Do Free-Trade Agreements Create Jobs?

The corporate push to get Congress to approve the Trans-Pacific Partnership (TPP) trade agreement is about to begin. Again and again we have been promised that these trade agreements “create jobs” and grow the economy. So do they?

“Free-Trade” Claims

Proponents of current corporate-negotiated trade agreements claim that the agreements increase jobs and boost economies. For example Time today has a column, Voters Won’t Like It, but We Have to Bring Back Free Trade, by Michael Schuman. Schuman claims that these agreements are “beneficial for economies overall — boosting exports, enhancing efficiency and reducing prices for consumers.”

Is this what actually happens? Let’s look at what has happened as a result of past agreements.

NAFTA

Negotiated by the George HW Bush administration and pushed by President Clinton, the North American Free Trade Agreement (NAFTA) went into effect January 1, 1994.

Ross Perot famously said we would hear a “giant sucking sound” as NAFTA took jobs from the US and he was right. According to the Economic Policy Institute (EPI) briefing paper Heading South: U.S.-Mexico trade and job displacement after NAFTA, “As of 2010, U.S. trade deficits with Mexico totaling $97.2 billion had displaced 682,900 U.S. jobs.” (That is net jobs, taking into account jobs gained.)

The EPI study did not look into NAFTA’s effect on US wages (but a 2001 EPI study found wage decreases). Clearly, however, NAFTA enabled companies to close American factories and move production to low-wage factories, putting downward pressure on everyone’s wages.

Public Citizen’s document, NAFTA’s Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement points out that over one million Mexican campesino farmers were driven out of business (and likely driven north to the US) by subsidized US corn from our giant industrialized farms.

China

China became a member of the World Trade Organization (WTO) in 2001. Americans were promised this would expand market opportunities for U.S. companies, thereby increasing jobs and American prosperity. How has this worked out?

In August, 2012 EPI estimated that the US lost 2.7 million jobs as a result of the U.S.-China trade deficit between 2001 and 2011, 2.1 million of them in manufacturing. Aside from job losses wages US wages fell due to the competition with cheap Chinese labor costing a typical household with two wage-earners around $2,500 per year.

Last month our country’s humongous trade deficit with China was $30.1 billion. That translates to a yearly deficit of more than $360 billion drained straight out of our economy.

Korea

In spite of the obvious problems with these trade agreements, the US approved an agreement with Korea that took effect March 15, 2012.

EPI reported in July, 2013 that the US-Korea free trade agreement had already cost the US 40,000 jobs and increased our trade deficit by $5.8 billion. According to EPI,

The tendency to distort trade model results was evident in the Obama administration’s insistence that increasing exports under KORUS would support 70,000 U.S. jobs. The administration neglected to consider jobs lost from the increasing imports and a growing bilateral trade deficit. In the year after KORUS took effect, the U.S. trade deficit with South Korea increased by $5.8 billion, costing more than 40,000 U.S. jobs. Most of the 40,000 jobs lost were good jobs in manufacturing.

So How Did They Work Out?

Again and again these trade agreements resulted in loss of jobs, particularly in higher-wage sectors of our economy like manufacturing, and big increases in the trade deficit. Yes, exports increased adding jobs in some sectors but imports increased more, costing more jobs than those gained. And the sectors that lost jobs tended to be higher-wage, like manufacturing.

While honest and fair trade is a good thing, these trade agreements are written to promote the interests of the giant and powerful multinational corporations over the interests of working people, smaller competing corporations, citizens groups, democracy and the environment. These “free-trade” deals increase unemployment, drive down wages and harm the environment while dramatically increasing the wealth and power of the 1%.

Again, fair trade is great. But trade deals written of by and for a few giant, multinational corporations are good for those corporations and the billionaires behind them — and only those corporations and the billionaires behind them.

The Worst Effect: Widespread Job Fear

When our government just lets companies close a factory here and move production to a country where people have few rights and can’t do anything to make their situation better, what do you think that will do to wages and rights here? When your boss can threaten to lay you off and move your job out of the country, what are you going to say? Are you going to complain about the job and demand a raise?

Job fear is rampant in today’s economy, so everything is sold as a promise to create jobs. Heck if eating bugs will “create jobs” I’ll try it. And you can be sure that the fried bug industry lobbyists are going to promise just that.

