Reject Free Trade Pacts

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The San Francisco Chronicle

Reject Free Trade Pacts

So much for bipartisanship. President Obama unveiled his jobs agenda before Congress, and Republicans really like the part of it voters hate the most.

The overwhelming majority of Americans oppose "free trade" agreements with South Korea, Colombia and Panama. Poll after poll shows Americans believe trade deals such as the North American Free Trade Agreement, after which these new pacts are patterned, hurt America.

Even supporters of the proposed deals, in their more candid moments, acknowledge they will do little to boost employment. Independent analysts say increased imports from the South Korea agreement could cost at least 159,000 jobs.

The South Korea trade agreement would have the largest economic impact of the three proposed deals. South Korea is an export powerhouse, selling us more than $8 billion in autos and $5 billion in electronics in 2006 alone. But Korean consumer buying power is small, about equal to that of Los Angeles, so U.S. exports are not expected to increase dramatically.

A report by the U.S. International Trade Commission, a nonpartisan government agency, details the specific sectors of the U.S. economy that will gain under the Korea deal - agriculture and financial services - and those that will lose - electronics, motor vehicles, textiles and apparel, as the trade deficit in manufactured goods would rise by more than $2 billion.

The report says the effect on the U.S. economy overall will be negligible because "expected losses in output and employment in contracting sectors are expected to be offset by gains in expanding sectors." (Emphasis added.)

But output and employment are not the same thing.

By the report's analysis, a Wall Street bank landing a billion-dollar deal in South Korea offsets the losses that South Carolina textile workers suffer from increased imports, even though the bank might not hire a single additional person. Financial and insurance firms might prosper under the South Korea pact, but that doesn't necessarily mean more jobs for Americans. It's hard to imagine Fred MacMurray selling double-indemnity policies in Seoul. And while U.S. portfolio managers will be allowed to pitch mutual funds and pension funds in Korea, will Korean asset managers eagerly turn over their portfolios to the same people who just finished crashing the world economy?

The trade commission predicts we will export more hogs, dehydrated potatoes and tree nuts even as we import more manufactured goods from South Korea. But don't expect the agricultural sector to replace lost manufacturing jobs.

In the magical thinking of Washington, machinists don't just become hog butchers and potato farmers - they actually become hogs. As a unit of output, an American worker and a hog are the same thing. This is the misguided, inhuman thinking that led to the jobs crisis we're in today.

Academic and political elites said it doesn't matter if we make computer chips or potato chips. America could throw away millions of jobs in manufacturing because we would all be Eli Whitneys and Thomas Edisons and Warren Buffetts, inventing iPods and selling mortgage-backed bonds happily ever after. The trade agreements before Congress reflect economic theories discredited in the financial collapse of 2008. They will destroy American jobs, not create them.

Congress should listen to the majority of Americans and reject these deals. We will put Americans back to work by making what we buy instead of importing everything.

Curtis Ellis

Curtis Ellis is the executive director of the American Jobs Alliance, an independent, nonpartisan, not-for-profit organization.

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