Free Trade Isn’t Fair Trade

By now most labor watchers are aware of the details of the pending trade pact between the U.S. and South Korea, and of the scorn and ridicule that’s being heaped upon the (UAW) United Auto Workers and UFCW (United Food and Commercial Workers) for breaking with tradition and endorsing the treaty.

The IAM (International Association of Machinists) and CWA (Communications Workers of America) have already depicted the treaty as being a step backwards for the American worker, and the AFL-CIO is expected to issue a formal denunciation on Thursday.

Admittedly, the UAW’s approval was a bit of a jolt.  Indeed, for the last 20 years — even before passage of NAFTA in 1993 — organized labor has been vehemently opposed to what’s euphemistically known as “free trade.”  And while that opposition has been unflatteringly portrayed by the media as selfishness or near-sightedness, it was organized labor who instantly saw these bogus treaties for what they were.

First of all, free trade isn’t free.  Although the word “free” happily connotes an enterprise that’s unfettered and unrestrained, these treaties — cruelly and ironically — are the opposite of that.  They are rigidly delineated, highly regulated and carefully monitored by their signatory governments and, more importantly, by the corporations they represent.

Second, free trade isn’t fair trade.  Those who profit from these agreements are the governments who approved them, the corporations who brokered them, and the Wall Street banks who financed them — not the workers who produce the goods.  All one has to do is look at the current labor unrest in places like Bangladesh, Colombia, Guatemala, Honduras, and India to see that these arrangements are creating victims, not “partners.”

So why did the UAW buy into the Korean treaty?  To answer that, one needs to identify what their choices were.  Clearly, there were only two available:

1. The UAW could do what it and every other large industrial union have been doing ever since NAFTA became law.  They could continue to spend millions of dollars lobbying against “free trade,” donate money to sympathetic politicians, deplore these treaties publicly, mobilize progressive groups to join in their protests, hold rallies, attend conventions, sponsor boycotts, urge union members to write their congressmen, etc.

Unfortunately, these tactics haven’t been effective.  Drawing a line in the sand and refusing to cross it didn’t stop NAFTA and CAFTA, didn’t get single-payer health care, didn’t get the EFCA, didn’t get striker replacements made illegal, didn’t get the Fed-Ex exemption repealed.  And as disappointing as the Democrats have been, organized labor’s avowed enemy, the Republican Party, just gained 63 seats in Congress.  No, playing Mr. Tough Guy hasn’t worked.

2.  Or the UAW could try and cut the best deal possible.  Instead of banging its head against the wall, futilely hoping to get Congress to do what it — and the White House — are clearly unwilling to do, the union could push for specific provisions in the treaty that would result in more American cars being sold in Korea and, accordingly, more jobs for American workers.

Which is what this treaty does.  Its provisions call for the 2.5 percent tariff on Korean cars and the 25-percent tariff on SUVs to remain in place for six more years.  Without the treaty these tariffs were set to expire this year.  Also, Korea will cut the tariff on American cars from 8-percent to 4-percent, and will allow 75,000 American cars to enter Korea each year, even if they don’t meet Korea’s strict (aka “protectionist”) safety standards.

Give the union some credit.  No one knows more about what will help the UAW than the UAW itself.  No one has to tell this union about the implications of globalization or new technologies or pension liabilities or an aging workforce or the rising costs of health care.  The UAW’s president, Bob King, has become an expert on these subjects.

While it’s clear why the UAW endorsed the pact, why did the UCFW embrace it?  Substitute “processed meat” for “cars,” and you have your answer.  This treaty significantly opens up the Korean grocery market by eliminating its prohibitive 40-percent tariff on American beef, a move which, some economists have estimated, could result in as many as 20,000 additional U.S. meat-processing jobs.

Although the treaty still needs to be ratified by both the House and Senate, as well as the South Korean National Assembly, Korean farmers and Korean labor union members have been publicly protesting, fearing that the pact places them at a disadvantage.

If the debate were all about ideology, then, yes, the UAW would deserve criticism for “caving.”  But if it’s not about theory, it’s about economic survival.  And despite America’s hundred-year love affair with the automobile, and despite the UAW’s sterling history and undeniable influence on virtually every industrial union that followed it, nobody’s been hit harder than the UAW.

They’re not only squeezed by Japanese, Korean, and German exports (all of whom benefit from government incentives), they’re under attack by the American South, which tantalizes these foreign automakers with offers of non-union labor, tax breaks, and few environmental regulations.  At last count, there were more than 40 assembly and parts factories in Dixie.

