Will the TPP Increase Trade? That’s the Wrong Question

Dave Johnson

One of the selling points for the Trans-Pacific Partnership (TPP) agreement is that it will “increase trade.”

Here’s the thing. If you close a factory in the U.S., lay off all of the workers, devastate the surrounding community, and move the production to a low-wage country like Vietnam, bring the same goods back to the U.S. and sell them in the same stores, you have just “increased trade” because now those goods cross a border.

Plus you have the added bonus that executives and shareholders can pocket the wage difference (or park the money in the Cayman Islands). Hopefully they can also pocket the difference in environmental protection costs, workers safety costs, etc., because in places like Vietnam, good luck with ever getting those things.

Economists will tell you that moving the factory to Vietnam is an efficient allocation of resources. The workers and factory here in the U.S. can now be used for something that “we do better here in the U.S,” they might say, and the workers will be rehired at a better wage. The repurposed factory will sell higher-value things to the world that more than make up for the loss of exports of what the factory had been making.

Look around you. Is that what is happening as a result of our trade policies? No; we instead have a massive trade deficit. Entire regions of the country are shifting to third-world status, downtowns boarded up, foreclosed houses falling down, people feeling hopeless… and a few people get more and more wealthy at the expense of the rest of the world.

Regular Americans see their standard of living falling as a direct result of trade policies designed to break unions and increase the wealth and power of a few at the top. Many workers in other countries have few rights, the environment is not protected, government and self-determination are undermined…

If our trade policies were combined with policies that share the benefits from lower production costs, etc. with all of us on all sides of trade borders, then increased trade would be a good thing. That is not what is happening. The trade policies are designed to break worker power and to break governmental power.

So, yes, TPP will “increase trade.” Which means more and more jobs and production moving out of the U.S.

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