May 31, 2010    Volume 17, No. 9

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Chamber Of Commerce President Tom Donohue Blames Labor Unions For Dearth Of Jobs

By Richard A. McCormack

The president of the U.S. Chamber of Commerce knows who to blame for America's economic ills: labor. He also has a best friend in the Obama White House: United States Trade Representative Ron Kirk.

"I have a problem with labor union leaders who have lost sight of what's in the best interests of their members and are in this town holding back this economy and reducing the opportunities to create new jobs for labor union members and for non-labor union members," Chamber of Commerce President Thomas Donohue told the National Press Club on May 14.

The only way to create the 22 million jobs needed to make up for those lost during the Great Recession is through exports, he said. Yet labor unions have worked against signing new free trade agreements.

The United States currently does not have a trade agenda that is focused on increasing exports overseas. "The reason why is as clear as it is indefensible," Donohue said. "Organized labor spent in excess of $400 million in the last election to help elect the current administration and the congressional majority. And for reasons that defy logic or common sense, they vehemently opposed the very policies that could create millions of new jobs for American workers. So as the rest of the world races to complete new deals, America is being locked out and left behind."

The United States has signed only 11 free trade agreements out of a global total of 262. There are currently 100 negotiations taking place globally between nations to sign bilateral and regional trade agreements. The United States is involved in one.

The U.S. Congress has not ratified agreements already negotiated with Colombia, Panama and South Korea, yet the EU signed an agreement with Colombia on May 19. The EU has also negotiated a deal with South Korea. Canada has negotiated an agreement with Colombia and signed a new trade agreement with Panama on May 15.

"It will mean that the EU and Canada will be able to sell their products in those markets at a much better price," said Donohue. "That means we will lose market share and jobs. It's simple as ABC. If we don't act, not only will we miss out on opportunities to create jobs, we will lose existing jobs as well. How can Congress and the administration and the unions thinking about their members that they represent sit by and allow this to happen? Union leaders can no longer be allowed to dictate our global trade and commercial practices."

When asked by members of the press how labor and environmental considerations should be handled, Donohue said that they should not be in free trade agreements. "If you listen to the arguments the unions are making about the labor issues, I can tell you countries we trade with all over the world are not going to [adopt] U.S. labor standards and U.S. pay levels because their economies are at a much lower [level]," Donohue responded. "We are taking more people out of poverty than you can imagine."

Environmental issues are being negotiated outside of the trade arena, such as in Copenhagen, he added. "I would suggest to you, if you ever could take those issues and solve them right now, that tomorrow morning the labor unions would have another issue. And by the way, these are not stupid people. They're very, very concerned about jobs. I respect that. I'm concerned about jobs. But they're not helping jobs. And when you look, more than half of the organized labor in this country now are public employees. Are they worried about trade? We're not going to trade them away. And I'll give you an idea," he continued: "You want to make a note of what's going to be going on in this country in the next five years: There's going to be a war between public employees that are unionized and private employees that are unionized, as public employees require more and more tax increases and other payments to pay for their very, very attractive pension and welfare things, and huge salaries that have to be paid for by a lot of people, including only 7 percent of the workforce that's unionized in the private sector."

When Donohue was asked if he was "forgetting about imports and their effect on jobs and manufacturing," he replied that imports are "very, very important" to the United States. "There are a lot of commodities that we can't get from our own country," he said. "There are a lot of products that we want to have that we can't get. And by the way, these labor union guys, or their leaders that all complain about trade, they all go to Wal-Mart to shop because you get quality products at lower prices.

"I talk all the time around the country and people say: 'All these jobs left Michigan and Pennsylvania and New York and went to China.' The hell they did. They went to Atlanta, Texas and Arizona. Most of the jobs, with some very visible exceptions, that have gone to Asia have gone there to try to take advantage of half of the global economy and have gone there to keep the intellectual property and the engineering and all that stuff in the United States."

Donohue said that people like him who believe in free trade must do a better job of communicating the benefits of the global trading system, "while not glossing over the disruptions that affect some workers and communities. We must devise ways to support effective programs to help those people that are disenfranchised. But that is no excuse to turn our back on the promise of trade expansion and all the new jobs and opportunities it can provide across this country. We've got the best products. We've got the best services and the most innovation and we have the best workers and the best companies in the world. We've been sitting on the sidelines too long. It's time to get back in the game."

The person that wants to get the United States back into the game, Donohue noted, is U.S. Trade Representative Ron Kirk. "Ron Kirk is one of the best people the president appointed," said Donohue. "He was a mayor right down on the border with Mexico. He's a good man. He's trying very hard. But Ron's got a problem. He's got to get some help from the White House and from the Congress or we're never going to do these trade deals. And by the way, his patience will wear thin pretty soon."

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