Donald Trump and Bernie Sanders are both wrong about the Trans-Pacific Partnership
That's confusing because Hillary also opposes the TPP. Why no mention of her opposition?
Hillary Clinton Opposes Trans-Pacific Partnership
Hillary Clinton said Wednesday she opposes the 12-nation Trans-Pacific Partnership, marking a significant break with the Obama Administration as she heads into the first Democratic presidential debate.
In an interview with PBS NewsHour, Clinton said that while she is still reviewing the deal, she is “worried” it benefits drug companies and does not address currency manipulation.
US opponents of the Trans-Pacific Partnership don’t understand how it works
Demonstrators opposed to the TPP rally for fair trade at the Capitol in Washington, DC. (AP Photo/J. Scott Applewhite)
[ image location address' w=1600 cut back to w=800 .. lol, love that .. thanks again, F6! ]
Written by Michael Schuman Journalist Obsession New American Economy June 25, 2015
What a fight the White House has had over free trade. Though the US Congress finally passed legislation .. http://www.pbs.org/newshour/rundown/senate-grants-obama-big-win-fast-track-trade-authority/ .. that grants Barack Obama “fast-track” authority to complete the Trans-Pacific Partnership .. https://ustr.gov/tpp/overview-of-the-TPP .. (TPP)—a massive, 12-nation free-trade agreement stretching from Malaysia to New Zealand to Chile—that came after weeks of rancorous debate that witnessed some of the most influential Democrats part ways with their president.
Obama has sold the TPP as key to stimulating US growth, creating American jobs and solidifying Washington’s leadership in the global economy. But some politicians aren’t buying it. Free-trade agreements (FTAs), they contend, cost Americans jobs, adding to the trials facing the middle class. “We want a better deal for America’s workers,” insisted Democratic leader Nancy Pelosi .. http://pelosi.house.gov/news/press-releases/pelosi-floor-speech-on-trade-adjustment-assistance-and-trade-promotion-authority .. in a June 12 address to the House of Representatives.
There is, however, something the TPP’s opponents don’t understand: the US jobs that have been lost to the developing world would have moved anyway, with or without free-trade pacts, so killing off the TPP won’t help American labor.
Critics of the TPP point to the damage done to the American workforce by outsourcing and offshoring, especially of factory production. The number of people employed in manufacturing in the US has plunged to 12.3 million from nearly 19.3 million at the beginning of 1980, according to the Bureau of Labor Statistics .. http://data.bls.gov/pdq/SurveyOutputServlet .
Sympathetic politicians and journalists highlight the suffering of communities hit hard when the local textile mill or electronics factory closed up—a blow from which many have never recovered—and they are quick to blame FTAs, such as the North American Free Trade Agreement, or NAFTA. The TPP, which its critics deride as “NAFTA on steroids,” will only make matters worse. Economist Jeffrey Sachs complained .. http://www.huffingtonpost.com/jeffrey-sachs/defend-workers-and-the-en_b_7282290.html .. that the TPP “would hand another gift to the multinational companies…without providing real protections for workers.”
There is no denying, though, that free trade helps some workers and hurts others, and perhaps FTAs like NAFTA facilitate the process of shifting manufacturing out of the US by further reducing barriers to exchange. But FTAs are not the primary cause of such job losses. We know that because the biggest beneficiary of the offshoring phenomenon, China, does not have an FTA with the US (nor is China a member of the TPP). That hasn’t stopped American companies from producing everything from sneakers to smartphones in Chinese factories for sale to American consumers. The increased trade with China has likely hit the US worker much harder than NAFTA. One study .. http://economics.mit.edu/files/9811 .. figures that imports from China cost the US at least two million jobs between 1999 and 2011.
