Politico | December 6, 2010
UAW under fire for trade deal support
By: John Maggs
Organized labor is in an uproar over the new free trade agreement with South Korea, with some union leaders accusing United Auto Workers president Bob King of embracing a deal to curry favor with a White House that saved the UAW with its $80 billion bailout of the auto industry.
King denied the charge in an interview Monday and said he would work to convince his fellow union presidents to support the agreement, predicting that “ they will see that this a good deal for our members, and they will respect that.”
AFL-CIO president Richard Trumka hasn’t rendered a verdict yet on the deal reached Friday between U.S. and South Korean negotiators, despite the labor federation’s longstanding position opposing trade deals that don’t include rules that would require other countries to improve workplace and environmental standards to slow the loss of American jobs overseas.
A draft statement criticizing the trade deal has been sitting on his desk since last week, as he continues to work the phones gauging whether to condemn the deal, or stay neutral.
Congressional Democrats are waiting to see how the union drama plays out before deciding whether to back Obama’s deal or fight it, as Democrats did when Democratic president Bill Clinton pushed through the North American Free Trade Agreement. “Nobody is happy about this,” said one Democratic House member close to Speaker Nancy Pelosi. “It is kind of like ‘do we really need this right now?”
Trumka was consulting Monday with other union presidents, many of whom strongly object to the deal, trying to decide whether to break ranks with the UAW and oppose the agreement, or take a neutral stance.
Neutrality would be a watershed moment for the labor movement, which has made a harsh attack on trade and globalization a central principle for decades, according to Andy Stern, former president of the Service Employees International Union.
Stern said Monday that the labor movement needs to move beyond can’t win efforts to hold back free trade and instead work to boost investments in education and training for American workers.
The AFL-CIO was neutral on the 2005 Peru free trade pact, but that country’s exports are tiny – about 7 percent of South Korea’s. Jeffrey Schott, an economist on a panel of outside advisers advising the White House on trade, said it would be “very significant” if the AFL-CIO decided to sit out a fight on Korea, since Democrats have opposed trade negotiations mostly because of union pressure. “I agree that it would be huge” to the politics of trade, he said.
The labor rancor about the Korea pact spilled over Monday at the monthly meeting of AFL-CIO legislative directors, where representatives of the different unions that make up the labor federation expressed anger and confusion about the UAW’s sudden embrace of free trade, which it has fought for decades, said Matt McKinnon, legislative and political director for the International Association of Machinists.
They heard a presentation from Barbara Somson and Doug Meyers, two UAW trade negotiators who reportedly urged King to oppose the deal. “They know it is a bad deal for auto workers,” said McKinnon. “They were forced to go a long with it.”
McKinnon said there was overwhelming opposition to the Korea deal among the AFL-CIO member unions at the meeting, and a widespread feeling that the trade pact was bad news for Democrats. He agreed with the sentiment of another union representative at the meeting, who said “Obama has decided to drive his 2012 campaign off a cliff. How do we get congressional Democrats off the bus?”
McKinnon said he is baffled about how King could endorse a deal that will dramatically increase the nearly 500,000 Korean-made cars now sold in the United States, while boosting U.S. auto sales in Korea from less than 10,000 now to eventually as high as 55,0000.
Loose rules on the content of Korean-made autos will allow Korean cars made mostly with parts from China or elsewhere to qualify for an exemption from import taxes. By contrast, under the European Union’s free trade agreement with South Korea, 55 percent of the parts for autos that qualify for free trade access will have to come from European car companies.
“Why didn’t we insist on a deal that good?” asked McKinnon. “This doesn’t pass the laugh test.”
But King said that most of his fellow union presidents believe the Korea agreement was good for American workers and said he was lobbying to get them to support the UAW, or at least avoid a divisive effort to kill the deal.
If the agreement has deficiencies, he said, it is because it was based largely on a 2007 deal negotiated under President George W. Bush. European companies got a better deal on the content rules, he said, because “we were negotiating from that 2007 agreement.”
King denied that his advisers had urged him to veto the deal. “They were all very happy with the deal we got,” he said.
Korea trade experts say that foreign policy considerations were foremost for the White House in pushing for an agreement. Obama, who campaigned against the 2007 agreement in 2008, showed little interest in revisiting it until last May, when an investigation confirmed that North Korea had torpedoed the South Korean navy ship Cheonan.
In the ensuing military confrontation, Obama decided to use the free trade pact to cement relations with South Korea, according to Marcus Noland, a specialist on Korean policy at the Peterson Institute for International Economics.
Another important consideration is China, according to Tim Shorrock, a journalist and expert on trade and labor relations with South Korea. The Obama administration wants closer ties with Korea to help encircle China, which it sees as its primary military adversary and economic competitor in Asia. He noted the announcement last week that the United States, South Korea and Japan would start talks aimed at pressuring China to be more involved in convincing North Korea to cease its aggression against the South.
Trumka has told at least one Democratic member in Congress that the AFL-CIO would might decide to skip a fight with the White House over South Korea to preserve its leverage in China policy, according to a source who spoke to that lawmaker.