The Korea trade deal is bad for Pennsylvania
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President Barack Obama won support from hard-hit manufacturing workers in states like Pennsylvania in 2008 with his pledge to renegotiate the North American Free Trade Agreement and create trade agreements that generate jobs here. Now, he is flip-flopping on those commitments and pushing three NAFTA-modeled trade deals with Korea, Panama and Colombia. These deals are projected to further hurt our state and nation.
But don't take my word for it; that's the government talking. Even the U.S. International Trade Commission, the nonpartisan government agency whose job it is to study each trade deal, reports that the Korea and Colombia deals will increase the overall U.S. trade deficit. And even proponents of the Panama trade pact admit that "you don't do a deal with Panama because you think that's a solution to the U.S. jobs problem."
The Korea study also named seven sectors that would be hardest hit, including autos and other transportation equipment, metals, electronics and textile industries. That puts tens of thousands of Pennsylvania jobs at risk. There are over 28,400 jobs in these at-risk sectors in the Pittsburgh area alone.
Economists calculate that the Korea deal will result in the net loss of 159,000 American jobs in its first seven years.
The United States has experienced a net loss of more than 5 million manufacturing jobs since our politicians began passing NAFTA-style trade deals in the 1990s. About 313,800 Pennsylvania jobs have already been lost in this wholesale destruction of our manufacturing sector. We can't afford another bad trade deal that will lead to more job loss -- especially in the current economic climate.
Politicians say manufacturing is vital to expand exports and preserve our shrinking middle class. But this pact is a frontal assault on what remains of our industrial base. And U.S. export growth to the 17 countries with which we have these NAFTA-style deals is half of that to the rest of the world.
Moreover, these deals also have the NAFTA-style foreign investor privileges that promote offshoring and allow corporations to go around our domestic courts and directly challenge our state and federal laws before foreign tribunals to demand compensation from our tax dollars for claimed violations of the agreement.
And the Korea deal goes beyond NAFTA in giving duty-free access to many products with up to 65 percent of their value coming from countries other than the United States and Korea. This means, for example, that a "Korean" car can contain 65 percent of its value in Chinese parts and an "American" car 65 percent in Mexican parts. This shamefully low domestic content rule is an offshorer's dream. Even NAFTA required 50 percent domestic content. Similar rules are in the Colombia and Panama pacts.
This deal even allows South Korean goods with a majority of its value in inputs from North Korea to benefit. This is despite U.S. sanctions on trade with the Kim dictatorship meant to block funds for building weapons programs aimed at attacking us.
You do not avoid these deals' economic threats by being employed in a nonmanufacturing job. Trade theory predicts -- and decades of data prove -- that our current trade policy worsens inequality and leads to stagnant wages, and not only in manufacturing. In real terms, wages for the average U.S. worker are stuck at 1970s levels even as American worker productivity has nearly doubled. And the loss to date of 43,000 manufacturing facilities since NAFTA has decimated the tax base we all rely on to fund our schools and other essential services.
Our old trade policy has clearly been a net negative for workers in the Keystone State and across the United States. These three trade deals would be the latest damaging installment. I urge our congressional delegation to stand with working Pennsylvanians and vote them down.
First Published August 22, 2011 12:00 am