Wednesday's trade balance report showed that just two years after signing a "free trade" agreement with South Korea we have reached a record monthly trade deficit of $2.3 billion with that country, up from $1.3 billion the month before. Now South Korea is attacking the U.S. steel industry. Meanwhile U.S. elites are pushing "fast track" and the Trans-Pacific Partnership (TPP) so we can get us even more of that.
What They Promised Then
When the trade deal with South Korea passed in 2011 we were promised 280,000 jobs and a "jump-start" to the "flagging economy without additional government spending."
The Washington Post reported, in "Obama gets win as Congress passes free-trade agreement":
Congress resoundingly approved long-stalled trade agreements with South Korea, Colombia and Panama late Wednesday, authorizing the most significant expansion of trade relations in nearly two decades.
... The South Korea deal has the potential to create as many as 280,000 American jobs, according to a recent assessment by the staff of the U.S. International Trade Commission, and to boost exports by more than $12 billion.
... Final approval of the agreements represents a victory for the Obama administration and congressional leaders in both parties, who have touted the trade pacts as a means to jump-start the flagging economy without additional government spending.
What We Got
The U.S.-South Korea trade agreement went into effect in March 2012. Instead of creating jobs, the deal has cost jobs and increased our trade deficit with South Korea. Last month we hit a record trade deficit with South Korea of $2.3 billion. As of July, 2013 the deal had already cost 40,000 U.S. jobs, "mostly in manufacturing." In other words, good-paying jobs. As of March, 201,4 that job-loss number had reached 60,000, again mostly in manufacturing.
But there are signs that job loss could get much, much worse. South Korea is now going directly after the U.S. steel industry. The Economic Policy Institute (EPI) report from May, titled “Surging Steel Imports Put Up To Half a Million U.S. Jobs at Risk,” finds that half a million jobs are at risk because Korea is "dumping" -- selling below cost -- steel goods onto the U.S. market, particularly "tubular goods" used in oil exploration and production.
The results of this dumping are just beginning to become clear. For example, there is this from Pittsburgh Post-Gazette: “U.S. Steel closes two tubular plants indefinitely, including one in McKeesport.”
(See also "NAFTA at 20: One Million U.S. Jobs Lost, Mass Displacement and Instability in Mexico, Record Income Inequality, Scores of Corporate Attacks on Environmental and Health Laws" which showed how NAFTA cost us:
- a $181 billion U.S. trade deficit with NAFTA partners Mexico and Canada,
- one million net U.S. jobs lost,
- a doubling of immigration from Mexico,
- larger agricultural trade deficits with Mexico and Canada,
- and more than $360 million paid to corporations after “investor-state” tribunal attacks on, and rollbacks of, domestic public interest policies.)
The effect of our trade deals and the resulting enormous, humongous trade deficits (and resulting job losses) was felt today in the May jobs report. The Alliance for American Manufacturing's #AAMeter measures progress toward President Obama's goal of creating 1 million manufacturing jobs in his second term. That #AAMeter is currently at only +134,000, falling 866,000 jobs short:
Meanwhile Elites Push For More Deals Like Korea, NAFTA
Meanwhile in The Hill this week former U.S. Trade Representative Clayton Yeutter (under Reagan) penned an op-ed, Trans-Pacific Partnership at a critical juncture pushes the treaty, saying, "If successful it will add enormously to global trade and global economic growth." Yuetter also pushes "the need for Trade Promotion Authority, or "fast track.' " (Fast track is a process in which Congress voluntarily gives up its Constitutional duty to review, debate and amend treaties because democracy is messy and might get in the way of the needs of giant corporations.)
Yeutter concludes, "With a little pragmatism and good judgment over the next few months TPP can become a reality. We Americans will be among its principal beneficiaries."
Beneficiaries? Like we were with the South Korea trade agreement?
At Bloomberg News the editors penned an editorial pushing fast track and TPP, Let Obama Be Dealmaker in Chief. The editors promise us, "it could increase U.S. exports by $78 billion a year and create hundreds of thousands of jobs over the next decade."
This is true, but like all of our previous free trade deals it would increase imports more than it increases imports, costing far more jobs than it creates.
With a promise reminiscent of the Korea deal promises the editors push Congress to bypass democracy to get TPP through – with little debate, no amendments and no time to think:
A deal would provide a welcome boost to a dawdling economy, but it won't happen unless Congress soon gives President Barack Obama fast-track authority, also called trade-promotion authority, which lets the president submit a treaty for a straight up-or-down vote.
The key promise in the Bloomberg editorial is this odd paragraph:
Granted, when trade pacts go into force, companies sometimes close factories and ship jobs offshore, where weaker environment and labor laws mean lower costs and fatter profits. Yet most studies conclude that the biggest U.S. free-trade accord so far, the 1994 North American Free Trade Agreement, produced net new jobs and achieved its other intended benefits.
NAFTA produced new jobs? According to Public Citizen the trade balance with Canada went from a $23.6 billion deficit in 1989 to $81.2 billion in 2013 and with Mexico has shifted from a $2.5 billion surplus in 1994 to a $96 billion deficit in 2014. The trade deficit is a direct measure of job loss because that is billions of dollars spent on things made or done elsewhere instead of here.
Bloomberg pushes fast track, saying, "Other countries, though, are reluctant to strike these bargains if Congress might rewrite them. Knowing that Congress can't unpick a deal would help bring them to the table."
When you see the word "Congress" in the editorial substitute in your mind some form of the words "democracy" or "representatives of We the People" and you'll understand what the editors are asking for here.
Is this about more "trade and growth" to benefit working people, or a few billionaires? That is the question. Why would anyone believe any promises about TPP creating jobs when the entire history of our "free trade" process has been a disaster for working Americans and our economy?