Will RNC Delegates Flip-Flop on Trade?

Interesting News: It seems that people do have a voice, however, it comes only during the time of the Presidential elections. For years, many people have felt that Free Trade has been a killer of American jobs (but have been unable to do anything about it). Exactly who has been AGAINST Free Trade for years? Progressive Democrats. Who has been FOR Free Trade? All Republicans (until now) and several big-business-friendly Democrats. Since the second Great Depression, there has been a slow growing resentment of Free Trade agreements. And, of course, now, both political parties are pandering for these discontented voters. For more about Free Trade, see my blog  entry: Why Free Trade is devastating to the USA.

Here are a couple of articles showing the current positions on Free Trade of the political parties.

Source: Tuesday Preview: Will RNC Delegates Flip-Flop on Trade? – Washington Wire – WSJ

Will RNC Delegates Flip-Flop on Trade – Wall Street Journal

Greetings from sunny Cleveland, where Republican Party delegates writing GOP platform will be in a windowless conference room to formally determine the party’s trade and immigration policies.

Headed into Tuesday, the big question on trade will be how far GOP Platform Committee delegates flip-flop on free trade. In 2012, the party formally called for enacting the Trans-Pacific Partnership trade deal. On Monday, delegates in a subcommittee stripped from the party platform draft language opposing passage of the TPP in the congressional lame-duck session this winter.

 Though Republican National Committee delegates will hash out the party’s platform this morning, the most likely outcome now appears to be sticking with a specific language condemning trade deficits without offering a position on either the North American Free Trade Agreement or the TPP, both of which presumptive nominee Donald Trump has promised to upend.

“There’s going to be nothing controversial in the platform because Republicans want to stay away from controversy,” said Justin Everett, a Platform Committee delegate from Colorado. “The true fight is going to be in the Rules Committee over our candidate.”

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Republican Platform Subcommittee Follow Trump on Trade – Bloomberg Politics

Republican Platform Subcommittee Follows Trump on Trade – Bloomberg Politics

The Republican Party, which has long backed free trade, is poised to support slowing down approval of trade agreements with Donald Trump as its presumptive presidential nominee.

A party platform subcommittee on the economy, jobs and debt voted on Monday in Cleveland to recommend language that significant trade agreements should not be rushed or undertaken in a lame-duck Congress. It also removed a reference to the Trans-Pacific Partnership agreement at the request of members who oppose it and didn’t want any suggestion of support. The full Platform Committee, meeting in advance of the party’s convention next week, will vote on the provision either late Monday or Tuesday.

The 2012 Republican platform called international trade “crucial for our economy” and said a Republican president will complete negotiations for a Trans-Pacific Partnership to open Asian markets to U.S. products. Trump’s stringent opposition to trade deals such as TPP — which he has called “a rape of our country” — pits him against some party stalwarts and pro-business groups such as the U.S. Chamber of Commerce.

“I expected it to be contentious and it wasn’t,” Andrew Puzder, chief executive officer of CKE Restaurants Inc. and co-chairman of the subcommittee, said about the debate on trade. “People all seemed to be going toward the same goal here, which is to get our candidate elected.”

Democrats stopped short of calling for a “no” vote on TPP during their platform committee meetings this weekend. Delegates for presidential candidate Bernie Sanders unsuccessfully pushed an amendment blocking TPP and urged that the trade deal not come to a vote in Congress.

The Republican Platform Committee sessions on Monday and Tuesday and Rules Committee later in the week are offering the first signs of how much turbulence Trump will face on his convention flight to the Republican presidential nomination on July 21.

Anti-Trump delegates are trying change party rules so that delegates who are bound by election results to back Trump can “vote their conscience” in Cleveland. Critics of the effort say that plan lacks the votes it needs and would thwart the will of about 13.3 million people who voted for Trump in the party’s primaries and caucuses.

Puzder, a Trump supporter whose company owns the Hardee’s and Carl’s Jr. fast-food chains, said he backs free trade and that there’s no disagreement that the U.S. needs it. Yet Trump regularly states that the country doesn’t need large trade deficits, that existing deals should be enforced, and that they can be improved with better terms has broad appeal.

 “Who can argue with, ‘We should have a better deal?”’ Puzder asked in an interview. “It has emerged in this election cycle that free trade is not the overwhelming popular issue it used to be because working-class Americans and middle-class Americas — whether accurately or inaccurately — perceive that they have borne the burdens of free trade, whereas other sectors of the economy have garnered the benefits.”

David Johnson, a member of the platform committee’s economic subcommittee, owns Summitville Tiles in eastern Ohio and said trade deals have decimated his company. It once had 800 workers and now is struggling to maintain 150, he said.

“Wall Street likes TPP, but the 70 percent of the people that are employed in this country by small businesses don’t like it,” Johnson said during the subcommittee meeting. He called trade a huge issue in the election as Trump seeks to appeal to working-class voters in states such as Ohio.

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Republican Party Platform Takes a Hard Turn on Trade – Alliance for American Manufacturing

Republican Party Platform Takes a Hard Turn on Trade | Alliance for American Manufacturing

GOP’s official stance could be very “Trumpian.”

The Republicans are working out their official party platform right now. And CNN, an enterprising newsgathering upstart, got a hold of a first draft of the platform document.

A lot of its content is what you might call “the usual” from the GOP. But, as CNN notes:

The most substantial changes to the 2012 platform came on trade — a key issue for Trump where he has sparred with the U.S. Chamber of Commerce and other reliable conservative business backers. The new language sounds remarkably like Trump, though it stays away from some of his more inflammatory positions including renegotiating the North American Free Trade Agreement.

Here’s a snippet of that language that is downright Trumpian:

We need better negotiated trade agreements that put America first. When trade agreements have been carefully negotiated with friendly democracies, they have resulted in millions of new jobs here at home supported by our exports. When those agreements do not adequately protect U.S. interests, or when they are violated with impunity, they must be rejected. We cannot allow foreign governments to limit American access to their markets while stealing our designs, patents, brands, know-how, and technology. We cannot allow China to continue its currency manipulation, exclusion of U.S. products from government purchases, and subsidization of Chinese companies to thwart American imports. The current administration’s way of dealing with these violations of world trade standards has been a virtual surrender.

That this is in the draft language of a bona fide GOP platform pretty remarkable. This kinda talk doesn’t go over well in some corners of the Republican establishment; the Chamber of Commerce is not a fan.

That’s not to say the free-trade-at-all-costs types are particularly enamored with Trump’s likely opponent, Hillary Clinton, either. The Democratic nominee has taken a trade-skeptical position this election season – presumably because her rival, Bernie Sanders, pushed her very hard on the issue.

And that’s not to say that either party has suddenly become vehemently opposed to trade deals: The platform committees for both rejected attempts to get anti-Trans-Pacific Partnership language into the drafts.

But still: The polling, particularly in swing states, backs up the calls for trade skepticism. Whether or not explicit, yes-or-no language is included in either party’s platforms, voters are clearly concerned that American jobs – often manufacturing jobs – are put at risk by our government’s current approach to trade policy.

If they weren’t, no one would be talking about this so seriously in 2016, and Donald Trump wouldn’t be poised to win the presidential nomination of the Republican party.

Anyway, the drafting continues. So let ’em know: Pro-manufacturing policy deserves a place in their platforms.

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Editor’s Note

It is interesting that both political parties want to represent that they are AGAINST Free Trade Deals without actually coming out and officially opposing them. The GOP, who are the architects of these Free Trade agreements and champions of “Free Trade”, have suddenly become the “Trump Party”. Is the GOP all just full of hot air? One way to find out: the controversial Trans-Pacific Partnership Free Trade Deal with Vietnam, Malaysia, Peru, Chile, Japan, Singapore, Australia, Brunei, is sitting in Congress waiting to become law during the Lame Duck session (after election day).  Let us see which party calls for the rejection of the TPP. Will it be the GOP who really want it to pass or the Democrats who really don’t want it to pass, except President Obama who would like it to pass. What did the TPP vote in 2016 look like? The vote in the Senate: passed 60-38 (Yeas: 47 GOP, 13 Dems; Nays: 7 GOP, 31 Dems & Ind.). The House vote: The vote was 218-208 (Yeas: 190 GOP, 28 Dems, Nays: 50 GOP, 158 Dems).

Free Trade has, without a doubt, costs the United States millions of good paying jobs and changed the US trade surplus into a giant trade deficit. Buy American, support your neighbor and reject the TPP and these awful Free Trade Deals.

I would recommend the elimination of all Free Trade deals except with the countries that have the same standards as the USA like Canada, and Western Europe. Which party will do that? Stay tuned.

