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Leo Gerard

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Bob King

In an interview with the Huffington Post’s Ryan Grim, the Steelworkers’ Leo Gerard took a swipe at Bob King of the UAW over King’s instant support of Obama’s NAFTA-Style Korea Free Trade agreement:

Told that the United Auto Workers were reportedly backing the deal, Gerard said that his union, which also represents rubber and tire workers, would take its time. “I guess some people feel they’re smart enough to make decisions based on rumors. I want to be more thoughtful,” said Gerard. The union’s board will meet Monday, he said, to discuss the pact.

The agreement was publicly announced on Friday at 7pm. Later that evening, the White House sent out a press release with quotes of support for their deal from King, JP Morgan’s Jamie Dimon, Citibank’s Vikram Pandit, Republican funder Dick DeVos, Steve Bartlett of the Financial Services Roundtable, John Engler of the National Association of Manufacturers and Tom Donohue of the US Chamber of Commerce.

Today, the White House boasts about support from WalMart, Mitch McConnell, AT&T, PhRMA and Jim Webb.

Both the UAW and the Steelworkers are unions within the AFL-CIO federation. The White House and hoped to keep the AFL-CIO on the sidelines by buying off the UAW and the Steelworkers with a “car fix,” pitting them against the building trades unions like the Bricklayers, the Electrical Workers, the Boilermakers the Painters and the Ironworkers that have been devastated by these NAFTA-style trade agreements.

The White House is also threatening to withhold support from the Steelworkers’ 301 petition, signed by 181 members of Congress, asking for swift action against China’s use of unfair trade practices to dominate the green technology sector. But it’s hard to see how signing on to another “free trade” agreement is a good idea for any labor union when the US government won’t take action against WTO violations that are already being committed.

The deal was announced on a Friday night, which allowed the White House time to dump statements of support into the media while the unions scrambled to respond. Members of Congress like Sander Levin  joined an all-out White House effort that included Labor Secretary Hilda Solis to stop the unions from responding so the story in the news would look like total support for the White House deal…and any opposition would just look like a grumbling coda to their glorious achievement.

The European Union recently completed a Korea Free Trade Agreement. However, the one negotiated by Obama is not nearly as favorable toward auto manufacturers:

  • Number of cars US can potentially sell into Korea increases from 6,500 per manufacturer to 25,000 per manufacturer (it’s estimated that Korean manufacturers will sell 950,000 cars in the US this year).
  • NO mandatory or even voluntary targets for Korea importing more US cars and pickups, which UAW and Levin had demanded
  • NO requirement that phase-out of US tariffs on Korean cars be conditional on number of US cars sold in Korea, also demanded by UAW and Levin
  • NO requirement that Korean cars be made with Korean parts and labor.  Only 35% of their value has to be Korean to come in to the US duty-free, which means that most of their parts can be back-doored from China.
  • NO removal of “duty drawback” provisions, which allows the Korean government to refund tariffs paid by the automakers to import their cars into the US, which puts the US manufacturers on an unequal footing with their Korean counterparts.  This provision was removed in the recent European trade agreement with Korea.

Bob King got almost nothing he asked for, which was why staff at the UAW opposed signing off on the deal.  At best, it could create 800 jobs for the autoworkers — but there are no provisions that guarantee this will happen, or any penalties if it doesn’t.  In short, nothing to act as an incentive for the Koreans to buy US cars whatsoever, which is no doubt why Korean automakers are hailing the deal today.  King signed off anyway because Obama called him personally, and because Ford likes the deal.  But Ford is manufacturing their cars in China, Thailand and the Philippines, so what’s good for Ford isn’t necessarily good for the autoworkers.

A recent EPI study from July concluded that 159,000 American jobs could be lost due to the Korea Free Trade deal negotiated by George Bush.  Obama’s deal changes very little, and as Michael Whitney notes, it “did not deal with core issues that would result in a $13.9 billion trade deficit that will cost the US 159,000 jobs.”  Thus, Obama is claiming that the deal “support” 70,000 jobs — he can’t even say the deal “creates” or even “saves” any jobs.

All over the internet, in every story I’ve seen on the deal, a phalanx of newly registered commenters were out supporting it (we had one here). Looks like the Chamber’s latest PR strategy includes paid online sockpuppet swarms.

As late as Thursday, the Building Trades unions were being told that there was no need for them to mobilize, because the White House would not be taking up Korea Free Trade for another year. This was the same thing they told the Social Security groups — right before they announced the formation of the Catfood Commission.  Without the support of the AFL-CIO, the building trades unions will be on their own mobilizing in opposition to the new NAFTA.

The Steelworkers board meets on Monday to discuss the new trade pact, which requires the support of Congress.

I asked Ryan Grim if Leo Gerard’s comment that “some people feel they’re smart enough to make decisions based on rumors” was directed at the UAW’s Bob King.

“Definitely,” he said.