The Tricks of the Trade Deals

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YES! Magazine

The Tricks of the Trade Deals

This week, Congress will vote on three free trade agreements that are predicted to kill jobs and solidify corporate power. It's our turn to have a say in how we trade.

Last week, President Obama submitted to Congress no fewer than three "hangover" free trade agreements (FTA's) originally negotiated by the Bush administration. All three bills have been widely opposed by labor organizations, environmental groups, human rights activists, and others for their strong likelihood of offshoring U.S. jobs, further deregulating the corporate sector, hurting the livelihoods of farming communities, and ignoring labor and environmental standards and human rights. They are expected to be voted on Wednesday.

Since negotiations on it first began, more than 700,000 South Koreans have protested the largest of the three pending agreements, the U.S.-Korea Trade Agreement, or KORUS.

The Koreans have long been out en masse, says Kim Kyung-Ran of the Korean Confederation of Trade Unions, because they believe people on both sides of the Pacific will lose if the agreement passes—a reality workers across the world have come together to fight.

In January, Kim came to the U.S. to share with labor organizers efforts to stop the agreement by the 40,000 members or her Confederation. In 2006, when negotiations were held in Seattle, 60 Korean labor activists joined more than one thousand local labor, Korean solidarity, and social justice advocates to rally for trade deals that promote prosperity for people, not just business.

In a post-crash, post-oil-spill era, we're enacting agreements that will put fewer, not more, environmental and financial restraints on transnational rule bending.  With agreements like KORUS and the others—with Panama and Colombia—it's transnational companies that stand to gain the most. They regularly benefit from the reduced tariffs FTA's offer: First, they move production to countries with lower wages and fewer established labor rights and environmental regulations, then sell these goods back to the wealthier market they left; and second, they are able to sell less expensive products duty-free to countries that make the same products (in Mexico, corn, a highly subsidized U.S. surplus crop).

Right now, tens of thousands of Americans—from New York to Seattle to St. Louis—are in the streets for a related reason: standing up to the control corporations have over the political process. Perhaps nowhere is this manipulation better exemplified than in the realm of global trade.

In the past 20 years, the U.S. has consistently instated international trade policies that secure the “rights” of corporations over those of workers and indigenous communities; that protect intellectual property, but not farmers' land, workers' health, or communities' water and air; that appropriate taxpayer money to bolster industries that shift production overseas, leaving a wake of unemployment at home.

It would be easy for those whose jobs are affected to blame workers in other countries, or even workers in other industries less directly impacted by trade policy. But we are all impacted in some way, and in coming together to demand a say in trade negotiation, labor unions, faith-based organizations, social justice groups, farmers, educational institutions, migrant workers, small and mid-sized business owners, and workers in both organized and unorganized sectors have realized their similarities outweigh their differences.

The Same Mistake Twice

At a time of debilitating national unemployment, our leaders are considering passage of legislation that has been projected by the U.S. International Trade Commission to kill American jobs and increase our trade deficit (which, at $700 billion, is already the world's highest). It means that in a post-crash, post-oil-spill era, we're enacting agreements that will put fewer, not more, environmental and financial restraints on transnational rule bending.

KORUS is the biggest FTA since the North American Free Trade Agreement (NAFTA), and shares the same model. NAFTA famously promised to raise up a middle class in Mexico and create millions of jobs throughout the continent. It also famously failed to deliver on this promise: In the last 15 years there is abundant evidence that this trade deal has failed. According to the Bureau of Labor Statistics some 900,000 jobs were lost in the U.S. alone, and millions of Mexican farmers' livelihoods were devastated when they failed to compete with the influx of tariff-free, subsidized crops from the U.S.

As with NAFTA, the U.S.-Korea FTA will likely offshore thousands of jobs from an already flailing economy. A large number of the endangered jobs pay around 40.5 percent more than the average wage in the U.S. Of the 159,000 lost jobs projected by the Economic Policy Institute, high tech and green jobs, along with manufacturing, are most at risk. While the Korean electronics and textile industries are positioned to benefit from the deal, it's agribusiness that will prosper in the U.S., producing low-quality, low-paid jobs often filled by migrant laborers—many of whom, as we have seen, are here because the aftershocks of other trade agreements have driven them off their land.

