Free Trade Isn’t Fair Trade

by David Macaray / December 15th, 2010

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, a Los Angeles playwright and author (It’s Never Been Easy: Essays on Modern Labor), was a former union rep. He can be reached at: dmacaray@earthlink.net. Read other articles by David.

This article was posted on Wednesday, December 15th, 2010 at 7:00am and is filed under Korea, Unions.