Why Free Trade is Devastating to the USA

Why Free Trade is Devastating to the USA

1) The Original Idea

This is a quick look at Free Trade. I am not against trade. Trade between countries is beneficial as long as all the countries follow the rules. Historically, all countries have placed import taxes of products coming into their countries to protect their own businesses from being destroyed. Some import taxes have been much higher than others. So, in order to improve trade, Free Trade Treaties were created (only 25 short years ago) which basically repealed the import tax. Theoretically, if agreements between countries with the same standards- like the USA and Canada – were created, this would be a good idea.

2) The Problem

The problem with the real life treaties is that the countries do not have similar economic conditions or moral convictions. A third world country will always have a lower cost of living, little regulation in the treatment of workers, unregulated working conditions and no protection of the environment  which creates a great advantage in making very inexpensive products compared to developed nations. In addition, many countries have been breaking the underlying principals of trade: some countries have: 1) de-valued their monetary units towards the U.S. dollar (thereby gaining an advantage in exporting into the US); 2) have persistently engaged in the practice of dumping – making so much a product that it artificially lowers prices and puts the other country’s businesses out of business; and 3) have been using slave labor and childhood labor.

3) Manufacturing Towns Take a Big Hit

As the Free Trade Advocates like to say so easily about Free Trade Treaties, there will be some “losers”. It was predicted that some manufacturing would be hurt, but nobody thought for a second that it would be this severe. It was acknowledged that major manufacturing cities would get hit – they were. (Think of Detroit and Flint, Michigan). But so were the small towns.

Within 8 years after NAFTA (North American Free Trade Act) passed, 700,000 American jobs were sent to Mexico. Here is a classic example of NAFTA: Hershey’s Chocolates no longer make any chocolate in the United States, it is all made in Mexico. As Hershey’s offshored all of its US jobs to Mexico. It has created numerous manufacturing ghost towns of cities like Oakdale, CA, Robinson, IL, Hazelton, PA, Stuart’s Draft, VA  Naugatuck, CT and, Hershey’s PA. From 1994 to 2015, the Labor Department certified that more than 216,000 workers in North Carolina were displaced by global economic pacts and qualified for assistance — making it the hardest-hit state in the country. (Ref 1).

NAFTA 1994, World Trade Organization 1995, China joins WTO 2001

4) The Loss of U.S. Manufacturing and Other Jobs

The loss of manufacturing jobs is sometimes called deindustrialization.  Since 1998, not only have we lost a “net” 8 million manufacturing jobs to offshoring, we continue to shed manufacturing jobs very fast almost at the same rate as we can create new ones. Also, Free Trade Advocates never mention (among many other things) is that we have lost many “associated” manufacturing jobs, like transportation, affiliated jobs, and community jobs that serviced the manufacturing workers which is usually equal to 2.5 to 3 jobs per manufacturing job. In addition (totally separate from manufacturing), there are the millions of service jobs that have been offshored to other countries just so large corporations can make greater profits.

The winner of Free Trade: China. Loser:United States

5) Free Trade Lowers Middle Class Wages

One thing that both Republicans and Democrats can agree on is that middle class wages have been stagnant, and most agree that it is due to disastrous Free Trade Treaties. (Interesting reading, Jared Bernstein’s article: The Era of Free Trade Might Be Over. That’s a Good Thing. – The New York Times). The reason wages are not increasing: 1) manufacturing used to be good paying jobs, but now we have much less manufacturing jobs and the “new” manufacturing jobs that are coming back are paying less; and 2) almost all jobs can be readily off-shored, so it makes it difficult to ask for raises. In fact, 25% of all service jobs or 40 million US jobs could be sent overseas in the next few years. (Ref 3).

6) Which Party Likes Free Trade Treaties?

So, who is to blame for these Free Trade Treaties? Although they are considered “bi-partisan”, it is really more partisan. You can decide for yourself. The North American Trade Agreement NAFTA) was started by Bush’s father, George H.W. Bush in 1990 and signed into law by President Bill Clinton in December 9, 1993 after being ratified by the House 234- 200 (Yeas: 132 GOP, 102 Dems, Nays: 43 GOP, 156 Dems) and the Senate 61-38 (Yeas: 34 GOP, 27 Dems, Nays: 10 GOP, 28 Dems).

The Trans-Pacific Partnership Pact (TPP) which will probably pass during the lame duck session (see my entry When Will the TPP Become Law)  has had a similar vote. In order to help pass the TPP, Fast Track (meaning you can not filibuster or add amendments to the the TPP), also known as the Trade Promotion Authority (TPA) was added. The vote in the Senate: passed 60-38 (Yeas: 47 GOP, 13 Dems; Nays: 7 GOP, 31 Dems & Ind.). The House vote: The vote was 218-208 (Yeas: 190 GOP, 28 Dems, Nays: 50 GOP, 158 Dems).

One of the things that have made Republicans so mad (besides listening to right wing media) is that their political party has consistently made their lives worse by supporting Trickledown economic theories, with the worst one being the Free Trade Treaties. And yet, the Republicans want to pass an even bigger one, the TPP, which is expected to cost the US 2 million jobs in just one year. (Ref 2).

7) Other Criticisms of Free Trade

There are many arguments besides economic against Free trade policies. First, Free Trade heavily favors large corporations destroying infant industries as well as the small and medium sized companies. It undermines long-run economic development – it is difficult to revive manufacturing ghost towns, and difficult to plan for growth when American jobs can be offshored at any time. Free Trade has definitely caused income inequality, and environmental degradation.

Born to Work
Picture from the Daily Beast in 2009

Free Trade is supportive of countries sticking to their native practices which often means supporting child labor and working in sweatshops where workers get no benefits in often poorly ventilated and dangerous work environments.

Bangladesh Clothing factory collapse

Free Trade has definitely caused the race to the bottom, wage slavery, accentuating poverty in poor countries, harming national defense, and forcing cultural change. One additional criticism is that it allows large corporations to ignore local, state and governmental rules and laws: U.S. Appeals WTO Ruling on Meat Labeling Laws – where the American Meat Institute refused to label their meats as to where the originated. The Congress has successfully repealed the Country of origin labeling law this past winter. Instead of raising global standards, free trade tries to lower standards of countries that are more advanced. We need to stop all of these Free Trade Treaties, because they are devastating to the USA in so many ways.

Trade Deficits with TPP Nations Cost 2 Million Jobs in 2015

Further job loss is likely if TPP goes into effect and currency cheating isn’t addressed.

Source: New Study: Trade Deficits with TPP Nations Cost 2 Million Jobs in 2015 | Alliance for American Manufacturing

New Study: Trade Deficits with TPP Nations Cost 2 Million Jobs in 2015

By Elizabeth Brotherton-Bunch Thursday, March 3, 2016

The U.S. trade deficit with TPP member countries cost 1.1 manufacturing jobs in 2015, according to new research by the Economic Policy Institute. | File Photo

Further job loss is likely if TPP goes into effect and currency cheating isn’t addressed.

The U.S. goods trade deficit with countries in the proposed Trans-Pacific Partnership (TPP) trade agreement cost the United States 2 million jobs in 2015 — 1.1 million of them in manufacturing — according to a new report from the Economic Policy Institute (EPI).

And researchers Robert E. Scott and Elizabeth Glass argue that the United States can expect its trade deficit with these nations to continue to increase if the TPP goes into effect and does not directly address currency manipulation.

The EPI researchers are not the first to raise the red flag about potential manufacturing job loss in the TPP.

A pro-TPP study from the nonpartisan Peterson Institute for International Economics found that 50,000 U.S. workers, most in manufacturing, could be out of a job each year during the implementation of the TPP. Researchers at the Global Development and Economic Institute at Tufts University were more pessimistic, arguing that nearly 450,000 U.S. jobs would be lost due to the trade deal.

EPI predicts job losses specifically because the agreement doesn’t do anything concrete to address currency manipulation by member nations. When a country artificially depresses the value of its currency, it acts like a subsidy to the goods its exports and a tax on what it imports from the United States.

That makes it harder for the United States to export its own goods, and makes it easier for the U.S. to import good. That creates trade deficits — which then drive job losses.

The $177.9 billion goods trade deficit with the 11 TPP nations in 2015 reduced the overall U.S. GDP by $284.6 billion. Of the 2 million jobs eliminated, 738,300 jobs were in the motor vehicles and parts sector, which equaled about 36.4 percent of the total jobs lost. Other manufacturing sectors that saw job loss include apparel, computer and electronic parts.

