Monday, May 2, 2011

South Korean - US Free Trade Agreement - Upcoming Vote

With a $498 billion trade deficit in 2010, the Obama Administration is prepping Congress for an upcoming vote to adopt the South Korea – United States “Free” Trade Agreement (KORUS FTA) as if approval were a foregone conclusion.    In truth, with labor unions the last organized line of defense against complete corporate control of the political system, there is considerably more at stake than just continuing an indefensible foreign trade policy. 

During a recent Senate Finance Committee hearing with the Obama Administration’s Trade Representative Ron Kirk, differences between Democrats and Republicans on the panel were barely distinguishable given the continued drift of  Senate Democrats away from traditional Democratic party values.   In addition to no recognition of outsourcing American jobs, also absent was a discussion about the benefits of the U.S. trade deficit with Korea or how the trade agreement will affect the country’s current economic or unemployment woes.  Committee Chair, Senator Max Baucus (D-Mont), whose reputation as a corporate-Democrat is well deserved,  repeatedly urged the Administration to wrap the pending Colombia and Panama Trade  Agreements together with the Korean FTA.  Ranking Senator Orrin Hatch (R-Utah), who was more than a reticent minority voice on the Committee, agreed.   

Free trade negotiations with South Korea were initiated by President George Bush in 2006 with the treaty renegotiated and signed by the Obama Administration in December, 2010.  Once ratified by both countries, the treaty will be the first FTA with a major Asian economy and the most comprehensive trade pact since the $1 trillion North America Free Trade Agreement (NAFTA) with Canada and Mexico in 1993. 

With new market opportunities for American business as a driving force, KORUS FTA includes more than just a full range of agricultural products, pharmaceuticals, “sizeable new” financial and investment services, machinery, telecommunications, electronics and passenger vehicles.  Citigroup’s representative on the U.S.-Korea FTA Business Coalition gushed that the Agreement “is the best financial services chapter …to date.”   The Administration predicts an increase in U.S. exports of ‘at least’ $10 billion and creation of  ‘at least’  70,000 new U.S. jobs, statistics which are disputed by the Economic Policy Institute (EPI) and the AFL-CIO.    

With imports of fuel efficient Korean vehicles considerably more than the export of U.S. gas-guzzlers into Korea, the trade balance between the two countries has been in deficit since at least 2001.  Measured in dollars, a trade deficit exists when imports exceed exports which translates into fewer American jobs as a drain on U.S. consumer dollars while stimulating job growth in another country.              

Kirk’s assurance of an ‘economically compelling” Agreement that will “advanceAmerican interests around the world’ is difficult to reconcile as the sale of an estimated 775,000 Korean vehicles (including 250,000 from Hyundai’s non-union plant in Alabama) overwhelmed the export of 4,000 American-made autos to Korea.  With a new Hyundai plant opening in Georgia, Korea’s total production in the United States will reach 600,000 vehicles annually – without any union contract.     
As KORUS FTA moves toward Congressional approval, the South Korea- European Union Trade Agreement was adopted in February, 2011.   U.S. Commerce Secretary Gary Locke had earlier predicted that American companies could lose out if South Korea finalized its deal with the EU prior to KORUS FTA.   Anticipating possible problems, Locke suggested that "those relationships will have already been formed between Korean companies, its consumers and European products” warning that “they're not just going to abandon those relationships and start buying from America just because we passed our agreement." 

As the world’s fifth largest vehicle producer and the third largest exporter of vehicles in the world amidst a relatively small Korean market of 1 million cars sold annually, South Korea has historically resisted opening its borders to imports – which foretells of a considerable shortfall for the overly-optimistic Administration and U.S. carmakers.   The Korea Institute for International Economic Policy estimates that, with KORUS FTA, exports to the United States will rise 12% each year giving South Korean President Lee Myong the confidence to say that KORUS FTA will bring ‘huge benefits’ to his country.

EPI’s 2010 Working Paper on Trade Policy and Job Loss predicts that the proposed Agreement will bring the U.S.-Korea trade deficit to $14 billion and create a loss of 322,000 American jobs by 2015.   In order to encourage sale of American vehicles, the FTA would eliminate South Korea’s tariff on American autos and reduce its engine displacement tax on large cars that US automakers believe to have been a ‘disadvantage’ to sales in Korea.  It is unclear what pie-in-the-sky analysis convinced Mr. Obama that Korean car consumers will be more likely to purchase a more costly 20 miles-to-the-gallon Chrysler rather than a locally produced, more efficient Kia or Hyundai.