And not only are foreign automakers and the American South drawing blood, but the U.S. media have also cut into them.  Instead of noting how many staggering wage and benefit concessions the UAW has already made (starting pay is now $14/hour, or about $28,000 a year), the media continue to portray the union as bloated and obsolete.  They do it because organized labor presents an easy target and because they haven’t got the courage to go after corporate America.

Incredibly, the UAW’s membership now stands at about 390,000.  Which means, going back to its glory days in the early 1970s, that it’s lost more than one million members.   That’s not just a million men and women who no longer have jobs, that’s a million middle-class paychecks that no longer contribute to the economy.

So if you think you’re justified in calling the UAW a “bunch of selfish pigs” for trying to hang on to its membership, that’s your privilege.  But unless you can offer a meaningful alternative, no one’s going to take you seriously… least of all working people.

David Macaray is a playwright and author, whose latest book is How to Win Friends and Avoid Sacred Cows: Weird Adventures in India: Hindus, Sikhs, and Muslims When the Peace Corps was New. Everything you ever wanted to know about India but were afraid to ask. He can be reached at: Read other articles by David.

3 comments on this article so far ...

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  1. jlohman said on December 16th, 2010 at 10:57am #

    Of course free trade isn’t fair trade. That’s not what the Fat Cat CEOs wanted when they paid off the politicians to pass the various trade bills, like NAFTA and CAFTA. They knew that other countries’ wages were one-tenth ours and that’s the best way for them to increase their salaries and bonuses. So these crafty guys decided to share their booty with the politicians that made it all happen. The call it “political speech” and “campaign contributions.”

    The rest of us know it by its real name: political bribery.

    Nothing else matters going forward. We must eliminate the corruption first, then you can move our country forward.

    Our problem is NOT government, and it is not R’s or D’s. It *IS* that government is owned by the special interests that want in the taxpayer’s pockets.

    As a former CEO my company would not have survived if I had an employee or board of directors who took money on the side and gave away company assets in return. Our country can’t survive this corruption either.

    So nothing changes. We elect a new group of politicians and the Fat Cats simply re-direct their bribes as we continue down our spiral. Only a national revolution will get our attention, but then it’s too late. And all because our politicians refuse to stop the bribery they benefit from.

    If politicians are going to be beholden to their funders, those funders should be the taxpayers. And at $5 per taxpayer per year it would be a bargain. Even at 100 times that. We MUST demand that our senators and representative pass the bill at:

    Jack Lohman …

  2. Charlie said on December 16th, 2010 at 1:22pm #

    I wouldn’t say that the UAW bought into the treaty. Apparently, only UAW President Bob King and his inner circle bought into it as far as I can tell. I don’t know his motives for endorsing the treaty, but I suspect that he has damaged the UAW greatly and that sadly the union will now lose even more members. In addition, other unions will begin to withdraw their support of and respect for the UAW because they feel betrayed. King has not yet offered a credible explanation to other unions for his actions, and he has chosen instead to arrogantly denounce those who have criticized him.

    I found these relevant articles interesting:

    King’s rush to endorse the treaty was perhaps too hasty. I can’t know for certain, of course, but I would think that many UAW members, if given all the facts, would not support King’s decision.

    And by the way, here in the American South, we are not the enemy of the Northern unions and manufacturing industries, and we are not “drawing blood.” The UAW and the Northern states were free to compete against us for any industry we have acquired. Instead, they chose to make themselves less attractive to various industries. Your article portrays King’s treaty endorsement as a matter of survival, a way of making the best of a difficult situation. We did the same thing in the South in acquiring automotive assembly and parts factories, and yet you portray us as almost under-handed and unfair in competing with the North. We were trying to help our economy, not hurt the economy of the North. We are not “bad” people; we’re just able to offer legitimate incentives to some manufacturers to locate here. We need jobs too. Don’t fault us for trying to attract them here.

    And the statement about “few environmental regulations” should perhaps be revisited. The primary environmental regulations governing manufacturing are Federal, not State. They apply equally in all 50 States. It is countries such as Mexico, China, and Vietnam that offer lax environmental oversight, not the States in the American South. In fact, you might want to compare, for example, the air pollution in the South with that in Los Angeles, which year after year ranks in the top five most polluted cities in the US, often holding the unenviable number 1 position. Detroit and Pittsburgh, Northern manufacturing meccas, also fare rather badly in such surveys. (See the American Lung Association’s State of the Air Report for 2010.) Pointing an accusing finger at the South may be easy, but we can’t see it through your smog.

  3. UhClem said on January 2nd, 2011 at 11:07am #

    >That’s not just a million men and women who no longer have jobs, that’s a
    >million middle-class paychecks that no longer contribute to the

    So you think that because they’re not members of the UAW they must be standing on a street corner somewhere selling pencils? You know, people can live their lives, even hold jobs, without paying union dues.