Free trade proponents argue that lowering tariffs enables producers in other countries to reach U.S. markets. But unless small farmers and manufacturers have access to infrastructure and appropriate resources, lowering tariffs alone does nothing to stimulate domestic economies in countries like Mexico and Colombia. Instead, vulnerable domestic industries risk losing ownership and control of production entirely: In an open market, they are forced to compete with transnational corporations with resources to buy land, invest in infrastructure, and undersell them in their own markets.

10 miles over the border with North Korea, is a complex of sweatshops where 44,000 North Korean workers labor in factories for as little as 25 cents an hour—about half of which is directly paid to the North Korean state.Communities also risk losing control of their natural resources including water, land, and even air. Within months of the implementation of the Peru Free Trade Agreement in 2009, communal lands of indigenous populations were slated for oil and gas exploration. When these communities sought to protect their land and water, they were violently dispersed and some were killed by government enforcement of the FTA's investment rules—rules that protect corporations' rights to the Amazon.

But human rights concerns under KORUS reach further.

About 40 miles north of Seoul, and 10 miles over the border with North Korea, is a complex of sweatshops where 44,000 North Korean workers labor in factories for as little as 25 cents an hour—about half of which is directly paid to the North Korean state. This, the Kaesong Industrial Complex, is a South Korean free trade zone, where 120 corporations like Hyundai use disgracefully cheap labor to manufacture products intended for export—exports that may soon enter the U.S. duty-free. On top of that, KORUS' "Rule of Origin" states that fully two-thirds of a product can be made outside of the country and still have the label "Made in Korea," entering the U.S. without tariffs.

Good on Paper

Greg Palleson, now vice president of the Association of Western Pulp & Paper Workers Union, worked at a paper mill in Longview, Wash., before it closed and the machine he operated was put on a barge and shipped to China. Since the early 1980s, the Association has seen its ranks decline from 24,000 members to about 5,000. They have worked tirelessly to bring attention to the condition of the paper industry, where hard-fought-for environmental reforms on processing, treatment and disposal of paper byproducts, and workers' rights have literally been rolled back with each U.S. mill that relocates to China.

When Greg later visited China to see the transplanted mills, he saw that the workers were not really benefiting from the outsourced jobs, and neither were the surrounding communities: Paper mills have been identified as the largest source of pollution in China’s rural environment. According to Greg, a Chinese mill worker received about one dollar an hour, with no pension or benefits. Their skilled American counterparts are paid almost thirty times that, plus health care and a pension. Lack of adequate health care makes it all the more worrisome that Chinese workers are regularly exposed to unregulated toxic wastewater effluents.

Trade policy has the ugly effect of pitting workers around the world against one another. But when we talk to each other and see that neither side is actually benefiting, we start to wonder, who is? After all, if it's not working for you, and it's not working for me, it must be working for someone. This questioning opens the door to systemic change.

We need to continue to build and nourish natural alliances—across industries, across countries, across unions; between faith, farm, and migrant communities; among students and small and medium businesses—so our voices are at the decision-making table ensuring that trade policy benefits our communities.

The FTA's being considered this week by our leaders lack the voices of the 159,000 Americans like Greg who will lose their jobs in the worst economy in decades; of the small farmers in countries without subsidies to fall back on when foreign grains flood their market; of the laborers in the Kaesong Industrial Complex, which is slated to expand to 6,000 acres; of Colombia's imperiled labor unionists, 22 of whom have been murdered already this year.

It is we the people—not we the corporations—who should drive the vote on trade.

Kristen Beifus and Christa Hillstrom wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions.

Kristen Beifus

Kristen Beifus is the director of the Washington Fair Trade Coalition, consisting of 55 diverse organizations across the state of Washington working for trade policy that benefits people and the planet.

Christa Hillstrom

Christa Hillstrom is web managing editor at YES!

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