(The AFL-CIO issued the following statement on February 10.)
WASHINGTON — The astronomical 2004 trade deficit is one record that holds no pride for America’s working families. The $618 billion gap between the overall value of our exports and imports represents a flood of good jobs out of our country, the devastation of our communities and millions of skilled workers who still cannot find living-wage work.
From timber in Washington to computer engineering in Massachusetts and every type of job and region in between, America is losing good jobs due to bad trade deals. These are not “just old economy jobs,” as some claim. Close examination of the trade deficit shows America is beginning to lose its competitive edge in the high-tech, services and agricultural sectors. The only sectors of the economy generating jobs right now are those with no trade competition.
In just the past three years, we have seen our trade surplus in advanced technology products turn into a whopping $37 billion deficit, much of that accounted for by growth in imports from China. Meanwhile, the trade surplus in services that hovered near $90 billion in 1997 came in this year at $48 billion. And 2004 was the first year in decades that we saw our trade balance in agricultural products turn negative for several months.
The rosy promises of free trade and unregulated globalization have failed to materialize for workers and the middle class. Free trade boosters promised that deals such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) would open markets for American goods and services, creating high-paying jobs at home and prosperity abroad. Instead, America’s working families are stuck in a spiral of deteriorating jobs and wages—while health care, gas and college prices rise. Meanwhile, workers in the developing world continue to struggle for basic human rights, decent wages and safe workplaces.
In 2004, we saw our trade deficit with China skyrocket to $162 billion, up more than 30 percent since last year and about double where it was in 2000, when Congress granted China permanent normal trade relations and China joined the WTO. This is the largest bilateral trade deficit between any two countries in the history of the world and reflects a failure of U.S. policy at multiple levels. Our own government has simply failed to insist that China live up to its international obligations with respect to workers’ rights, human rights, currency manipulation and illegal subsidies. This failure is costing hundreds of thousands of U.S. jobs every year.
Also troubling is the growing U.S. trade deficit with the European Union. Despite dramatic decline in the value of the dollar relative to the Euro over the past three years, our trade deficit with the E.U. grew again in 2004, up more than 10 percent since 2003. While the declining dollar has improved our exports somewhat, clearly there is a long way to go to begin to turn around these growing deficits.
We need an urgent and aggressive policy response, starting with trade, tax and currency policies that allow American businesses and workers to compete and survive in the global economy.
The first step is for Congress to reject the Central American Free Trade Agreement (CAFTA) and the other flawed trade agreements—with Thailand, the Andean countries and several others—on the horizon. These deals reflect precisely the wrong model for trade: excessive protection of corporate rights and a flimsy fig leaf for workers, farmers and the environment. The Bush administration and Congress must stop giving tax and financial incentives to corporations to ship jobs offshore.
We need fair rules for the global economy that address growing financial instability, combat increasing income inequality and lay the foundation for equitable and sustainable economic development. New global trade rules must ensure no government and no corporation can gain a competitive advantage by trashing the environment or violating core workers’ rights, such as workers’ freedom to form unions and bargain collectively and a minimum employment age.
Only then will we build an international economy that respects and rewards workers’ rights, job creation, a healthy environment and decent wages.