October 20, 2006 Volume 107 Number 20

Oregon anti-NAFTA group says trade causing job losses

The Oregon Fair Trade Campaign, a labor-community alliance critical of NAFTA-style trade agreements, released a report Oct. 10 on the human impact of trade-related job losses in Oregon. The report is the product of over a year’s worth of interviews with Oregon workers who lost jobs due at least in part to foreign trade.

OFTC staffperson Kari Koch, with help from college students, interviewed over 100 dislocated workers in communities across the state.

Their stories are the heart of the report, which is available online at www.citizenstrade.org/oregon-stories.php

Angela Kile was an employee of J.R. Simplot until the company closed its Hermiston potato processing plant and moved the work to Canada, laying off 790 people in a town of 13,000. Kile said Simplot was the best job she ever had. Her job doing quality control on the graveyard shift paid $12.43 an hour. Bosses and co-workers were like family, Kile said, and employees had access to an on-site doctor.

“I became such close friends with a lot of people there,” Kile said. “And I watched them cry when they heard the news.”

The closure tore up co-worker relationships, not just paychecks, Kile said. She was one of the lucky ones: Trade Act benefits allow her to study industrial maintenance mechanics at a local college, and her husband is the family breadwinner.

Koch said one of the goals of the project was to halt the impression of outsourcing as inevitable, and instead get people to look at outsourcing as the result of specific decisions, including votes on trade agreements.

Congress has yet to reject a trade agreement negotiated by the president, but members aren’t hearing from constituents who’ve been impacted, said OFTC director Arthur Stamoulis.

It’s hard to know just how many jobs have been lost due to trade agreements. Since NAFTA passed in 1993, the U.S. Department of Labor has certified 32,000 Oregon workers as eligible for a special program of retraining benefits. But in most cases there were other factors besides trade in those layoffs. For example, consumers switching to sugar substitutes may also have contributed to the closure of Amalgamated Sugar in Nyssa, Oregon. The Atkins diet fad, turning people away from carbohydrates, may have contributed to the closure of the J.R. Simplot potato processing plant in Hermiston. Both were certified as trade-related closures.

On the other hand, there are other workers who may have lost jobs due to trade but who wouldn’t be eligible for benefits. Benefits go only to companies that themselves relocate or lose business to foreign trade. Workers at companies “upstream” or “downstream” from those companies aren’t covered — these could include suppliers, truck drivers, farmworkers and business consultants.

The Economic Policy Institute, based in Washington, D.C., takes a different approach to estimating trade-related job losses. They look at the average number of manufacturing jobs required to produce a million dollars of goods, and then estimate job-loss figures by looking at trade flows. In other words, if U.S. companies are selling stuff to other countries, that means U.S. workers are making it; if U.S. companies are buying stuff from other countries, U.S. workers aren’t making that stuff.

These days America is doing way more buying than selling: The trade deficit is at an all-time high. Trade surpluses largely disappeared after 1970, and trade deficits really began to shoot upward after 1997, setting new records every year but one since then. Last year, the U.S. trade deficit was $716 billion, and this year’s is on track to surpass that.

Trade with Mexico and Canada, America’s two partners in NAFTA, ballooned after the treaty passed, but U.S. imports grew faster than U.S. exports. From 1993 to 2004, EPI estimates 941,000 exported-related jobs added, but 1.9 million import-related jobs lost, for a net loss of over 1 million U.S. jobs to trade with Mexico and Canada. The figures for Oregon are 11,740 jobs created by increased exports, and 25,393 jobs lost to increased imports, for a net loss of 13,653. In Washington, EPI estimated 14,688 jobs created, and 31,203 jobs lost, for a net loss of 16,515 jobs.

Of course, it’s not obvious that the trade agreements themselves bear all the blame for that. Jobs were heading south to Mexico before NAFTA’s passage, and jobs are heading to China at a rapid clip without the U.S. having signed any NAFTA-style trade agreement with that country. But critics like OFTC’s Stamoulis say NAFTA-style trade agreements accelerate the trend by making it easier and safer for businesses to conduct foreign trade. And the treaties do nothing to increase labor standards in U.S. trading partners, something that might slow the flow of jobs to lower-wage countries.

The next trade agreement to come up for a vote in Congress (as early as Nov. 13) will be one with Peru. Trade watchers say it’s most likely to get a scheduled vote after the election in the “lame-duck” session of Congress before newly elected members take office in January. It could come up for a vote as early as Nov. 13. “It’s time we call upon our congressional delegation to ensure we have strong labor and environmental standards in these agreements,” said Oregon AFL-CIO President Tom Chamberlain.

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