So these giant-corporate-promoting trade deals are sold with the promise that they will “create jobs” even though we see again and again that the opposite occurs. Ironically, the job fear so many of us experience is the result of these trade agreements that enabled corporations to close factories here, ship the equipment out of the country, make the same stuff there and bring it back here to sell in the same stores to the same customers. (For some reason that is called “trade.”)

These Agreements Reign In Our Democracy

Now the giant corporations are working on the Trans-Pacific Partnership (TPP). Only a small part of this agreement covers “trade.” Much of it is about “investor rights.” This means that countries that enter into the agreement will not be able to do things that limit the profits of corporations. This includes trying to enforce environmental regulations, trying to get low-cost medicine to sick people, etc. It won’t matter if we call ourselves a sovereign country and a democracy — we will not be allowed to pass the laws that we want to if they interfere with the “rights” of the owners of the giant corporations.

These trade agreements are negotiated by giant multinational corporations along with government officials who understand they will get lucrative jobs with those corporations. They benefit only the 1% and the billionaires behind these corporations. They have not helped our economy and have not increased jobs. In fact they have led to massive trade deficits that are draining our economy, massive job loss and wage loss, and job fear for those still working.

We must insist that trade from now on agreements be negotiated with all of the stakeholders at the table in a process that guarantees their interests have equal weight with the interests of the giant corporations. Representatives of environmental organizations, human rights groups, labor groups, consumer groups and all other stakeholders must be included in these negotiations.

We must also insist that existing agreements be renegotiated so that We the People benefit, instead of just the billionaires behind the giant corporations.

—–

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary

Trying To Provoke Racial Fear III

I’ve been writing about how the Republican site Drudge Report has been getting more and more racist. They have story after story about black people attacking white people, black mobs running around beating whites, etc.

Today, for example:

Woman brutally beaten by group of teens says attack was racially motivated…

‘Was so animalistic. So violent’..

“Animalistic?”

Well this is what they have up today. (Today is 50th anniversary of the March for Jobs and Justice and the “I Have A Dream” speech…)

OK, really?

PS someone pointed out this was one of the performers today. I suspect cultural advancement was not the motivation of Drudge, and is not the reception the photo is getting from Drudge’s audience.

Trying To Provoke Racial Fear II

The other day I noticed that the Drudge Report was over-the-top, entering “out-and-out KKK territory.” It has only gotten worse. This morning:

RNC Speaker Tells Blacks: Gays, Immigrants Prioritized Over You…

HAD A DREAM: Black lawmakers lament flaring of racial tensions under Obama…

POLL: Just 1 in 4 blacks say situation better…

UPDATE: ‘Homeland Security’ employee behind racist website placed on PAID leave…

SHOCK: Pre-teen black kids bully 3-year-old white girl…

VIDEO: ‘When white people piss black people off’…

COPS: Black teen girls assault white woman; charged with ‘ethnic intimidation’…

PAPER: Black man attacks elderly white male, tells him he ‘shouldn’t be in his park’…

Report: SC restaurant refused to seat black patrons…

SCHOOL: Black student sent racist texts to himself…

And a new Nazi theme, flag included:


Student posts Nazi flags around liberal college campus as ‘joke’…

Nazi-themed wines come under fire…

Trial reveals secret life of ‘Nazi bride’…

Detroit, Manufacturing And ReMaking America

We have to have things to sell to others to bring in the money to buy things from others. Detroit’s bankruptcy shows what happens when a country forgets that.

I hosted a blogger call yesterday with Carl Pope and Scott Paul to discuss the new book ReMaking America. I wrote about the book a month ago. (Harold Meyerson said, “Going down to Mississippi wages does not signal a bright future for American economy.”) Please visit www.remakingamericabook.com for more information about this book.

p1_pic1

Click this link to play a recording of the call.

But first, here are my remarks introducing the call:

On today’s call we are talking about the revival of manufacturing. This is especially timely because of the bankruptcy of Detroit, a city that used to exemplify of America’s manufacturing prosperity, now a wasteland of crumbling buildings and homes – and people.

So let me set the stage for today’s call.

Detroit’s bankruptcy shows exactly what this whole manufacturing discussion is really about.

Manufacturing is one of the main ways a country makes a living. We have to have things to sell to others to bring in the money to buy things from others.