The International Trade Commission’s 2007 report indicates that despite a 1998 MOU with the US to improve the perception of foreign vehicles in Korea, “U.S. industry reports that anti-import activities have continued and have a strong residual effect on the (Korean) consumer.”   In other words, the likelihood that many Korean car owners, with an already ingrained bias against auto imports, will hasten to purchase American SUV’s is problematic.

First introduced to a woefully gullible Congress in 1993 by a mythologically liberal President  Clinton,  NAFTA’s promise of an improved trade balance and increased U.S. employment opportunities never materialized.  Leo Girard, President of the Steelworkers Union has stated that “since NAFTA, $7 trillion of wealth has transferred out of America to our trade partner countries.” EPI has further estimated that trade agreements in force since 1994 cost American workers 879,288 jobs by 2003 with a loss of 5 million manufacturing jobs between 2001 and 2009.   While not all were labor union jobs, the massive transfer of American employment to foreign markets has devastated the American labor union movement and the country’s middle class in general.   At the same time, the multi-national corporate oligarchy have greatly benefited with considerably lower labor costs and realized enormous increased profits.    Former Clinton Labor Secretary Robert Reich’s data that 300,000 new jobs are required each month between now and 2014 in order to reach the 2008 unemployment level of 6% puts a gigantic unrealistic burden on KORUS FTA.

Congressional Republicans, who excel at out-flanking the timid Senate Democrats, agreed with Baucus that passage of KORUS FTA would be endangered unless a trade package including Colombia and Panama was offered at the same time as one vote but the Administration knows it risks losing UAW support. Internationally known for assassinating its judges and labor leaders and despite Baucus’ assurances that the new Colombian President is a model reformer, right up there with Abraham Lincoln, Kirk acknowledged that the Administration faces a moral dilemma of sorts in restoring “the faith of the American public to its trade policy.”  

President Obama has lauded the Agreement, hoping that support from both business and Labor will attract bi-partisan votes.   The United Auto Workers, backed into an awkward shareholder relationship with Chrysler and General Motors in 2009 as both companies neared  collapse, paid into the union’s trust fund with stock instead of cash.  Initially opposed to the Agreement, the UAW endorsed the pact after receiving concessions for improved access to Korean markets and tariff reductions.

Opposition from AFL-CIO President Rich Trumka, with 9 million members, cited concerns that "go beyond the auto assembly sector."  Trumka believes that “too many flawed trade deals like NAFTA do not justify optimism that this deal will generate the promised new jobs.  We've seen U.S. multinational companies take advantage in past trade deals to shift production offshore, undermining the jobs, wages and bargaining power of American workers and the results have been catastrophic.” 

In addition, the AFL points out that labor protections in previous trade agreements have not resulted in one single fine for labor violations since 1993.  NAFTA inequities are evident in tracking the United States $1.7 billion trade surplus with Mexico in 1993 that grew to a $74.8 billion deficit by 2007 costing the U.S. 560, 000 jobs between 1993 and 2004.

As Presidential candidate, Senator Barack Obama opposed the KORUS FTA as `badly flawed'  claiming it would not increase U.S. auto sales and promised to vote against the Agreement on the Senate floor.   As a sop to labor unions during campaign stops in 2008, Obama suggested "opting out" of NAFTA if he was elected but Senior Economic Advisor Austen Goolsbee dismissed the possibility as "more …political maneuvering than policy.”       

Following his predecessor’s lead, President Obama, who presented himself as a leader of open government committed to the objectives of labor unions, now plans to reprise Bush’s Presidential "fast track" no-amendment, no-filibuster legislative rule (known as Trade Promotion Authority) with limited debate and passage requiring a one-vote majority.  

The United States’ deep trade imbalance hole will require a drastic change of policy to reverse the decade-long trend of deficits.   Based on his first two years in office, it would appear doubtful that Obama has the gumption to do anything that requires drastic action.  

As heirs to a rich heritage of long-ago union heroes who fought and died for the 8-hour day and the 5-day week, labor unions prospered after WWII with stable wages and benefits and became reliable Democratic voters as America’s working middle class was lifted to economic security.  If Congressional Democrats approve KORUS FTA, acting as business agents for  insatiable multinational corporations, they will, in effect, let down those working class voters who have been the backbone of their electoral support for decades.  With massive budget cuts to favored People Programs on the table and as the America Dream continues to be exported, opposition to KORUS FTA will depend on those 80-100 Democratic members of the House who still  remember what it is to stand for democratic principles as the future of the American labor union movement remains the last vestige of a Democratic party’s moral and ethical leadership.    

