“Free-Trade” is Never Free

Categories: Workers' Rights

Labor History Month provides an opportunity to look at past struggles and remember the workers who gave their lives to create a more-perfect present. From strikes, to sit-ins and marches, the labor movement has overcome incredible odds to help working people.  

One of the classic struggles between capital and labor been about the idea of ‘free-trade’ – a misnomer at best. It’s easy to see that ‘free-trade’ policies hurt working families and degrade protections for employees. In the past, companies have abandoned the towns that helped make them successful, American jobs have been sent overseas and new workers are given low-wages and few workplace protections. 

What will happen when that next ‘free-trade’ deal comes along?’ Well, the Trans-Pacific Partnership is here and history is set to repeat itself once again. Here’s a look at what ‘free-trade’ has meant in the past and what it could mean for the future: 

Unsafe Workplaces 

Two years ago, 1,127 Bangladeshi workers died when the eight-story Rana Plaza building, which housed several sweatshops, collapsed. 

What did these victims make in those so-called factories? Chances are the clothing from H&M, Zara, Mango, JC Penny, Benetton, Children’s Place, and Primark, among other brands that are already in your closet. 

These Bangladesh workers were paid only $38 a month thanks to ‘free-trade’ deals that keep labor costs low and oversight of worker safety even lower.  

Even now, many companies refuse to take any responsibility or compensate the victims and their families. Free-trade policies made it easier for business to turn a blind eye towards unsafe work environments. 

Claiming the need to be ‘competitive’ shouldn’t mean having the ability to employ sweatshops to expand profit margins. Many workers who want to form a union in some of these factories face harsh retribution, are attacked and even murdered 

The tragedy at the Rana Plaza building is not an isolated incident. In 2012, a fire killed more than 100 Bangladeshi workers -- just another example about how 'Free Trade' can result in unsafe working conditions 'Free-trade’ should not come at the expense of safety for hard-working working people. 

Killing – Not Creating – Jobs 

“Nike isn't the solution to the problem of stagnant wages in America,” former Labor Secretary Robert Reich said. “Nike is the problem.”  
The last big ‘free-trade’ deal, the North American Free Trade Agreement (NAFTA), closed many businesses across the country, despite promising millions of new, good paying jobs for workers in the United States.  

Instead, NAFTA gave wealthy corporations free license to send millions of manufacturing jobs out of the country, paid workers incredibly low wages and hurt the ability of overseas workers to unionize.  

One of the biggest beneficiaries of NAFTA was Nike. It is telling that that President Barack Obama paid a visit to Nike last week to promote TPP. 

In 1990s, low wages and abuse at its factories in Indonesia led to global boycotts. Some conditions have improved but wages are still extremely low. TPP won't require Nike to give workers a living wage Nike’s largest production center in Vietnam – where many corporations would send jobs under TPP – employs 330,000 workers who only make 48-69 cents an hour, or about $100-$140 a month. 

Nike shoes are not cheap. They usually start at $60 and go well over $200. The average customs value of the Nike shoes is just $5.27 a pair. Workers, of course, do not see that profit. The manufacturer and Nike pocket the rest.  

The government of Vietnam has even been lobbying Congress in favor of TPP. Nike even cited the need to combat workers’ voices who are “are well organized and vocal.” AFGE has joined other labor unions in speaking out against the deal, as working people are not as well funded as foreign governments or American companies. 

Lowering Wages  

TPP is a massive international free-trade agreement among 12 countries – the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. The agreement, covering 40 percent of the world’s economy, will enormously enrich international corporations but devastate workers. 

If enacted, TPP will keep wages in developing countries low to attract foreign companies looking to set up overseas manufacturing operations. Here are minimum wages in several TPP countries: 

  • Vietnam: 48-69 cents an hour
  • Mexico: 56-73 cents an hour 
  • Peru: $1.70 an hour 
  • Chile $1.86 an hour

If this deal will truly help expand business and employ new workers with good-paying jobs, why can’t it be done in the open? The truth is TPP and similar policies have never actually helped people out of poverty, but done the opposite. History is clear – ‘free-trade’ isn’t free, and American workers can’t afford it now. 

AFGE Events

Event Calendar is for Members Only. Please Log In to see our calendar of events.


SUBSCRIBE Latest news & info