The truth is if you want toasters, TV and microwaves to be available for really low prices, then foreign trade agreements can help make that happen. But if you want to have an income that provides ample possibility to purchase luxury items then you might not be so thrilled with trade agreements.

The Obama administration is eager to commit to a new trade agreement designated as the Trans-Pacific Partnership (TPP), an agreement between 12 nations designed to make trade more efficient and effective between the partners in the agreement.

Supporters argue that this agreement will position us in a better position than China in emerging Asian markets and increase the flow of goods into U.S. consumer markets.

But the first question to be asked is do we need another trade agreement?

We have existing bilateral trade agreements with six nations to be included in the TPP, why not simply adapt those agreements as circumstances change?

Two of the TPP partners are low wage/low income nations, Vietnam and Malaysia, nations that would offer low wage workers but small markets for U.S. imports. From experience we know the effects of international wage “shopping,” it drives US wages and benefits downward.

Japan, the world’s third largest economy, and a long time trade partner, has kept its markets closed to the U.S. in many product categories for decades. U.S. auto sales in Japan are virtually non-existent today though Japanese car sales in the U.S. are significant. If we could not level that trade imbalance with existing agreements, why would adding the TPP solve this core imbalance?

In 1975 the U.S. had a trade surplus. That was to be the last year we had any trade surplus and the trade deficit has grown incrementally since then. When NAFTA was passed in 1993, the deficits of the 1990s in trade dwarfed all historic trade imbalances. That trend has not changed.

Then of course there is the process of writing the TPP that raises issues. While as many as 500 multi-national corporations have made contributions to the formulation of the TPP there have been no consumers groups, no labor interests represented in the construction of the treaty.

That should worry anyone because we do know that corporations that were once American are now not tethered to the U.S. in any meaningful way. Where once workers and management cooperated to achieve excellence, corporations now move to the lowest labor available and seek to lower wages and benefits wherever possible while generating profits and avoiding U.S. taxation of those profits.

Apple, now the world’s largest company, has been cited with avoiding over $9 billion in U.S. taxes in 2012 alone. Does that make anyone trust that Apples’ interests are the same as other American taxpayers?

Finally, if the TPP were a good deal for America wouldn’t the agreement include valuable concerns of middle class Americans like a workers bill of rights for all trade partners that ended sweat shop working conditions, guaranteed healthcare, and promised a country based livable wage?

And would not any good agreement require environmental protections universally adopted by all partners so the globals could not operate without concern for underdeveloped countries?

Surely a good agreement would require any multinational to meet their tax commitments to their home nation before being permitted to participate in any trade, thus ensuring that corporations like Apple would have to pay their taxes to participate.

 

Jim Crawford is a retired educator and political enthusiast living here in the Tri-State.