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Union warns that TPP would make things 'significantly worse' for steelmakers

Thousands attended a union steelworkers rally in Gary last summer. The USW is urging Congress to reject the Trans-Pacific Partnership, or TPP.

The United Steelworkers Union has warned Congressman Pete Visclosky, D-Merrillville, and the Congressional Steel Caucus that passage of the Trans-Pacific Partnership would make conditions “significantly worse” for domestic steelmakers.

“The United States is facing a crisis with approximately 19,000 steel workers across the country facing layoffs, reduced hours and expiring unemployment benefits,” President Leo Gerard wrote in a letter to Congress. “How Congress and our government responds to this crisis domestically and on the global stage are vitally important to ensuring national security, middle-class jobs and a domestic manufacturing industry."

The Obama administration and business interests like the U.S. Chamber of Commerce have pushed for the trade deal, which they’ve said would give America more say over the future of trade in Asia than rival global powerhouse China. Critics like the USW have attacked the lack of labor and environmental standards, which they say would result in good-paying jobs being outsourced. For instance, they’re concerned that under the trade deal cars could get a “Made in America” stamp even with 63 percent of parts coming from abroad.

Negotiators in Washington have failed factory workers in previous trade pacts, and this one is no different, Gerard said in his letter.

“Our current trade policies are not working for America’s steelworkers,” Gerard wrote. “The TPP is a prime example of a failed trade policy in steel as it simply follows the existing template of past agreements."

Gerard wrote that since the passage of the United States-Korea Free Trade Agreement, South Korea has become the third largest exporter of steel into the United States, while the U.S. export market share into South Korea is down by 5.3 percent since 2014.

The union fears the TPP would worsen the trade deficit in steel and threaten half a million jobs on the supply chain since the steel trade deficit was already 2.8 million tons in 2014.

“This trade deficit in steel will not only continue, but will worsen,” Gerard wrote. “There are a multitude of reasons why the USW has no doubt that the U.S. steel trade deficit will deteriorate further under the TPP."

The union boss gave examples such as an unacceptably low domestic content requirement in the act.

The proposed trade deal would lift tariffs for steel parts that only needed minor alteration like stamping, which the USW says is a loophole that will exploited.

“By not encouraging a melted and poured standard for steel products it is quite likely that non-TPP countries such as China will be able to ship semi-finished steel and have it merely stamped in a TPP country and have that product eligible for preferential treatment under the agreement,” Gerard wrote. “This along with many other shortfalls in the Rule of Origin will dramatically and negatively impact the domestic steel industry.”

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Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.