[Congressional Record (Bound Edition), Volume 157 (2011), Part 11]
[Extensions of Remarks]
[Pages 16024-16026]
[From the U.S. Government Publishing Office, www.gpo.gov]




  UNITED STATES FREE TRADE AGREEMENTS WITH KOREA, PANAMA, AND COLOMBIA

                                 ______
                                 

                        HON. MICHAEL H. MICHAUD

                                of maine

                    in the house of representatives

                        Friday, October 21, 2011

  Mr. MICHAUD. Mr. Speaker, I submit the following additional letters 
of opposition to the Free Trade Agreements with Korea, Panama, and 
Colombia: A letter from the United Brotherhood of Carpenters and 
Joiners of America; and a letter from the International Association of 
Machinists and Aerospace Workers.

                                             United Brotherhood of


                            Carpenters and Joiners of America,

                                    Washington, DC, July 11, 2011.
       Dear Member of Congress: On behalf of the over half a 
     million members of the United Brotherhood of Carpenters, I am 
     writing to urge you to vote against the proposed Free Trade 
     Agreements with South Korea, Colombia and Panama. Approval of 
     these three proposals is a vote to undercut American living 
     standards
       The evidence is clear. Over the last twenty years our 
     government has agreed to similar trade deals with Mexico, 
     Central America, China and other nations. Each time their 
     promoters promised the Congress that the agreements would 
     make America more competitive and create more jobs. Each 
     time, the result was a widening trade deficit financed by 
     borrowing from foreigners and a net loss of U.S. jobs. Our 
     massive indebtedness to China, for example, is a direct 
     result of the trade deficit that followed the 2000 China 
     trade agreement.
       We now know that these deals were not designed to help U.S. 
     workers or businesses that produce here. Rather they were 
     designed to allow multinational corporations to off-shore 
     production in countries where costs are cheap because workers 
     are suppressed, the environment is abused and finance is 
     unregulated.
       As in prior trade deals, the new agreements lack 
     enforceable labor and environmental protections. They allow 
     foreign companies to challenge U.S. laws on the grounds that 
     they inhibit foreign competition. And despite the claims of 
     ``free trade,'' they give away access to the U.S. markets 
     without reciprocal rights for U.S. producers.
       Thus, to give one example, under the agreement with Panama, 
     any company registered in that country--including the 
     thousands of Chinese and other foreign companies registered 
     there--will have the right to bid on virtually any 
     significant U.S. government procurement or construction 
     project. But American firms are denied access to bid on the 
     only large scale project of any size in Panama--the widening 
     of the Panama Canal.
       In effect, we would give away American jobs in order that 
     U.S. multinationals have even greater opportunity to use 
     Panama's notorious lax and corrupt financial system to escape 
     U.S. taxes and rules against money laundering.
       The negative impact of the deal with South Korea will be 
     larger. The Economic Policy Institute--which has accurately 
     forecast the economic impact of prior trade deals--estimates 
     that the Korean FTA will directly cost Americans at least 
     160,000 jobs to start. The long term damage will be even 
     greater. The agreement allows South Korea to export goods 
     duty-free to the U.S. even if only 35% of the content is 
     actually produced there. This will open the door for the 
     transshipment of goods primarily manufactured in places like 
     China, Vietnam and the totalitarian regime in North Korea.
       Moreover, the Korea agreement has no effective provision 
     for dismantling the labyrinth of non-tariff barriers that 
     already results in the U.S. selling only 6,000 autos there a 
     year, while Korea sells us 500,000. Neither does it prohibit 
     Korea from manipulating its currency to gain competitive 
     advantage in the same way that China now does.
       The proposed deal with Colombia is morally offensive as 
     well as economically unsound. Colombia has by far the most 
     brutal record of repression of independent trade unionists in 
     the world. On nothing but the flimsy promise that they will 
     do better in the future, our government will be rewarding a 
     corrupt oligarchy that suppresses workers'

