Daily Archives: August 6th, 2011

More Free Trade?

To date, 682,900 U.S. jobs have been lost or displaced since the North American Free Trade Agreement took effect in 1994, a new Economic Policy Institute study finds. The main reason for the job loss is a $97.2 billion trade deficit with Mexico. In 1993, one year before NAFTA was implemented, the United States had a $1.6 billion trade surplus with Mexico that supported nearly 30,000 U.S. jobs. ~Economic Policy Institute

I guess we all remember that warning and would like to side-step a similar situation now that a breakthrough has been announced and Senate leaders promise swift votes on the trade agreements with South Korea, Colombia and Panama after Congress returns next month.

Not surprisingly, the U.S. Chamber of Commerce is all for it. “These trade agreements are one of the best ways to create jobs in America now,” said Thomas J. Donohue, president and chief executive.”  The only hang-up, it seems, has been a congressional stall “over a related employment assistance program for U.S. workers who lose their jobs to trade.”

The Trade Adjustment Assistance program ($575-million) should have been included in the trade pacts, but because the cost was frowned on by Republicans, a deal was made to separate the two issues to speed up the trade agreement vote.

Being diligently consistent, “The political trade-off did not please House Democrats, who are concerned that the worker aid program will be left behind.” Hoping out loud that the TAA will in fact be renewed, “the top Democrats on key committees, said in a joint statement. “American workers deserve no less.”

In the Trade Adjustment Assistance program, which is designed to help employees who have lost jobs as a result of overseas competition or production moving outside the United States, “74 percent of the trainees get new jobs with average earnings 85 percent of their last paycheck. Not bad considering many were among the most senior and well-compensated at their old jobs and start green in their new positions.”

Where is Obama on all this? “I won’t stand here and tell you that we can — or should — stop free trade, I will not sign another trade agreement unless it has protections for our environment and protections for American workers.” That’s what he said while campaigning in 2008.

This most recent round of trade agreements does include a new, improved “labor chapter” – whether it works or not is left to be seen. The Sierra Club stands against the agreements for a multitude environmental reasons.

As to protecting American workers, here is an interesting article by Tim Robertson, who is the director of the California Fair Trade Coalition. He is not convinced – at least, not in the case of South Korea. “It promotes exports but fails to address imports, which is a big mistake.”

“The president and administration officials have often claimed export increases from the South Korea pact will support 70,000 jobs, which is true. Unfortunately, when including imports, the Economic Policy Institute predicts a net loss of 159,000 U.S. jobs.”

“If President Obama and his team are serious about using trade to create jobs, which they should be, they will abandon the so-called free trade system and work for policy that actually helps U.S. industry, protects U.S. workers and creates U.S. jobs. To do so, they really have to stop ignoring half of the trade equation.”

Hopefully, before the new trade pacts go into effect we will have debated the policies and learned enough to balance past experience with the present and future needs of all parties concerned – especially the American people.