Labor Unions' Dilemma: Supporting Trade with China for Job Creation

Strategic Insights -

Two major US labor unions, the International Brotherhood of Teamsters and the International Association of Machinists, are caught in a paradox. While they oppose normalized trade relations with China, they are supporting United Parcel Service's (UPS) bid to access the Chinese market for package delivery, potentially creating union jobs. The unions' support for UPS is driven by the prospect of increased trade on their terms, with job creation in the US, rather than exporting jobs to China.

Key Takeaways:

  • The International Brotherhood of Teamsters and the International Association of Machinists are supporting UPS's bid to access the Chinese market, despite their opposition to normalized trade relations with China.
  • The unions believe that accessing the Chinese market through UPS will create union jobs in the US, with 1,200 new jobs expected in the first year.
  • The Teamsters argue that the market-opening opportunities in the WTO agreement are not comparable to the benefits of the air delivery slot, citing a shift of manufacturing from the US to China.
  • Congressional approval of permanent normal trade relations (NTR) with China would pave the way for China to enter the World Trade Organization under the terms of the market-access agreement.
  • The spontaneous delivery of 40 packages per day could potentially create a new Teamster job, according to Teamsters President James P. Hoffa Jr.
  • The UPS bid is a major opportunity for the unions to increase trade on their terms, with union workers in the US employed without exporting jobs to China.

Statistics:

  • 200,000 Teamsters employed by UPS
  • 1,200 new jobs expected in the first year from accessing the Chinese market
  • 40 packages delivered per day could potentially create a new Teamster job
  • The US stands to gain unprecedented access to the Chinese market through the WTO pact
  • More than 300 members of Congress have supported UPS's bid

Sources:

  • William M. Daley, Secretary of Commerce, speech
  • James P. Hoffa Jr., Teamsters President, letter to Secretary of Transportation Rodney Slater
  • Chip Roth, Teamsters spokesman, comments to William M. Daley
  • Tad Segal, UPS spokesman, comments on new jobs
  • Fred Clark, spokesman for House Minority Whip David E. Bonior, comments on contradiction in opposing permanent NTR