USW Cites Failure of Korea Free Trade Deal in 2nd Year

Contact:   Gary Hubbard, 202-256-8125,
                 Wayne Ranick, 412-562-2446,

Washington, D.C (Mar. 12) -- The United Steelworkers (USW) joined Members of Congress and private sector experts today in declaring the U.S. - Korea Free Trade Agreement (KORUS-FTA) has fallen far short of  job promises and improvements in trade balances marked by the second anniversary of the trade law this Saturday.

“Government data, congressional voices and economic studies confirm that the US-Korea Free Trade Agreement has failed us,” USW President Leo W. Gerard said.  “It has failed to produce good jobs and the evidence on exports is clear. Our export growth rate in the past 20-out-of -21 months is below the average monthly level seen before the FTA was signed.

“What’s astounding is the monthly imports from Korea are up four percent and the monthly U.S. trade deficit with Korea has ballooned 45 percent when compared to the pre-FTA level. The damage from KORUS and other free trade deals have been shown by the Economic Policy Institute (EPI) to have caused the loss of tens-of-thousands of good-paying U.S. manufacturing jobs.”

The U.S. - South Korea trade deficit has reached a historic high of $20.67 billion this year, which is a $7.4 billion (56 percent) increase from 2011 – the year before KORUS took effect. And the government numbers continue to get worse in each of the following years with U.S. exports down $1.8 billion since 2011 and $700 million since 2012. “These trade imbalances cost us more lost jobs,” Gerard points out.

 “This unsustainable trade imbalance is undermining the economic wellbeing of American workers,” Gerard states. “If law-makers in Washington spent as much time worrying about our country’s trade deficit as they did the government’s budget deficit, our country would have more family-supportive jobs and a better trade policy.”

While imports from Korea continue to flood into the U.S., costing workers their jobs, exports to Korea have failed to live up to the promises made when the agreement passed Congress. 

Trade data for the first year of the FTA, document exports of manufactured metal products to Korea fell eight percent. Exported manufactured wood, paper, and petroleum products have all fallen three percent. Thousands of USW members are employed in the sectors of steel, aluminum, copper, paper and petroleum products.

The trade data also shows that the U.S. overall trade deficit with the 11 countries currently participating in negotiations of the flawed Trans-Pacific Partnership (TPP) is $154 billion. If TPP has the same negative and growing impact as KORUS, American job losses and the effect of trade imbalances will multiply.

The USW continues to voice concerns related to the vehicle and auto parts industry -- perhaps the single most important industrial sector involved in trade between Korea and the U.S. The USW has more than one-third of its 850,000 members making parts that can go into manufactured vehicles. 

U.S. vehicle exports to Korea totaled 14,819 units in 2011 and increased to 27,553 units in 2013; but Korea’s exports to the United States grew from 587,328 to 752,675 units over the same period. The entire annual increase in U.S. vehicle exports to Korea are dwarfed by less than one-month of the increase alone in Korea’s exports.

“The failures of the Korea FTA show why future trade deals need to eliminate non-tariff trade barriers; include strong rules of origin; develop enforceable labor and environmental standards; and stop our country’s focus on negotiating enhanced protections for corporations at the expense of workers’ rights.  And, these provisions need to be backed up by strong implementation and enforcement provisions to guarantee results,” Gerard declared.

Fred Redmond, USW Vice President/Human Affairs, who joined today’s Capitol Hill press event with Members of Congress and the private sector economists, described USW member jobs lost from Korea’s unfair trade practices.  He cited a small machine shop in Pennsylvania that made parts for steam and gas turbines; a Whirlpool bottom-freezer refrigerator factory that shutdown with 900 workers after unlawful dumping by Korea-made refrigerator units; and a layoff of steelworkers by an American steel producer impacted by Korea’s dumping of subsidized drill pipe.  

In speaking at the press event, Redmond said Korea has failed to play by the rules of the FTA or U.S. trade laws. He added: “Success in trade deals should be measured by the number of good jobs created, not the number of agreements that are signed.” 

A copy of Redmond’s statement is available HERE

 The USW is the largest private-sector union in North America, representing workers employed in metals, mining, rubber, paper and forestry, oil refining and renewable energy products, chemicals, transportation, health care, security, hotels, and municipal governments.

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