Mingas statement on Korea FTA
Mingas | February 15, 2011
Mingas statement on Korea FTA
Mingas firmly opposes the U.S.-Korea Free Trade Agreement under current consideration in Washington. Like NAFTA, the U.S.-Korea FTA will set new rules of international investment that will guarantee profits for multinational corporations, increase their freedom to move about the globe in search of cheap labor, and weaken regulations that protect workers and communities.
The labor standards included in the agreement are meaningless because of a footnote that renders them nonbinding. If a worker does file a complaint, there is an onerous 11-step process that has never been successfully navigated over the course of 16 years of “free trade” provisions. Not a single labor complaint has ever resulted in a fine.
In stark contrast, investors have recourse to a binding, one-step, private arbitration process that renders quick and efficient decisions over and above the laws and jurisdiction of national governments. Whether in Korea or the U.S., any municipal, state, or federal legislation designed to improve wages, working conditions, regulations, or environmental conditions can be blocked by this treaty. As in the case of NAFTA, a U.S. investor in Korea, or a Korean investor in the U.S., has the right to challenge any such measure as an act of expropriation subject to legal action for compensation, to be decided by an “international” arbitration tribunal. Investors can even bring suit if their “reasonable expectation of profit” is not met. This aspect of “free trade” agreements was implemented beginning with NAFTA and has led to several cases where multinational corporations have been awarded and received compensation from local governments.
Another consequence of this misnomered “free trade” agreement will be a tremendous downward effect on U.S. wages and working conditions through outsourcing. Under the “rules of origin” section of the agreement, products will be regarded as “national” if they contain a mere 35% of inputs from either Korea or the U.S. This means that U.S. and Korean multinationals can move up to 65% of production offshore, to low-wage third countries like China or Vietnam, and import/export the products as “Korean” or “American.” That is the kind of wage-pressure competition that U.S. domestic auto parts manufacturers and workers alike will face.
The U.S. government’s International Trade Commission itself estimates that the overall impact of the Korea FTA will be an increase in the U.S. trade deficit which translates, according to Economic Policy Institute estimates, into a loss of 159,000 U.S. jobs in the next seven years. The same agency states that the jobs affected will be high-paying positions in high-technology sectors as well as those in auto parts manufacturing.
The U.S.-Korea treaty is an agreement of the multinationals, by the multinationals and for the multinationals. It undermines national sovereignty and turns workers into expendable commodities with no mechanisms to protect themselves and their livelihoods.
If the U.S.-Korea FTA is approved, two other treaties of the same type with Panama and Colombia will likewise be presented for ratification. Once the Panama treaty is approved, provisions regarding financial transactions will solidify Panama as a center for money laundering and risky financial speculation. And of particular concern to our organization, a U.S.-Colombia FTA would be a disaster: among other things, it would further ruin Colombian agriculture, which is already foundering in a flood of cheap, tariff-free agricultural imports from the U.S.; swell the suffering ranks of a displaced rural population already numbering in the millions; and give legitimacy to the situation in the country with the world’s worst record in terms of labor rights, where murders of political and labor activists have continued during the administration of Juan Manuel Santos.
The U.S.-Korea FTA must be opposed not only because of its own terrible effects on U.S. and Korean workers, peoples and communities, but also because it would open the door to similar disastrous agreements with Panama and Colombia.
