Avarice, Apathy and the TPP
America is once again at a crossroads. We’ve witnessed the constant dilution of a once strong industrial base. We’ve agonized at the greed of profit over people, as Wall Street and corporate raiders dissected once mighty manufacturers, leading them to bankruptcy courts, their legions of pensioners into the rolls of the impoverished and their workers into the ranks of the chronically unemployed.
Much of this hardship has been caused by off-shoring and the implementation of massive Free Trade Agreements (FTA’s).
America has sought to keep its markets open with free trade “mega-deals” such as NAFTA, CAFTA, and the most recent, Korean FTA (KORUS). In retrospect, these agreements failed miserably to protect American jobs, the environment, and labor and safety standards in the majority of countries involved.
Hailed as the trade deal of the 21st century, the proposed, 12-member Trans-Pacific Partnership (TPP) seems to be heading us down this road again. The United States, Canada, Mexico, New Zealand, Chile, Brunei, Malaysia, Peru, Australia, Singapore, Japan and Vietnam have all signed on to participate.
President Obama states theTPP contains safety measures for labor, the environment and other aspects, but if the KORUS agreement is any indication of what Americans are in store for, it is highly doubtful these measures will work to effect changes in emerging market nations such as Vietnam. KORUS is a good example to use because those who have crafted the TPP apparently used KORUS as a framework.
Although KORUS was initiated under the Bush Administration, it was signed in 2011 by President Obama, who hailed the agreement as a job creator with the potential for our goods to be exported. A White House fact sheet claimed KORUS would support 70,000 jobs, and the export of goods would add $10 billion to our coffers.
Four years later, the numbers are much more sobering. KORUS has caused a net loss of 75,000 jobs, and exports to Korea have only increased $800 million, while our trade deficit increased by $26.4 billion dollars, according to the Economic Policy Institute.
Vietnam, whose dossier includes a plethora of child labor and environmental violations, is also a violator of point of origin rules. Point of origin is a big sticking point with U.S. corporations and labor organizations because violators such as China nefariously circumvent tariffs by routing their products (such as steel) through countries such as Vietnam. Once they do this, the host country relabels the products as their own.
The rule of origin standard is also a contentious issue. When NAFTA was passed, 62.5% of a product had to originate from an FTA to qualify for trade benefits. The U.S.-Australia FTA reduced it to 50%, and KORUS reduced it to 35%. The TPP will also remain at 35%, which means that 65% of content may come from elsewhere (such as China).
The question remains as to why our trade representative has allowed these numbers to decrease so dramatically in each FTA. This is not a way to create or even sustain levels of employment domestically.
Currency manipulation, the artificial inflation or deflation of a currency’s exchange rate, has also hurt our ability to trade fairly with countries. China’s currency manipulation began concurrently with its inclusion in the World Trade Organization. Japan, which will be a partner in the TPP, has also been a frequent abuser. The International Monetary Fund has jurisdiction in disputes of this nature, but they, as well as the WTO, lack the will to handle the complaints meritoriously.
There should be an outcry on all these issues from the masses of America, but we are sadly faced with an arms thrown up, "what can we do?" apathetic attitude.
There was a time when the manufacturing might of the United States was on display around the world. The main industry in my Pennsylvania town was steel, and the corporation employed over 9,000 steelworkers. There are now only 80. Much of the business was eroded by the dumping of steel from Japan, Korea and others. The TPP will exacerbate this erosion, and the only people reaping the rewards will be in the corporate and Wall Street boardrooms.
In the next few months, I’ll be taking my wife and five children to New York to see a building constructed with steel from our small plant, the magnificent One World Trade Center. I’m proud to tell my family, as many before me have had the chance to say, “I helped make this.” Can you imagine a time in our country when those words may not be uttered? If the TPP is passed, it may be sooner than we think.
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