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Trade impacts local jobs

By Steven Stiefel
The Times-Journal

Published September 26, 2003

According to the U.S. Bureau of Labor Statistics, the nation has shed 2.5 million manufacturing jobs since President George W. Bush took office.

Trade policies, including the North American Free Trade Agreement and those of the World Trade Organization, have helped multinational corporations ship manufacturing jobs to nations with few labor and environmental protections, according to Jim Leonard, a Deputy Assistant Secretary of Commerce over textiles.

“These issues are very large and complicated,” Leonard told a group of hosiery manufacturers Wednesday. “We get pulled in 20 different directions, hearing from those of you who are against imports and also those who push us to open up overseas markets for their goods. [America] exports a lot of ag products and raw materials.”

American retailers’ eagerness to sell consumers goods at the lowest cost/highest profit margin, China’s manipulation of its currency and unexpected events affecting trade agreements have all combined to create a decline in U.S. manufacturing jobs.

“Early in NAFTA, we had a positive trade balance with Mexico and were shipping a lot of raw materials there, but more American industries moved their operations to Mexico than anyone thought would,” Leonard said.

“They did not want to wait for materials to ship from North Carolina or Alabama, so they set up factories down there to expand operations. Some unforeseen things had an impact on NAFTA. The Asian currency crisis of the late 90s caused a lot of people to buy from Asian markets rather than Mexico because the product cost 40 to 70 percent less. In a financial crisis, those companies had to cut their excess capacity, which was their American factories.”

The greatest threats to Fort Payne hosiery mills, according to Charles Cole of The Hosiery Association, are China and large multinationals who can ship materials from the U.S. to the Caribbean and return the finished sock back to American retailers duty-free. U.S. Sens. Richard Shelby and Jeff Sessions, both Republicans from Alabama, are campaigning to reverse this.

In the most recent round of trade talks in Cancun, Leonard said, U.S. negotiators stood firm, demanding other countries open their markets to American-made goods. Talks stalled.

“Some [nations] take the very strong position that they can’t lower their tariffs because they’re poor. For the first time, we didn’t accept this, yield or bend. Those countries have got to be willing to give up market access in exchange because there is no more free lunch,” he said.

There is considerable pressure on wealthy nations, however, because a global trade deal could spur economic growth in developing nations and lift as many as 144 million people out of poverty by 2015 so they can afford to buy U.S.-made products, he added.

Lawmakers are aware of how China’s manipulation of its currency is giving industries there an unfair advantage, on top of low wages and lack of regulation.

“The Chinese have gotten the message, but I can’t say whether they’ll do anything or not. There are mechanisms through the WTO to act on this because that is internationally illegal,” Leonard said.

Retailers and consumers, he said, are also responsible for the loss of American jobs by their purchase choices.

“We all know who the major buyer of imports is,” Leonard said. “If Wal-Mart buys the cheapest goods from China, that forces Target and Kmart to do the same.”

He said the “Crafted With Pride” initiative to persuade consumers to buy American-made goods had an impact a few years ago but has fallen to the wayside because many items simply aren’t made in the U.S. anymore.

“You have the ability to make an impact as a consumer, to tell the store clerk, ‘Tell your store manager I’m not going to shop here anymore if you don’t offer American products’. People have to make decisions on their own. Every garment is legally required to have a tag identifying the country in which it was made. The U.S. government can’t tell retailers who to buy their products from,” Leonard said.


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