Free trade on steroids: The threat of the Trans-Pacific Partnership
The TPP would have a devastating effect on jobs and America’s middle class.
By George Miller, Rosa DeLauro and Louise Slaughter
April 21, 2014
Many supporters of the proposed Trans-Pacific Partnership, or TPP, trade agreement are arguing that its fate rests on President Obama’s bilateral talks with Japanese Prime Minister Shinzo Abe in Japan this week. If Japan and the United States can sort out market access issues for agriculture and automobiles, the wisdom goes, this huge deal — in effect, a North American Free Trade Agreement on steroids — can at last be concluded.
But this view obscures the many seemingly intractable problems TPP negotiators are grappling with. There are other unresolved issues — such as intellectual property concerns that could limit access to affordable medicines — that have deadlocked the 12-nation pact.
And for every issue that is being intensely discussed, there are others that are being swept under the rug. For instance, bipartisan majorities in Congress have demanded rules in TPP against currency cheating, but the Obama administration has refused to include them.
But foremost among all these issues is the devastating effect the agreement would have on jobs and the American middle class. Americans were promised 20 years ago that NAFTA would bring an unprecedented economic boom and 200,000 jobs in the first year. The three of us doubted those promises and voted against it. The data on NAFTA’s outcomes make clear that the concerns we and other critics had were warranted.
In 1993, before NAFTA, the U.S. had a $2.5-billion trade surplus with Mexico and a $29-billion deficit with Canada. By 2012, that had exploded into a combined NAFTA trade deficit of $181 billion. Since NAFTA, more than 845,000 U.S. workers in the manufacturing sector — and this is likely an undercount — have been certified under just one narrow program for trade adjustment assistance. They qualified because they lost their jobs due to increased imports from Canada and Mexico, or the relocation of factories to those nations.
Even worse, NAFTA has been used as a model for additional agreements, and its deeply flawed approach has resulted in the outsourcing of jobs, downward pressure on wages and a meteoric rise in income inequality.
For example, to sell the NAFTA-style U.S. agreement with South Korea passed in 2011, Obama said it would support “70,000 American jobs from increased goods exports alone.” In reality, U.S. monthly exports to South Korea fell 11% in the pact’s first two years, imports rose and the U.S. trade deficit exploded by 47%. This led to a net loss of tens of thousands of U.S. jobs in this pact’s first two years.
Now we are hearing that the TPP, as we were promised with other pacts, will mean prosperity around the corner…
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