Under Threat: New Trade Deals and Construction Workers (June 2003) Prepared for the By the Resource Center of the Americas & Labor Education Service, University.

Under Threat: New Trade Deals and Construction Workers

Under Threat: New Trade Deals and Construction Workers

(June 2003)

Prepared for the

By the Resource Center of the Americas & Labor Education Service, University of MNMinnesota Fair Trade CoalitionMinnesota Fair Trade Coalition

Manufacturing Jobs Lost … Manufacturing Jobs Lost …

• 3,000,000 manufacturing jobs lost to free trade since 1994

• Over 750,000 jobs lost under NAFTA alone

Free Trade Agreements once affected mostly manufacturing jobs.

Sweatshops-R-Us Globalization Sweatshops-R-Us Globalization • Many jobs sent to poor

countries

• Work often done under sweatshop conditions

• Workers often denied unions and basic human rights

Free Trade in Services Free Trade in Services

• International trade no longer targets just manufactured goods

• Now corporate free traders are going after services – including construction jobs

New Trade Deals and Construction Workers

New Trade Deals and Construction Workers

• Negotiations are underway on GATS (General Agreement on Trade in Services)

and FTAA (Free Trade Area of the Americas)

• These agreements could:– undermine prevailing wage laws– undermine union wages and jobs– undermine project labor agreements

FTAA (Free Trade Area of the Americas) FTAA (Free Trade Area of the Americas)

• FTAA extends NAFTA to 34 western hemisphere nations

• FTAA greatly expands coverage of NAFTA

• Negotiations aim to be done in 2004 -- voted on by Congress in 2005

GATS (General Agreement on Trade in Services)GATS (General Agreement on Trade in Services)

• Goal is to cover all services, all methods of delivering services, and every government measure at all levels affecting trade

• GATS is administered by the World Trade Organization (WTO)

• GATS covers 146 nations, including U.S.

• Negotiations aim to be done in 2004 -- voted on by Congress in 2005

GATS, FTAA and Construction Workers

GATS, FTAA and Construction Workers

• Would restrict rules that are “more burdensome than necessary” for foreign companies

• Rules would have to be “least trade restrictive”

• Would prohibit government from setting conditions for awarding contracts except those necessary for product quality or supplier capability

Prevailing wage threatenedPrevailing wage threatened

• Would likely be judged “more burdensome than necessary” for foreign construction firms

• Prevailing wage laws could be attacked for going beyond what is necessary to ensure service quality or supplier capability

Project labor agreements threatenedProject labor agreements threatened• Agreements that require

union labor could be prohibited

• Would likely be judged to go beyond what is necessary to ensure quality, or be the alternative that is least restrictive to trade

Temporary Foreign WorkersTemporary Foreign Workers

• New GATS rules will almost certainly make it easier to import temporary foreign construction workers

“[GATS negotiations are now] addressing issues that were previously considered to be untouchable due to their political sensitivity (e.g. visa and immigration procedures)”

-- high ranking WTO official

India’s ProposalIndia’s Proposal

• Service workers (including construction workers) could work in other countries under “GATS visas”

• Companies would not even have to follow the country’s minimum wage laws

• WTO internal memo: India’s proposal is getting “serious attention” from U.S., the European Union, and others

GATS workers as indentured servantsGATS workers as indentured servants

• GATS visa workers would have few rights or protections

• Workers who tried to form or join a union could find themselves fired or deported

As proposed:As proposed:

Hypothetical Case – Twins StadiumHypothetical Case – Twins Stadium

• Assume GATS rules are already in place

This is how prevailing wage could be affected under the new trade agreements …

• In 2006, the Minnesota Legislature gives $400 million to build a new Twins Stadium

• Labor fights hard to win assurances that all work will be done under a project labor agreement

Assume GATS passes in 2005 …Assume GATS passes in 2005 …

Bids are put out, and Bouygues Construction bids on the stadium contract.

• Built the French World Cup soccer stadium in the 1990s

• Is big, experienced, and politically well-connected

Bouygues …

• Their bid is the lowest because they plan on importing workers from their Chinese, Malaysian, and Philippine subsidiaries.

Bouygues wins the low bid by 20%.

Bouygues is the lowest bidder,

• because Bouygues plans to pay these imported workers less than $10 an hour –

-- far below wages in the U.S. but more than in their own country

What about Minnesota’sprevailing wage law?

• Minnesota requires prevailing wage on all state funded construction projects and the stadium bill ensured a project labor agreement

But wait…

Bouygues contacts its political friends,• The European Union

challenges Minnesota’s prevailing wage law under the WTO

• The stadium is put on hold while the case is decided

The case is heard by a WTO trade tribunal.

• They are unelected.

• They meet in secret.

• Representatives from Minnesota are present only if the federal government invites them

The WTO finds against Minnesota’s law.

• The tribunal rules that Minnesota cannot have a prevailing wage law under GATS

• The U.S. has only two choices:– Pay trade sanctions ($400

million in this case)– Use all means at its disposal

to force Minnesota to repeal its law

This was fiction.But if GATS rules are adopted as currently envisioned, this fiction could become all too real.

In the 1990s the corporate free-traders went after industrial workers.

Now they are coming after construction and public sector workers.

What can be done?What can be done?• Build awareness

– educate your membership

– write opinion piece or letter to editor

– write article for local newsletter

• Contact Congress– write Congress about specific issue

– encourage organization or local elected officials to contact Congress

• Make it an election issue– put question on candidate screening

– talk to local elected officials about local impacts

• Mobilize people nationally– prepare for November Miami rallies

Join the

Minnesota Fair Trade Coalition

more than 60 unions and allied groups fighting to make respect for working people, family

farmers, our environment, and our democracy an integral part of the global economy

Contact:

Larry Weiss612-276-0788 x19

[email protected]