New generation of trade treaties threaten workers

By Don McIntosh, Associate Editor

What the North American Free Trade Agreement (NAFTA) did to U.S. manufacturing, a parade of new foreign trade agreements now threatens to do to nearly every other sector of the U.S. economy.

NAFTA, which went into effect in 1994, made it easier for U.S. companies to close U.S. factories and reopen them in Mexico with workers who would earn a fraction of the wages. Over the last decade, U.S. factory workers who didn't lose their jobs outright often lost ground in wages because of competition with foreign workers and laid-off American workers.

In the next three years, as many as eight trade agreements are expected to go before Congress for approval. They include "bilateral agreements" between the U.S. and one other country and "multilateral agreements" which would write economic rules for regions or even much of the world. Taking up where the Clinton Administration left off, the Bush Administration has been negotiating bilateral agreements with Chile, Singapore, Australia and Morocco, and multilateral agreements with Southern Africa, Central America and the entire Western Hemisphere minus Cuba. The broadest negotiations of all would expand the General Agreement on Trade in Services (GATS), through the framework of the World Trade Organization (WTO), to which 144 nations are bound.

All of these treaty negotiations are complex and conducted almost entirely in secret. But leaks and occasional official announcements give a good overall picture of what they'll contain, enough to put labor leaders in a state of alarm.

The treaties would encourage the privatization and deregulation of services, and would place U.S. workers in numerous service industries in competition with foreign workers.

For example, under one proposal, companies could import foreign workers to work at foreign wage rates and under foreign labor laws, for "temporary" periods of up to three years.

In the brave new world of trade in services, U.S. hospitals could import nurses from the Philippines; South African construction firms could win Portland bridge repair contracts free of prevailing wage requirements or local craft licensing standards; post-Enron accounting regulations could be overturned; and project labor agreements struck down as barriers to trade. The WTO GATS negotiations cover 160 separate "services," including construction, transportation, education, health care, telecommunications, postal services, entertainment, banking, sanitation, accounting, engineering, data processing, software development, real estate, advertising, management consulting, security, janitorial, social service, photo development, printing and publishing, human resources, courier services, and television production. [The complete list, in all its detail, can be viewed at: - click on "Services sectoral classification list"].

"In these negotiations," says former Indiana Congressman Jim Jontz,"'services' means everything you can't drop on your foot." Jontz, who now heads the Portland-based labor-environmentalist group Alliance for Sustainable Jobs and the Environment, has been organizing against corporate-conceived trade treaties since NAFTA. Don't be fooled by terminology, Jontz advises: "When they say 'free trade,' what they're really talking about are rules to protect foreign investors.

"They'd like to take their agenda of privatization and deregulation to somewhere you can't fight them - to unaccountable international trade tribunals where ordinary judicial rules don't apply." "The good news is we do have time to stop this, if we organize now," Jontz says. Under the "fast-track" law passed by Congress last year, after the president presents a signed trade agreement, the House has 60 days and the Senate 45 days to approve or reject it, with no amendments allowed.

The first of the bilateral treaties - an agreement with Chile - is expected to be signed in late April, at which point the Bush Administration could send it to Congress for approval at any time. It's expected to go to Congress this summer.

Meanwhile, the negotiations to create a Free Trade Area of the Americas - dubbed "NAFTA on steroids" by opponents - are scheduled to conclude in 2005, as are the WTO GATS negotiations. To Jontz and other critics of the corporate trade agenda, this means time to educate and mobilize.

At the Dec. 13 meeting of the Oregon AFL-CIO Executive Board, Research Director Lynn-Marie Crider made a presentation intended as a wake-up call. The Oregon AFL-CIO formed an ad hoc committee on trade, and leaders of the Northwest Oregon Labor Council and local unions are planning a member-education and mobilization campaign. They will start by training speakers to take the message to local union meetings. The goal is to get members of Congress to commit to a trade treaty yardstick - a set of principles by which to measure proposed trade treaties that would guide their votes as each treaty comes up for passage.

The Oregon AFL-CIO Executive Board approved such a yardstick, designed by Crider in consultation with labor allies, at its Feb. 28 meeting. In essence, to commit to the yardstick is to say no to any trade treaty that sacrifices protections for workers, the environment and public health, or that sets up a trade dispute resolution process that is secretive or closed to input from the public.

"It's become clear to union workers that the trade agenda is not in their interests," said Thea Lee, assistant director of public policy for the national AFL-CIO. Lee is one of several AFL-CIO officials who sit on U.S. government trade advisory panels. Under a 1974 law, the U.S. government is required to appoint environmental and labor representatives to several such panels, which would otherwise consist entirely of representatives of different business sectors. But it has taken a lawsuit and a court order to get the Bush Administration to comply; labor's environmental group allies are still fighting to get their representative.

Lee said she has no illusion that the Bush Administration would take her advice on trade negotiations, but serving on the panel gives her access to information about negotiations that are extraordinary for their secrecy.

Ironically, once she sees these details, Lee is forbidden to share what she knows with the 13 million union members she represents.

She can discuss them in broad terms, however. She said the new deals would make it easier for corporations to outsource service work to low-wage countries.

This outsourcing is already occurring in a massive way, Lee said, particularly to India, the Philippines, South Africa and Ireland, because those countries have English-speaking workers.

A Feb. 3 Business Week cover story entitled "Is Your Job Next?" documented a growing wave of outsourcing, in which U.S. companies are transferring clerical, customer service and computer work to low-wage foreign workforces. And it's not just low-skilled work: Architects, software engineers, even Wall Street financial analysts, are being replaced by foreign workers. One observer quoted by the magazine predicted 3.3 million white-collar jobs will be lost to low-wage countries by 2015.

Most of these new job losses are in non-union sectors, but the trend is affecting white-collar unions too. The Society of Professional Engineering Employees in Aerospace (SPEEA) has fought - with only limited success - efforts by Boeing to outsource work to engineers in Russia, even as the company is laying off thousands of U.S. engineers.

"It is part of the logical extension of what happened in manufacturing," Lee said. "If you don't have any allegiance to your country or care about the conditions of your workers, it becomes easy to move the work abroad. With the new lower trade barriers, there's not much advantage to doing it here."

It's a trend that Lee believes will profoundly undermine the U.S. standard of living.

"The prosperity of the United States is based on the idea that workers are also consumers. If you rupture that, there's no limit to how low you can push wages. If you're a CEO who's moving production abroad, your workers are not your neighbors, not your kids, and not your consumers, so why would you care how little they make?"

"We're being sold out," said Oregon U.S. Representative Peter DeFazio, D-Eugene, a longtime critic of trade treaties like NAFTA. "And it's being done in secret, for fear that elected representatives and citizens groups will have time to scrutinize these agreements."

DeFazio said that even he, as a member of Congress, can't get the text of U.S. government trade proposals to foreign governments.

Like Lee, DeFazio said he sees looming disaster ahead from any move to accelerate U.S. job flight. "If these trade agreements go through, in seven years we'll have the financial profile of Argentina."

March 7, 2003 issue

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