Make sure free trade is fair
Published 12:48 pm Friday, June 19, 2015
For nearly three decades the U.S. has moved progressively towards free trade and continues to do so with the proposed Trans Pacific Partnership (TPP) and the upcoming European Trade agreement.
But why should we create opportunities for our global corporations to reduce their costs, hoard their profits illegally, and transfer American jobs across the globe to the poorest workers on the planet?
When the U.S. encouraged the acceptance of China in the World Trade Organization (WTO) in 2003 President Clinton lauded the jobs that would be created, and he was right, except that those jobs re-located out of America and into China. China began its trade policy, which it maintains today of lying, cheating, and stealing in trading with the U.S.
China began its new trade policy by subsidizing industries and lying about that inconvenient truth. American manufacturers were encouraged to relocate manufacturing to China. Once they built a new Chinese plant these manufacturers would then sell their low labor cost goods at their manufacturing cost. The Chinese government would then, in the lumber industry for example, send the manufacturer a check for 17 percent of the sale, which represented the profit margin typically earned. Free trade? Hardly.
The U.S. Commerce Department is currently accusing China of “dumping” subsidized solar panels in the U.S. market, as it dumped steel products previously. This blatant cheating continues product by product all under the rubric of free trade.
China also continues to steal U.S. intellectual products, whether movies, art or music, all while claiming that the government is simply unaware of these violations.
Worse still, China, like Japan, has manipulated its currency to make U.S. goods more expensive for their consumers.
Japan, one of our long term trading partners, and a currency manipulator, has long protected its auto market from U.S. imports. Currently all foreign car imports in Japan represent less than 5 percent of the car market. Other markets, like the U.S. and Europe, import 30 percent to 40 percent of automobiles.
Japan’s currency manipulation, targeted to protect their domestic industries, nearly destroyed the U.S. tool and die industry before our commerce department took action.
But the costs of free trade are far greater than lying, cheating, and stealing by nation states. Global corporations effectively hold down worldwide wages by pitting workers against each other and paying wages that often simply maintain the poverty of workers.
These same global corporations hide U.S. taxable income offshore in literally billions of dollars. Taxable income that should be used to repair the roads, bridges, airports and ports that these same corporations use daily.
That these corporations support the newest trade agreements should be enough to concern every American about who wins and who loses in these deals. The winners are obvious, for they are the 1 percent. The losers are equally obvious, for we are they, with sinking wages and income and cheap toasters for sale at Walmart, our trade benefit.
If you think the TPP is a good idea, consider that Congress intends to create a significant fund to pay for the re-training of U.S. workers displaced by the TPP. So when those advancing the deal tell you how great the TPP is, ask them why losing jobs is so great, why increasing the profits of global tax evading corporations is a good idea, and why cheating partners are good for America.
When free trade is not fair trade we should just say no.
Jim Crawford is a retired educator and political enthusiast living here in the Tri-State.