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12/16/2004

Massive U.S. trade deficit undercuts U.S. workers.

The U.S. trade deficit continued its record-breaking rise, jumping to an unprecedented $55.5 billion in October, up from $51.6 billion in September, the U.S. Department of Commerce reported Dec. 14.

The U.S. trade deficit with China, the largest with any country, swelled to an all-time high of $16.8 billion—the eighth consecutive month this year the nation’s trade shortfall with China has grown. The growth in the deficit with China follows last year’s record $124 billion deficit with that country, the largest annual deficit with one country in U.S. history.

Such a huge trade deficit undercuts domestic manufacturing and destroys good U.S. jobs because the nation is importing, on a large scale, products that had been produced domestically. Because of market barriers abroad and unfavorable tax and currency policies, U.S. manufacturers then are unable to sell enough products abroad to offset the losses from imports. Due to the combination of imports and companies moving jobs overseas, America’s workers lose good jobs and see their wages and benefits eroded.

More than 2.7 million U.S. manufacturing jobs have disappeared since President George W. Bush took office, many because of unfair trade policies and job exporting. Many jobs have been lost to China, where workers’ rights are routinely violated to keep wages low, according to Robert Scott, director of international programs at the Economic Policy Institute (EPI).

‘Devastating for the Economy’

Unfair trade policies pushed by corporate interests also are behind the nation’s jobs drain. Just this month, Electrolux shut down an entire plant in Greenville, Mich., and a portion of another plant in St. Cloud, Minn., and moved production overseas, causing more than 2,900 people to lose their jobs.

“Our trade policies have to be changed. They are unfair. If they keep moving jobs away from here it will be devastating for the economy. It would be really bad, terrible. There are no jobs here that pay as well as these. When you have children, you don’t want to work two jobs just to make it,” says Colleen Murphy Cooney, a painter at the St. Cloud Electrolux plant. Although Cooney will not lose her job now in the plant’s production shift to China, she is unsure whether the company will move more jobs out of the United States.

U.S. manufacturers are losing markets to foreign competitors because of trade agreements such as the North American Free Trade Agreement (NAFTA). Similar trade deals proposed by the Bush administration, including the Central American Free Trade Agreement (CAFTA), reflect the interests of large multinational companies, not domestic manufacturers and workers, union leaders say.

CAFTA is the first bilateral or regional agreement the Bush administration has pushed since fierce opposition from workers in North and South America and their community allies stymied trade ministers in November 2003 from consolidating the Free Trade Area of the Americas, which would eliminate tariffs among 34 countries with a population of more than 800 million. CAFTA, which would eliminate most tariffs and other trade barriers between the United States, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and possibly the Dominican Republic, would extend the same disastrous anti-worker policies and environmental damage to Central America, according to union leaders, who have joined in a coalition with environmental, human rights, poverty, trade and faith organizations to fight the trade proposal. The Bush administration plans to submit CAFTA to the new U.S. Congress for approval next year.

Since NAFTA went into effect 10 years ago, U.S. workers have lost nearly 900,000 jobs, while poverty and inequality in Mexico have increased and Mexican real wages have fallen, according to the EPI.

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