LONG BEFORE 2008, when Wall Street’s unchecked greed brought the world’s economy to its knees, we in the middle class could feel our future slipping away. We knew that we were working longer and harder - we could see that even with two salaries, most families had less disposable income than families did in the 1960s and ’70s when one income was the norm. We knew that good quality jobs were harder to find and hold. And we knew that a big reason we were falling behind was a flawed trade policy that shipped many of our jobs overseas.
Yet even after losing 682,000 jobs to NAFTA since it took effect in 1994, and 2.4 million to China since it joined the World Trade Organization, Washington continues in its blind faith that somehow these trade deals are good for us. This summer Congress is expected to take up three new trade deals - with Korea, Panama, and Colombia. These trade pacts are bad for American workers, bad for our domestic economy, and bad for democracy.
Consider the impact on just one industry - textiles. In recent years Korea has carefully targeted $21 billion in government subsidies in order to capture a larger share of the technical textile industry, which supplies high-tech fibers for aerospace and for products like Kevlar. This is an industry still dominated by US manufacturers. The trade deal would immediately remove tariffs for Korean imports entering the United States, but would gradually phase out tariffs on US goods entering Korea over many years. This would create an immediate 15 percent competitive advantage for most Korean textiles and other products.
How many American jobs will be lost? According to the National Textile Association, 40,000 in textile-related industries alone. In all, according to the Economic Policy Institute, the pending Korean and Colombian trade deals are likely to cost us 214,000 jobs.
The bad news doesn’t end there. Buried within the Korean trade deal is a gift to the Wall Street tycoons who wrecked our economy. It prohibits either country from adopting limits on each other’s banks. Although the provisions don’t directly prohibit new controls over Wall Street, the effect is the same. Congress won’t restrain Goldman Sachs while their Korean competitors run free. If Congress approves the Korean trade deal, needed reforms, like those to limit the size of banks so they can’t be too big to fail, would be put out of reach.
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These unfair trade deals undermine our democracy in other significant ways. They empower foreign corporations to haul us before a secret trade tribunal whenever they think a law or regulation makes it harder for them to do business here.
These “investor state enforcement’’ provisions have been used to attack public interest laws ranging from gambling regulation to ground water protection. A recent World Trade Organization ruling means we might soon lose the right to know where our food comes from - they ruled against our country-of-origin labeling law - claiming it gave US food producers an unfair advantage.
The chief failings of the Panama and Colombia trade agreements have more to do with missed opportunity than with large job loss; their economies are relatively small. The Panama agreement did not require meaningful financial transparency for a nation that is one of the world’s top safe-havens for tax dodgers and money laundering-drug traffickers. Colombia, were on average one labor leader is assassinated each week, was not required to address labor conditions or the abuse of human rights.
The Economic Policy Institute found that NAFTA took 17,000 jobs from Massachusetts’ families; China trade took another 72,000. The human cost is clear to see in places like Fall River, a former textile city of 91,000 that has lost more than 15,000 manufacturing jobs over the last 20 years.
Which makes it all the more troubling that both Senators John Kerry and Scott Brown have come out in support of the Korea, Colombia, and Panama free-trade agreements. They probably can quote estimates of theoretical job gains to justify their positions. But all of the statistics and studies that were trotted out to justify NAFTA, the WTO, and a host of other bad trade deals proved to be wrong. So will these.