• What Are The NAFTA and TPP Trump and Clinton Fought About in the Debate?

    October 20, 2016

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    Posted in: #99Percent, Economy

    Detailed_Triangle_Trade



    In the presidential debates, Trump and Clinton referenced the NAFTA and TPP trade deals. What are they and are they good, or bad, for America?


    What Are NAFTA and TPP?

    The North American Free Trade Agreement (NAFTA), which went into force in 1994, and the Trans-Pacific Partnership (TPP), which is still pending ratification in the U.S. and elsewhere, are international trade agreements.

    Trump is unambiguously, totally, absolutely, hugely opposed to both deals and any others in the future. He has held that position from Day One.

    Clinton, less so. NAFTA was pushed through by Bill, and Hillary continues to defend it. As Secretary of State she strongly advocated for the TPP. She continued that advocacy during the first part of her campaign, right up until Bernie Sanders started to score points against her by opposing it. Hillary then shifted to also opposing it. No one knows what her stance will be if she is elected.

    Meanwhile, the Obama administration is still hoping to force TPP through a lame duck Congress following the election. Hillary would then be free to shrug her shoulders come January and claim the TPP is not her responsibility.



    The Basics Of Trade

    International deals like NAFTA and the TPP are designed to promote more trade, more goods and services, and sometimes more workers, moving across borders. The deals typically reduce taxes and tariffs, change visa rules, and sometimes soften regulations that keep foreign products out. The phrase used most often is “lower the barriers.”

    So, if widgets made at a higher cost in the U.S. can be made more cheaply in Vietnam and then imported into the U.S., something like TPP can facilitate that by lowering American tariffs on widgets. Meanwhile, Vietnam might be required to change its agricultural import system to allow American genetically modified fruit into Hanoi’s supermarkets.

    Looking at You, NAFTA

    NAFTA is a good place to start in learning more, as it involves three countries — the U.S., Canada, and Mexico — that generally get along, play reasonably fair, and already had a robust cross-border trade. Lots of non-variables there. Plus, since NAFTA’s been around for over 20 years, there should be a decent consensus on how it worked. That will provide a real world example to weigh against a newcomer like the TPP.

    You wish.

    There are numbers. For example, the U.S. Chamber of Commerce says increased trade from NAFTA supports about five million U.S. jobs. Unemployment was 7.1% in the decade before NAFTA, and 5.1% from 1994 to 2007. But then again unemployment from 2008 to 2012 has been significantly higher.

    You can find similar ups and downs on imports and exports, the value of goods, and the like. Some are clearer than others; since 1993, U.S. exports to Canada and Mexico have climbed 201 percent and 370 percent. The problem is trying to attribute them. Global economics is a complex business, and pointing to a singularity of cause and effect like NAFTA is tough. And NAFTA, remember, was just three countries. The TPP would draw in 12 nations.


    Cui Bono?

    The Latin phrase cui bono means “who benefits?,” and is used by detectives to imply that whoever appears to have the most to gain from a crime is probably the culprit. More generally, it’s used to question the advantage of carrying something out. In the case of things like NAFTA and TPP, the criminal context might be more applicable.

    NAFTA made certain products cheaper for American consumers, as manufacturing costs are lower in Mexico than Idaho. American companies who found new export markets abroad also saw a rising tide of new money. That’s the good part (for a few.)

    However, allowing American firms to make things abroad and import them into the U.S. free or cheap moves jobs out of the United States. A current case cited by Trump is Carrier. Carrier sent 1,400 jobs making furnaces and heating equipment to Mexico. Mexican workers typically earn about $19 a day, less than what many on Carrier’s former Indiana assembly line used to make in an hour.

    Carrier will see higher profits due to lower costs. They put Americans out of work.

    The Losers

    Economists will often claim that such job losses are part of the invisible hand, how capitalism works, duh. The laid off workers need to learn to code and build web pages, migrate to employment hot spots such as California like a modern day Tom Joads. But pay a visit to nearly anywhere in what we now blithely call America’s Rust Belt, and see how that’s working out.

    Retraining industrial workers just does not happen overnight, even if there was free, quality education (there’s not.) Indeed, since the beginnings of the hollowing out of America, it has not happened at all.

    The risk is also that retraining takes unemployed, unskilled people and turns them into unemployed, skilled people. Training is only of value when it is connected to a job. Remember, even if all those unemployed Carrier people somehow learn to build web pages, America’s colleges are churning out new workers, digital natives, who already have the skills. Even Silicon Valley’s needs are finite.