[[Page 16025]]

     efforts to improve wages and working conditions with 
     beatings, torture and assassination. Despite claims that the 
     political system there has ``reformed,'' a record 52 Colombia 
     trade unionists were murdered last year. Of the 2,800 
     assassinations of union leaders over two and a half decades, 
     only five percent of the cases have been prosecuted.
       The primary purpose of the treaty with Colombia is the same 
     as that of the 2007 treaty with Peru--outsourcing American 
     jobs. As the Peruvian president told the U.S. Chamber of 
     Commerce the night the Peru FTA was signed, ``Come and open 
     your factories in my country so we can sell your own products 
     back to the U.S.''
       The United Brotherhood of Carpenters supports balanced 
     reciprocal trade agreements that provide the benefits of 
     economic growth to workers in both the U.S. and its trading 
     partners. Under any circumstances, these current proposals 
     would not meet this commonsense test. Today, at a time of 
     high joblessness, deteriorating wages and shrinking work 
     opportunities, our members and their families have little 
     tolerance for trade policies that will make their lives worse 
     and their country weaker.
       The only responsible vote is no.
           Sincerely,
                                              Douglas J. McCarron,
                                                General President.
                                  ____
                                  
                                      International Association of
       Machinists and Aerospace Workers, Upper Marlboro, MD, June 
                                                         30, 2011.
     Re Jobs and Trade.

       Dear Senator/Representative, As one of the nation's largest 
     manufacturing unions, and the largest union in the aerospace 
     industry, one of the few industrial sectors in which the U.S. 
     has a positive balance of trade with the world, IAM members 
     know the potential benefits of international trade. We have, 
     however, also witnessed the systematic destruction of our 
     manufacturing base and the loss of six million manufacturing 
     jobs in the last decade from failed trade policies and the 
     devastation that this has wrought on American workers, their 
     families, and their communities.
       A critical test for any trade agreement is whether it will 
     create American jobs, raise living standards, and improve 
     international labor, consumer, and environmental standards. A 
     careful review of the three pending free trade agreements 
     with South Korea, Columbia, and Panama reveals that these 
     Bush-era, NAFTA style agreements all fail this essential 
     test. Consequently, the IAM strongly opposes the deeply 
     flawed free trade agreements with South Korea, Colombia, and 
     Panama.


                            The Jobs Crisis

       Passage of these trade agreements will add to the misery of 
     our nation's workforce and could hamper efforts to restore 
     the structural and sustainable health of our economy. For 
     ordinary Americans the current economic crisis has meant 
     persistent and deep unemployment. This month's employment 
     report showed a stagnate job market with a high unemployment 
     rate of 9.1 percent. Hundreds of thousands of Americans have 
     given up looking for nonexistent jobs and have dropped out of 
     the workforce. Through May, labor force participation 
     remained at 64.2 percent for the fifth consecutive month, the 
     lowest rate since the start of the Great Recession. The 
     Economic Policy Institute (EPI) estimates that if labor force 
     participation were the same as a year ago, the official 
     unemployment rate would be 10.1 percent.
       Long-term unemployment, the percentage of the unemployed 
     out of work for over six months, has risen to 45.1 percent, 
     only slightly off last year's record 45.6 percent. The other 
     significant employment rate, the U-6 measure of 
     underutilization which includes the unemployed, discouraged, 
     and those working only part time continues to hover at 15.8 
     percent, representing nearly 25 million Americans.
       With the continued loss of jobs comes downward pressure on 
     the wages and benefits of working Americans. According to the 
     Department of Labor, workers' pay for the twelve months 
     ending in May rose a scant 1.8 percent before adjusting for 
     inflation. The economic news, however, is not all bad. 
     According to the Department of Commerce, through the first 
     quarter of 2011, U.S. corporations earned profits at a record 
     annual rate of $1.727 trillion--the highest amount ever 
     recorded in the sixty years the government has been tracking 
     such data.


