Under Threat: New Trade Deals and Postal WorkersUnder Threat: New Trade Deals and Postal Workers

(June 2003)

Prepared for the

By the Resource Center of the Americas & Labor Education Service, University of MN

Minnesota 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

• Corporate free traders are now going after services – including postal services

New Trade Deals and Postal Workers New Trade Deals and Postal Workers

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

and FTAA (Free Trade Area of the Americas)

• These agreements could:– mandate privatization of postal services– undermine union wages and jobs– undermine prevailing wages under the

Service Contract Statutes

“Multinational agreements, like the North American Free Trade Agreement (NAFTA) and the General Agreement on Trade in Services (GATS) are slowly taking the decision whether or not to privatize out of the hands of state and local government officials and giving wide-ranging powers to private corporations.”

-- Continuing the Fight Against PrivatizationResolution passed at AFSCME’s 35th International Convention, June 2002

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 Postal EmployeesGATS, FTAA and Postal Employees

• Could require many public services to be opened to bid by private foreign companies

• This includes “non-governmental” entities that do the public’s work – like the USPS.

Postal services targetedPostal services targeted

• Both the European Union and the United States are specifically seeking to include postal services under GATS rules

So,So,What specific postal services are targeted?

What specific postal services are targeted?

Europe wants open to bid … Europe wants open to bid …

• the clearance

• sorting

• transport

• and delivery of

“addressed written communications on any kind of physical medium.”

“addressed written communications on any kind of physical medium.”

This would include: This would include:

• Hybrid mail services

• Direct mail services

• Registered or insured mail services

It would also include: It would also include:

• Addressed press products

• Addressed parcels and packages

• Express delivery

United States is targetingUnited States is targeting

• express delivery services that are subsidized by government monopolies -- like those provided by the USPS.

This is only what we know so far.

This is only what we know so far.

With both the U.S.

and E.U. targeting

postal services … it is likely that GATS will

cover many USPS services.

With both the U.S.

and E.U. targeting

postal services … it is likely that GATS will

cover many USPS services.

And,And,this means:this means:• USPS services covered by

GATS will be open to bidding by private foreign companies.

But that’s not all …But that’s not all …• GATS and FTAA will also likely

prohibit governments from setting conditions for awarding contracts except those necessary for product quality or supplier capability.

The Service Contact Act would almost certainly not meet this test.

• The Service Contract Act mandates prevailing wages for certain services –

this goes beyond ensuring product quality or supplier capability.this goes beyond ensuring product quality or supplier capability.

Let’s look at a hypothetical case …Let’s look at a hypothetical case …

• Assume GATS rules are about to go into effect.

… and see how USPS employees could be affected

… and see how USPS employees could be affected

In the months before the new GATS takes place …In the months before the new GATS takes place …

Deutsche Post(from Germany)

Deutsche Post(from Germany)

Teams up with

TPG Post(from Holland)TPG Post(from Holland)

Deutsche Post & TPGDeutsche Post & TPG

• Both are partially privatized national postal services.

• Both now compete in other countries.

Together,Together,they get the E.U. to challenge the U.S. Private Express Statutes as an illegal trade barrier under GATS.

This law gives the USPS the exclusive right to carry letters for compensation.

About the same time …About the same time …

TransForce (Canada’s second-largest trucking company)

… gets Canada to challenge the Service Contract Act as an illegal trade barrier under GATS.

When GATS takes effect,When GATS takes effect,

Both the European Union and Canada file challenges before the WTO.

The E.U. claims …The E.U. claims …

• the Private Express Statutes violate GATS.

• They claim this law restricts the right of foreign postal services to compete in the United States.

Canada claims …Canada claims …• The Service Contract Act is an

illegal condition placed on government contracts.

• They claim its prevailing wage requirement goes beyond what is needed to ensure product quality.

The United States contests the charges.

The United States contests the charges.

The case is heard by a WTO trade tribunal.

• The WTO assigns three “trade experts” to decide the case.

• They are unelected.

• They meet in secret.

The WTO finds against the United States.

• The tribunal rules that both the Private Express Statutes and the Service Contract Act violate GATS.

• The U.S. has only two choices:– Pay hundreds of millions of

dollars in trade sanctions, or– Change the laws to comply

with GATS

Congress changes the laws as directed by GATS.

Congress changes the laws as directed by GATS.

But now, U.S. carriers want some of the action.But now, U.S. carriers want some of the action.

They insist that foreign corporations shouldn’t get better opportunities than U.S. companies.

In the end,In the end,Congress changes the laws to include U.S. carriers.

Congress changes the laws to include U.S. carriers.

Now, both domestic and foreign companies can bid on USPS services without paying prevailing wage.

Deutsche PostDeutsche Post

Federal ExpressFederal Express

TPG…TPG…and others …

Pick off USPS’s largest customers.Pick off USPS’s largest customers.

Like,Like,Capitol One with 1.4 billion pieces per year in presorted permit mail.

Quebecor – the world’s largest printer which drops two billion pieces each year.

and,and,

Canada’s TransForce … Canada’s TransForce … • Bids on 30 key USPS

long-haul mail transportation routes.

• TransForce will pay its drivers less than $10 an hour with few benefits.

Under the new GATS rules,Under the new GATS rules,

USPS must accept TransForce’s bid.

U.S. trucking firms begin bidding on routes.

U.S. trucking firms begin bidding on routes. They, too, no longer have to abide by prevailing wage requirements.

This was fiction.

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

the corporate free-traders went after industrial workers.

they are coming after postal, construction and public sector workers.

In the 1990s,In the 1990s,

Now,Now,

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

Citizens’ Trade Campaign

a national coalition of labor, environmental, consumer, family farm and religious

organizations fighting to bring fairness to the global economy.

(CTC has affiliated state coalitions in CA, TX, FL, IN, MN, WI, PA, WA, NYC)

Contact:

www.citizenstrade.org