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QI:ongr.e.s.s of tll.e lItnit.ell ~ t a t . e . s W1asl,illgtoll, 1ilC!r 20515

President Barack ObamaThe White House1600 Pennsylvania Ave., NWWashington, DC 20500

Dear President Obama:

October 4, 2011

As members of the House Populist Caucus, we are opposed to the free tradeagreements (FTA) with South Korea , Colombia and Panama signed by President Bushin 2007 that you have just submitted to Congress. During your presidential campaign ,you repeatedly stated your opposition to the Colombia and Korea agreements whilepledging to "shut offshore tax havens"i of which Panama is one the world's mostsignificant.

Given your past opposition to the FTAs with South Korea and Colombia , we areeager to understand the basis for your change in position. We recognize that youradministration attempted to tackle some of the issues that you raised. However, theoutcomes of these efforts have fallen far short of effectively addressing the seriousproblem that you rightly raised during your campaign . Thus, it is not surprising that mostDemocrats in the House of Representatives continue to oppose these dealsIn 2008, during a speech at the AFL-CIO convention in Pennsylvania, you statedthat you were opposed to the Colombia FTA "because the violence against unions inColombia would make a mockery of the very labor protections that we have insisted beincluded in these kinds of agreements"ii. During the final presidential debate, explainingyour opposition to the Colombia FTA, you said: "The history in Colombia right now isthat labor leaders have been targeted for assassination on a fairly consistent basis andthere have not been prosecutions . . we have to make sure that violence isn't beingperpetrated against workers who are just trying to organize for their rights."iiiYet, targeted violence against unionists continues to be a major problem inColombia. Indeed, since you made that statement, the number of unionistsassassinated in Colombia annually has grown. And, the evidence is gruesomelycompelling that the "Labor Action Plan " that your trade officials signed with Colombia inApril 2011 is not altering the reality on the ground in Colombia that you in the pastdeemed unacceptable for a prospective trade partner country. This year 22 laborleaders have been killed in Colombia. Fifteen of these assassinations have occurredsince your administration's Labor Action Plan was signed. Threats of violence continueto escalate. And, there is no turnaround with respect to the shameful record of impunity

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for the perpetrators of these attacks, with convictions in only six percent of the 2,860trade unionists murder cases since 1986. Yet your trade officials continue to certify thatColombia is meeting its obligations under the Plan. ivGiven this grim reality, and, given violence against union leaders was a primaryreason for your opposition, why have you changed your position on the Colombia FTA?You have also stated your opposition to the South Korean FTA calling it "badlyflawed" and noting that "the terms of the agreement fall well short of assuring effective,enforceable market access for American exports of manufactured goods and manyagricultural products" in a 2008 letter you sent to President Bushv. You have alsostated: "As President, I will work to ensure that the U.S. again leads the world inensuring that consumer products produced across the world are done in a manner thatsupports workers, not undermines them"vi. As well, you answered "yes" to an OregonFair Trade Coalition candidate questionnaire stating: "Will you require new tradeagreements to include core International Labor Organization (ILO) Conventions?"viiNow you support the same South Korea FTA deal. Yet, it still includes footnote#1 of it labor Chapter inserted by President Bush in 2007 that forbids reference to theILO Conventions. You did not obtain the removal of this offensive prohibition during theadministration's 2010 supplemental negotiations on the Korea FTA. And, the onlychanges in those supplemental talks with respect to agricultural market access was notto improve it, but to extend for several years Korea's tariffs on U.S. pork.Nor did you remedy the FTA's rules of origin which thus still allow variouscategories of goods, including autos and many categories of electronics, to have asmuch as 65 percent of their value produced outside the U.S. or South Korea and stillobtain FTA benefits.viii Given South Korea's close proximity to China, Vietnam and

other cheap labor nations, corporations will likely use this loophole to flood the U.S. withcheap materials tariff free. This loophole is simply unacceptable and could decimatewhat's left of the U.S. auto supply chain and undercut numerous other industries. In atime where we are struggling to reinvigorate our manufacturing sector, why are yousupporting yet another free trade agreement that will send good paying American jobsoverseas while boosting the bonuses of "cost-cutting" corporate CEO's?This rule of origin provision has been passionately opposed by the unions of bothcountries and is loved by large U.S. and Korean multinational manufacturers as itfacilitates the offshoring of manufacturing supply chains to China and other low-wagelabor-rights-free zones. Even the North American Free Trade Agreement (NAFTA)

required 50 percent domestic content for autos, while the European Union's recent FTAwith Korea requires 55 percent. Even though the U.S. FTA is projected to greatlyincrease the U.S. auto trade deficit with South Korea, the Korean auto workers union,which represents workers in both final assembly and supply chain manufacturing,opposes the FT A because the extremely low rules of origin will see their workersreplaced by parts imports from China. And, in the United States, where many moreworkers are employed making the glass, steel, tires and parts that go into autos than infinal auto assembly, the U.S. auto supply chain unions such as the Steelworkers,