               No to the Korea-U.S. Free Trade Agreement

       This FTA is the largest since the North America Free Trade 
     Agreement (NAFTA) and has the potential to eliminate as many 
     U.S. jobs. While the Administration is careful to only claim 
     that the FTA will ``support'' 70,000 jobs, the net effect 
     will be a loss of jobs; EPI estimates a 159,000 job loss. 
     According to the International Trade Commission (USITC) the 
     KORUS FTA will increase the trade imbalance in seven 
     industrial sectors. Electrical equipment (with a negative 
     balance between $762 and $790 million) and motor vehicles and 
     parts (with a negative balance $531 and $708 million) being 
     the two most at risk sectors. Jobs will also be at risk in 
     the aerospace, auto parts and supply, appliance, machinery, 
     textile, and other industries.
       It is important to note that prior official estimates by 
     the USITC of the impact of trade agreements have 
     significantly underestimated U.S. trade imbalances and job 
     losses. According to the USITC, China's entry into the World 
     Trade Organization was not supposed to have appreciably 
     affected employment, but an estimated 2.4 million American 
     jobs have been lost to China since 2001. A similar impact was 
     felt after the passage of NAFTA, which the USITC originally 
     projected would create a trade surplus for the U.S.
       The KORUS FTA does not address the huge trade imbalance 
     between the U.S. and South Korea in automobiles. In 2009, 
     South Korea shipped approximately 500,000 cars to the U.S., 
     while we exported a mere 6,000 autos to South Korea. While 
     the December 2010 supplemental agreement allows the Big Three 
     U.S. automobile manufacturers to sell up to a total of 75,000 
     U.S. made cars (but, importantly, does not guarantee this 
     number) without having to meet South Korea's stringent safety 
     and environmental requirements, it is doubtful that a South 
     Korean consumer would want to buy an inferior U.S. made 
     product, particularly when South Koreans have a cultural 
     aversion to foreign made autos; foreign autos only make up 
     four percent of the South Korean market.
       Any extension of the U.S.'s meager 2.5 percent protective 
     tariff will continue to be nullified by the manipulation of 
     Korea's currency, an issue that the FTA fails to address. 
     Nonmarket barriers in South Korea's auto market, such as, 
     higher insurance rates and taxes, were also not addressed in 
     the FTA. The Korea Automobile Manufacturers Association 
     actually expects exports to the U.S. to increase.
       The agreement contains inadequate provisions regarding the 
     rule of origin that undercut what it means to label a product 
     ``Made in U.S.A.'' and allows for 65 percent foreign content 
     in manufactured goods that are eligible for the lower tariff 
     treatment. This means that a product with only 35 percent 
     domestic content will be considered American made. NAFTA 
     required a 50 percent domestic content requirement and the 
     EU-South Korea agreement requires an even higher 55 domestic 
     content. The ultimate effect of the low domestic content 
     requirement of the KORUS FTA will be to incentivize the 
     outsourcing of production to countries with low wages and few 
     labor rights, including Mexico and China. More specifically 
     South Korean vehicles shipped to the U.S. could be built with 
     North Korean and Chinese made auto parts, putting at risk the 
     jobs of both American and South Korean workers, which is a 
     primary reason why South Korean unions oppose the KORUS FTA. 
     While the lowest domestic content requirement may be 
     beneficial to large multinational corporations like General 
     Motors, which now produces and sells more vehicles in China 
     than it does in the U.S., it will put the jobs of American 
     auto workers at risk.
       The FTA also raises concerns over the possibility that 
     goods made in the Kaesong Industrial Complex (KIC), the North 
     Korean sweat shop zone set up by Hyundai where some 120 South 
     Korean companies employ over 40,000 North Koreans, and where 
     labor rights are nonexistent, could gain future access to the 
     U.S. market. According to South Korea's Ambassador to the 
     U.S., Han Duk-Soo, ``The planned ratification of the South 
     Korea-U.S. free trade agreement will pave the way for the 
     export of products built in Kaesong to the U.S. market.''
       North Korean workers in the KIC are paid a mere 0.25 to 
     0.38 per hour with the repressive North Korean regime first 
     taking a cut of nearly 45 percent of the wages. These 
     payments provide an important source of foreign currency for 
     North Korea, pumping millions per month into the corrupt 
     regime, and, ironically, helping to fund the North's 
     dangerous nuclear program. The Kaesong Industrial Complex has 
     remained open despite the ongoing geopolitical tensions on 
     the Korean peninsula that require the continued presence of 
     28,500 U.S. military personnel. Hyundai recently signed a new 
     lease to expand the KIC ten fold and house an expected 1,500 
     companies and employ an estimated 350,000 North Korean 
     workers.
       This KORUS FTA also fails to address flaws in the May 2007 
     framework that the Bush Administration negotiated. That 
     framework, which also applies to FTAs with Colombia, Panama, 
     and Peru, specifically excludes reference to the conventions 
     of the International Labor Organization, the only 
     internationally enforceable labor standards. The labor 
     provision also limits labor violations to those that 
     ``affect'' trade and are sustaining or reoccurring. The 
     framework also extends extraordinary private investor rights 
     that undermine federal and state sovereignty and incentivize 
     the offshoring of U.S. jobs. Additionally, the agreement's 
     deregulation of financial services ignores the experience of 
     the recent financial debacle that led to our current economic 
     crisis and threatens to undermine the re-regulation of that 
     industry.