But manufacturing wasn’t the only industry that took a hit. Health care and social assistance sectors lost 204,200 jobs, retail trade lost 142,800 jobs, accommodation and food services lost 101,800 jobs and finance and insurance lost 42,700 jobs.

All states and all but two congressional districts saw job losses because of the trade deficit with these 11 countries, which include known currency manipulators like Japan, Singapore and Malaysia. Seven of the 10 states with the highest job losses were in the Midwest or Southeast, — places where manufacturing is a key part of the economy — including Michigan, Indiana, Kentucky, Alabama, Tennessee, Ohio, and Mississippi.

 

Michigan lost 214,600 jobs, equal to 5.12 percent of its total employment. Ohio lost 112,500, about 2.16 percent of its total employment. Net job losses were greatest in California, with 227,500 lost jobs, about 1.38 percent of its total employment.

The TPP member countries aren’t the only ones whose currency cheating is causing job loss. The U.S. trade deficit with China — driven largely by that country’s currency manipulation — cost 3.2 million jobs between 2001 and 2013. While China isn’t part of the TPP yet, Chinese officials have expressed interest in joining.

When will the TPP become Law?

When Will The TPP Become Law?

This blog entry is whether the Trans-Pacific Partnership which passed the Senate and the House and signed by the President will become law.

The Trans-Pacific Partnership Treaty (TPP) is a “Free Trade Agreement” between the United States and the following countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, Thailand, Vietnam.

In general, the Free Trade Agreements, although loved by corporate America, are felt to be major reasons for the downfall of the American economy causing the loss of the American middle class, the greatest wealth inequality since the 1920s, the devastation of American manufacturing, and the race to the bottom.

The Bumpy Road of the TPP into law.

The Trans-Pacific Partnership started as a small Trade agreement between the United States and Brunei, Chile, New Zealand and Singapore back in 2005 under President George W. Bush. Similarly, The North American Trade Agreement NAFTA) was started by Bush’s father, George H.W. Bush in 1990 and signed into law by President Bill Clinton in December 9, 1993 after being ratified by the House 234- 200 (Yeas: 132 GOP, 102 Dems, Nays: 43 GOP, 156 Dems) and the Senate 61-38 (Yeas: 34 GOP, 27 Dems, Nays: 10 GOP, 28 Dems).

Since the original agreement, the TPP has expanded to more countries, the biggest and latest one is Japan. One interesting note, the text (the details) of the TPP had been kept secret for many years, it was only made public in November, 2015, months after Congress had passed it. And, don’t you think that it is strange that such an enormous agreement involving 40% of the world’s GDP that there is hardly a word about it in the media?

The Tricks of Congress

Because the TPP is not popular with the public, it is extremely difficult to just introduce the Trans-Pacific Partnership Treaty as a simple stand-alone bill, because it could be filibustered or it could be threatened or weakened by all sorts of Amendments. So, how do you get around that? The first step was the creation of “Fast Track.” Fast Track is a special rule where members of the Senate are unable to filibuster, unable to add amendments and can only vote up or down. It was created in 1974 under President Gerald Ford and is almost used exclusively in trade agreements like NAFTA. However, Fast Track has became a dirty word and so, in 2002, Congress changed the name to the Trade Promotional Authority  (TPA). As more countries signed onto the agreement, Congress finally brought up the TPA (Fast Track) for the TPP for a vote in May 2015. Going through the Senate first, even with its GOP majority, Big Business forces were afraid that it would not pass. So, in order to get more Democratic votes, the Senate coupled it with another law. This law was the Trade Adjustment Assistance Enhancement Act (TAA) – which would give compensation to workers who would be displaced by the TPP. The TPA-TAA (after barely getting past a filibuster) passed the Senate on 5/21/15 by a vote of 62-37 (Yeas: 48 GOP, 14 Dems, Nays: 5 GOP (including Rand Paul), 32 Dems & Independents (including Bernie Sanders).

The Counter Offensive by The Democrats

The bill passed by the Senate had specifically coupled the TPA with the TAA, meaning that the House had to pass both bills. House Republicans, were, then, surprisingly defeated when the Democrats voted to defeat the (Democratic favored bill) TAA on a vote of 126 – 302. Because the TAA lost, the coupled TPA became a symbolic vote. This was approved by a margin of 219-211 on June 11, 2015. It was a stunning defeat and for a moment it looked like the TPP was sunk.

Revenge of the Establishment and the GOP

The majority of the House of Representatives  (ironically, the Party of No) would not take “NO” as an answer. They went back to the drawing board and tried a gamble (based on conversations of members of the House and the Senate). The House decided to de-couple the bills and see if the TPA (the Fast Track Authority) could pass alone and have it sent to the Senate where it could possibly pass – with the TAA (Worker Relief) coming later. The vote to decouple the bill and send the TPA to the Senate occurred on June 18, 2015. The strategy worked. The vote was 218-208 (Yeas: 190 GOP, 28 Dems, Nays: 50 GOP, 158 Dems).

The ultimate showdown vote came down to the Senate on June 23, 2015. This issue was to pass the TPA solely on its own.. After much arm twisting from the Obama Administration, the TPA (Fast Track) passed 60-38 (Yeas: 47 GOP, 13 Dems, Nays: 7 GOP, 31 Dems & Ind.). With the TPA passed by the Senate by itself, there was no absolute need to pass the TAA (Worker Assistance plan). But, since President Obama said he wanted the TAA passed and had the power to veto the deal, the House of Representatives allowed the TAA to a vote which passed 286-138 on June 24, 2015.

TPA is signed by President Obama

The President signed the TPA and the TAA on June 29, 2015.

On February 3, 2016, all of the Trade Ministers have signed the Trans-Pacific Partnership in Auckland, New Zealand under the cover of night. Trade Representative, Michael Froman, signed for President Obama.

Where Do We Go From Here?

The Trade Promotion Authority (TPA) and The Trade Adjustment Assistance Enhancement Act (TAA) have both passed the Senate and the House and has been signed by the President. So, isn’t it the law? Well, not quite.

The next step for Obama will be to send Congress the legislative text of the agreement, which he is expected to do sometime before June. Once he does that, it starts a countdown clock: House and Senate lawmakers will have 90 legislative days—that’s days the chambers are in session—to formally vote on it.

Because Congress passed the “fast-track” bill last summer, lawmakers can’t change or amend any of the language in the version of the agreement that Obama sends to them. They must vote only to ratify it, or not, in its entirety. If Congress votes to ratify it, then Obama signs it, and it goes into effect—and becomes fully enforceable—30 days later.

So When will The TPP Become Law?

At the present time, the President has enough votes in both the Senate and in the House to pass now – since both Houses are under a GOP majority. However, the TPP is very unpopular with the public (and for good reason). Both Democratic Presidential candidates said they are against it. Senator Bernie Sanders actually has always voted against the TPP/TPA. Senator Clinton was not in office to vote on the TPP, she was previously for it, but, now, on the campaign trail she says she is against it. If she becomes President of the USA, would she approve it or veto it? I can not be sure, but it is more likely that it will pass even before she takes office. What if the Republicans win the Presidency? Only one GOP Presidential candidate even mentions the TPP and that is Donald Trump. The other are definitely for the TPP (even Ted Cruz who once voted against the TPA (Fast Track) only when he knew there were enough votes to pass, because just the month before, he voted for the TPA).

Because of the unpopularity of the TPP with the public and because it is an election year, votes at this time of the year will have severe consequences in November. Because of this, Senate Majority Leader, Mitch McConnell, and Speaker of the House, Paul Ryan, will not bring up the bill to be ratified until after the November elections. That is right, the TPP will be passed during the lame duck session, the time after the November election and before the new members are sworn in to office in January, 2017. Talk about your dirty tricks.

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Why are Free Trade Agreements Bad for the US economy

The reasons why the Free Trade Agreements are bad for the US economy are this: 1) the Free Trade treaties, like the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), eliminate import taxes of products into the United States, making foreign products much cheaper; 2) By agreeing to deal with these (less civilized) foreign countries, their countries, because their standard of living is so low, often pay workers (slave labor) extremely poorly without any benefits, so their products are much cheaper; 3) these countries devalue their money (which artificially makes the imports even cheaper); 4) because the Free Trade Agreements have banned quotas of imports into the country, these countries are legally able to “dump” (produce voluminously) and make imports even cheaper; and 5) American CEOs have taken advantage of these “rules” (which were made for their benefit) and have closed down American manufacturing plants, threw out millions of American workers, and move their manufacturing to places like China, Mexico and Vietnam – which makes our Trade Deficit outrageous – The US is losing $1 billion a day just to China.

Stop the TPP and save American jobs.

