Truthout.org looks at NAFTA

ThinkProgress writes that the Republican-led House of Representatives passed the so-called “fast-track bill” for the TPP trade agreement again on Thursday with the assistance of 28 Democrats.

The Trade Promotion Authority (TPA) bill, which was decoupled from a labor program will now go back to the Senate for approval, writes ThinkProgress. If Obama signs that bill, then the final Trans-Pacific Partnership (TPP) trade deal can go to Congress for a straight up-and-down vote, and Congress will not be allowed to make line-item changes to the deal.

The TPP is globally and money-wise larger than NAFTA.  What happened with NAFTA?

Truthout.org writes that NAFTA – The North American Free Trade Agreement – went into effect in 1994, despite strong opposition from unions and their workers’ rights allies.

Since then, NAFTA has served as a backdrop for other agreements that cover U.S. free-trade relations, which include relations with 20 countries.

According to truthout.org, NAFTA also serves as a cautionary tale of what opponents say has gone wrong with free trade and what proponents argue has succeeded.

Below are portions of the question-and-answer article by truthout.org:

What are the arguments in favor of the free-trade bill?

The arguments for free trade predate NAFTA but picked up speed in the 1990s. In general, proponents say free trade stimulates the economies of all of the countries by allowing goods and money to more easily cross borders, creating new businesses, jobs and wealth for everyone.

What are the arguments against free trade?

The major argument is that free trade doesn’t fulfill its promise in creating new jobs or wealth. Even if new jobs are created, they are far less desirable and do not pay as well as the jobs that are lost. Further, cheaper foreign goods will mean that U.S. wages will be forced down so American companies can compete. Over time, environmental or safety rules that protect U.S. workers will also tend to be ignored as companies struggle to keep labor costs down.

Have jobs been created or lost?

Both. Some jobs, mainly in manufacturing, were certainly lost, but proponents of free trade argue that the number of created jobs were economically more significant.

For example, in their report on the effects of NAFTA, Gary Hufbauer and Jeffrey Schott of the pro-trade Peterson Institute for International Economics in Washington said the United States gained 100,000 jobs per year thanks to increased North American trade from 1993 to 2003, although all of the increase may not have been due to NAFTA. In 2005, Peterson researchers estimated that heightened trade had increased U.S. economic output by 7.3%.

Opponents sharply disagree. Public Citizen, a Washington-based consumer advocacy group, estimated that 1 million jobs have been lost because of NAFTA. What had been a small trade surplus in the U.S. turned into a combined trade deficit of $177 billion as more goods from Mexico and Canada crossed the border, the consumer group says, citing government statistics.

There certainly were some jobs lost, however. According to the White House, 2.2 million American workers have received federal money or retraining since 1974 after losing their jobs because of trade-related issues.

How significant is the job loss?

This is another contentious area. The number of manufacturing workers has fallen this century from about 15 million to about 13 million, but factories have continued to function at well more than 85% output (with a slight dip during the recession years). Better technology allowed industry to continue to function well despite the loss of some jobs.

But many factory workers found they had to take pay cuts to find new work. “According to the U.S. Bureau of Labor Statistics, two out of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them taking a pay cut of greater than 20%,” Public Citizen said. In effect, the middle class, fueled by better-paying jobs, shrunk, and income inequality increased as a result of the trade agreement.

(Updated article)

http://www.truth-out.org/news/item/31429-what-nafta-can-teach-us-about-the-trans-pacific-partnership-trade-deal#

http://thinkprogress.org/climate/2015/06/18/3671309/tpa-passes-house-without-labor-companion/

http://blogs.rollcall.com/white-house/obama-tpa-taa-veto-threat-trade-promotion-authority/?dcz=

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