Fiftieth Anniversary of the Freedom Rides

            Seventeen years after Irene Morgan refused to sit in the back of the bus in Hayes Store, Virginia and six years after Rosa Parks’ refusal set off the Montgomery bus boycott bringing Dr. Martin Luther King Jr. to national attention, a racially integrated group quietly boarded a Trailways and a Greyhound bus in Washington, DC in 1961. 

            Morgan’s earlier defiance led the NAACP to successfully challenge the State of Virginia’s ban on integrated interstate transportation before the Supreme Court in 1946 (Morgan v. Commonwealth of Virginia) - but by 1961, little had changed.  Interstate buses remained segregated as southern officials refused to accept the Court’s verdict citing Interstate Commerce Commission guidelines.   By 1961, lunch counter sit-ins in Greensboro, North Carolina and even the Court’s 1955 ‘with all deliberate speed’ decision on Brown v. Board of Education desegregating the nation’s public schools had met with little long-term success.  

            By 1961, one hundred years after the Civil War, America was still a country divided by its racial history; a country still at war with its own hopes and ideals and, as it was soon to discover, the American people were ready to move toward a new era of tolerance and reconciliation.  But that progress would come through bitter struggle.

            Immediately after the Civil War, President Abraham Lincoln’s Emancipation Proclamation was embedded in Constitutional law in 1865 with adoption of the 13th Amendment banning slavery.   In 1868, the 14th Amendment established the concepts of due process and equal protection; and in 1870, the 15th Amendment guaranteed voting rights regardless of race (but not gender).  In 1883, the Civil Rights Act of 1875 that guaranteed all citizens fair and equal treatment was found unconstitutional by the Supreme Court.  

            As black southerners began to assume the mantle of full citizenship after the Civil War, white Democrats, still dominating the south’s political landscape, remained intent on depriving blacks of their constitutional rights.  Adopting Jim Crow laws that mandated racial segregation as ‘separate but equal,’ southern blacks who attempted to vote or participate economically or politically were met with swift and brutal retaliation.  Living in daily terror amidst a system that condoned lawlessness and assassination in the belief that blacks were less human than whites, Tuckegee Institute’s last Lynch Report estimated 4,733 lynchings of southern blacks between 1882 and 1959 with an average of 150 lynchings annually across the South between 1882 and 1901.  

            Even after Morgan and President Harry Truman created the Presidential Commission on Civil Rights and introduced anti-lynching legislation which southern Democrats blocked, American blacks were still second-class citizens trapped in a caste system of racial bigotry.

            In 1942, the American affiliate of the London-based Fellowship of Reconciliation branched off to form the Congress on Racial Equality (CORE) embracing Gandhian principles of pacifism with its mission to ‘abolish the color line through direct non-violent action.”   As repeated attempts at bus integration met with fierce resistance and no institutional vehicle to force compliance with Morgan, CORE’s trio of Bayard Rustin, James Farmer and Jim Peck conceived of a Journey of Reconciliation to challenge the continued segregation of the south’s transit system. While philosophical and strategic differences emerged between CORE, impatient for progress and the national NAACP which preferred a more cautious approach through the Courts, two events in the summer of 1946 sparked CORE’s Journey:  a WW II combat veteran of the Pacific was severely beaten riding home to North Carolina and lost sight of both eyes by gouging from a police billy club while another WWII combat veteran’s successful trip from Atlanta to Washington, DC encouraged further acts of defiance.

            In April, 1947, sixteen volunteers including three ministers, a biologist and a jazz musician traveled a ‘safe’ route through preselected areas of Virginia, North Carolina, Kentucky and Tennessee.  By the end of their two week Journey, the value of direct action in exposing the country’s hypocrisy to democratic ideals had proved successful with only 12 arrests and one violent confrontation but the larger goal of a fully integrated transit system south of Mason-Dixon remained illusive.    

            By the early 1950’s, as Wisconsin Senator Joe McCarthy’s attacks took their toll on liberal causes, CORE’s funds and enthusiasm waned as a unanimous 1956 Supreme Court decision (Gayle v Browder) desegregated local city-wide bus transit ending the Montgomery bus boycott.  In 1957, the Eisenhower Administration’s federalizing the National Guard to protect nine black high school students in Little Rock, Arkansas was its last effort to enforce Brown.  As each sit-in or march became an individual victory, no one single achievement broke the back of decades of vigilante terror and discrimination.