Trans-Pacific Partnership Full Text

This is the moment we have been waiting for The complete text for the Trans-Pacific Partnership. This is the agreement between with the United States with: Chile, Japan, Malaysia, Vietnam, Brunei, Australia, Canada, Mexico, New Zealand, Peru and Singapore. The TPP will drop taxes on imports into this country from these other countries. The United States already has one of he lowest import tax rates of all countries averaging 2.5% (with many countries sending their imported products into the U.S. with 0% tax). This loss of tax on imports has been blamed as one of the major reasons why U.S. companies have out-sourced their jobs to these favored countries, in order to take advantage of the lower costs incurred in these countries.

Source: TPP Full Text | United States Trade Representative

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TPP Full Text

TPP Final Table of Contents

Chapters

• Preamble
• 1. Initial Provisions and General definitions (Chapter Summary)
• 2. National Treatment and Market Access (Chapter Summary)
  • Annex 2-D: Tariff Commitments
    • Australia General Notes to Tariff Schedule
    • Australia Tariff Elimination Schedule
    • Brunei General Notes to Tariff Schedule
    • Brunei Tariff Elimination Schedule
    • Canada General Notes to Tariff Schedule
    • Canada Tariff Elimination Schedule
    • Canada Appendix A Tariff Rate Quotas
    • Canada Appendix B Japan Canada Motor Vehicle NTM
    • Chile General Notes to Tariff Schedule
    • Chile Tariff Elimination Schedule
    • Japan General Notes to Tariff Schedule
    • Japan Tariff Elimination Schedule
    • Japan Appendix A Tariff Rate Quotas
    • Japan Appendix B 1 Agricultural Safeguard Measures
    • Japan Appendix B 2 Forest Good  Safeguard Measure
    • Japan Appendix C Tariff-Differentials
    • Japan Appendix D Appendix between Japan and the United States on Motor Vehicle Trade
    • Japan Appendix E Appendix between Japan and Canada on Motor Vehicle Trade
    • Malaysia General Notes to Tariff-Schedule
    • Malaysia Tariff Elimination-Schedule
    • Malaysia Appendix A Tariff Rate Quotas
    • Mexico General Notes to Tariff Schedule
    • Mexico Appendix A, B and C Tariff Rate Quotas and Tariff Differentials
    • Mexico Tariff Elimination Schedule
    • New Zealand General Notes to Tariff Schedule
    • New Zealand Tariff Elimination Schedule
    • Peru General Notes to Tariff-Schedule
    • Peru Tariff Elimination Schedule
    • Singapore General Notes to Tariff Schedule
    • Singapore Tariff Elimination Schedule
    • US General Notes to Tariff Schedule
    • US Tariff Elimination-Schedule
    • US Appendix A Tariff Rate Quotas
    • US Appendix B Agricultural Safeguard Measures
    • US Appendix C Tariff Differentials
    • US Appendix D Motor Vehicle Trade
    • US Appendix E Earned Import Allowance Program
    • Viet-Nam General Notes to Tariff Schedule
    • Viet-Nam Tariff Elimination Schedule
    • Viet-Nam Appendix A Tariff Rate Quotas
• 3. Rules of Origin and Origin Procedures (Chapter Summary)
  • Annex 3-D: Product Specific Rules
  • Annex 3-D: Appendix 1—Automotive
• 4. Textiles and Apparel (Chapter Summary)
  • Annex 4-A: Textiles Product Specific Rule
  • Annex 4-A Appendix: Short Supply List
• 5. Customs Administration and Trade Facilitation (Chapter Summary)
• 6. Trade Remedies (Chapter Summary)
• 7. Sanitary and Phytosanitary measures (Chapter Summary)
• 8. Technical Barriers to Trade (Chapter Summary)
• 9. Investment (Chapter Summary)
• 10. Cross Border Trade in Services (Chapter Summary)
• 11. Financial Services (Chapter Summary)
• 12. Temporary Entry for Business Persons (Chapter Summary)
  • Annex 12-A: Temporary Entry for Business Persons
    • Australia
    • Brunei
    • Canada
    • Chile
    • Japan
    • Malaysia
    • Mexico
    • New Zealand
    • Peru
    • Singapore
    • Viet Nam
• 13. Telecommunications (Chapter Summary)
• 14. Electronic Commerce (Chapter Summary)
• 15. Government Procurement (Chapter Summary)
  • ​​Annex 15-A: Government Procurement
    • Australia
    • Brunei
    • Canada
    • Chile
    • Japan
    • Malaysia
    • Mexico
    • New Zealand
    • Peru
    • Singapore
    • United States
    • Viet Nam
• 16. Competition (Chapter Summary)
• 17. State-Owned Enterprises (Chapter Summary)
• 18. Intellectual Property (Chapter Summary)
• 19. Labour (Chapter Summary)
  • US-BN Labor Consistency Plan
  • US- MY Labor Consistency Plan
  • US-VN Plan for Enhancement of Trade and Labor Relations
• 20. Environment (Chapter Summary)
• 21. Cooperation and Capacity Building (Chapter Summary)
• 22. Competitiveness and Business Facilitation (Chapter Summary)
• 23. Development (Chapter Summary)
• 24. Small and Medium-Sized Enterprises (Chapter Summary)
• 25. Regulatory Coherence (Chapter Summary)
• 26. Transparency and Anti-corruption (Chapter Summary)
• 27. Administration and Institutional Provisions (Chapter Summary)
• 28. Dispute Settlement (Chapter Summary)
• 29. Exceptions (Chapter Summary)
• 30. Final Provisions (Chapter Summary)

Annexes

• Annex I: Non-Conforming Measures
  • Consolidated Formatting Note
  • Australia
  • Brunei
  • Canada
  • Chile
  • Japan
  • Malaysia
  • Mexico
  • New Zealand
  • Peru
  • Singapore
  • United States
  • Viet Nam
• Annex II: Non-Conforming Measures
  • Consolidated Formatting Note
  • Australia
  • Brunei
  • Canada
  • Chile
  • Japan
  • Malaysia
  • Mexico
  • New Zealand
  • Peru
  • Singapore
  • United States
  • Viet Nam
• Annex III: Financial Services
  • Consolidated Formatting Note
  • Australia
  • Brunei
  • Canada
  • Chile
  • Japan
  • Malaysia
  • Mexico
  • New Zealand
  • Peru
  • Singapore
  • United States
  • Viet Nam
• Annex IV: State-Owned Enterprise
  • Australia
  • Brunei
  • Canada
  • Chile
  • Malaysia
  • Mexico
  • New Zealand
  • Peru
  • United States
  • Viet Nam

 

Related Instruments

• Market Access Related
  • US- AU Letter Exchange re Recognition of FTA TRQs in TPP
  • US-AU Letter Exchange on Sugar Review
  • US-CA Letter Exchange on Milk Equivalence
  • US-CA Letter Exchange on Agricultural Transparency
  • US-CL Letter Exchange on Distinctive Products
  • US-CL Letter Exchange regarding Recognition of FTA TRQs in TPP
  • JP Exchange of Letters on Distinctive Products
  • JP to US Letter on Safety Regulations for Motor Vehicles
  • US-JP Letter Exchange on Operation of SBS Mechanism
  • US-JP Letter Exchange on Operation of Whey Protein Concentrate Safeguard
  • US-JP Letter Exchange regarding Standards of Fill
  • US-JP Letters related to the PHP
  • US-MY Letter Exchange on Auto Imports
  • US-MY Letter Exchange on Distinctive Products
  • US-NZ Letter Exchange on Distinctive Products
  • US-PE Letter Exchange on Distinctive Products
  • US-PE Letter Exchange on TRQs and Safeguards
  • US-VN Letter Exchange on Catfish
  • US-VN Letter Exchange on Distinctive Products of US
  • US-VN Letter Exchange on Distinctive Products of VN
  • US-VN Letter Exchange on Offals
• Textiles and Apparel Related
  • US-BN Letter Exchange on Textiles and Apparel
  • US-MY Letter Exchange on Registered Textile and Apparel Enterprises
  • US-SG Exchange on Letters on Textiles and US-SG FTA
  • US-VN Letter Exchange on Registered Textile and Apparel Enterprises

• Sanitary and Phytosanitary Related
  • US-CL SPS Letter Exchange regarding Salmonid Eggs