American used to sell far more to the world than we brought in. Until the early 80s we were the largest “creditor” nation. We made things and sold them. Then tax and trade policies transformed us to the world’s largest debtor nation – we moved factories out of the country or just bought things from elsewhere – and since then that imbalance has only gotten worse and worse … and worse and worse.

The Southend portion of the 452-acre Buick City site, currently an EPA disaster area.

The Southend portion of the 452-acre Buick City site, currently an EPA disaster area.

Do you remember the movie “Roger and Me,” about what happened to Flint? THAT movie showed what happens to cities when “government gets out of the way,” and lets factories and industries move. That movie was in 1989, and the same thing has only gotten worse and spread around the country.

As the factories moved well-paying manufacturing jobs disappeared, and were replaced by low-wage jobs at places like Walmart and Staples. This started a downward spiral and now everyone feels the downward pressure on wages.

Entire regions were devastated as manufacturing left the country, and suppliers left the country, and design jobs and machine maintenance jobs and all the rest of the jobs associated with manufacturing left the country and over time the middle class started to shrink and feel the squeeze.

And now we see the results in major cities like Detroit.

So what are we going to do about it?

As a country we have to rethink this and remake America, and to talk about a new book called Remaking America I would like to introduce Scott Paul.

_0010_Scott Paul.JPG_

Scott Paul, Alliance for American Manufacturing

Scott is President of the Alliance for American Manufacturing, a partnership of some of America’s leading manufacturers and the United Steelworkers union, working to restore American manufacturing competitiveness.

After Scott talked he introduced Carl Pope, former Executive Director of the Sierra Club. Carl’s chapter in the Remaking America book, “Energy Manufacturing: The Linchpin for America’s Future,” argues for more support for renewable energy technology innovation and explains precisely how this can be done. Carl is going to tell us about this today.

 Listen to the call below:

—–

This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary

This Is A BIG Deal

This is a BIG deal. Huge.

They used the excuse of “anti-terror” legislation to detain and question the partner of a journalist for 9 hours, a Brazilian citizen, over the protests of Brazil, inside an airport as he was changing planes.

This means that ANY “anti-terror” legislation can be used against anyone whether they are actually engaged in terror or not. This is a very big deal. Because suddenly the excuse that the NSA spying is about “anti-terror” means it can be used against journalists and their friends and families, too. And you.

More Proof Obama Socialist!

President Obama is working on a plan to provide high-speed Internet to every school in the country. According to Republicans this is more proof that he is a Socialist.

The Hill has the story: GOP Rep. says Obama has founding fathers ‘turning over in their graves’,

Rep. Michael Grimm (R-N.Y.) said recent executive actions by President Obama, including a plan to extend high-speed Internet connections to virtually every school in the nation, demonstrate a “blatant” attempt to subvert the will of the American people.

“It’s just a flagrant, you know, arrogant disregard not just for the current Congress,” Grimm said in an interview with Fox News. “Look, it’s not about me personally. That’s not what this is about. You think about who is the Congress? It really — it is the voice of the people.”

[. . .] “He has an agenda and he’s going to do whatever he has to do to pass that agenda, regardless of the Constitution,” Grimm said. “I mean, I think our founding fathers are turning over in the graves right now because he’s just so blatant in his— the administrators, the people he puts in charge of these agencies are bold and brazen about saying, ‘yes, we’re going to make an end run around Congress.’”

Giving people good pay and pensions and healthcare and sick pay and vacation time is “socialism?” AND fast internet? Where do I sign up?

Keystone Pipeline To Sell Canadian Tar Oil To China

Step back and see what this is.

A Canadian oil company wants to cross our country with a pipeline so they can sell oil to China. A political party and the Tea Party are working, for-hire, as the agents of this company.

This is one revenue-generating project for a company, not a cause.

How MUCH are they paying the Republicans?

And then on top of that Obama might approve it? Here is what Van Jones has to say:

Must-Watch Video of the Day

ALEC – The American Legislative Exchange Council – Explained in 5 Minutes:

Visit AlecExposed to view the model legislation and learn more about ALEC:

http://alecexposed.org/wiki/ALEC_Exposed

Sign a petition to get corporations out of ALEC:

http://site.pfaw.org/site/PageServer?…

Read here why ALEC should have its 501 c3 tax status revoked:

http://www.commoncause.org/site/pp.as…

Go here for regular ALEC-related updates:

http://www.prwatch.org/