Thread: Firms sign letter rejecting trade deal

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Firms sign letter rejecting trade deal
By Michael Rappaport, Staff Writer

Nine Inland Valley companies were among several dozen from the state that signed on Tuesday as opponents to the Central American Free Trade Agreement.

The companies involved signed a letter released in Washington, D.C., by the United States Business and Industrial Council urging Americans to reject CAFTA as "not a trade agreement, an outsourcing agreement."

The USBIC and its affiliated research arm, the USBIC Educational Foundation, lobbies on behalf of domestic family-owned and closely held firms that create new products, jobs and growth in the U.S.

"This is the wrong deal with the wrong countries at the wrong time," said Alan Tonelson, a USBIC research fellow. "For many different reasons, this is one of the worst public policy initiatives down the pike in a long time, and in Washington, that says a lot."

CAFTA would extend the benefits of the North American Free Trade Agreement to the six Central American nations, removing trade barriers and treating the entire continent as a free- trade zone.

The problem, says Tonelson, is that Central America isn't big enough to benefit American consumers as a trading partner.

"The six countries involved have a total economy of $85 billion," he said. "That's equivalent to the economy of New Haven, Conn., or half of San Diego. How that's supposed to help drive growth in the $12 trillion U.S. economy is beyond me."

In fact, the six countries combined have a population of about 45 million.

"That's about the same number of people as California and New Jersey combined," Tonelson said. "Half of them are making $2 a day or less and most of the rest aren't doing that much better. These are micro markets that are desperately poor.

"When we hear that is vital to the growth of the U.S. economy, it doesn't pass the laugh test."

Local companies expressing their agreement with that position were Alger Manufacturing Co., Metric Machining & Subsidiaries and Nash-Webber Molds of Ontario, Berman Mold & Engineering Inc. of Upland, Everett Charles Technologies Inc. CPD Division of Pomona, Pacific Precision Inc. of San Dimas and Empire Injection Molds, Prestige Mold Inc. and Pyramid Mold & Tool of Rancho Cucamonga.

Tom Phillips, operations manager of Pacific Precision, said he wasn't the one who signed the letter, but he tended to agree with its sentiments.

"We're seeing corporations able to bring in products they make overseas and label and sell them as domestic products," he said. "That didn't exist in our field five years ago, and it is definitely a threat to us."

To Tonelson, that's the heart of the problem.

"This is not a trade bill," he said. "It's an outsourcing bill."

Economist Jack Kyser has been studying CAFTA for the Los Angeles Economic Development Corp.

"One of the biggest effects this might have, other than on the sugar industry, is that it might bring jobs that have been outsourced to China by the apparel industry back to Central America," Kyser said. "It won't have a huge economic impact on Southern California, but it could have one indirect effect.

"If it helps grow the Central American economy, it might start to curb some of the undocumented immigration."

But wherever the jobs go, whether to Central America or China, USBIC is opposed to their leaving.

"We are in the middle of a very weird and fragile economic recovery," Tonelson said. "CAFTA is just one more leg of the race to the bottom."

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"It won't have a huge economic impact on Southern California, but it could have one indirect effect.

"If it helps grow the Central American economy, it might start to curb some of the undocumented immigration."

I think that sums it up. Thanks RedGirl.