• Intellectual Property Related
  • US-AU Letter Exchange on Selected IP Provisions
  • US-AU Letter Exchange on Article 17.9.7(b) of AUSFTA
  • US-CA Letter Exchange on IP Border Enforcement
  • US-CL Letter Exchange re Geographical Indications
  • US-CL Letter Exchange re Article 17.10.2 of US Chile FTA
  • US-JP Letter Exchange re Copyright Term
  • US-MY Letter Exchange re Articles 18.41 .50 and .52
  • US-MY Letter Exchange re Geographical Indications
  • US-MX Letter Exchange re Geographical Indications
  • US-MX Letter Exchange re Tequila and Mezcal
  • US-PE Letter Exchange re Article 16.14.3 of US-Peru TPA
  • US-VN Letter Exchange on Biologics
  • US-VN Letter Exchange re Geographical Indications
• Services/Financial Services/E-Commerce
  • US-CL Letter Exchange regarding Express Delivery Services
  • US-VN Letter Exchange on Pharmaceutical Distribution
  • US-VN Letter Exchange regarding Electronic Payment Services
  • US-AU Letter Exchange on Privacy
• Temporary Entry
  • US-JP Letter Exchange re Temporary Entry

• Government Procurement
  • US-AU Letter Exchange on AUSFTA GP Thresholds
  • US-CA Letter Exchange re GP Thresholds
  • Letter Exchange US-CA-MX re GP Procedures
• SOEs
  • US-SG Letter Exchange on SOE Transparency

• Environment
  • US-CL Understanding regarding Fisheries Subsidies and Natural Disasters
  • US-MY Exchange of Letters on Committee to Coordinate Implementation of Environment Chapters
  • US-PE Understanding regarding Biodiversity and Traditional Knowledge
  • US-PE Understanding regarding Conservation and Trade
• Annex on Transparency and Procedural Fairness for Pharmaceutical Products and Medical Devices
  • US-AU Letter Exchange on Transparency and Procedural Fairness for Pharmaceuticals and Medical Devices
  • US-JP Transparency and Procedural Fairness for Pharmaceuticals and Medical Devices
  • US-PE Understanding re Transparency and Procedural Fairness for Pharmaceuticals and Medical Devices

 

US-Japan Bilateral Outcomes

• US-Japan Motor Vehicle Trade Non-Tariff Measures
  • US-JP Letter Exchange on Certain Auto NTMs
  • JP to US Letter on Motor Vehicle Distribution Survey
• Japan Parallel Negotiations on Non-Tariff Measures
  • US-JP Letter Exchange on Non-Tariff Measures

The TPP comes Knocking on Your Door on Tuesday

House Sends Trade Bill Back to Senate in Bid to Outflank Foes – The New York Times.

One of the most important legislative battles of this century comes back to the Senate on Tuesday, June 23, 2015. For those who do not know what is going on, I am not surprised (because a lot of it is secret).  But I will simplify it all: what is the Trans-Pacific Partnership; what is Fast Track; who is for it and who is against it; the expected results of the TPP and the legislative wrangling that has led us up to Tuesday’s crucial vote.

What is the Trans-Pacific Partnership?

For those of you who know nothing at all about The Trans-Pacific Partnership (TPP), it is a Free Trade treaty between the USA, Canada, Mexico, Australia, New Zealand, Brunei, Chile, Peru, Japan, Vietnam, Thailand and Singapore. What “Free Trade” Treaties do is it eliminates import taxes and therefore, theoretically, increases trade between countries. So, why have import taxes in the first place? Right? Nobody likes taxes.

The Reason For Import Taxes

After the US Constitution was ratified, our Founding Fathers, at the very beginning, had placed a 95% tax on all imports (like other countries did at the time). The reason: they wanted to assure that American businesses had a fair shot at staying in business (so England did not overrun U.S. businesses) and to raise money for the government. Through the 20th Century, the US gradually decreased rate on import taxes.

Free Trade Treaties

Then, in 1990, US businesses got even more aggressive and start pushing “Free Trade” Treaties – eliminating all import tax form countries that had treaties with the U.S.. The first modern Free Trade Treaty was the North American Free Trade Act (NAFTA) between the US, Canada and Mexico, which became law on January 1,1994. The next year, and an even bigger Free Trade Treaty came into being on January 1, 1995, called the World Trade Organization (WTO) which presently encompasses 144 countries with China joining in 2001. Today, the average import tax rate into the US is 2.5% (which is almost non-existent).

What is the Result of Free Trade Treaties?

The results of Free Trade Treaties has been very mixed. The winners: people who like $6 shirts from Old Navy (and don’t care how it got that way); China; India; Multi-national Corporations; and anti-union people. The losers: small businesses, the American middle class, small towns (the multiple manufacturing ghost towns caused by offshoring), manufacturing jobs and its related jobs, and multiple other conditions (see the movie “The True Cost“).

Why Have Free Trade Treaties been Bad for the United States?

When Free Trade Treaties were initially discussed, economists knew that there would be loss of some US jobs, especially the industrial type jobs. It was 1994, America was in the middle of an economic boom, loss of US jobs didn’t seem to be such a big deal. However, the economists were greatly off in their predictions. According to the Economic Policy Institute, NAFTA costs the US 3.1 million jobs (examples: car manufacturers moved many plants to Mexico; Hersheys moved all of its operations to Mexico), and the World Trade Organization costs the US over 20 million jobs (even a recent report by the Congressional Research Service acknowledges that America lost over 2 million factory jobs just to China).

Why were the economists so far off?  First, globalization – all of the world became instantly interconnected by telephone, internet and travel. Because of this interconnectedeness, US corporations suddenly became multi-national corporations to take advantage of several issues: decreased of costs of wages, minimal safety regulations for workers, minimal regulation of pollution standards, subsidies from the US government to move their US companies overseas, avoid American taxation, and special kickbacks to CEOs from foreign governments to take advantage of the 0% import tax into the United States. To become multi-national corporations, CEOs had to offshore millions of U.S. jobs, not only manufacturing jobs, but also technical and service jobs. And it is still going on.The US offshored more than 2.6 million jobs in 2013 and there is a potential of offshoring another 25% of the American workforce or around 40 million jobs in the next few years according to the Congressional Research Service. These are all products of the Free Trade Treaties.

For more details (and graphs and citations) on the Global economy see my Blog entry: The global economy: A Short Lesson.

Who Are For the TPP and Who Are Against It?

The people who are for are the ones that wrote the Trans-Pacific Partnership, obviously. The people who wrote the TPP: 28 trade advisory committees have been intimately involved in the negotiations. Of the 566 committee members, 480, or 85 percent, are senior corporate executives or representatives from industry lobbying groups. Many of the advisory committees are made up entirely of industry representatives. From leaked documents, we know that Big Pharma is a big player. The TPP has written sections to increase the length of their drug patents and make generics more difficult to produce.  Big Ag has been a big player and they have been trying to get countries to accept their GMO vegetables/fruits or hormonally treated livestock. We also know that intellectual property is also another section that has been leaked, which means this involves number of large corporations, Wall Street as well as Hollywood/Big Media. So, in a couple of words the ones that wrote the TPP: Big Businesses (small companies not allowed).
Politically, who supports Big Business? The biggest supporter is the Republican Party. Even most Tea party members support the TPP, see the voting record. Another group of supporters are big corporate Democrats, called “bought” Democrats, which are less than 15% of all Democrats. And, of course, President Barack Obama.

Who is against the TPP? The middle class, the poor, progressives, Tea Party members who have seen US jobs offshored, people who care about the US economy and its future as well as organized labor. If you do see anything printed in the newspaper about the TPP, it says that the only opponents to the TPP is organized labor. Really?!! Organized labor comprises only 7% of private businesses. It is the ordinary citizens who are against the TPP and we don’t even get to vote on this. Not only do we not get to vote on the issue, we are forbidden to read it. And Big Media rarely report anything about the TPP. But, the grassroots movement from the opponents of the TPP have been making the legislative process bumpy.

The Legislative Process of the TPP

Now this is where things get a little hairy. After years and years of private negotiations, the TPP finally was brought to Congress, just at a time when things seemed favorable for passage, a Republican majority in both the Senate and The House. To get around the usual wrangling in Congress, the President with the permission of Congress is trying to pass the Trade Promotion Authority – which is used to be called “Fast Track” (probably changed the name to confuse the public), which means Congress can not debate aspects or add amendments to the bill, just an up or down vote. This was introduced to the Senate, however it could not pass the 60 vote filibuster needed to send it to the House. So, to entice some Democrats, the Senate added another bill that would help out workers that will be displaced by the TPP, called the Trade Adjustment Assistance Enhancement Act (TAA). These two bills were coupled and sent to the House of Representatives to be passed. However, the House couldn’t get enough votes to pass the coupled package. Then, this where the wrangling starts. The House of Representatives then de-coupled the two bills and just voted on the Fast Track (TPA) and passed it on a 219-211 vote. However, it is not law because the two bills were de-coupled. So, the House just kicked the can over to the Senate to see if they can pass Fast Track without the Trade Adjustment Assistance Enhancement Act. The Senate vote is scheduled for Tuesday, June 23rd. Write to your Senators. We have seen what previous Free Trade agreements have caused. The TPP is absolutely no different. And China can join this treaty as well. Why President Obama is pursuing this is beyond me. Stop The TPP. My prediction: The TPP, if passed, will cause a loss of more than 5 million US jobs in 15 years and make income inequality worse.

