By: Jim Goodman, FFD board member and dairy farmer near Wonewoc, WI
Published 4/11/11 by the Capital Times (Madison, WI)
“We have to seek new markets aggressively, just as our competitors are. If America sits on the sidelines while other nations sign trade deals, we lose the chance to create jobs on our shores.” — President Barack Obama, State of the Union Address, Jan. 27, 2010
The Korea-U.S. Free Trade Agreement (KORUS) is precisely what President Obama is promoting. The arguments and the promises are pitched again, over and over and over, ad nauseam: Free trade agreements will produce more and better jobs for U.S. workers, better markets and more profit for U.S. farmers.
Considering our long history of FTAs — the North American Free Trade Agreement (NAFTA) of 1994, the World Trade Agreement (WTO) of 1995, and the Central American Free Trade Agreement (CAFTA) of 2005 — shouldn’t the prosperity for workers and farmers be kicking in pretty soon?
The underlying assumption of job creation through FTAs is false. Current trade policy has not created more U.S. jobs. It has accelerated offshoring of U.S. jobs and it has, in effect, allowed multinational corporations to opt out of environmental protection and fair labor standards.
Prior to NAFTA, our trade deficit with Canada in 1990-1994 averaged $8.1 billion; by 2006 it was $71 billion. In 1993 we had a $1.6 billion trade surplus with Mexico; by 2010 we were $61.6 billion in the red. Given economic factors unrelated to NAFTA, both positive and negative, the Congressional Budget Office estimates that under NAFTA, the U.S. gross domestic product increased a few hundredths of 1 percent. Wow.
While an opinion column in the Boston Globe indicated NAFTA was bad for U.S. jobs and the environment, another, in the San Francisco Chronicle, noted that under NAFTA multinational corporations had been able to cut labor costs and increase their profits.
KORUS would be no different: bad for workers, good for corporate profits. The U.S. International Trade Commission estimates that under KORUS, the U.S. trade deficit would again increase, and U.S. jobs would again be lost. So, while profits would be realized, the benefit to society is a question of one’s perspective. While workers are laid off, farmers gain nothing and the poor sink deeper into destitution, corporate power and profit would keep growing.
Who really benefits when, for example, General Electric made over $14 billion in profit in 2010 yet paid no taxes? GE is one example, but the parallels are pointedly exact, whether it is GE, Wal-Mart, Nestle, Kraft, Cargill or any of a host of agribusiness corporations: They profit, they do not pay their fair share of taxes and they happily exploit labor standards and environmental protection.
Agriculture could be the biggest winner when KORUS is approved. U.S. agricultural interests stand to gain billions in earnings. Farmers, however, are not international traders. The real profit in agriculture is made in the corporate boardroom; farmers don’t have a seat there. Perhaps the stronger point is that most farmers worldwide produce food to be consumed locally, not commodities for international trade. They stand to be victims of corporate “dumping” rather than standing to benefit by trade.
Like Mexican and Central American farmers under NAFTA and CAFTA, Korean farmers will, perhaps, suffer the most. They stand to lose their land, their culture and their dignity.
If the argument in favor of KORUS is increased corporate profit, fine, call it that, but it is a perverse misrepresentation to imply that U.S. farmers and workers will profit. Farmers and workers do not have the power, the lawyers or the off-shore banks that the multi-national corporations use to push their agenda.
As tariff barriers are removed, the world will indeed be the oyster of multi-national corporations. Shakespeare could be quoted as their guiding light: “Why then the world’s mine oyster/Which I with sword will open.”