The IAM has joined with the United Steelworkers and United Auto Workers in a joint proposal to protect workers in each of the countries signed-on to the overly-ambitious, extremely-flawed Trans-Pacific Partnership (TPP), a proposed free trade agreement that’s currently being negotiated in secrecy and with no congressional oversight.
The proposal provides recommendations on how “rules of origin” for automobiles should be handled in the TPP to prevent “leakage,” a term used to describe when other countries that are not part of the trade agreement benefit from it by getting a significant amount of their content into products for which tariffs have been reduced or eliminated.
“To share in the benefits of the projected market, it is vital that rules of origin ensure that, to gain the benefits of the agreement, content in the products eligible for favorable tariff treatment actually are the product of the hard efforts of workers in those countries,” reads the proposal. “The joint proposal’s goal for the Trans-Pacific Partnership Free Trade Agreement (TPP-FTA) is to maximize employment, at good compensation, for workers in the originating countries.
“Earlier FTAs have liberalized trade while maximizing corporate profits at the expense of employment and the standard of living of hard-working citizens. Trade should be a force for progress and the TPP-FTA, to be successful, must maintain, as well as reclaim, production and jobs that have transferred offshore as a result of the globalization of supply chains.”
The recommendations include a minimum domestic content requirement of 62.5 percent, similar to the North American Free Trade Agreement (NAFTA). But the requirement would rise to 68.5 percent in four years and 75 percent after eight years.
The recommendations also include a tracing process for major parts such as engines. The portion of the engine not produced in a TPP country will be used to achieve a more accurate calculation of the car’s total regional value content.
To read a copy of the proposal and full list of recommendations, click here.