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THE TPP – NAFTA ON STEROIDS

June 23, 2016

THE TPP – NAFTA ON STEROIDS

The Trans-Pacific Partnership (TPP) is a proposed trade agreement involving the United States and 11 other nations that would include 40 percent of the world’s economy. It is expected to be considered by Congress later this year and is sometimes referred to as “NAFTA on steroids.”

Given our history of thousands of shutdowns of factories and mills and chronic loss of good jobs in this country directly traceable to trade agreements gone awry, supporters of labor (as well as many of labor’s employers whose factories are shut down and who are fighting to survive given unfair trade practices by Chinese and other cheap labor jurisdictions) are bringing trade cases before the U.S. International Trade Commission (ITC) to set tariffs against Chinese (and other) producers. These American companies and their labor forces are understandably wary of the effect of the TPP in view of their experiences under other trade pacts, as am I, and they oppose it, as I do. So far, such pacts have for the most part been good for multinational corporations and their big bank financiers on Wall Street, not American labor and American corporations (as promised). For millions of former workers, prior trade agreements have been unmitigated disasters.

The United Steelworkers Union (of which I am an honorary member) recently put together a “lobby day” in which hundreds of steelworkers descended on Washington to lobby politicians of both political stripes with arguments that failed trade policies are destroying the country’s manufacturing core and replacing it with a service economy, that our jobs and our way of life and future of our country are on the line right now and, of course, how and why they (the politicians) should vote against the TPP when and if it comes up for approval later.

Richard Trumka, president of the AFL-CIO, summed up the situation nicely. He said: “We support trade. What we oppose are bad trade deals that hurt workers and send our jobs away and destroy our communities.” He is right. We have had “trade” since before the Silk Road Orient-to-Occident routes, but even then there is evidence in economic history that their exchanges were mutually beneficial, unlike those today, which are not beneficial to our economy, our workers and our disappearing middle class.

Some members of Congress responded positively. House Democratic Leader Nancy Pelosi pledged to fight for trade policies that support good jobs. She said “It’s a mystery to me” why the United States continues to sign onto trade agreements that result in good jobs being shipped to low-wage countries. My favorite senator, Elizabeth Warren, said that “They keep saying, ‘this time it will be different,’” (in comparing the TPP to the job-killing NAFTA deal), “but it’s a rigged process, one that is designed to help corporations and leave workers in the dirt.” She and Ohio Senator Sherrod Brown promised to wage a vigorous battle against the TPP in the Senate when and if it comes up for approval.

Labor and owners of shuttered and about to be shuttered mills and factories have had some perhaps unexpected support from the U. S. international Trade Commission (ITC) itself. A recent report from the ITC on the expected effects of the TPP confirms what labor and other opponents of the proposed pact have long believed, i. e., that the TPP would not help American workers.

The ITC found that the agreement would have virtually no positive effect on the nation’s gross domestic product, employment rate or annual income, while causing the trade deficit to increase by $21.7 billion. The USW president, Leo W. Gerard commented on the ITC findings as follows: “This report validates that the TPP is not worth passing. In the past, similar reports have proven to widely underestimate the negative impact of trade agreements on American workers and the economy. This report indicates the TPP will produce almost no benefits, but inflict real harm on so many workers.” He continues, “The American public is sick and tired of economists projecting fantasies of prosperity for them (American workers) when it is primarily corporations that benefit. This may be the most damming government report ever submitted for a trade agreement. It is clear that the TPP will be dead on arrival if Congress ever decides to bring it up.”W

With all due deference to President Gerard’s view of the ITC’s findings and their effect, I think it not clear at this time that the TPP is certain to die on the floor of Congress. As we have seen in the past, including NAFTA of 1994 and the Korean pact of 2012 (which have resulted in lost jobs, lower wages, shuttered factories and greater income inequality in this country), there are powerful forces on Wall Street which call for approval of such pacts irrespective of their effect on American workers and GDP. Our steel industry, for instance, has been virtually destroyed with Chinese overproduction though the Chinese keep promising to correct such a violation of the language of current agreements, which is responsible for a new wave of 13,500 layoff notices to American steelworkers as I write this piece.

It appears that our domestic steel difficulties are the result of Chinese overproduction of steel by producers who benefit from illegal government subsidies and then dump their artificially low-priced steel into the U.S. market, and it’s not just the steel market that’s in play. Similar problems are to be found in rubber, paper and aluminum markets.

Foreign producers of such products pay their help poorly and operate virtually free of environmental restraints; thus when we import their products we are effectively importing unemployment and pollution, all the while as steel towns in the United States are setting up food banks for their laid-off workers and one (Fairfield, Alabama, where U.S. Steel has shut down its blast furnace) in which the city council is debating closure of its police department!

This is wrong. Our trade policies should be made in Washington, not Beijing and Wall Street.   GERALD   E

 

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