 

The Trade Debate Moves to the House

The Trade Debate Moves to the House | Alliance for American Manufacturing.

The Trans-Pacific Partnership (TPP), a large Free Trade deal, is just one small hurdle into becoming law. The TPP has passed the Senate and is now on to the House of Representatives. The TPP is an agreement between the United States and other countries: Australia, Brunei, Canada, Chile, Peru, Malaysia, Mexico, New Zealand, Singapore, Vietnam, and Japan. It effects 40% of all of the world’s economy. The TPP would eliminate import taxes from these countries into the U.S. and if history is any indication (see NAFTA – loss of 3.1 million U.S. jobs and the World Trade Organization – loss of 21 million U.S. jobs) we should see an increase in the offshoring of U.S. jobs. Below is the article:

 

The Trade Debate Moves To The House  written May 26, 2015 by Taylor Garland from the Alliance for American Manufacturing

The House will now have the chance to make trade work for American manufacturers and workers.

The Senate worked late on Friday to pass several bills before the holiday recess, one of which was the notorious Trade Promotion Authority (TPA). The bill passed the Senate 62-37 without strong and enforceable currency rules, regrettably.

That’s not to say the Senate didn’t have the chance. The Senate voted to reject the Portman-Stabenow amendment to address currency manipulation with strong and enforceable provisions in TPA on Friday afternoon by a vote of 48-51.

But all is not lost in the trade debate for American manufacturers and workers.

The Obama administration and Republican leadership in the House may need to extend an olive branch — trade enforcement — to Members of Congress who represent districts that have been negatively impacted by unfair trade. There are two bills in the House that that would make it easier for U.S. industries to fight back against unfair foreign trade practices.

The first, the Trade Facilitation and Trade Enforcement Act, overwhelmingly passed the Senate 78-20. This bill includes the Schumer Currency Amendment that directs the Comerce Department to investigate undervalued currencies as a subsidy under U.S. trade remedy laws. The second enforcement measure, the American Trade Enforcement Effectiveness Act, was introduced in the House last week by Rep. Mike Bost (R-Ill.).  Both bills are backed by several steel industry leaders.

The House of Representatives has the chance to stand up for American businesses and workers who face of flood of illegally dumped imports. “Trade enforcement and currency manipulation must also be addressed as a part of Trade Promotion Authority legislation, or trade agreements such as the Trans-Pacific Partnership will fail to deliver for American workers,” said Alliance for American Manufacturing President Scott Paul.

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The legislative wrangling in trying to pass the Treaty is interesting. It pits politicians whose areas that do not depend on any manufacturing (they are for the TPP) against politicians that still have some remnants of American manufacturing who are verbally against it. Since America does not have much manufacturing anymore, the manufacturing politicians are in the minority. And to cope with the expected loss of U.S. jobs, these politicians have worked hard to add an amendment to compensate for the Americans that will lose their jobs. Obviously, corporate America does not want this amendment. And corporate America has a history of looking for quick profits at the expense of America’s future.

It is truly amazing that this big news which will cause the loss of millions of U.S. jobs, yet, gets no media coverage. In fact, if you ever read the rare newspaper article, it is no mistake that they avoid using the terms: “Free Trade” or the Trans-Pacific Partnership. Reuters’ newspaper recently did a poll about “The Trade Policy”, 56% of Americans were for it! There is a major problem with this survey: I know that less than 10% of Americans know a single thing about the TPP. How could they? Nobody on the American news mentions it and no one can not even read about the actual legislation. So, why have a poll about an issue that nobody has ever heard of? Obviously, it is a ploy to sway public opinion.

Consumers Reports reported that more than 80% of Americans would like to buy American made products, even if it costs more. However, there is a giant business conglomerate that doesn’t want you to buy anything American and if it has it’s way, you won’t even be able to tell whether anything is “Made in the USA.” It is called the World Trade Organization. Their agenda is to offshore all American manufacturing for increased corporate profits and to end labeling of all products. They have already been successful in repealing laws that says where meat comes from (Country of Origin Labeling [COOL]) and they have passed legislation so that Americans can not know when chickens are processed in China and then sold in the USA. It is just a tiny step until they repeal the labeling of clothing, appliances, automobiles, food, etc (obviously objects “made in China” are going to suffer when it goes directly up against “made in USA”- you saw the Consumers Reports article didn’t you?).

The Trans-Pacific Partnership is bad for America’s present and future. Especially when you consider that China (which is the world’s largest economy – thanks to the WTO) joins the TPP – which it can do at any time. NAFTA and the World Trade Organization has put American manufacturing and the American middle class on its deathbed, the TPP is NAFTA on steroids, and it will nail the coffin shut and bury our future 6 feet under. Why is this Free Trade Treaty any different than the other Free Trade treaties (NAFTA, WTO)?  It is exactly the same.  Conservatively, it will cost the United States over five million jobs (and it won’t just be manufacturing jobs) over the next 15 years. You can take that to the bank. Got any good ideas on how to bring good paying jobs into the United States over the next 15 years? No? Funny, nobody does. Certainly, free trade deals will not do this.

Stop the TPP. Make the government reveal the Trans-Pacific Partnership to the public.

Perils of Globalization When Factories Close and Towns Struggle

Perils of Globalization When Factories Close and Towns Struggle – NYTimes.com.

With the legislation of the Trans-Pacific Partnership (a free Trade treaty) coming perilously close to passing, we should look at a much smaller fore-runner of the TPP, it was called NAFTA – The North American Free Trade Agreement between the U.S., Canada and Mexico. The below article was written by The New York Times. And one of the results from NAFTA is a unique phenomenon – it caused “manufacturing ghost towns”. It is very difficult to rehab these small little towns that were devastated by NAFTA (and the World Trade Organization).

Perils of Globalization When Factories Close and Towns Struggle

From the New York Times

By BINYAMIN APPELBAUM MAY 17, 2015

Michael Patrick by the defunct Maytag factory in Galesburg, Ill., last week. Credit Ryan Donnell for The New York Times

GALESBURG, Ill. — Even in this city of abandoned factories, it is possible to see some of the benefits the United States reaps from increased foreign trade: At the rail yard, where boxcars of bargain-price Asian goods are routed to American consumers; at the nearby slaughterhouse, where pigs are packaged for the global market; and at Knox College, where almost 10 percent of the students now come from foreign countries.

It is also hard to miss the enduring costs. In 2004, Maytag shut down the refrigerator factory that for decades was Galesburg’s largest employer and moved much of the work to Mexico. Barack Obama, then running to represent Illinois in the Senate, described the workers as victims of globalization in his famous speech that year at the Democratic National Convention.

A decade later, many of those workers are still struggling. The city’s population is in decline, and the median household income fell 27 percent between 1999 and 2013, adjusting for inflation.

George Carney, who drove a forklift until the day the factory closed, and then found work as a bartender, is now receiving federal disability benefits. He says he is bitter that American policy makers smoothed Maytag’s road to Mexico by passing the North American Free Trade Agreement in the early 1990s.

“I don’t believe in laying someone off, in taking away someone’s livelihood just so other people can make more money,” Mr. Carney said as he nursed a beer in a windowless bar on the banks of the Mississippi River. “Why would I want to destroy that person? Why would I want to destroy lives?”

It is one of the basic principles of economics that trade is good and more trade is better. But as Mr. Obama presses Congress for the authority to negotiate a new generation of trade deals, the struggles of Galesburg illustrate why some economists have come to doubt the relevance of that orthodoxy. The costs of globalization have been greater and more enduring than they expected, and government efforts to mitigate the impact on American workers have often proved insufficient.

“I think what we’ve learned is that U.S. labor markets aren’t as flexible and self-correcting as I think we had presumed,” said Gordon Hanson, an economist at the University of California, San Diego. “The uneasiness I have about the way we’ve handled globalization is not so much globalization itself. It’s that if you don’t have the right safety net, you’re going to impose an enormous amount of hardship.”

