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Labor, capital and the Korea- U.S. ‘free trade’ agreement

Published Feb 6, 2011 9:05 PM

Sometime in the first half of this year Congress will be voting on KORUS, the south Korea-U.S. “free trade” agreement. With the support of not only the Obama administration but also two major unions — the United Auto Workers and the Food and Commercial Workers — passage of this NAFTA-like agreement seems likely.

The ruling class could not be more ecstatic.

“Manufacturers congratulate President Obama,” stated John Engler, a former Michigan governor who is now president of the National Association of Manufacturers.

“Now it’s time for the new Congress to make passage of KORUS a top priority in January,” stated U.S. Chamber of Commerce president and CEO Thomas Donahue. “We will do everything in our power to round up the votes.”

More statements of corporate solidarity came from AT&T, Caterpillar, Chevron, Microsoft, Wal-Mart, UPS, Citigroup, JPMorgan Chase, Honeywell, Boeing, Intel, Amway and the Pharmaceutical Research and Manufacturers of America.

The American Meat Institute and the National Pork Producers Council have come out in favor of the latest version of KORUS, modified to eventually allow U.S. food monopolies to flood the south Korean market. Beef exports could increase tenfold from their current value of around $200 million if the agreement becomes law. Support from the Food and Commercial Workers is tied to industry claims — which no union should ever treat as fact — that 26,700 jobs will be generated.

However, it is not creating jobs but maximizing profits sweated out of both Korean and U.S. workers that is behind the enthusiasm of big business.

General Motors, Chrysler and Ford issued a joint statement of support. Changes to the 2007 KORUS — which Ford and Chrysler opposed — could make it easier for the Detroit Three to sell vehicles in south Korea. GM, the parent company of Korean car manufacturer Daewoo, was neutral at that time. Ford CEO Alan Mulally reportedly wrote the actual language, with input from UAW President Bob King. King’s support for this FTA contrasts sharply to the UAW’s staunch opposition to NAFTA and other trade agreements. The argument is that exports to south Korea will create jobs for UAW members. But how many and for how long? Sales of 100,000 vehicles might translate into 3,500 union jobs. The union’s membership has fallen from 766,000 to 355,000 since NAFTA went into effect.

The tariffs on Korean-made vehicles will be phased out eventually, eliminating Detroit’s trade advantage. Even in its current version KORUS has the strong support of Hyundai Kia Motor Corp. The militant Korean Metal Workers Union remains steadfastly opposed.

Those in labor favoring this FTA have advanced another argument: If labor doesn’t support this version, the new Republican-dominated Congress will pass a worse version. Yet voices on both sides of the congressional aisle have joined the chorus for KORUS. Republican Sen. Mitch McConnell of Kentucky, who attacked the UAW during the 2008 bailout hearings, proclaimed that “with a more balanced Congress we will see renewed support for this and other trade agreements that have languished for the past two years.” McConnell’s spouse, Elaine Chao, who was Bush’s labor secretary and is a staunch opponent of the Employee Free Choice Act, concurs.

NAM, the Chamber of Commerce and many of the above-mentioned companies are major Republican donors. The ultraright Heritage Foundation put out a statement backing KORUS.

‘This agreement must be stopped’

The unions that have gotten behind President Obama on this issue argue that it is good for their membership. But what about the rest of the working class? The Economic Policy Institute estimates that 159,000 jobs will be lost in the U.S. if KORUS goes through; south Korean farmers fear the loss of 200,000 livelihoods when the barriers to U.S. agricultural products fall.

The AFL-CIO and some of its member unions — notably the Steelworkers, Machinists and Communication Workers — have let Washington know that they still oppose this FTA. The strongest statements, underscoring the need for class-wide solidarity, have come from the independent International Longshore Workers Union and the United Electrical Workers.

In a December letter to then-House Speaker Nancy Pelosi, ILWU President Robert McElrath stated, “By all accounts, the Korea-United States Free Trade Agreement (KORUS FTA) will increase trade between South Korea and the United States, which will result in an increase in cargo movement between the two countries. An increase in cargo movement is good for dockworkers. However, this fact alone is insufficient to overcome the vast deficiencies of the KORUS FTA. The KORUS FTA will cost jobs, lower environmental, labor, food and product quality standards, and empower corporations from the United States and South Korea to challenge public interests in both countries.”

In its own statement the UE pointed out that, “while the Administration has touted KORUS FTA as promoting jobs, our experience with NAFTA has convinced us that these agreements do far more to increase corporate profits than to create jobs or put food on the tables of working families. ... This agreement must also be viewed in light of the increased tensions between North and South Korea, as an attempt to shore up South Korea’s president and broaden the national security relationship with South Korea. The need to declare a victory by political leaders cannot come at the expense of increased militarization and the wellbeing of working people in the U.S. and Korea.

“Not only is it seriously deficient, but it will likely grease the wheels for similar agreements with Colombia and Panama — both countries with egregious records on labor rights.

“This NAFTA-like bill must be stopped.”