The White House will resume this week negotiations with congressional Democrats over the Trans-Pacific Partnership agreement.
Though Obama administration argues that the deal would be beneficial for the nation’s economy, Democrats are concerned that the agreement would harm economic growth and the jobs of millions of American workers, the party’s key constituency.
But the dispute is not new. In the 1990s, a similar trade deal called the North American Free Trade Agreement, which was designed to ease commercial transactions between the U.S., Canada, and Mexico, stirred hot debates, too. And it was ultimately passed in 1994 despite nationwide protests coming from trade unions and workers’ rights advocates.
Since then, NAFTA has grown to 20 trade partners, but its critics say that it had made more harm than good. NAFTA backers on the other hand said that the deal was a huge success. Their main argument is that free-trade stimulates the countries economies by removing burdening tax and tariffs, thus leading to new business opportunities and new jobs.
But NAFTA critics argue that free-trade destroys more jobs than it promises to create. And the new jobs it does create are less paid and desirable than the lost jobs. Additionally, competing with cheaper, lower quality products such as those made in China, will force U.S. employees to lower wages or resort to massive lay-offs to be able to survive. Workers’ rights will also be disregarded as companies will focus on keeping labor costs at a minimum.
Proponents of NAFTA and other free-trade deals claim that indeed jobs had been lost but the new positions are “economically more significant.” For instance, the Peterson Institute for International Economics reported that the U.S. economy gained 100,000 new jobs between 1993 and 2003, but it admitted that not all jobs were created by NAFTA. About a decade ago, the institute reported that free trade deals increased the nation’s economic output by 7.3%.
On the other hand, consumer advocacy groups such as Public Citizen said that about 1 million jobs were lost in the U.S. after NAFTA was signed off. As a result, the U.S. saw a $177 billion trade deficit since North America was flooded with imported goods made in Canada or Mexico, Public Citizen said.
The White House’s statistics show that 2.2 million workers lost their jobs since 1974 and became entitled to federal money. Additionally, manufacturing industry experienced a 2 million loss in jobs, despite factories’ production jumping by more than 85 percent in one century.
Also, displaced manufacturing workers who were rehired had to work for less, most of them agreeing with a 20 percent reduction of their wages, according to Public Citizen. The group also said that the trade deal shrank the middle class and expanded income inequality across society.
Image Source: The Sacramento Bee