Is expanding trade good for Americans? No, pact not the way to create jobs

2013-05-13T00:00:00Z Is expanding trade good for Americans? No, pact not the way to create jobsMark Weisbrot Arizona Daily Star
May 13, 2013 12:00 am  • 

WASHINGTON - The Trans-Pacific Partnership is a very special trade agreement. It is so special that our government officials who are negotiating it want to keep it completely secret from us.

They won't even let Congress see what they are negotiating. However, hundreds of corporations have been given access to the draft text.

This gives an idea of our government's trade agenda. President Obama says that he wants to create jobs through trade, but this agreement is more likely to cost jobs than create them.

Leaked drafts indicate that our negotiators are trying to increase patent protection for pharmaceutical companies, for example. This will not create jobs, but it may make our drug companies and their shareholders richer.

For the TPP, they are saying that we will increase our exports to Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam and now possibly Japan faster than our imports from these countries. That is unlikely.

The most important thing our government needs to do to create jobs is to stimulate the economy by spending more money. Private demand for goods and services has not recovered sufficiently from the Great Recession, and we still have more than 21 million people who are unemployed, working part-time involuntarily, or have given up looking for work.

Our government is going in the wrong direction - weakening the economy by reducing spending.

However, we can increase exports more than imports by lowering the value of the U.S. dollar against the currencies of our trading partners.

A lower dollar would mean that our exports are more competitive and imports more expensive. This would reduce our trade deficit, and that would definitely create jobs here, including manufacturing jobs.

Our trade deficit has come down lately - it has fallen from 5.7 percent of GDP at its peak in 2006 to about 3.6 percent today. But this is overwhelmingly because of the Great Recession and the weak recovery since it officially ended nearly four years ago. When the economy returns to normal growth, imports will shoot up because the dollar is overvalued.

Of course our most powerful corporations are fine with an overvalued dollar. Wall Street likes it because it keeps inflation lower. For both, it means they can buy things - and labor - cheaper around the globe.

As with our trade agreements, the big corporations dominating our government don't care so much about jobs or whether we have a manufacturing sector. You do not hear much debate about what an overvalued dollar has done - or continues to do - to our economy and employment.

Lots of money can be made for the "1 percent," even if our domestic economy remains sluggish, our infrastructure and educational system deteriorate and jobs - even more, good jobs - remain scarce at home. That is the "free trade" agenda.

No, pact will cost, not create, jobs

Editor's note

Every Monday we offer pro/con pieces from the McClatchy-Tribune News Service to give readers a broad view of issues.

Mark Weisbrot is the co-director of the Center for Economic and Policy Research.

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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