            By the 1960’s, as the country’s consciousness shifted with the ascendancy of rock ‘n roll, the early desegregation of professional sports and entertainment and continued black migration north, CORE recognized it was time to renew its challenge with a bold initiative to end segregated transportation in the deep South.   With the newly formed Southern Christian Leadership Conference as cautious as the NAACP, a new militancy in the civil rights movement was about to burst onto the national scene.  

            By May, 1961, the Freedom Rides would step in with a courage and commitment to non-violent civil disobedience that would accelerate the campaign for social justice and touch the conscience of the Nation.   After advance scouts reconnoitered a proposed route to New Orleans, eighteen specially chosen black and white Americans ranging in age from 18 to 61 years were trained and ready to take the long ride into history.   

            Separated on two buses, their ride continued for more than a week through Virginia, North and South Carolina and even most of Georgia without major incident.   During their stop in Atlanta, Dr. King declined the opportunity to join the Ride and warned ‘you will never make it through Alabama.”

            As the Riders traveled through the Deep South, CORE’s earlier communique to government authorities was transmitted to the infamous Bull Connor, Commissioner of Public Safety for the City of Birmingham, Alabama.   Unbeknownst to the Riders, a southern-style Ku Klux Klan welcome of vigilante justice was awaiting their arrival. The Greyhound bus left Atlanta an hour earlier and headed west to Anniston, Alabama with two undercover agents from the Alabama Highway Patrol on board.   Approaching Anniston, the bus driver received a warning that an angry mob had gathered and as the Greyhound arrived at the bus terminal, a crowd of white men screaming ‘sieg heil’ and armed with assorted chains, crowbars, pipes, bats and brass knuckles surrounded the bus, broke its windows, dented its body and punctured its tires.  Local police escorted the bus to the city limits as a long line of vehicles filled with hysterical hoodlums followed until two flat tires ground the bus to a halt.   Thereupon, without police protection, all hell broke loose.  With its passengers still inside, the crazed mob continued to rock the bus until burning rags thrown in filled the interior with dense black smoke, setting its seats aflame.  Three Riders squeezed out through open windows while several passengers escaped out the front door.  As one of the Highway Patrolman pried open a door to allow the remaining passengers to escape, shouts of “fry the niggers’ and ‘burn them alive” were drowned out as both gas tanks exploded.  Warning shots in the air from the Patrolman ultimately drove the maddened throng away.   In the aftermath of the attack, ambulance service was denied until the same Patrolman intervened.  Upon arrival at the nearest hospital, the Klan attempted to block access to medical treatment and maintained a vocal presence threatening to set the hospital on fire.  Evicted from the hospital before nightfall as the Klan crowd continued to jeer, the Riders were rescued by a caravan of church Deacons flaunting rifles as their wounded passengers sought refuge.

            Faring only slightly better than the Greyhound, the Trailways bus with the remaining Riders had taken a different route.  Several beefy Klansmen had boarded in Atlanta and began to beat the male Riders as they crossed into Alabama.  When the bus arrived at the Birmingham terminal, the Riders exited as a new contingent continued the beatings with several Riders rendered unconscious.  Coincidentally, CBS reporter Howard K. Smith was in Birmingham and reported eyewitness attacks to the nation as several photographers were assaulted, their cameras later retrieved to ultimately share images of the Klan in action.  

            Once the Riders of both buses were reunited, the decision was made to complete the Ride to New Orleans but access out of Birmingham was blocked by bomb threats.  Meanwhile a group of seasoned civil rights students from Tennessee State organized a second Freedom Ride which left Nashville less than 48 hours later headed to Birmingham. 

            Sixty three Freedom Rides continued for the remainder of 1961 with over 400 participants including Riders who went on to national prominence such as two current Members of the House of Representatives John Lewis and Robert Filner, James Forman, Percy Sutton, Mark Lane, Stokely Carmichael, William Sloane Coffin, Jr., Tom Hayden,  Ralph Abernathy, Fred Shuttlesworth, Bayard Rustin and current Supreme Court Justice Clarence Thomas and the often violent struggle for full citizenship brought a new generation of young people into the civil rights movement, more willing to take risk and less willing to wait for justice.

            Now, fifty years later with the envisioned Promised Land still on the horizon, the time has come to honor the 350 surviving Freedom Riders for their sacrifices and their glorious achievement which changed the country forever and made it a better place for all Americans.            

Recommended Reading: A Death of the Liberal Class by Chris Hedges