Free trade deal will be bad for workers
Portland Insight | Feb 10, 2011
Guest Opinion
Free trade deal will be bad for workers
My View • Large companies, not Oregon employees will benefit from pact
By Arthur Stamoulis
What’s good for Oregon employers isn’t always good for their employees.This point seems fairly obvious, yet somehow it gets lost in the debate on international trade policy.
When Doug Badger of the Portland Business Alliance argued in a Portland Tribune cover story that the Korea-U.S. Free Trade Agreement would be “much more advantageous to our side than to their side,” he at first appeared grossly misinformed (Oregon may be a trade winner, Jan. 27).
As the same article pointed out, the U.S. International Trade Commission’s official study on the Korea pact found that it would increase the overall U.S. trade deficit – meaning that the U.S. will be buying more than it sells as a result of the agreement.
The ITC isn’t known for overstating the potential costs of free trade deals. This is the agency that predicted that the U.S. decision to allow China into the World Trade Organization, for instance, would only increase the trade deficit by $1 billion.By 2008, the deficit with China had instead reached $185 billion.
Passing a trade deal that further increases the trade deficit, especially at a time like this, would have dire economic consequences.The Economic Policy Institute predicts that, should the Korea trade pact move forward, 888,000 American jobs will be displaced by Korean imports within just seven years.Yes, some jobs will be created as a result of new exports, too, but not nearly enough to make up for all the jobs that are destroyed.
Since the North American Free Trade Agreement took effect in 1994, the U.S. Labor Department has certified 51,339 individual Oregon jobs as lost to either direct offshoring or displacement by imports.This figure is almost certainly low for a variety of reasons, including that service-sector jobs shipped overseas were typically excluded from the data set until midway through 2009.The true number of Oregon jobs lost as a result of deficit-expanding trade policies could be as much as double the Labor Department figure.
The local jobs most threatened by the proposed Korea Free Trade Agreement are the ones that are supposed to represent the state’s economic future.The electronics sector, which employs almost 10,000 Oregonians in fields such as semiconductors and solar panels, is expected to be one of the biggest losers, according to the ITC.
These so-called 21st century jobs aren’t ones we can afford to send away, especially when one considers that many of our “old school” jobs are at risk, too. Iconic Northwest industries from transportation equipment to wheat production are also on the ITC’s list of losers under the Korea trade deal. The ITC even predicts that the U.S. service sector will be a net loser as a result of the pact.
Looking at the history of past trade agreements, none other than Karan Bhatia, the chief U.S. negotiator of the Korea Free Trade Agreement, argues that it is a “myth” that “the U.S. will get the bulk of the benefits” from this trade deal.So how can local business leaders possibly claim that the Korea Free Trade Agreement will be best for “our side”?
In this instance, it all depends how you define those sides. Large corporations that would benefit from more easily offshoring their production either directly or through their supply chains will, in fact, see benefits resulting from this deal. It’s those of us who rely on a paycheck who will suffer should the Korea Free Trade Agreement be enacted.
Even if one’s own job is immune from the ravages of offshoring, the rise in unemployment from other people’s job losses contributes to overall stagnation in wages and benefits.The tax base is reduced.Home values can decline.“Our side” loses out big time.
Arthur Stamoulis is director of the Oregon Fair Trade Campaign, a statewide coalition of labor, environmental and human rights organizations working together to improve trade policy.
