Why do labour unions oppose free trade?

Though nearly 80 percent of Americans favour international trade, labour unions remain staunchly opposed to existing free trade laws and their expansion. While unions often use living and environmental standards, off-shoring and the failures of the North American Free Trade Agreement (NAFTA) as reasons to curtail free trade, Ivan Osorio of the Capital Research Centre suggests these concerns ring hollow:

Labour unions cry foul against trade agreements with developing countries (those with lower living and environmental standards), but they most recently objected to a new trade deal with Australia, one of the richest, high-wage countries in the world.

The Bureau of Labour Statistics reports that, of 239,361 private sector non-farm layoffs during the first quarter of 2004, just 4,633 were "associated with movement of work outside of the country."

Concurrent with some $150 billion in increased U.S.-Mexico trade under NAFTA, the Federal Reserve found that industrial output has increased annually at a rate of 3.3 percent in 1993 to a high of 7.4 percent in 1997 and 4.3 percent or higher in other years --dipping only during the 2001 recession.

Osorio says that while NAFTA certainly can't claim all the credit, the data undercuts the argument that the trade agreement would ravage American manufacturing.

Ultimately, what unions fear the most is increased competition from non-union businesses that benefit from free trade. Thus, despite the economic boom that has coincided with greater international trade, Osorio asserts labour will continue its fight to "protect" jobs and frustrate free trade initiatives.

Source: Ivan G. Osorio, For Unions, Protecting Jobs Means Protectionism, Capital Research Centre, August 2004.

For text http://www.capitalresearch.org/pubs/pdf/LW0804.pdf

For more on Unions: Campaigns and Politicshttp://www.ncpa.org/iss/uni/

FMF Policy Bulletin/ 09 November 2004