Minneapolis, Minn. (January 25, 2011) – Approximately 57,000 Minnesotans work in industries that a U.S. government study identifies as at risk of being off-shored should a proposed trade pact with South Korea be enacted. According the U.S. International Trade Commission, the proposed trade agreement will increase the U.S. global trade deficit, negatively affecting employment in industries prevalent in Minnesota.
“With 7 percent unemployment in Minnesota, more than 9 percent unemployment across our country and an electorate that is strongly opposed to more NAFTA-style trade agreements, it is baffling why any member of Congress would support a deal that even the International Trade Commission says will increase our trade deficit,” said Steve Hunter, Secretary-Treasurer of the MN AFL-CIO.
Since the North American Free Trade Agreement took effect in 1994, the U.S. Labor Department has certified 33,800 individual Minnesota jobs as lost to either direct off-shoring or displacement by imports. This figure is almost certainly low, given that service-sector jobs shipped overseas were not typically counted in the data set until mid-way through 2009. In terms of volume of trade, the Korea FTA is the largest pact of its type since NAFTA.
The U.S. International Trade Commission, the independent federal agency tasked with estimating the likely economic effects of trade agreements, predicts that implementation of the Korea FTA would lead to an increase in the overall U.S. goods trade deficit of between $308 million and $416 million. The changes made to the deal by the Obama administration in December 2010 do not alter these USITC findings.
The USITC also indicates that jobs are likely to be lost in high-wage industries such as electronic equipment and metal products manufacturing with deficits for these sectors totaling up to $1.8 billion. According to research by Public Citizen, there are thousands of Minnesotans employed in sectors of the economy that the USITC has identified as most at risk under the Korea FTA.
This includes over 20,500 in electronics; 15,500 in metal products manufacturing; 9,100 in motor vehicles and parts; 5,400 in other transportation equipment; 3,000 in textiles; and 1,800 in iron-containing metal work. The average hourly earnings of workers in the electronics industry, which is projected to lose the most jobs, were $30.38 in 2008.
This was 40.5 percent greater than the average hourly earnings of all workers employed in the private sector. This is a particularly troubling development, since high-tech jobs are often touted as being the “jobs of the future.”
“Past trade pacts such as NAFTA have destroyed well-paying manufacturing jobs and eroded the middle class,” said Kris Jacobs, Executive Director of JOBS NOW Coalition. “The Korea FTA, based on the NAFTA model, is projected to further undermine the American economy and put more people out of work.”
The bulk of jobs at risk in Minnesota are concentrated in two of the state’s eight congressional districts, with an estimated 12,800 jobs at risk in the 3rd District and 12,000 jobs at risk in the 1st District. According to an Economic Policy Institute report, these two districts, along with the 2nd Congressional District, already rank among the Top 50 districts nationwide that have the greatest net job loss due to growing trade deficits with China. Congressman Erik Paulsen (R-MN-03) is not only a proponent of the Korea agreement, but is co-chair of the Congressional Korea-U.S. Free Trade Working Group which is focused on the agreement’s swift passage. Congressman Tim Walz (D-MN-01) has not stated his position on the Korea FTA. The Minnesota Fair Trade Coalition is urging all of Minnesota’s members of Congress to oppose the trade pact.
“Whether or not Congress approves this pact will depend in no small part on how Minnesota’s Congressional delegation votes,” said Jessica Lettween, Director of the Minnesota Fair Trade Coalition. “In today’s economic climate, it would be unthinkable for our elected officials to support another job-killing trade agreement. The high cost of so-called ‘free’ trade is something workers just can’t afford.”