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Thursday, April 10, 2008

Killing American Jobs, Pelosi Style

Nancy Pelosi has taken a big step towards killing a bunch of good paying, union jobs in the US, with the backing of the union's who's workers are going to be hurt.

What she's doing is changing the rules (midstream) on trade agreements. Over the last few years Congress and the Bush administration have agreed that any trade agreement sent to Congress gets an up or down vote within 90 days. Pelosi has decided to change that rule to kill the Columbian Free Trade Agreement.

Pelosi's stand is that she's protecting American workers from having cheaper Columbian goods come to the US under the agreement. That might be good if it were the truth, but it's a lie. Between 92% and 95% of everything coming to the US from Columbia is already duty free under the Andean Trade Preferences Act, which got a yea vote from 365 members of Congress 8 months ago.

The truth is, the unions, specifically the AFL-CIO has decided that anything that says "Free Trade" is bad, and that Pelosi needs to stop it. The Wall Street Journal has a great piece about the actual effects of this action. Specifically they talk about Caterpillar, which employs 50,000 US workers.

Under the agreement Cat's big machines will get rid of the 5-15% tariffs that are currently imposed on them by Columbia. Japan and Canada are also producers of similar machines, and are both expected to ratify free trade pacts with Columbia. That would give both Komatsu and Champion price advantages over US products made at UAW shops in Illinois.

If you don't think that's a big deal, Columbia has more Cat D-11 dozers running in it's mines than any other country in the world. But why buy more from Cat to replace them, when Komatsu will have a 15% price edge?

The other problem this rejection creates is a security issue. Columbia has been a good ally of the US in South America, kind of a counter balance to the Chavez block down there. However, we now get to be seen as a country that doesn't honor it's agreements, we signed the free trade agreement in 2006, and have been revising (to meet Democratic demands) since. Now we aren't even going to give it a vote. That type of action makes Hugo Chavez's anti-American rhetoric sound a little more truthful.

It's a sad day when our Congressional leaders cowtow to union heads on a deal that would have done nothing but increase the US market share in Columbia. US Union's have made boogey men of free trade agreements, and the truth is they hurt their own workers the most when they work to squash them.

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