Quotation: “Our so-called free trade policies have been a disaster for the United States ever since NAFTA was enacted. Before NAFTA went into effect 20 years ago, we never had had a trade deficit of more than $135 billion. Every single year since then, for 20 years in a row, our trade deficit has been over $135 billion. Our last 14 trade deficits have been the 14 largest trade deficits not only in our history, but in the history of the entire world. And the result of that is that we’ve gone from $2 trillion in surplus with our trade to $11 trillion in debt. And we’ve lost five million manufacturing jobs and roughly 15 million other jobs in the last 20 years. So we’ve lost twice: We’ve lost the jobs, and we’ve also gone deeper and deeper into debt.
What’s happening is not that we’re buying goods and services from foreigners and they’re buying an equal amount of goods and services from us-that’s the way free trade is supposed to work. What’s actually happening is that we’re buying our goods and services from foreigners, and they are taking the money that we give to them for that, and buying our assets.
That has all sorts of consequences for our economy. First we lose those jobs. Secondly, it makes American income and wealth more and more unequal. The reason why we have the fourth most unequal distribution of wealth in the world is because of fake trade. The reason why we have a bizarre, and at this point unprecedented, “quantitative easing” [monetary] policy, where the government uses the cash in our pockets to buy up assets and drive those asset prices up further and further, is because of fake trade. The reason why we have a federal deficit is because we have a trade deficit. The TPP, “fast-track,” the Transatlantic version of TPP, these dramatically increase the amount of countries with whom we have this relationship – they quadruple them – and they put us on a fast track to Hell, where America is nothing but cheap labor and debt slavery. . . .” (Representative Alan Grayson, Democrat, Florida)
Editor’s note: Grayson is standing for the US Congress.
Comment
Wait long enough and anger and frustration will wither and die. This is what is happening to TTP and TTIP, the so-called “Trade agreements”. The proponents of these agreements know this very well, so couldn’t care less about odd protests against them. Nonetheless, let me try.
Neither of these trade agreements have much to do with trade (import duties now being very small). Rather, they are vehicles designed for two objectives – reining in Chinese industrial power and allowing well-connected corporations to do business unchecked by any national rules. They are neo-liberal, secretive, predatory deals which allow corporations to sue any country that stands in their way, using small panels of business lawyers to sue governments. The deals will protect “intellectual property” (patents and trade marks) for much longer, ensure bigger profits for pharmaceutical giants, protect makers of cancerous cigarettes and diabetes-inducing sugar-dense canned drinks, and, of course “financial products”.
The agreements are power-grabs at the expense of governments and their people. The state has become a predator, and the corporations are its guardians, paying for elections, choosing pliant Congressmen and making sure that the dice are loaded in their favor. We should no longer listen to the “Miss Mary Sunshines” who tell us it can’t be that bad in a democracy. It is. Bit since we can do very little about it, except wield pitchforks, it’s best to spend calm times in an Epicurean garden.
Yes, but I’m going to slap a placard on the Garden wall: DOWN WITH THE EVIL TPP!
Yeah but isn’t it as true to say that the corporations are the predators and the state, just as Plato prescribed, is the Guardian, at-the-ready to rescue, enable, and enjoy the near-monopoly of force? How can people not see this?
Trade agreements between similarly developed countries are mostly reasonable- they simply expand the market in which companies can sell to. The problem with the Trans-Pacific Partnership is that is is between a highly developed country- the United States- and much less developed Asian countries. There is simply no way the US can compete given its high wage costs and relatively high taxes to fund generous social security programmes. Under the trade agreement, there would be nothing stopping corporations from outsourcing jobs to areas where it will always be cheaper. And although Americans may benefit from slightly cheaper consumer goods, this will be more than offset by the loss of jobs required for those goods to be made in the first place. The rich would get richer because their profit margins would be wider as a result of lower labour costs. But the poor would lose good manufacturing jobs, and would have to work in the low-paid service sector.
There’s also a moral argument to be made here. Its simply wrong to make your economy so dependent on services. Not everyone is academic (I’m speaking as someone who is), so not everyone will be suited to working in an office. There must be other well-paid things to do. This can partly be achieved by spending a greater proportion of GDP on infrastructure upgrades, which would create jobs and make people’s lives easier. But there has to be skilled manufacturing as well. The world cannot be a race to the bottom, where companies are given freedom to locate to the places with the lowest taxes and wages.