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OpEdNews Op Eds    H3'ed 3/19/16

Has The Election Finally Killed TPP And Corporate "Free Trade"?

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"Free trade encourages further exploitation of workers and the environment in other countries and here. It helps fuel calls inside of our own country for 'less regulation' (fewer environmental protections), 'right-to-work' laws (that break unions and lower wages) and 'more competitive' tax policies (that defund democracy and our ability to provide public services) to 'attract' companies back to the U.S."

The free trade discussion is breaking out in other online outlets as well. Eduardo Porter, writing at the New York Times in "On Trade, Angry Voters Have a Point," explains that the price being paid for free trade is making voters angry:

"What seems most striking is that the angry working class -- dismissed so often as myopic, unable to understand the economic trade-offs presented by trade -- appears to have understood what the experts are only belatedly finding to be true: The benefits from trade to the American economy may not always justify its costs.

"In a recent study, three economists -- David Autor at the Massachusetts Institute of Technology, David Dorn at the University of Zurich and Gordon Hanson at the University of California, San Diego -- raised a profound challenge to all of us brought up to believe that economies quickly recover from trade shocks. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.

"They examined the experience of American workers after China erupted onto world markets some two decades ago. The presumed adjustment, they concluded, never happened. Or at least hasn't happened yet. Wages remain low and unemployment high in the most affected local job markets. Nationally, there is no sign of offsetting job gains elsewhere in the economy. What's more, they found that sagging wages in local labor markets exposed to Chinese competition reduced earnings by $213 per adult per year.

"In another study they wrote with Daron Acemoglu and Brendan Price from M.I.T., they estimated that rising Chinese imports from 1999 to 2011 cost up to 2.4 million American jobs."

As this cost to most of us hits home, voters appear ready to make politicians pay a price. The result, according to Jared Bernstein, also writing at the New York Times, is that "The Era of Free Trade Might Be Over. That's a Good Thing."

"It is unquestionable that expanded trade has vastly increased the supply of goods and services and has thus contributed to lower costs for consumers. But basic trade theory connects prices to wages, and in the United States, globalization is widely accepted as a contributor to both wage stagnation and the growth in inequality. For example, the real wage for blue-collar manufacturing workers in the United States is essentially unchanged over the past 35 years, while productivity in the sector is up more than 200 percent.

"We should no longer buy the statistically strained arguments about F.T.A.s delivering growth and jobs. The evidence just isn't there, a fact not lost on those campaigning for president.

"The F.T.A. process has been captured by investors and corporate interests. According to The Washington Post, 85 percent of the members of the outside committees advising the administration on the proposed Trans-Pacific Partnership were from private businesses and trade associations (the rest were from labor unions, NGOs, academics and other levels of government)."

Dean Baker pins down why working class voters are angrier than professionals, in "The Year of the Angry Economists":

"It is hard to know where to begin with the contempt for 'free trade' economists. The trade agenda of administrations of both parties has been to quite deliberately put U.S. manufacturing workers in direct competition with low paid workers in the developing world. The predicted and actual consequence of this competition is to eliminate jobs in manufacturing and to put downward pressure on the wages of less-educated workers more generally. And the economists can't understand why people are unhappy.

"The economists' complaints would at least be more understandable if it they were based on some consistent principle, but they aren't. We have not sought to impose free trade everywhere. We have only done it for less well paid and less educated workers. We have maintained and in some cases strengthened protectionist barriers that sustain the jobs and paychecks of the most highly paid professionals.

"Take the case of doctors with an average pay of well over $200,000 a year. ... We prevent foreign doctors from practicing in the United States unless they completed a U.S. residency program.

There is a similar story for dentists, who get paid almost as much as doctors. ...

"This is about power. Just as autoworkers and textile workers want protection from foreign competition, so do doctors and dentists. The difference is that doctors and dentists have the power to get protection and to get the economists to ignore this massive interference with free trade.

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Dave has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational (more...)
 

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