              No to the U.S.-Colombia Free Trade Agreement

       The killings of trade unionists continue in Colombia. Last 
     year, even with the ETA under scrutiny, fifty-one of our 
     brothers and sisters were murdered and twenty-one trade 
     unionists survived attempts on their lives, an increase from 
     2009. According to the

[[Page 16026]]

     International Trade Union Confederation (ITUC), more trade 
     unionists are killed in Colombia than the rest of the world 
     combined.
       The killings continue because year after year the Colombian 
     government has failed to bring justice for the victims of 
     this violence. Nearly 2,800 trade unionists have been 
     murdered in Colombia since 1986 yet there have been only a 
     handful of persecutions. The impunity rate for the murders of 
     trade unionists is 96 percent.
       The Administration's so-called ``Action Plan'' to address 
     the labor atrocities is not an agreement and lacks any 
     meaningful enforcement provision. Indeed, once implemented, 
     any violation under the LAP would be ``resolved'' through the 
     weak labor chapter based on the May 10 agreement. Since 
     violations would have to be connected to trade, labor 
     violations in the public sector, or any sector where there is 
     not a connection to trade, would apparently not be covered. 
     Moreover, violations would have to be sustained or 
     reoccurring. Most importantly, however, the LAP makes 
     absolutely no guarantee that the killings, injuries, and 
     threats will stop. Even if all of the requirements of the 
     ``Action Plan'' are met there is no guarantee that the murder 
     rate will go down, nor would a failure to stop the killings 
     prevent the free trade agreement from being implemented, and 
     once the free trade agreement goes into effect the U.S. will 
     lack any leverage with Colombia to stop the murders and 
     improve labor rights.
       If the Central American Free Trade Agreement (CAFTA) is any 
     model, there will be an increase in murders if the FTA is 
     passed. When CAFTA was under consideration, the murders of 
     trade unionists in Guatemala dropped to zero, only to 
     increase to sixteen in 2009 and ten in 2010. The labor 
     protections in CAFTA have been a failure; last year the 
     Guatemalan labor leader who filed the first labor complaint 
     under CAFTA was murdered.
       The agricultural provisions of the FTA fail to address the 
     displacement of over 5.2 million Afro-Colombians and 
     indigenous peoples within Colombia, which now has more 
     internally displaced citizens than any other country in the 
     world.
       Before a trade agreement with Colombia goes forward, 
     Colombia needs to demonstrate to the world that it has a zero 
     tolerance for violence against trade unionists and that human 
     rights will be protected. The U.S. needs to show the world 
     that it is serious about protecting basic human rights and 
     that it will not sacrifice that agenda for higher profits for 
     multinational corporations.


