U.S. Labor, Environmental Groups Join Auto Makers in Opposing TPP

Despite the political debt owed the White House in the wake of the U.S. auto industry bailout, the UAW is challenging the proposed Trans-Pacific Partnership, which includes Japan, that Obama considers a key element of his second-term agenda.

Joseph Szczesny

June 7, 2013

6 Min Read
Japanrsquos entry into trade pact would undermine ongoing US economic recovery King says
Japan’s entry into trade pact would undermine ongoing U.S. economic recovery, King says.

DETROIT – The United Auto Workers union says it opposes one of President Obama's major economic and trade initiatives, the Trans-Pacific Partnership, which is running into growing opposition from his political allies.

The free-trade agreement would include 11 nations around the Pacific Rim and serve as a counterweight to China's growing economic influence throughout the region, according to Obama, who touted the benefits of the proposed pact in last year's presidential debates and during his State of the Union Address in February.

The TPP talks have been under way for three years, and Japan would like to participate in the next round of negotiations beginning in July, which requires a formal decision by those already involved in the talks. The common market that would be created by the TPP, in addition to Japan, includes the U.S. Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

With Japan on board, the TPP reportedly would cover about 40% of global economic output and one-third of all world trade, and China now is showing an interest in the trade pact as well. Obama and China President Xi Jinping are expected to discuss the subject during a 2-day summit meeting in California that starts today.

UAW President Bob King reversed three decades of union opposition to free trade and also surprised other unions in 2011 by supporting the Obama Admin.’s new FTA with South Korea because he believes it will help create jobs in the U.S.

But despite the political debt owed the White House in the wake of the U.S. auto industry bailout that critics long have argued was tilted in favor of the UAW, the union is challenging the proposed TPP, which Obama considers a key element of his second-term agenda.

“The UAW strongly opposes Japan’s entry into the Trans-Pacific Partnership, because their inclusion would undermine our nation’s ongoing economic recovery," King is quoted as saying.

The union predicts Japan’s inclusion would cost tens of thousands of automotive manufacturing jobs in the U.S.

“Although Japan’s trading partners have worked for decades to open the Japanese market to imported automobiles, Japan remains the most-closed automotive market in the world,” King says in a statement on the TPP. “Despite a Japanese automotive import tariff that is already at 0%, global import penetration remains less than 6%.

“We already have an enormous trade deficit in the automotive sector,” he adds. “For every 117 Japanese cars sold in the United States, only one American car is sold in Japan. Absent true reform, Japan’s entrance into the TPP would only worsen this situation.”

King accuses the Japanese government of deceptive practices, such as currency manipulation, to give its auto industry an unfair advantage. The yen has depreciated 23% against the dollar since October 2012 due to intervention by Prime Minster Shinzo Abe’s administration.

King also says Japanese auto makers manufacturing in the U.S. routinely violate global standards on workers’ rights to organize and bargain collectively. The UAW for years has tried and failed to recruit members at Japanese auto plants in the southern part of the U.S.

Before Japan can be considered for membership in the TPP, King says the government must intervene with its domestic auto makers to guarantee they will fully honor labor standards set by the International Labor Organization, the Organization for Economic Co-operation and Development and the United Nations Global Compact, “and allow a fair, democratic process for workers to decide on union representation."

American Auto Jobs Threatened by Competitive Disadvantage

The American Automotive Policy Council, which represents the interests of Ford, General Motors and Chrysler, while supporting the TPP in principle, also has attacked it because of the opening to Japan. "It is stunning that the U.S. government would endorse a trade policy that puts the industry at a competitive disadvantage and comes at the cost of American auto jobs," says Matt Blunt, AAPC president.

The AAPC, along with the Alliance for American Manufacturing and the American Iron and Steel Institute, on Thursday applauded a bipartisan letter signed by a majority of the House of Representatives calling on Obama to push for strong currency-manipulation rules in the TPP agreement.

The letter led by U.S. Reps. Rick Crawford (R-AR), John Dingell (D-MI), Sam Graves (R-MO) and Mike Michaud (D-ME), emphasizes how unfair currency policies distort trade, harming American workers, exports and economic growth. The TPP trade agreement needs to create a level playing field that will prevent further jobs from being shipped overseas as a result of currency manipulation, it says.

“Undervalued exchange rates allow other countries to boost exports of their products and to impede exports of ours,” the lawmakers wrote. “They also contribute to trade imbalances and market-access limitations that make it difficult for U.S. companies to compete in foreign countries.”

U.S. trade officials have said Japan has agreed to separate negotiations focused on regulatory and non-tariff barriers believed to keep U.S. vehicles out of the Japanese market, according to a Reuters report. And it agrees to a U.S. phase-out of its auto tariffs over the longest period possible under the future TPP deal.

The report also says Tokyo is promising to create a simpler and faster certification method used by U.S. auto makers to export to Japan, allowing up to 5,000 units of each vehicle type under the program, compared with 2,000 previously. But so far those assurances have not been enough to win over the opposition.

Against this backdrop, U.S. environmental and labor activists are trying to mobilize grass-roots opposition to the TPP. 

An analysis of the proposed text of the agreement, which leaked last summer, indicates major beneficiaries of the trade pact would be energy and pharmaceutical companies and financial institutions, which could free themselves from regulations, according to Lacey Kohlmoos, an analyst and organizer with the Washington-based Global Trade Watch, an offshoot of Ralph Nader's organization Public Citizen.

The proposed TTP agreement also could scuttle existing environmental, health, zoning and labor laws, she says.

The Sierra Club, a top environmental lobbying group agrees. "The TPP touches on a broad range of issues – environment, workers and jobs, access to medicine and more," the group says in a statement condemning the ongoing negotiations. "Despite the impact that the TPP would have on nearly every aspect of our lives, the TPP is being negotiated in near-complete secrecy."

The goal of the campaign being organized by Global Trade Watch and Public Citizen is to peel away support for the trade pact among Democratic congressmen and senators, Kohlmoos says during a recent visit to Detroit.

Despite Obama's support for the TPP, many Democrats in Congress have serious reservations about the proposed pact, she says, citing Sen. Sherrod Brown, (D-OH), who won re-election in 2012 with substantial help from the UAW. Many Republicans who support the idea of free trade also oppose the TPP, which Kohlmoos says is exceptionally complex.

"The TPP is NAFTA (North American Free Trade Agreement) on steroids,” she says. “It's designed to break down trade barriers at all costs. It has gone through 17 rounds of negotiations and it's getting broader all the time."

The Obama Admin. wants the TPP pact finalized by the end of the year, and Sen. Max Baucus, (D-MT), has said he plans to introduce a bill soon that would give the president "Fast Track" authority to finish the deal, meaning the agreement could not be amended or subject to a filibuster in the U.S. Senate.

Kohlmoos claims the U.S. has lost 5 million manufacturing jobs since NAFTA was signed in 1993, and more jobs will be lost if TPP is approved.

"I'm sorry we didn't block NAFTA," says Selwyn Rogers, a long-time UAW Local 160 member who met with Kohlmoos on her visit here. "We tried but failed. I feel (TTP) is even worse."

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