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Machinists, Teamsters, CWA-IUE and others remain opposed to the Korea FTA alongwith the AFL-CIO, which recently reiterated that it will score votes on each of theseFTAs on its congressional vote chart.Finally, with respect to human rights, there was nothing in the text of the

agreement President Bush signed that specified that the 65 percent of allowable thirdcountry content cannot come from North Korea ix . A significant problem was createdwhen U.S. negotiators did not specify in the FTA text that the U.S. would not permitaccess to goods that meet the FTA's rules of origin unless they also met the licensingrequirements of the Office of Foreign Asset Control (OFAC). This problem was pointedto your administration by various Members of Congress. The FT A also generally bansimport licensing yet while the U.S. listed exception to this for licensing regimes fortimber and other goods, no exception was provided for the OFAC licenses thatimplement our trade sanctions on North Korea.The issue of "leakage" around the OFAC North Korea sanctions program of

goods assembled in South Korea by containing inputs from North Korea was highlightedby the Congressional Research Service (CRS). CRS also provided details on the NorthKorean Kaesong Industrial Complex where 122 South Korean firms employ 40,000North Korea workers for whose work the Kim dictatorship is paid in hard currency.About half of the 25-40 cent-per-hour wages are then paid back to the workers in NorthKorean currency or scrip. The workers are bussed in daily to work under North Koreangovernment supervision and have no basic labor rights. Even the current U.S.Ambassador to Korea, Han Duk-Soo, who was Prime Minister when the FTA wassigned, noted: 'The planned ratification of the South Korea-U.S. free trade agreementwill pave the way for the export of products built in Kaesong to the U.S. market."xClearly, conditions in the Kaesong zone in North Korea do not meet yourprinciple for worker's rights. Yet, the failure to fix the loophole in the Korea FT A meansthat products that have final assembly in South Korea with up to 65% of the product'svalue being comprised of parts and inputs made in Kaesong would meet the FT A's rules

of origin and thus the U.S. would have a new obligation to allow access for such goods,which are currently forbidden. This sets up a scenario where the U.S. governmentwould not only be creating a new market for production under the most abysmal laborand human rights conditions, but could be providing a new hard currency revenuestream for North Korea's Stalinist dictatorship to build up the weapons systems withwhich it threatens the United States.Given the FTA still bans the ILO Conventions and still has rules of origin thatfavor chronic-offshoring multinational corporations over U.S. workers, why do you nowsupport it? Also, why did your negotiators not prioritize closing the Kaesong loophole? Ifthe reason is that South Korea could not agree to this after promising its corporationsthat the FTA would allow new Kaesong access, as per the former Prime Minister, thenwhy would you permit the pact to go forward with this serious problem rather thanmaintain your past opposition?

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Given that you may be sending the FTAs to Congress imminently; we wouldgreatly appreciate an expeditious reply. We give these agreements high priority giventheir potential implications. According to even the official U.S. International TradeCommission study of the pact, the Korea FTA will increase the U.S. trade deficit andthus puts at risk tens of thousands more U.S. manufacturing jobs. Colombia remains thecountry where more labor unionists are murdered than the rest of the world combined,with the number of assassinations growing from 37 when the FTA was signed to 51 in2010. Panama is a major tax haven that the U.S. State Department identifies as themajor venue for Mexican and Colombian drug cartel money laundering.

We ask that you reply to our questions before the House votes on the pendingFTAs. Thank you in advance for your reply. Please feel free to contact any of us if wecan provide further assistance.

Sincerely,

~ ruce L. BraleYChairman, Populist Caucuset tYt tonVice hair

; http:// findarticles.com/P/news-articles/political-transcript -wire/mi SI67lis 200S 1026/sen-barack-obamadeliversremarks/ai n507725 I 11 (Sen. Obama Delivers Remarks at a Camp aign Event, Reno, Nevada, October 25, 200S);; http://blogs.wsi com!washwireI200S/04/02 /obama-vows-opposition-to-colombia-trade-deall;;; http://latimesblogs.latimes.com /washingtonl200S/10/debate-transcri.html;, http://thehill.comibusiness-a-lobbyinglIS3909-afl-cio-sends-list-of-killed-colombian-Iabor-Ieaders-toobama http://www.reuters.co m/article/200S/05124/us-usa-trade-idUSN23295550200S0524,; Obama's response to a Texas Fair Trade Coalition questionnaire, March 3, 200S. Ava ilable at:http://www.cit izen.orgidocum entS/TXFairTradeCoalitionObama.pdfvi i Obama's response to an Oregon Fa ir Trade Coalition questionnaire, May 9, 2008. Ava ilable athttp://www.citizen.orgidocumentS/ORFairTradeCoalitionObama.pdf

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,;;; http://www.ustr.gov/sites/defaultlfiles/uploads/agreements/ftalkorns/asset upload file680 12704.pdfix hup:/ www.ustr.gov/trade-agreementsl free-trade-agreements/korus-nal fina 1-textx Yeo Cheong-mo, "Prime Minister Han visits N. Korean industrial park ," Yon hap News Agency, December 12,2007,Available at:http://english.yonhapnews.co.kr/nationaV2007/ 121l 2/ 18/030 1000000AEN200712 120086003 I5F.HTML