Caterpillar and the AFL-CIO on Trade Agreements

Apr 19, 2011

After the administration signaled it’s ready to move forward on a trade agreement with Panama, all three pending FTAs are now ready for action on the Hill. This is a chance to level the global playing field for U.S. businesses and create jobs here in America. 

But these job-creating agreements aren’t without their opponents.  The question is, “what is the competitive issue” they oppose?  Looking back at this exchange between a Caterpillar executive and AFL-CIO President Richard Trumka at the Council on Foreign Relations, even the labor boss isn’t quite sure!

QUESTIONER:  Bill Lane with Caterpillar, and thank you very much.

I might ask just a question, and it's just about the overall discussion you had with the trade deficit.  When you look at the U.S. trade deficit, we have a trade surplus in services, we have a trade surplus in agriculture, we have a very large trade deficit in oil, and we have a very large trade deficit in manufactured goods.  Except if you look at the 17 countries where we have trade agreements, free trade agreements, we have a trade surplus with those countries, which is a validation that, if there's really a level playing field, American manufacturers do quite well.  Recent ones were Chile, Australia, Peru -- we've seen big increases in exports to Peru.  What is it about Chile that scares you?  Is it all the fresh grapes that come in in the winter or the wine that's coming in?  I mean, what is the competitive issue?  If we're doing so well where there's truly a level playing field, why wouldn't you embrace more trade agreements and more domestic energy -- which you are doing, on that score?

TRUMKA:  Because, you know, 10 years ago, you at Caterpillar -- and I happen to know your company -- how many people do you have in the United States now, employed?

QUESTIONER:  More.  And we just opened six new factories.

TRUMKA:  Well, wait.  Whoa, whoa, whoa.

QUESTIONER:  Six new factories in the U.S. in the last year.

TRUMKA:  You don't have more than you did -- you don't have more than you did 10 years ago.  You have --

QUESTIONER:  Yes we do.

TRUMKA:  You only make your big Cats here.  You make all your small Cats overseas.

QUESTIONER:  That's not true.

TRUMKA:  Oh, okay.  Well, I got to fire my research department over there.  (Laughter.)

QUESTIONER:  That'll increase unemployment.

TRUMKA:  All right, put your hands up.  You're finished.  (Laughter.)

Caterpillar’s Bill Lane adds separately that the company saw its U.S. employment double – from 23,833 in 1990 to 47,319 in 2010 – during the past 20 years.  And that’s during a time of enormous productivity gains. Today, more than half of what Cat makes, it exports.  And more than half of what the company exports goes to developing countries like Panama.

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