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US Economic Slump Spurs Growing Free Trade Backlash - 2003-10-28

“I am Dena Hoff a family farmer from Eastern Montana. I'm Gary Grant from North Carolina. My name is Kenneth Riley. I'm President of the International Longshoremen's Association in Charleston, South Carolina. My name is Petra Mata, and I was born in Mexico. My name is Guillermo Glenn, and I'm from the city of El Paso, Texas.”

Last June these men and women gathered in Washington, DC and testified before congress on the effect free trade has had on their jobs and lives. A new book called Shafted: Free Trade and America's Working Poor collects the stories of these family farmers and workers in the United States.

Kenneth Riley is president of the Charleston, South Carolina chapter of the International Longshoremen's Association or ILA, a 65,000 member union that represents waterfront workers at ports on the Atlantic and Gulf Coast. Here is his testimony:

“Let me begin by saying that the ILA is not opposed to trade because, as you know, 95% of all the world's commerce moves by ships. Therefore, longshoremen are a direct beneficiary of the cargo moving in and out of the ports. Free trade, though, benefits industries that take advantage of cheap labor and weaken labor and environmental laws abroad while putting American companies and workers at a disadvantage. At risk are the basic rights to form and join unions to protect our livelihoods and preserve the standard of living for one's self and one's family. These rights are at the core of our society, and the American labor and civil rights movement will not rest until justice is served.”

The editor of Shafted, Christine Ahn, says the book is a rare chance for workers to tell the American public and the world about the impact of free trade on their lives: “We were very concerned that there wasn't much congressional oversight or even debate taking place in Washington, DC, about the effect of free trade. And we're coming up to 10 years of NAFTA this January, and the United States is in the process of negotiating several more free trade agreements, including the Free Trade Area of the Americas, which will be negotiated by 2005 and which would include 34 countries in the Western Hemisphere. And so before we continued to sign more trade agreements, we felt it was really important to have more public discourse on a national level on the effects free trade is having on the domestic economy.”

Christine Ahn also serves as program coordinator for economic and social human rights at Food First, a nonprofit research and advocacy center for food and development policy. She says Shafted examines the impact of free trade agreements in the framework of international human rights, specifically the United Nation's Universal Declaration of Human Rights:

“We use the Universal Declaration of Human Rights because everybody is entitled to them. And countries that sign on to them just as they sign onto the World Trade Organization they've committed to upholding these principles. So Article 25 that says, 'Every human being is entitled to the right to food, the right to housing, the right to health care,' I think that governments have the responsibility to orient their domestic policies to try to uphold those rights.”

Christine Ahn says the U.S. government is failing to uphold such basic human rights by promoting free trade, which allows companies seeking to lower their production costs either to move operations abroad or contract with foreign companies to supply essential goods and services. This cuts American jobs.

In 2002, the U.S. Census Bureau reported that U.S. household incomes declined for a third year in a row, while the number of Americans living in poverty increased by one-point-seven million people that year.

Political analysts say the U.S. economy is a top concern of American voters. They expect the issue to play a decisive role in the 2004 U.S. presidential election, which may explain why politicians, both Democrats and Republicans, are now paying more attention to this free trade backlash.

Dan Griswold, associate director of the Center for Trade Policy Studies at the Cato Institute, a libertarian research organization, says that resurgent protectionism reflects the importance of labor unions to the Democratic Party, as well as a still struggling economy: “I think a lot of the discontent is related to the general state of the U.S. economy. We had a recession in 2001. We've recovered slowly, especially in terms of jobs. But you can't blame trade for that. The problem isn't too much trade but not enough trade and growth and job creation.”

But some observers disagree. Paul Craig Roberts, former U.S. assistant secretary of treasury under Ronald Reagan, says free trade worked when the United States traded primarily with other industrialized countries like Canada, Japan and the countries of Western Europe. Not any more: “What happened with the collapse of world socialism is that suddenly and without precedent huge populations became available for Western capital and technology. By relocating the capital and technology, they were able to substitute 25 cents an hour of labor for $26 an hour labor and that makes a big difference.”

Mr. Roberts says high-skilled, well-educated workers who once thought they would be the big winners in a globalized economy are also being threatened because of advances in communications technology: “The Internet allows people in India, the Philippines, China, to check into their American offices every morning electronically, get their work assignments, perform them and send them back in electronically. They stay in their home countries where the cost of living is lower, where the accustomed standard of living is lower, and where the wages are lower. For example, you can hire an engineer in India or China whom you pay six thousand dollars a year. You'd have to pay that same engineer $60,000 a year in the United States. We find this happening across a wide range of knowledge jobs: accounting, stock analyst, engineering, design, even research.”

Without any type of protection in place for American workers, Mr. Roberts says they will continue to lose their jobs to workers in countries with abundant supplies of cheap labor.

Dan Griswold from the Cato Institute isn't surprised by the growing protectionist sentiment in the United States: “It's kind of a tradition that when the economy is in a difficult time we look for foreigners to blame. Fifteen years ago it was Japan. Now China tends to be the focus of discontent.”

“I think if the U.S. economy recovers, as it is showing signs of doing, a lot of this discontent toward trade and towards our trading partners like China will dissipate,” Mr. Griswold says. “But what I fear that in the name of stimulating manufacturing and the economy Congress will inflict genuine harm on our economy by raising trade barriers and raising prices for U.S. consumers and making it more difficult for U.S. companies to compete in the global market.”

Dan Griswold says that international trade issues rarely decide presidential elections but if the American labor market continues to shed jobs in early 2004, this election year may be different.