Korea-U.S. Trade Deal Bad for Workers in Both Countries

by James Parks, Apr 2, 2007

Workers in Seattle protest the Korea-U.S. trade agreement last September.

The AFL-CIO will join with its Korean allies and strongly oppose the just-completed South Korea-U.S. trade deal (KORUS) completed over the weekend because of the damage it will do to working families, farmers and domestic producers in both countries.

Negotiators worked down to the wire to seal the deal before the end of April 1, so it could meet a 90-day required notice period for Congress. By meeting the deadline, the Bush White House can have the deal considered under Fast Track trade promotion authority, which expires June 30.

AFL-CIO President John Sweeney says the flawed deal, which would be the largest trade deal since the North American Free Trade Agreement in 1994,

contains no enforceable protections for core workers’ rights, and it will undermine both governments’ ability to provide affordable and high-quality public and social services, and to protect food safety, the environment and public health.

Further, Sweeney says:

Rushing these important negotiations to meet the deadline for consideration under the current Fast Track authority virtually ensures that issues important to both countries have been railroaded through, without adequate consultation or consideration.

Alan Reuther, UAW government affairs director, told the House Ways and Means Committee a few weeks ago the deal likely will jeopardize tens of thousands of U.S. auto jobs by further opening the U.S. auto market to Korean cars while failing to address the barriers to the sale of U.S. automobiles in Korea. The United States already has a $14 billion trade deficit with South Korea, and almost $12 billion of that is in autos and auto parts.

While details of the agreement have not been made public yet, Sweeney says workers are “deeply concerned” about reports that the agreement allows South Korea to export products made in the industrial zone in the North Korean border city of Kaesong.

Workers in Kaesong have no ability whatsoever to exercise their basic human rights to freedom of association, to organize and to bargain collectively. They are essentially indentured servants of the North Korean government—not allowed to collect wages directly from their South Korean employers, but paid only by the North Korean government after arbitrary and excessive deductions. In our view, it is completely unacceptable for products made under these repressive conditions to receive preferential access to the U.S. market. This has human rights implications, economic implications and national security implications.

President Bush is pushing hard to renew Fast Track, which allows the president to negotiate trade deals but prevents Congress from improving or rejecting harmful provisions by allowing only “yes” or “no” votes on such agreements. Fast Track would enable the Bush administration to pass more bad trade deals that are skewed in favor of Big Business, not workers.

Workers in both countries have protested the proposed pact. As recently as Sunday, workers in Korea marched against the deal. In February, some 100 workers from the United States and Korea demonstrated in Washington, D.C., one of a series of protests, from Seattle to Seoul, involving U.S. and South Korean trade unionists and allies against yet another bad trade deal skewed in favor of Big Business at the expense of workers.

Last year, unions in both countries issued a declaration saying KORUS, like other trade agreements pushed by the Bush White House, fails to protect workers’ rights and the environment and undermines governments’ ability to regulate public services while strongly protecting the investments and profits of multinational corporations.

The declaration was signed by the AFL-CIO, Change to Win, the Federation of Korean Trade Unions (FKTU) and the Korean Confederation of Trade Unions (KCTU).

Meanwhile, Sharon Treat and Sean Flynn report on AlterNet the Korea deal could jeopardize state programs that provide medicines for America’s poor and elderly.

Since negotiations began in June 2006, the U.S. trade representative (USTR) has been doggedly attacking South Korea’s public drug reimbursement formulary as a potential barrier to trade.

The rub is that the USTR’s latest demands won’t just raise prices in Korea—it may raise prices in American states. This is because Korea’s drug formulary is substantially similar to the “preferred drug lists” used by at least 40 American states for Medicaid purchases. Adjusted for inflation, Medicaid spending on pharmaceuticals by state governments declined in 2005, while overall national drug spending increased at double the rate of inflation the same year, and by over five times since 1994. But the federal government can sue states to preempt laws and programs that conflict with FTAs. Thus, whatever is required of Korea in the FTA may apply to states as well.

Last month, the AFL-CIO Executive Council adopted a statement that calls on Congress to institute new reforms on trade that stop our jobs from being exported and put our workers and the companies they work for on a level playing field.

The Executive Council statement outlines the principles that should be embodied in all U.S. trade policies:

• Enforceable International Labor Organization standards in every trade agreement, so no government and no corporation can gain a comparative advantage by violating workers’ human rights.
• Reform of the environment, investment, government procurement, intellectual property rights and services provisions in trade agreements.
• Our negotiators must not put our trade laws on the chopping block, nor should they make irreversible commitments with respect to immigration policy.
• We need more transparency and much broader public participation in the negotiation of trade rules, at both the national and international levels. Business is not the only constituency affected by trade, and it should not be the only nongovernmental group at the table when these deals are cut.

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