Bal Harbour, Fla.
The Bush Administration has notified Congress of its intention to negotiate a free trade agreement with Thailand. This proposed free trade deal poses a serious threat to tens of thousands of automotive jobs in the United States.
Thailand currently is the second leading source of pickup truck production in the world. The major Japanese and U.S. companies produce pickups in Thailand, and Thailand already serves as the source of pickup truck production for most of Asia. Thailand is actively recruiting auto companies from Japan, South Korea and India to locate production in Thailand. Pickup truck production in Thailand will soon approach one million units annually and could grow even larger.
The U.S. currently imposes a 25 percent tariff on imported pickup trucks. If this tariff were reduced or eliminated in a free trade deal with Thailand, this could lead to a flood of imported pickup trucks from Thailand. When NAFTA was enacted, it eliminated the 25 percent tariff on imports of pickup trucks from Mexico. As a result, the production of pickups in Mexico soared, and it became a major source of pickups for the U.S. market. The same result could happen with Thailand, if the 25 percent tariff on pickup truck imports from Thailand were reduced or eliminated in any free trade agreement.
In addition, if Thailand were granted privileged access to the U.S. automotive market through a free trade deal, there is a danger that Japan, South Korea, and India could use Thailand as a backdoor into the U.S. automotive market. This would undermine U.S. leverage to negotiate reductions in tariff and non-tariff barriers in these countries that distort global auto markets and restrict the access of United States exports to markets in these countries.
The overall impact on automotive production and employment in the United States could be devastating. The Big Three auto companies assemble pickup trucks in plants across the United States that employ about 20,000 workers. Thousands of other workers are employed in plants throughout the country that produce engines, transmissions, stampings and other parts for these pickup trucks. Thus, the jobs of tens of thousands of American auto and auto parts workers are directly threatened by the proposed U.S.-Thailand free trade agreement.
Since President Bush took office, the United States has lost 2.8 million manufacturing jobs. The proposed U.S.-Thailand free trade agreement could exacerbate this terrible record by jeopardizing tens of thousands of good-paying automotive jobs in this country. To prevent this from happening, the AFL-CIO believes that any trade agreement with Thailand must not reduce or eliminate the existing 25 percent tariff on imported pickup trucks.
In addition, the Thailand agreement, like all trade agreements, must incorporate enforceable protections for core workers’ rights and ensure that our governments can regulate multinational corporations to protect the public interest. Protecting workers’ rights is all the more critical now. The Bush Administration is reaching out to the Thai government at the precise moment when the Thai government has reversed its longstanding policy of providing refuge to Burmese pro-democracy groups and allowing them to operate in Thailand in accordance with Thai law. The crackdown on pro-democracy groups only serves the interests of Burma’s ruling junta and coincides with the latest imprisonment by the junta of Nobel Peace Prize laureate, Aung San Suu Kyi.
The AFL-CIO will continue to work with its allies to reject the failed Bush free trade agenda and to advance our shared vision for an alternative form of integration that creates good jobs and promotes global justice.