Why free trade isn’t always fair for America….Part 1
The Trans-Pacific Partnership (TPP) is a free-trade agreement between twelve Pacific Rim countries: United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. TPP negotiations began behind closed doors in 2010 and President Obama signed the agreement on February 4, 2016. The TPP is a “docking agreement” which would allow other countries to be added without the approval of Congress.
As a top trade agenda goal of the Obama Administration, the President has urged Congress to quickly adopt the agreement while organizations with big transnational members have echoed his request. The 5,500 page TPP agreement was written by the staff of the U. S. Trade Representative office, with the help of over 600 corporate advisors and was only made available to members of Congress in late 2014. In response to questions of its secrecy, the Obama administration finally made the TPP available to the public in November 2015.
The pro-TPP argument in the ag industry is that when agricultural exports increase, all agricultural producers will benefit. It’s the regurgitated claim of the trickle down effect for all free trade agreements. The blatant problem is that free trade is not always fair or balanced trade and the big winners are usually transnational corporations, not American workers and producers. It’s no surprise that big agribusiness, meatpacker and food processing industries all stand to gain under the TPP and are promoting the agreements as economic thrusters for the agricultural base. In reality, individual farmers and ranchers will see little substantial benefit. Instead, they will be faced with increased imports that undermine domestic prices and threaten the viability of family farms and ranches in an already depressed market.
As Food and Water Watch, et. al. correctly point out in a letter to Congress opposing the TPP, individual producers aren’t directly exporting their crops or livestock. Grain traders, meatpackers, produce shippers and food processors export these products for substantial gains while the farmer and rancher’s share remains as minuscule as their share of the retail food market. Any increased exports promised in the TPP will be overshadowed by increased imports to the U.S.
According to conventional economic theory, both sides benefit from the exchange of goods. But this is not always true. Unbalanced, free trade has hurt millions of American workers in textile, manufacturing and auto industries who lost their jobs and have struggled to find work again. Each free trade agreement promises jobs and domestic growth, yet the U.S. continues to have huge trade deficits, importing more than we export ($40.1 billion deficit reported in March).
U.S. job losses due to free trade are as follows: NAFTA – 600,000 manufacturing jobs lost. China’s entry into the World Trade Organization – 3.2 million manufacturing jobs lost (between 2000 and 2010). Korea-U.S. (KORUS) – 60,000 manufacturing jobs lost since going into effect in 2012. 3.4 million U.S. service and call center jobs have been lost since 2000. The result, a cumulative trade deficit of $12 trillion in goods since 1994. KORUS promised to create 70,000 jobs and $10 billion in exports, yet our trade deficit with Korea reached $28.4 billion in 2015 after only three years.
Free trade does have a trickle down effect. Consider the rural communities where textile, manufacturing and automotive industries have completely shut down or where any industry once thrived. They are practically ghost towns with vacant storefronts and dilapidated warehouses where city do-gooders, environmentalists and non-governmental agencies (NGOs) have since showed up with grants and sustainability programs to “save” them. It’s ironic that government free trade deals shut down their industry, outsourced their jobs, and drastically changed their small towns, but now government, in the form of grants and programs, is here to save them with the help of NGOs. Or is it? Government keeps getting bigger and bigger, while small businesses and blue collar workers keep disappearing.
U.S. ranchers and farmers may very well be the next outsourced American worker under the TPP. Free trade agreements continue to pad the pockets of big transnational corporations while robbing American workers and communities. They’ve stimulated the world’s economy with American dollars, while stagnating our own economy. The TPP is bad for American consumers, workers and producers. It’s high time for free trade, that is balanced trade.
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