New trade bill would be disastrous to NC

by MaryBe McMillan, NC AFL-CIO, published in News and Observer, October 10, 2013.

Job growth in North Carolina is going in the wrong direction. The most recent government data revealed a surprising increase in the state’s unemployment rate – now the third-highest unemployment rate in the country. Five years after the financial crash, nearly 1 out of 10 North Carolinian workers is still out of a job.

And a so-called “trade” deal that was sold to us as a job-providing solution has become part of the job-eroding problem.

Under the first year of implementation of the U.S.-Korea Free Trade Agreement, U.S. exports to Korea of LED lights, photovoltaic cells and similar high-tech manufactured goods plunged 41 percent, in comparison to the year before the agreement took effect. These energy-saving products, a high-growth sector, have already risen to stand among North Carolina’s most important exports, making the export loss under the Korea deal especially bad news for jobs.

Unfortunately, the Korea FTA has been bad news all around. The overall U.S. trade deficit with Korea grew 37 percent under the first year of the agreement, resulting in the net loss of 40,000 American jobs according to a recent study.

Not only did imports from Korea increase, as predicted by government studies before Congress voted, but overall U.S. goods exports to Korea declined by 10 percent (a $4.2 billion decrease) compared with the year before FTA implementation. In the first year of the deal, U.S. beef exports to Korea dropped 8 percent over the prior year, while pork exports fell 24 percent and poultry exports plunged 41 percent. And a slight $114 million rise in U.S. automotive exports to Korea under the deal was wiped out by an enormous $2.5 billion surge in automotive imports from Korea, prompting a 16 percent increase in the U.S. automotive deficit with Korea.

And, now the Obama administration is asking Congress to give up its exclusive constitutional authority over trade so an even more threatening trade pact can be foisted on North Carolinians. That agreement is the Trans-Pacific Partnership, a massive 12-nation deal based on the North American Free Trade Agreement that the administration wants to sign this year.

The Trans-Pacific Partnership would continue the Korea FTA’s job-eroding legacy. The TPP includes Vietnam, a new favored destination of U.S. corporations looking to offshore manufacturing jobs, given that minimum wages there are a fraction of those in China. In addition, Vietnam was recently red-listed by the Department of Labor as one of just four countries that use both child labor and forced labor in apparel production. If that weren’t enough, a leaked chapter of the TPP would provide special privileges to firms that relocate abroad, eliminating many of the usual risks that make corporations think twice about offshoring to low-wage countries like Vietnam.

To push through the TPP, Congress is being asked to grant the president what is called “Fast Track” authority. Fast Track would let the president sign trade deals before Congress even gets to vote on them. This would remove Congress’ authority to make sure deals like the TPP do not cause us more harm. In the past, Congress has said no to this power grab, but the TPP is packed with so many outrageous provisions, including a ban on Buy American policies, that the Obama administration needs this constitution-busting procedure to railroad the TPP into effect.

The last thing that North Carolina’s congressional delegation should do is support Fast Track and give up its constitutional authority to protect us from another damaging trade deal. North Carolina has lost nearly one half of its manufacturing jobs (an incredible 374,612 lost jobs) since implementation of NAFTA and the global World Trade Organization agreement, according to the Bureau of Labor Statistics. This takes into account both jobs created by exports and jobs displaced by imports. These are aggregate numbers, but the Department of Labor tracks instances of specific workers at specific workplaces who applied for special benefits for trade-displaced workers.

In North Carolina, there are 202,293 such workers certified under the Trade Adjustment Assistance program as having lost their job due to imports or offshoring. This program is difficult to qualify for, and this figure includes only those workers who were certified.

The hard lesson of the fall in key North Carolina exports under the Korea agreement hopefully will lead members of Congress, including the Triangle’s David Price, to retain their constitutional authority over trade and vote no on Fast Track so they can ensure that the next trade deals do not do more damage.