There is also mounting evidence that the benefits of globalization have accrued disproportionately to upper-income households, while the costs have fallen heavily on the less affluent, contributing to the rise of economic inequality.

The Obama administration has presented the proposed agreements — one with nations that border the Pacific Ocean, the other with Europe — as, in part, a shield against globalization that would require other nations to move closer to American standards for environmental protection, worker rights and intellectual property.

But the administration and many outside economists say further trade, despite the negatives, is still clearly beneficial.

David Weinstein, a Columbia University economist, said the image of downtrodden Galesburg should be set alongside the prosperity of Silicon Valley, because the decline of manufacturing in the United States helped free resources to feed the high-tech boom.

“There was a sense that by losing the ability to produce computer chips, we were going to see the American electronics industry collapse, and it turns out that those cheap imported electronic components were just the thing that all of these companies needed,” he said. “What these critiques miss systematically is that the losers know who they are, but the winners don’t know who they are yet.”

Drop in the Bucket

Trade deals are at the center of the political debate about globalization, but for all the sound and fury they generate, recent deals have played only a small role in the expansion of global trade. In 2013, on the 20th anniversary of Nafta, the Congressional Research Service reviewed the research and concluded it was not that big a deal. [Well not compared to the WTO -Ed.]

“In reality, Nafta did not cause the huge job losses feared by the critics or the large economic gains predicted by supporters,” the report concluded.

[Editor’s note: the report doesn’t say how many U.S. jobs that were lost – some sources have said as little as 670,000 jobs and as high as 3.1 million jobs. Before NAFTA, the trade between U.S, and Mexico went from (1993) a $1.7 Billion surplus to (2012) $61.4 Billion deficit. Before NAFTA, there were zero cars imported into the USA, now Mexico has imported $40.1 Billion vehicles into the USA].

Since Nafta, the United States has made trade agreements with 17 other countries, but the estimated impact of those deals, taken together, is even smaller — a few snowflakes added to a snowball already rolling downhill.

The seismic shift came after World War II, when the United States and other developed nations began to minimize tariffs and other barriers. Global trade grew as industrialization spread, particularly in China, and thanks to innovations including the standardized shipping container and the Internet.

Tracy Warner, who worked at the factory for 15 years, is now a teacher’s assistant. Credit Ryan Donnell for The New York Times

Just as individuals benefit by working in one field and using their earnings to pay for other goods and services, economists contend that nations, too, prosper by specializing: exporting what they have and importing what they want.

A 2005 study by the Peterson Institute for International Economics, a research group in Washington that is a strong proponent of trade deals, estimated that embracing trade had added about 7.3 percent to America’s economic output — or about $10,000 in annual income for every household in the United States.

But the benefits are not distributed evenly. Trade increases overall prosperity by eliminating less productive jobs. In theory, the workers find new jobs. In practice, studies by Mr. Hanson and other economists show that in cities like Galesburg, global competition is increasing unemployment and reducing wages.

Josh Bivens, an economist at the liberal Economic Policy Institute, estimates that increased globalization, aided by a strong dollar that led to a persistent trade deficit, reduced the annual earnings of the roughly 70 percent of American workers without college degrees by about $1,800.

Joseph Stiglitz, a Columbia University economist and Nobel laureate, said the magnitude of these losses was large enough that increased trade may now be harming the American economy.

“The argument was always that the winners could compensate the losers,” Mr. Stiglitz said. “But the winners never do. And that becomes particularly relevant when we have a society with as much inequality as we have today.”

Few Job Options

Richard Lindstrom, whose family has owned an appliance store on Galesburg’s Main Street for the last 89 years, said sales fell when Maytag left. But that was about the same time he started selling many imported high-definition televisions.

“We rode that crest, and it really offset the drop in appliance sales,” he said.

Some Maytag workers were able to find better jobs. Mark Semande is now a foreman on the BNSF railroad, which has prospered greatly from increased trade. He made $14.50 an hour at the factory. Now he makes $28.93. With overtime, he estimates that his pay has tripled.

But many of the 1,600 Maytag workers were not as fortunate, according to Chad Broughton, a lecturer in public policy at the University of Chicago who chronicled Galesburg’s struggles in his book, “Boom, Bust, Exodus.”

Tracy Warner, who worked at the factory for 15 years, has not come close to matching her former salary of about $37,000 a year. She works as a teacher’s assistant by day and a janitor by night and makes about $21,000.

Mr. Semande — whose father also worked at the factory — said he expected that his two daughters, ages 13 and 15, would move away when they grow up. “Maybe they could find jobs and live in the community,” he said, “but not if they want to do as well as us.”

Downtown, Lindstrom’s Appliances displays an early refrigerator. Credit Ryan Donnell for The New York Times

Trade also tends to reduce prices, and there is evidence that lower-income households may benefit disproportionately, because they spend a larger share of income than wealthier households on the goods with the largest price declines. This Walmart effect may partly offset the distribution of income gains.

A study published last year estimated that international trade had lifted the purchasing power of lower-income American households, at the 10th percentile of the income distribution, about 62 percent. For wealthy households, at the 90th percentile of the income distribution, the power increase was 3 percent.

The variety of imports has also roughly tripled since the 1970s, according to a 2006 study that Mr. Weinstein, the Columbia economist, helped write. “We benefit from the fact that it’s no longer just a choice between Maxwell House and Folger’s,” he said.

Walmart opened a supercenter in Galesburg in 2007, but Mr. Broughton said the arrival of the store could hardly offset the loss of the factory.

“The decline in the quality of life for working-class families has not been nearly matched by the low, low prices,” he said. “Maybe those diffuse benefits have benefited America more generally. But it’s not the case in Galesburg.”

Lying Idle

President Obama returned to Galesburg in 2013 to deliver an economic policy speech at Knox College. “Let’s tell the world that America is open for business,” he said. “I know there’s an old site right here in Galesburg, over on Monmouth Boulevard — let’s put some folks to work.”

But most of the old factory has been demolished. The last trace of its former life is a “Maytag Drive” street sign. The last refrigerators to roll off the line sit in a makeshift museum at the back of a downtown antiques mall.

Michael Patrick, who started working at the factory in 1959 and became a senior union official representing workers throughout the region, said job losses were nothing new. Companies went out of business, mechanized, moved to new cities. He recalled that in the 1970s, the workers who made the shells of refrigerators were replaced by a new machine the size of a football field.

The difference in recent decades, he said, is the absence of new companies.

But Mr. Patrick is not sentimental about what he views as the end of manufacturing in Galesburg. He said he focused on getting as much funding as possible to help his members train for new careers. He went to work after high school, he said, partly because there was no junior college in Galesburg. Now there is.

“Manufacturing was for people like me,” Mr. Patrick, who is now 73, said.

When Ms. Warner, 49, learned that the plant would close, she finished an associate’s degree at the local community college, then won a share of that training money to pursue a degree in communications at Western Illinois University.

But two years of tuition was not enough to reconstruct her life.

She is proud of the degree, but it has not helped her find a job. She lacks professional experience, and jobs in Galesburg are scarce. She has a teenage son and she does not want to move.

“I just needed a little more help,” she said. “I didn’t ask for my job to be taken out of the country.”

Thanks to the Alliance for American Manufacturing for pointing out this article.

Deal Reached on Fast-Track Authority for Obama on Trade Accord – NYTimes.com

Deal Reached on Fast-Track Authority for Obama on Trade Accord – NYTimes.com.

Deal Reached on Fast Track Authority For Obama on Trade Accord – NY Times

By JONATHAN WEISMANAPRIL 16, 2015

Before a Senate Finance Committee hearing on the trade pact Thursday: Senator Robert Menendez, seated at table, and standing from left, Senators Benjamin L. Cardin of Maryland and Ron Wyden of Oregon; Treasury Secretary Jacob J. Lew; and Michael Froman, the United States trade representative. Credit Stephen Crowley/The New York Times

WASHINGTON — Key congressional leaders agreed on Thursday on legislation to give President Obama special authority to finish negotiating one of the world’s largest trade accords, opening a rare battle that aligns the president with Republicans against a broad coalition of Democrats.

In what is sure to be one of the toughest fights of Mr. Obama’s last 19 months in office, the “fast track” bill allowing the White House to pursue its planned Pacific trade deal also heralds a divisive fight within the Democratic Party, one that could spill into the 2016 presidential campaign.

With committee votes planned next week, liberal senators such as Sherrod Brown of Ohio are demanding to know Hillary Rodham Clinton’s position on the bill to give the president so-called trade promotion authority, or T.P.A.

Trade unions, environmentalists and Latino organizations — potent Democratic constituencies — quickly lined up in opposition, arguing that past trade pacts failed to deliver on their promise and that the latest effort would harm American workers.