    Everybody Wins, Except for Most of Us

    Economist Robert Scott claims over the last 20 years, trade and investment deals have increased U.S. trade deficits and cost Americans their jobs. For example, the agreement allowing China into the World Trade Organization led to trade deficits that eliminated 3.2 million jobs between 2001 and 2013. Meanwhile, the United States already faces a trade deficit with countries in the proposed Trans-Pacific Partnership that cost two million U.S. jobs in 2015.

    In his 2008 book, Everybody Wins, Except for Most of Us, Josh Bivens showed increased global integration harms working Americans. Bivens estimated that the growth of trade with low-wage countries reduced the median wage for full-time workers without a college degree by about $1,800 per year in 2011.



    A Broader View

    If one is asking whether or not international trade agreements are good for America, one needs to think bigger. On a whole-of-society level, economics is about people. We all want American companies to make money. It’s also great that Walmart is full of low-cost consumer electronics from Asia, or Carrier air conditioners fresh from Mexico, but you need money — a job — to buy them.

    Think broader, and you’ll see economics is about people. Let that answer the question for you about whether international trade agreements are good or bad for America.


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    Copyright © 2017. All rights reserved. The views expressed here are solely those of the author(s) in their private capacity. Follow me on Twitter!

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  • Recent Comments

    • Mitch said...

      1

      PVB,

      Thank you!
      This is a topic that is a Must cover.

      As a business person,

      I can say this…

      NAFTA is a wonderful thing… From a I don’t care who’s lives I destroy point of view.

      TPP will be the same.

      The wealthy, IN CERTAIN categories, will gain massive wealth.

      BUT only in certain categories.

      What concerned me most was what Killary said about ” assigning a “SPECIAL PROSECUTOR” to enforce these agreements. ”

      M

      10/20/16 9:05 AM | Comment Link

    • chuck said...

      2

      “Flush the TPP” Nov. 12-17th D.C.. See the website or Facebook. I may go. TY PVB.

      10/20/16 2:13 PM | Comment Link

    • chuck said...

      3

      TPP, your nasty!

      10/20/16 2:16 PM | Comment Link

    • Mitch said...

      4

      TP…. 4 your PP….Killary…

      And yes!!!

      That was meant to be FULLY disrespectful to Killary, as a “woman” ( if she actually is, and is not an woman shaped alien), as a potential president, as a parent of an incredibly disrespectful child, and the wife/ enabler of a sexual predator.

      Is That controversial enough?

      However, it is NOT intended toward any other women, execpt my ex-wife, whose middle name is ” devil from deepest hell”.

      M

      10/20/16 3:07 PM | Comment Link

    • Bill said...

      5

      Gets to the heart of the matter. We can also reframe it in terms of capital, technology, and labor (with technology replacing the old land component). In these trade agreements, what is freed is capital and technology. Labor is held captive to national borders and companies move their technologies the same as capital. Ask the beneficiaries of trade agreements then, if they are willing to expand to a construct that benefits labor too: common markets. I dare say that they don’t want labor allowed to flow as these agreements allow capital and technology to flow.

      Changing topics, the basket of goods did get cheaper but, not as much of a decrease as the the return on labor fell. The two plugs that made the middle class feel like they could play along were increasing labor hours (adding new family members to the work force or adding hours to existing workers) and borrowing against perceived equity. The labor option played out: families can’t add more workers to their earning component–we don’t like child labor. The bust in 2007 ended the borrowing boom for consumers. So, now we have this here thing. Sucks, don’t it?

      10/20/16 6:20 PM | Comment Link

    • charlie said...

      6

      This joke that the government calls free trade is just another way to send skilled, decent paying jobs to low wage countries.
      Free trade will never happen. Better to try for and get fair trade. But then, I am just an old, now disabled machinist/former US Marine/Vietnam war vet with only degrees from community colleges.

      10/20/16 8:46 PM | Comment Link

    • chuck said...

      7

      Soon they will call it “Democracy Trade” for the World (the 1%).

      10/21/16 9:26 AM | Comment Link

    • chuck said...

      8

      “Patriot Act”, “Free Trade”. “Bullshat” (my quote!)

      10/21/16 9:28 AM | Comment Link

    • John Poole said...

