01.31.2011 0

Unions’ Anti-Trade Agenda

  • On: 02/10/2011 09:32:59
  • In: Big Labor
  • Part III

    By Rebekah Rast

    It is no surprise that the AFL-CIO and the United Steelworkers, among other union groups, are opposed to the U.S.-South Korea free trade deal.

    There aren’t many, if any, free trade deals they aren’t opposed to.

    Their argument for this particular deal is “that it will drain U.S. manufacturing jobs and does not include worker and other protections unions had hoped President Obama would demand.

    In fact, a statement given by AFL-CIO President Richard Trumka stated, “We’ve seen U.S. multinational companies take advantage of the investment and other corporate protections in past trade deals to shift production offshore, while maintaining access to the U.S. consumer market and undermining the jobs, wages and bargaining power of American workers… So long as these agreements fall short of protecting the broad interests of American workers and their counterparts around the world in these uncertain economic times, we will oppose them.”

    If it is jobs that the unions are worried about then what about the fact that “South Korea, Colombia and Panama are together worth almost $13 billion of new sales for our U.S. goods and services?” This is according to Rep. Kevin Brady, a member of the House Ways and Means Committee and Chairman of the Subcommittee on Trade.

    Because of all the new sales, Rep. Brady went on to say, “We are going to create a lot of jobs and find new customers that will help us get out of this economic recession, if we can open those markets.”

    Is it really American jobs the unions are worried about preserving or it is union jobs that concern them?

    After all, the United Auto Workers and the United Food and Commercial Workers support the trade agreement with South Korea. The United Food and Commercial Workers union support it for lowering agricultural tariffs, which will likely boost sales of U.S. meat and other foods. The United Auto Workers support the deal because it would reduce tariffs and other trade restrictions on American auto exports and continue American tariffs on Korean cars and trucks for an extended period.

    Although unions argue that trade agreements negatively impact America’s job market, their argument doesn’t hold up when looking at the value of U.S. exports in connection with U.S. jobs.

    An article on the International Trade Administration’s website point to a report, entitled “Exports Support American Jobs,” which shows that “export-supported jobs rose from 7.6 million in 1993 to 10.3 million in 2008, an increase of 2.7 million jobs. This increase accounted for 40 percent of total job growth in the United States during this period.”

    The report continued, “The new record [level of GDP] shows that the upward growth of trade in an expanding global market holds great opportunities for U.S. businesses whose leaders are thinking strategically about the future growth of their companies.”

    Considering Obama’s goal to double exports by 2015, opening up a trade agreement with other countries is necessary and will also help to stimulate America’s economy, though his usually supportive union allies don’t agree.

    Another anti-trade argument unions might claim is that trade agreements typically favor non-unions or those manufacturing businesses who pay their workers less.

    Don Todd, senior research director for Americans for Limited Government (ALG) and former deputy assistant secretary for the Office of Labor-Management Standards at the U.S. Department of Labor, clearly debunks this argument.

    “If the argument was true that trade is bad for unions because it favors manufacturers that get paid less, then less fortunate and poor countries would be the top manufacturers because they pay their workers a very low amount.”

    Todd goes on to say that obviously that isn’t true, and despite this union argument, the U.S. is still a top manufacturer. In fact, according to the National Association of Manufacturers, the United States is the world’s largest manufacturing economy, producing 21 percent of global manufactured products.

    Further invalidating the argument that reduced restrictions on trade will put America on a path to low wages is explained by the Library of Economics and Liberty:

    “One motivation for such standards is the fear that unrestricted trade will lead to a “race to the bottom” in labor and environmental standards as multinationals search the globe for low wages and lax environmental regulations in order to cut costs. Yet there is no empirical evidence of any such race. Indeed, trade usually involves the transfer of technology to developing countries, which allows wage rates to rise, as Korea’s economy—among many others—has demonstrated since the 1960s. In addition, rising incomes allow cleaner production technologies to become affordable. The replacement of pollution-belching domestically produced scooters in India with imported scooters from Japan, for example, would improve air quality in India.”

    Therefore union opposition to trade can be explained simply.

    “Unions’ role as monopoly cartels explains their opposition to trade and competition. A cartel can charge higher prices only as long as it remains a monopoly. If consumers can buy elsewhere, a company must cut its prices or go out of business,” says James Sherk in his article, “What Unions Do: How Labor Unions Affect Jobs and the Economy.”

    As the AFL-CIO argues its point that unions offer a pathway to higher wages and prosperity for the middle class, it is interesting that global trade accomplishes that same goal.

    Through trade American is able to compete with other nations, advance its manufacturing and give its people the freedom to choose between various quality products.

    “Freedom in every avenue in life is a good thing,” says ALG’s Todd, “whether it is freedom in trade or in political action. Moves towards restricting free trade are moves toward restricting freedom.”

    To read part I of this series, click here. To read part II, click here.

    Rebekah Rast is a contributing editor at Americans for Limited Government (ALG) News Bureau. You can follow her on Twitter at @RebekahRast.


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