Votes on NAFTA-style Pacts with Korea, Colombia & Panama this Summer Could Undermine Economic Recovery


At the same time that unemployment remains at historic highs, creeping back up to nine percent last month as more Americans who had given up looking for work return to the job market, corporations are lobbying hard in Washington, DC for free trade deals that will make it easier for them to send more jobs overseas.

Despite public opinion showing broad rejection of North American Free Trade Agreement (NAFTA)-style deals, scores of campaign promises to uphold fair trade principles, and a call from the National Conference of State Legislatures (NCSL) to bar provisions that pre-empt state sovereignty, the Obama administration and some in Congress are pushing for the fast-tracked adoption of the three such trade deals negotiated by former-President George W. Bush with South Korea, Colombia and Panama. Bringing forth the three FTAs at the same time echoes undemocratic tactics that corporate-allied state lawmakers have used this year to rush through unpopular attacks on nurses, teachers, firefighters and collective bargaining rights before prolonged public attention divided the voting blocs needed for passage. In recent weeks, some conservative legislators have been breaking party ranks to criticize the pursuit of this anti-middle class ideological agenda, rather than focusing on what is still the top priority of the American public: creating jobs.

There couldn’t be a worse time to move forward with these agreements, with state economies still in a fragile recovery, the middle class under attack, and more job creation desperately needed. Despite the spin on last month’s job creation figures, the real jobless numbers continue to rise, with 24.8 million underemployed and 2.3 million new working-age Americans opting out of the labor force in 2010.

For a refresher of how NAFTA affected your state, check out a new study by the Economic Policy Institute (EPI) which explains how NAFTA went wrong and why the new trade deals modeled on it could lead to more job losses across the country. The report concludes that while NAFTA supporters promised that the agreement would create a trade surplus and U.S. jobs, it did neither. By 2010 U.S. trade deficits with Mexico totaled $97.2 billion and displaced large swaths of U.S. workers, with a net loss of 683,000 jobs attributable to the trade agreement.

Every single state has experienced a net loss of jobs due to NAFTA. Twenty-four states lost more than 10,000 jobs each, including many of the states where conservative lawmakers are attacking workers’ rights, public servants, and the middle class this year rather than creating jobs: Wisconsin (14,500), Ohio (34,900), Indiana (24,400), Michigan (43,600), Florida (28,800), Pennsylvania (26,300), Tennessee (16,400), Texas (55,600), and Missouri (12,600). New Hampshire lost 4,000 jobs, making it the sixth-hardest hit in percentage of total jobs lost, due to the small size of the state population.

The three NAFTA-style agreements up for a vote this summer are being sold with similar arguments used by NAFTA-supporters in the early 1990’s. And just like NAFTA, these pacts are likely to undermine the U.S. economy. The Korea, Colombia and Panama deals also go boldly against NCSL policy by empowering foreign investors with the right to sue for compensation in private tribunals if they can argue that a state or federal law has or could undermine company profits.

Pending Trade Deals at a Glance:

  • U.S.-Korea FTA– The Korea deal is the biggest U.S. free trade agreement (FTA) since NAFTA and could undermine job growth in the United States. EPI predicts that the Korea deal could cost the United States 150,000 jobs in the first seven years of the agreement. (See Hawaii State Rep. Roy Takumi’s op-ed explaining why the Korea FTA is bad for states).
  • U.S.-Colombia FTA– If passed, the Colombia deal would contribute to the severe human rights crisis in Colombia and could lower the bar for workers’ rights throughout the hemisphere. Human rights atrocities continue to be committed against workers in Colombia with shameless impunity. Giving U.S. companies extra incentives to do business in Colombia without ensuring first that the Colombian government resolves labor abuses would be a shameful disservice to workers in Colombia and the United States.
  • U.S.-Panama FTA– For a glimpse into one of the major flaws of this deal, just watch how quickly a Global Trade Watch summer intern set up an offshore tax haven! Panama has yet to implement legislation that sufficiently cracks down on tax dodging.

These deals are gifts to the same U.S. multinational companies that have offshored the U.S. middle class and continue to dodge taxes. In recent weeks, a bipartisan coalition of state legislators began circulating a letter asking colleagues to send a message to the U.S. Congress that state legislators don’t want any more NAFTAs. For more information on the letter, contact Sarah Edelman at Global Trade Watch or call 202-454-5193.

Full Resources from this Article

Votes on NAFTA-style Pacts with Korea, Colombia & Panama this Summer Could Undermine Economic Recovery

Economic Policy Institute – Heading South: U.S.-Mexico trade and job displacement after NAFTA
  – Continuing dearth of job opportunities leaves many workers still sidelined
National Conference of State Legislators – Policy on Free Trade and Federalism
American Prospect – SPECIAL REPORT: Jobs Well Done: What the Obama Administration Can Do for American Workers Now
Forum on Democracy and Trade – Plain Language Guide: Global Agreement on Trade and Services Negotiations on Domestic Regulation
Global Development and Environment Institute at Tufts University – Reforming U.S. Investment Treaties

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