[ Just pass a law telling business they have to buy or sell X % of products that are made in America. Tell Walmart or Target they have to sell X% and see what happens. Do you think Trump supporters will buy American? Do you think Americans will buy American good if they have to pay more? http://investorshub.advfn.com/boards/read_msg.aspx?message_id=121160890 ]
The reason boils down to cost. Certain types of manufacturing, especially consumer goods like clothing, shoes, toys and electronics, has been transferred to countries like China because US wages are too high to allow the products made to be competitive. According to government data, the average earnings of a US manufacturing worker are nearly $830 a week .. http://www.bls.gov/news.release/empsit.t24.htm . Compare that to China, where the salary of a factory worker is only $403 a month, according to a recent survey conducted by the Japan External Trade Organization .. http://www.jetro.go.jp/ext_images/en/reports/survey/pdf/2015_01_biz.pdf (JETRO).
[ No, that is not any good argument for continued wage depression in the U.S.A., nor for lowering the minimum wage in Australia ]
Wages are even lower in other emerging economies: $239 a month in India, $176 in Vietnam, and $100 in Bangladesh. Statistics from the Conference Board .. https://www.conference-board.org/ilcprogram/index.cfm?id=28269 .. show similarly gargantuan differences in the hourly compensation costs of manufacturing workers in the U.S. and various emerging economies.
Trade barriers between countries are just not high enough to offset this tremendous difference in wage levels, even before FTAs are in place. The unfortunate reality, then, is that some American workers—especially those with limited skills—will find it nearly impossible to compete head-to-head with Chinese or Indians willing to accept a lot less money to perform similar tasks. Some may call this “stealing” American jobs, but the only crime a Chinese or Indian worker has committed is being poor.
Unfair? Many think so, and that’s driven a backlash against the entire concept of free trade. Why not hike trade barriers to defend an American worker unjustly besieged by a flood of cheap labor from China, India and elsewhere?
Though that may sound like a nice solution, it probably won’t work. Sure, a few factory jobs might be kept on US shores. But protectionism probably won’t lead to a boom in manufacturing jobs. Since the labor costs of making blue jeans or television sets in America are much higher than in economies like China’s, the stuff produced in these factories would be more expensive. Pinched US shoppers would buy less at their local Walmart.
That not only damages American lifestyles, but also depresses demand for consumer goods—and thus the number of workers required to make them. Factory owners, meanwhile, would likely turn to automation to replace workers to keep costs down.
Even more, these high-cost US factories probably wouldn’t manufacture competitively priced goods for the global marketplace. So US companies would still need to outsource to foreign firms or build factories in China and other developing nations in order to sell to customers outside the US. The upshot is that reversing free trade may protect a handful of poorly paid factory jobs, but only at huge cost—to the welfare of the US household and the competitiveness of US business.
Many people reading this analysis will probably dismiss it as free-market ideological nonsense or pro-business claptrap. But the tremendous technological change we have witnessed over the past 40 years has made global production a fact of economic life. FTAs like the TPP are designed to maximize the possible benefits from economic trends already taking place. Though NAFTA, for instance, may have spelled bad news for some workers, there are estimates .. http://www.piie.com/publications/chapters_preview/332/01iie3349.pdf .. that the boost to US exports from the pact may have added a significant number of jobs to the American economy overall.
None of this argument, you say, will help those hurt by free trade. True enough. The real problem, as former labor secretary Robert Reich and others have pointed out .. http://robertreich.org/post/85532751265 , is how policymakers are responding to the economic change spawned by globalization. Leaving Americans to slug it out with low-paid Chinese workers is a death sentence. Helping them improve their skills to overcome that competition is the only way out. The US government, however, has not invested enough in education and job training programs to aid workers laid low by globalization to reset their careers and find better paying, more stable employment.
Furthermore, there is a clear link between education and employment in the US Data from the Bureau of Labor Statistics shows that those with the least education suffer the highest rate of unemployment .. http://www.bls.gov/emp/ep_chart_001.htm .
Rejecting the TPP won’t save the American worker; better programs to upgrade American skills will.
Michael Schuman, a Beijing-based journalist, is the author of Confucius and the World He Created. You can follow him on Twitter at @MichaelSchuman. We welcome your comments at ideas@qz.com.
News 
Market Data 
Discover 
AI
