Colombia and Caterpillar

By April 9, 2008Labor Unions, Trade

In their drive to defeat the U.S.-Colombia Free Trade Agreement, the labor unions are sticking it to their members who work for companies that export. Take Caterpillar, for example, as the Wall Street Journal does today:

Union leaders like to say they’re looking out for the well-being of the rank and file. But by quashing the Colombia FTA, [the AFL-CIO’s] Mr. Sweeney would weaken the competitiveness of American manufacturing and put some of America’s best-paying union jobs at risk. These are jobs that exist today but could well be gone if Congress rejects this market opening in South America.

Exhibit A are 8,600 jobs at two Caterpillar Inc. factories in Illinois. Caterpillar exports more to Peru and Colombia than it does to Germany, Japan or the United Kingdom. So keeping and growing market share in both countries is important to union members in both plants. Not all are union jobs but both facilities are United Auto Worker shops.

Consider exports of the off-highway truck, made in Decatur. Customers in Colombia now pay a 15% tariff – equal to $200,000 – on the import of these vehicles. If the FTA goes through, that import tariff goes to zero immediately. Conversely, if the deal dies and Colombia, which is trying to expand its world trade, strikes an agreement with another country where similar vehicles are made, U.S. exports will immediately be at a 15% price disadvantage.

Union leaders don’t care? Sadly, that doesn’t surprise us. Their fight against the free-trade agreement is more about the exercise of raw political power than it is about improving the quality of lives of their members.

The Journal also has a good news story today about the advocacy for the agreement, including by the NAM and its member companies.

But the lobbying also will involve smaller firms, such as Quality Float Works Inc., of Illinois, with hopes of widening their reach abroad.

Quality Float’s owner, Sandy Westlund-Deenihan, said she has spoken with her local representative, Democratic Rep. Melissa Bean, and hopes to meet other lawmakers next week. “We’re not General Motors, we’re just the little guy,” Ms. Westlund-Deenihan said. “I would just want them to know that we’re a small business that supports free trade.”

The agreement helps labor and business, workers and employers, large and small.

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