The deal was struck by Senators Orrin G. Hatch of Utah, the Finance Committee chairman; Ron Wyden of Oregon, the committee’s ranking Democrat; and Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Ways and Means Committee. It would give Congress the power to vote on the more encompassing 12-nation Trans-Pacific Partnership once it is completed, but would deny lawmakers the chance to amend what would be the largest trade deal since the North American Free Trade Agreement of 1994, which President Bill Clinton pushed through Congress despite opposition from labor and other Democratic constituencies.

While supporters have promised broad gains for American consumers and the economy, the clearest winners of the Trans-Pacific Partnership agreement would be American agriculture, along with technology and pharmaceutical companies, insurers and many large manufacturers that say they could also expand United States’ exports to the other 11 nations in Asia and South America that are involved.

President Obama embraced the legislation immediately, proclaiming “it would level the playing field, give our workers a fair shot, and for the first time, include strong fully enforceable protections for workers’ rights, the environment and a free and open Internet.”

“Today,” he added, “we have the opportunity to open even more new markets to goods and services backed by three proud words: Made in America.”

But Mr. Obama’s enthusiasm was tempered by the rancor the bill elicited from some of his strongest allies. To win over the key Democrat, Mr. Wyden, the Republicans agreed to stringent requirements for the deal, including a human rights negotiating objective that has never existed on trade agreements.

The bill would make any final trade agreement open to public comment for 60 days before the president signs it, and up to four months before Congress votes. If the agreement, negotiated by the United States trade representative, fails to meet the objectives laid out by Congress — on labor, environmental and human rights standards — a 60-vote majority in the Senate could shut off “fast-track” trade rules and open the deal to amendment.

“We got assurances that U.S.T.R. and the president will be negotiating within the parameters defined by Congress,” said Representative Dave Reichert, Republican of Washington and a senior member of the Ways and Means Committee. “And if those parameters are somehow or in some way violated during the negotiations, if we get a product that’s not adhering to the T.P.A. agreement, than we have switches where we can cut it off.”

To further sweeten the deal for Democrats, the package includes expanding trade adjustment assistance — aid to workers whose jobs are displaced by global trade — to service workers, not just manufacturing workers. Mr. Wyden also insisted on a four-year extension of a tax credit to help displaced workers purchase health insurance.

Both the Finance and Ways and Means committees will formally draft the legislation next week in hopes of getting it to final votes before a wave of opposition can sweep it away. “If we don’t act now we will lose our opportunity,” Mr. Hatch said.

At a Senate Finance Committee hearing Thursday morning, Jacob J. Lew, the Treasury secretary, and Michael Froman, the United States trade representative, pleaded for the trade promotion authority.

“T.P.A. sends a strong signal to our trading partners that Congress and the administration speak with one voice to the rest of the world on our priorities,” Mr. Lew testified.

Even with the concessions, many Democrats sound determined to oppose the president. Representative Sander Levin of Michigan, the ranking Democrat on the House Ways and Means Committee, condemned the bill as “a major step backward.”

The A.F.L.-C.I.O. and virtually every major union — convinced that trade promotion authority will ease passage of trade deals that will cost jobs and depress already stagnant wages — have vowed a fierce fight. The A.F.L.-C.I.O. announced a “massive” six-figure advertising campaign to pressure 16 selected senators and 36 House members to oppose fast-track authority.

“We can’t afford to pass fast track, which would lead to more lost jobs and lower wages,” said Richard Trumka, president of the A.F.L.-C.I.O. “We want Congress to keep its leverage over trade negotiations — not rubber-stamp a deal that delivers profits for global corporations, but not good jobs for working people.”

In all, the bill sets down 150 negotiating objectives, such as tough new rules on intellectual property protection, lowering of barriers to agricultural exports, labor and environmental standards, rule of law and human rights. Reflecting the modern economy, Congress would demand a loosening of restrictions on cross-border data flow, an end to currency manipulation and rules for competition from state-owned enterprises.

Businesses and business lobbying groups lined up behind the bill as fast as liberal groups and unions arrayed in opposition. “With facts and arguments, we’ll win this trade debate and renew T.P.A.,” vowed Thomas J. Donohue, president of the U.S. Chamber of Commerce.

It all made for a dizzying change of tone in a Washington where partisan lines have hardened. Republican leadership fell firmly behind T.P.A. Business groups battling the president on climate change, taxes and health care urged Congress to expand his trade powers.

But a sizable minority of Republicans — especially in the House — are reluctant to give the president authority to do anything substantive. Whether Republican leaders can get their troops in line, and how Mr. Obama can round up enough Democratic votes, might be the biggest legislative question of the year.

Mr. Reichert, the Republican lawmaker, said 20 or fewer Democrats currently support the measure in the House; last year, House Speaker John A. Boehner of Ohio said he would need 50.

Senator Charles E. Schumer of New York, the third-ranking Democrat, said he will demand the inclusion of legislation to combat the manipulation of currency values, especially by China. “China is the most rapacious of our trading partners, and the stated goal of this deal is to lure these other countries away from China,” Mr. Schumer said. “It’s not at all contradictory to finally do something with China’s awful trade practices.”

Mr. Brown said the negotiating objectives must be turned into solid requirements. “I don’t think negotiating objectives without more enforcement mechanisms get you very far,” he said. “Negotiating objectives are, ‘Hey U.S.T.R., try to get this,’ and they’ll say, ‘We tried.’ We need something better than that.”

Others appeared dead set against the accord.

“Over and over again we’ve been told that trade deals will create jobs and better protect workers and the environment,” said Senator Bob Casey, Democrat of Pennsylvania. “Those promises have never come to fruition.

Editor’s Comment

We knew this story was coming down the pipe, but it was hard to follow it because no major news outlet either: doesn’t think this is news worthy (which I doubt) or the corporate heads have been suppressing the story (highly likely).  In short, Congress has approved  “Fast Track”  (official term is Trade Promotion Authority – a special rule passed by Congress just for Trade agreements) meaning you either vote up or down on the bill.  There are no amendments and no filibusters allowed. Another little known fact is that The Trans Pacific Partnership (TPP) is a treaty and ordinary treaties require a 2/3 majority vote. However this is a “special” executive treaty and only requires a majority to pass.

The TPP is a Free Trade Deal like NAFTA and the World Trade Organization which has caused massive offshoring of millions of jobs (NAFTA 3.2 million and WTO over 20 million). So why wouldn’t this Free Trade Agreement offshore millions more? It would. In fact, in a hard fought concession, displaced workers could get compensation for four years. What a great strategy, we know the TPP will destroy our economy, so why don’t we have the government pay for the millions of new unemployed workers?

This is a story of unadulterated corporate greed – haven’t we had enough? Spread the word and stop the TPP and put a halt to all of the underhanded corruption in Washington. Stop the TPP.

Labor unions ramp up opposition to Obama trade agenda | TheHill

Labor unions ramp up opposition to Obama trade agenda | TheHill.

From The Hill April 13, 2015

By Vicki Needham – 04/13/15 12:29 PM EDT

The AFL-CIO is ramping up its efforts this week to convince Congress to oppose giving the White House fast-track authority on trade.

The labor group is holding events across the country as part of a “week of action” on trade.

“The week of action will increase the political momentum and grassroots opposition to fast track the same week Congress is expected to begin consideration of a trade promotion authority bill,”  the AFL-CIO said in a statement.Lawmakers, labor union leaders and their members will hold a rally Wednesday on Capitol Hill and follow that up with 50 grassroots events around the country and in more than a dozen countries on Saturday as part of the weeklong effort.

Sens. Sherrod Brown (D-Ohio) and Al Franken (D-Minn.) and Reps. Rosa DeLauro (D-Conn.) and Keith Ellison (D-Minn.), as well as United Steelworkers President Leo Gerard, AFL-CIO Executive Vice President Tefere Gebre and Sierra Club National Campaign Director Debbie Sease, are among those expected to attend the Wednesday event in the Upper Senate Park on Capitol Hill.

The efforts include letter-writing campaigns, phone calls, petitions and door-knocks.

“The grassroots movement against fast track is nationwide — and it’s not just labor,” said Celeste Drake, the AFL-CIO’s trade policy specialist.

“It’s folks from the environmental, consumer, faith, farm, business and good governance communities as well. And we’re having an impact.”

Editor’s Note

Stop the TPP. No more Free Trade Agreements our import tax is already so incredibly low at 1.5%. No more offshoring of US jobs. The Free Trade treaty the TPP is very close to coming up for discussion – it could be any day. Call your Congressmen today.