Crazy Against Trade


Investor’s Business Daily
Issues & Insights Section
May 26, 2009

Trade: The Obama administration has moved swiftly to advance Panama’s free trade pact, talking to all sides. But Big Labor’s resistance is so counterproductive to even its own interests, it’s starting to look like bad faith.

If unions like the Teamsters and the AFL-CIO were honest, they’d admit that their real agenda isn’t taxes, labor laws or a need for a “new framework,” whatever that is. They’d just admit they’re against free trade no matter what.

Their unending objections to the Panama treaty are nothing but a bid to kill the pact through delays. They’ve been pretty successful at this so far, putting the deal on hold for two years.

The administration, however, has moved swiftly to get the pact done by July 1, extending a good-faith bid to labor so an acceptable outcome can be reached for all. Panama is doing its part by making concessions that stretch the definitional limits of free trade.

But instead of working with the president, Big Labor only presents new demands. The AFL-CIO’s congressional testimony reflects this.

The new gripes? We now learn that overtime rates for canal-zone workers are “only” 25% instead of a Detroit-like 75%, that Panama’s nationality law conflicts with U.N. standards and that free trade is the reason for the U.S. trade deficit. Worst of all: the pact was negotiated under George Bush.

The new objections are pretty contorted in the face of facts. Panama’s best-paying jobs, for example, are in the canal zone, where few workers want unions. The U.S. has a $4.2 billion surplus with Panama that will rise as it does in all free trade countries. And the pact was negotiated by U.S. Trade Representative pros, not Bush.

But that isn’t stopping the Teamsters’ James Hoffa. Fresh from losing as many as 44,000 American jobs over the Mexican truck shutout, he claims the Panama pact will increase unemployment. It’s the opposite: Three months ago, 20,000 Caterpillar workers were laid off as the U.S. economy tanked.

Caterpillar will need to rehire those union workers if it wins new contracts for earthmovers. There’s a $4 billion Panama Canal expansion going on with contracts up for bids. Without the pact, Caterpillar equipment is subject to 20% tariffs. Nonunion Chinese workers could easily get this work while UAW workers stand in unemployment lines.

The unions are utterly indifferent about this. They’re also out of sync with public sentiment that once again favors trade. Instead, they’re preoccupied with micromanaging Panamanian law as if that, instead of helping U.S. workers, is their business.

Publication:IBD; Date:May 26, 2009; Section:Issues & Insights; Page Number:A14

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