Tuesday, March 25, 2014

It's The Trade, Stupid !

  First Published in DelawareLiberal Blog by ProgressivePopulist on March 25, 2014

One of my favorite investigative reporters, David Cay Johnston observes that our foreign trade deals in the last couple of decades figure in a big way in  the systemic weakness of our domestic economy.  Particularly hard hit by really bad trade deals are the non-college educated in the workforce.
Here's how that seems to work.  While the economy overall is somewhat positively impacted by our trade agreements such as NAFTA, CAFTA and the WTO, the evidence in the manufacturing and family farm sectors we all know is quite the contrary.  The loss and exporting of manufacturing jobs has impacted 100 million U.S. workers and 170,000 family farms,  which are by and large non-college educated and include a significant share of minority persons.
These are people who were at the heart of our middle class, the drivers of the consumer economy in the U.S.A.  If they are not among the 5 million left unemployed with the manufacturing jobs eliminated  or exported via NAFTA and the WTO by 2010, they are suffering from the wage gap and income inequality we are experiencing today.  Half of those jobs went to China.
And speaking of income inequality, the immigration debate raging today would be much less a factor in the national conversation if it were not for the impact of NAFTA on our neighbor to the south, Mexico.  In 1992, just before NAFTA, we had 3.9 million undocumented within our borders, mostly from Mexico.  By 2011 they numbered 11.1 million.  It is impossible to not correlate the impact of NAFTA on this increase, starting in 1994.  The NAFTA agreement  in Mexico resulted in 2.5 million small/tenant farmers being dislocated by corporate farming (Monsanto?) and either driven to the tar paper shanty towns outside of Mexico City or across our border  through 2005.
I was heartened by Bill Clinton's observation at the African conference he keynoted in Wilmington a few days back.  Remember, he was a huge cheerleader for the NAFTA agreement.  He said that it is important when we are dealing with African nations that any deal we set up with them take into account that the farming populace there not be dislocated from their source of family income from the land.  I've always admired his intellect and am very happy that he learned from our mistakes and unintended consequences on the citizens whose governments make trade deals.
Then of course we also have to account for the impact of these agreements on our trade deficits, which were mostly surpluses before these pacts with counties such as Canada, China, Japan, Mexico and South Korea.  By 2013 the trade deficit accounted for 3% of our GDP, at around $500 million.
The recent, much applauded decline in the trade deficit increases is accounted for almost entirely by the petroleum industry.  Examples of bad trad deals?  How many  U.S. cars were purchased last year in South Korea?  Around 15,000.   And S. Korean cars sold in the U.S.A.?  1.3 million !  Clearly this new trade deal isn't working to our benefit.
It is time to ask, why do  smart Americans make such stupid  trade deals?   Unintended consequences?  Maybe.  Or maybe the corporate and multinational lobby is so damned persuasive (Think $$$$$ persuasive) compared to fair trade, labor such brilliant analysts as Public Citizen that the deck is stacked against us non-corporate citizens.  With new trade agreements pending such as TPP, It is time to learn from past mistakes and make damned sure our congressional representatives robustly research and debate the contents of old trade deals and new trade proposals alike and vote to rebuild our manufacturing base and middle class.  These are the job creators, not the 1%.