               No to the U.S.-Panama Free Trade Agreement

       As the U.S. struggles with a budget deficit of historical 
     proportions, it is incredible that we would be considering 
     extending trade privileges to Panama, one of the world's top 
     countries for tax cheats. Panama has long been a heaven for 
     money laundering both for multinationals and narco-
     traffickers. Unfortunately, the FTA fails to effectively 
     close this huge loop hole. Nor does the FTA allow U.S. 
     companies the ability to bid on improvement projects in the 
     Panama Canal Zone.
       All three of these flawed FTAs contain the NAFTA Investment 
     Chapters which provides foreign investors and corporations 
     extraordinary rights to challenge state and federal laws 
     pertaining to procurement (e.g., Buy American requirements), 
     consumer and public health protections, and environmental 
     regulations. Such challenges would not take place in U.S. 
     courts, but before secret international tribunals which would 
     have the power to require compensation for ``regulatory 
     takings.'' This is no hypothetical matter, as the federal and 
     state governments have spent millions defending NAFTA 
     challenges to regulations while Canada and Mexico have had to 
     pay millions because of these challenges.


                    China--the Real Trade Challenge

       Like most Americans, we do not understand why Congress and 
     the Administration continue to focus on passing these free 
     trade agreements while our manufacturing base and economy 
     strain from the impact of the unfair trade practices of 
     China. Last year our trade imbalance with China was over $273 
     billion, an imbalance that costs the U.S. millions of jobs 
     and billions in lost tax revenue. China is a country that 
     gives generous subsidies to state owned enterprises, engages 
     in intellectual property theft, has no independent labor 
     unions, and continues to manipulate its currency, which is 
     estimated to be undervalued by as much as 40 percent. The 
     undervalued currency makes Chinese manufactured products 
     artificially cheap and U.S. made products more expensive. 
     Failing to address China's numerous unfair trade practices 
     will prevent the U.S. from ``winning the future'' as 
     President Obama has proclaimed America must do.


                       Fair Trade--A New Template

       We have stated repeatedly that the U.S. should take a 
     strategic pause and evaluate the full impact of past trade 
     agreements and practices before ratifying any new agreements. 
     Such a pause is more important than ever before as our weak 
     economy continues to struggle with the lasting effects of bad 
     trade deals and the wreckage of the global financial crisis 
     brought on by deregulation. The KORUS FTA has yet to be 
     ratified by the South Korean Parliament, and 2012 
     parliamentary and presidential elections may push off 
     ratification even further into the future.
       Economically, the KORUS FTA has the potential to do as much 
     damage to the living standards of ordinary Americans and 
     NAFTA. Linking Trade Adjustment Assistance (TAA) to the KORUS 
     FTA is a clear indication that the FTA will result in the 
     loss of American jobs. American workers need jobs, not the 
     burial insurance of TAA. Morally, no FTA is as repugnant as 
     the agreement with Colombia, the murder capitol of the world 
     when it comes to violence against trade unionists. As 
     previously stated, the so-called Action Plan is a fig leaf 
     that seeks to provide cover for the inaction of the Colombia 
     government and the impunity with which murders take place in 
     that country.
       America can no longer afford ``free'' trade agreements that 
     benefit Wall Street and multinational corporations at the 
     expense of U.S. workers. I urge you in the strongest possible 
     terms to reject these job killing agreements.
       If you have any questions, please contact Legislative and 
     Political Director Matthew McKinnon.
           Sincerely,
                                           R. Thomas Buffenbarger,
     International President.

                          ____________________