We are Working for Better Rules
Buy Wisconsin is not an anti-trade movement. In fact, it’s vitally important that the quality goods and services that Wisconsin workers produce enjoy a fair share of the global market. Wisconsin exporters shipped $23.1 billion worth of products to 200 countries in 2012 alone. Studies show trade supports over 20% of all jobs in the state.
The issue is not trade itself, but how the rules are written. Supporters of so-called free trade agreements say these deals have led to an increase in US exports. That’s true as far as it goes. What they don’t tell you is that US imports from our Free Trade Agreements partners have grown even more. If you subtract the job loss related to those imports from the job gains created by exports, America’s workers come out on the short end by a wide margin.
The problem is supporters of Free Trade Agreements only want to talk about exports, while ignoring imports and the impact on issues like offshoring of jobs, foreign investment, employment, wages, and the distribution of income. Looking at exports alone is like just counting the runs the home team is scoring while ignoring what the other team is doing—it might feel good, but it doesn’t accurately reflect who’s winning the game.
So why do some politicians like Free Trade Agreements so much? Because these agreements make it easier for US corporations to outsource production to countries with weak labor and environmental standards, countries that use currency manipulation, dumping, and other unfair trade practices to undercut production and wages in the United States. This boosts profits enormously, but it also creates a race to the bottom that lowers wages and working conditions for workers in every country involved in the deal.
In a global economy, we can’t afford not to trade with other nations. But we need to negotiate and enforce trade agreements that protect American workers and benefit all our citizens, not just corporate shareholders.
The Trans-Pacific Partnership: NAFTA on Steroids
The North American Free Trade Agreement (NAFTA), which includes Canada, Mexico and the United States, was passed by Congress in 1993 with the promise it would create hundreds of thousands of U.S. jobs. Unfortunately for American working families, the opposite has occurred. To date, nearly 700,000 U.S. jobs have been lost or displaced since NAFTA took effect in 1994, according to a study by the Economic Policy Institute (EPI). The main reason for the job loss is a skyrocketing U.S. trade deficit with Mexico—reaching $66 billion in 2010.
Nearly 20 years after NAFTA was passed, all 50 states, the District of Columbia and Puerto Rico have seen jobs lost or displaced to Mexico.
Since 2010, negotiations have been taking place for the Trans-Pacific Partnership (TPP), a huge, NAFTA-style deal involving the United States and the governments of Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, South Korea, Taiwan and Vietnam. Negotiations are conducted in secret, with little opportunity for citizens to see what is being proposed and agreed to.
While the public has been shut out of negotiations, recent WikiLeaks disclosures suggest corporate representatives have been given free access and are in fact assisting the U.S. Trade Representative in the TPP drafting process. Details of what’s being negotiated in our names are hard to come by, but critics have suggested that TPP goes far beyond tariff reduction and trade promotion, giving unprecedented power to corporations and undercutting citizens’ ability to enact and preserve consumer, labor, and environmental protections.
Once the final TPP agreement is negotiated, the Obama Administration is seeking so-called “fast-track” authority to enact it. Fast track limits legislative review and debate, requiring Congress to vote the deal up or down without amendments. Once approved, TPP would actually require changes in US law where it conflicted with the terms of the agreement.
One recent example of how trade agreements are used to advance corporate interests over public rights and domestic law is the Lone Pine Resources case. Lone Pines Resources is an energy company based in Calgary, but registered in Delaware. By registering in the US, the company has standing to sue the government of Canada under terms of the NAFTA agreement. When their plans to open a fracking operation were blocked by Quebec’s moratorium on the controversial energy recovery process, they invoked NAFTA’s investor protections clause, suing for $250 million in damages. The suit is currently in litigation.
The Lone Pines case is illustrative. Once in place, so-called free trade agreements, drafted in secret without citizen input and under massive corporate influence, have the power to trump national sovereignty and the public interest. They are designed to give corporations unprecedented power over governments on issues like labor and environmental standards. They are meant to establish a trading system that is far from being “free”. Instead, they re-write the rules in favor of multinational corporations at the expense of the rights of people in the countries where they do business.
As citizens, we have the right to know what our government is proposing and agreeing to under the TPP and similar negotiations. Our representatives in Congress must have the ability to review and amend any agreement before it becomes law. Take time to learn more about TPP and tell your elected officials you want an agreement that supports American workers, not just corporate shareholders.
Facts and Figures
Manufacturing is present in every state across the nation, including the District of Columbia, and contributes about 12 percent to the U.S. Gross Domestic Product (GDP). An innovative and growing manufacturing sector is vital to America’s economic and national security, as well as to providing good jobs for future generations of workers.
Unfortunately, bad trade policies and corporate greed have led to mass offshoring of millions of American jobs. The economic theory is that offshoring and outsourcing reduce production cost furthering corporate profits, but the economic reality of offshoring on working Americans and local communities has been dire.
According to the Alliance for American Manufacturing, in the last decade alone 50,000 manufacturing sites have been shuttered and over 6 million American jobs have been lost nationwide due to offshoring. Between 2008 and 2009 Wisconsin lost 13% of its manufacturing jobs. Wisconsin’s trade deficit to China alone has cost the state a staggering 54,500 jobs.
The Economist estimates that the impact of offshoring on U.S. jobs is a loss of between 150,000 and 300,000 a year per year from 2004-2015. This represents a whopping 10-15% of U.S. job creation.
When good jobs and steady wages leave a community, the economic impact is devastating. Offshoring and outsourcing do not just impact plant workers or public workers and their families. The ripple effect of the job loss is felt by local communities and the entire state. Wages stagnate, economies contract and our tax base shrinks.