This article is a good backgrounder on why we should be afraid of the Trans Pacific Partnership (TPP) = a trade deal that is being brewed up in the Obama Administration.
The TPP has been called NAFTA on steroids, and there is concern among many economists as to its effect on labor and markets. To me the greatest concern is how the TPP is being formed:
Negotiations for the TPP began in 2010, for the purpose, according to the United States Trade Representative, of increasing trade and investment, through lowering tariffs and other trade barriers among participating countries. But the TPP negotiations have been taking place in secret, forcing us to rely on leaked drafts to guess at the proposed provisions. At the same time, Congress introduced a bill this year that would grant the White House filibuster-proof fast-track authority, under which Congress simply approves or rejects whatever trade agreement is put before it, without revisions or amendments.
The TPP is being authored by multinational corporations in concert with the government. It appears obvious that the creators of this plan want to ensure as little public understanding and involvement as possible. What could be the motive to fast-track this plan? Is a partnership being negotiated since 2010 in need of a fast track?
This article provides some insight into the effects of NAFTA, pointing out that the effects of the TPP could be much bigger:
The Labor Department’s Trade Adjustment Assistance program, which documents this trend, reads like a funeral program for the middle class. More than 845,000 workers have been certified under this one narrow and hard-to-qualify-for program as having lost their jobs because of offshoring of factories to, and growing imports from, Mexico and Canada since Nafta. The result is downward pressure on middle-class wages as manufacturing workers are forced to compete with imports made by poorly paid workers abroad. According to the Bureau of Labor Statistics, nearly two out of every three displaced manufacturing workers who were rehired in 2012 saw wage reductions, most losing more than 20 percent.
The fair trade argument that trade partnerships will help the middle class by providing cheaper goods is also refuted:
They [Center for Economic and Policy Research] found that American workers without college degrees had most likely lost more than 12 percent of their wages to NAFTA-style trade, even accounting for the benefits of cheaper goods. This means a loss of more than $3,300 per year for a worker earning the median annual wage of $27,500.
Last year, 33.5 percent of Americans ages 25 to 29 had at least a bachelor’s degree. Can entry level employees at the bottom of the pay scale afford a bigger free trade agreement? Tack on the growing loss of jobs primarily on the lower end of the labor market due to technological improvements, and this portends a bleak future for middle America.
Hopefully coverage of the TPP and its secretive development will be exposed, and a grass roots effort will arise to bring this agreement and how it was developed for public discussion. If not, this could have long term effects on furthering the deterioration of wealth inequality in the United States.