance the competitiveness of our economy, to ensure the strength of our manufacturing base and to increase employment, wages and income. As a result, we must look at the terms of the FTA on their own.
Most of the focus has been on the provisions relating to the auto sector, perhaps the single most important industrial sector involved in trade between our two countries. The final provisions are better than the Bush-negotiated agreement. But they remain insufficient and are damaging to manufacturing sectors where our members work. There are many other provisions in the proposed FTA that the USW and others in organized labor specifically identified as needing improvement, but these concerns were not addressed in these talks.
Our members live with the effects of trade every day and recognize that we live in a global economy. Today’s trade situation has cost the jobs of too many of our members, and they are looking for a change in trade policy that will advance their interests, as well as those of others living around the globe. This agreement, however, does not represent the change in trade policy that will advance American workers’ interests.
South Korea is a strong ally that deserves our friendship and support. They have it. But we do not need to inflict further damage to our manufacturing sector and the lives and livelihoods of our workers to prove the strength of our alliance. We have concluded that, while improved, it still does not merit USW support, and we will oppose its passage.”