      9

      CEOs of companies which manufacture goods will always chase after the cheapest labor. Once the cheap labor pool has been exploited and depleted it will seek to alter animals to do mundane assembly work. Imagine owning a phone assembled by trained penguins! It is bound to happen.

      10/21/16 11:11 AM | Comment Link

    • chuck said...

      10

      cAPITALISM AND THE eMPIRE WILL FAIL

      10/21/16 1:27 PM | Comment Link

    • chuck said...

      11

      hAVE ANICE DAY !

      10/21/16 1:27 PM | Comment Link

    • chuck said...

      12

      (time out)

      10/21/16 1:28 PM | Comment Link

    • bloodypitchfork said...

      13

      Hahahahahaha… hohohohohohoho.. hahahahaha…!!!

      NAFTA?TTP.? Trade? Hahahaha… umm, I hate to break the bad news.. but ..I TOLD YOU SO!!!

      quote”How an army of vulnerable gadgets took down the web today”unquote

      Make no mistake. This is a war on capitalism. Trade? Hahahahaha… if there’s NO internet.. trade? Hahahahahaha.. in this day and age? Hahahahahahaha

      goddamn.. I hate to say it..but I said it’s going to happen. At some point, the net is going down.. big time. Maybe not in my life time but look what is happening. The WHOLE goddamned planet is now dependent, hook line and sinker, on the net. And FOR those that think that they’re lives are gonna get better once their whole goddamned house, car, work, play, medical, taxes, food, heat, cooling, electrical, music, phones, etc etc etc …are tied into the INTERNET OF EVERYTHING.. well..let me put it this way. You are a fucking moron.

      http://www.theverge.com/2016/10/21/13362354/dyn-dns-ddos-attack-cause-outage-status-explained

      bartender..you betcha.. a big ole pint of ITOLDYOUSO cult beer and two shots of 100prf HAHAHAHAHAHAHA.

      10/21/16 8:29 PM | Comment Link

    • Mitch said...

      14

      Pitchfork,

      Right now….the net…and I do agree with you, .. It is so vulnerable to crashing…

      And…. It does not necessarily have to be a intended act such as a dos, ddos, or others…
      Dos, and ddos…. Hell, those are simple. The way these are being done now… That’s kindergarten stuff.
      I have gear that would make that look like Mary Poppin’s… To my Godzilla.
      I run a great deal through my own proxy server… Reasons I am Not allowed to say. Legal…so relax…

      But… A bunch of years ago…. Very smart people laid cable under the oceans to push VOICE along.

      Brilliant…. However…. Completely inadequate for high speed data of todays world.

      Now days …ALL …repeat….ALL data..which includes voice….data, burst trans, microwave up and down, … A ton of things that are being used that are not common knowledge…

      I mean….everything…. Including this comment…and yours…. Are going across a bird.

      Are going through the satellites…. Which….are outside of the earths EM field.

      Which is bad….very bad….like biblical bad.

      Every summer…the sun….and its been getting worse….has been throwing some pretty decent tantrums…. Called solar flares. And solar storms.

      An x class was forecast…. It did not occur.

      Currently…. Mankind is not even capable of getting a ship up to deploy a satellite with out the aid of another satellite.

      If…..IF…. The storms continue to get worse… (as in a month ago, the space station astronuts, had to take shelter in safe rooms )The satellites are going to cook. And. Despite what it takes to put one up…. Satellites are Very fragile….like a 13 year olds ego…

      The cost of running fiber or lazer trans under the oceans is cost prohibiting.

      So… The weak link…. Is the satellites….

      Hence…. What you outlined….is actually quite possible.

      With out them….nothing will work….post 2014 production….. For the most part.

      But…..the nice side of it…..the drones around your house won’t be there anymore.

      M

      10/22/16 12:19 AM | Comment Link

    • bloodypitchfork said...

      15

      Mitch said:
      “Every summer…the sun….and its been getting worse….has been throwing some pretty decent tantrums…. Called solar flares. And solar storms. ”

      Mitch, you haven’t been around these parts very long. For the last four years, I’ve been “predicting” a massive EMP will send this planet back to the stone age. Now that most human beings entire lives revolve around digital control of everything, their world will STOP. But that’s not the whole of it either. The one thing the USG is afraid of…is a NUCLEAR EMP…say from North Korea. One well placed explosion 300 miles above North America… and the US will be toast.

      ok, nuff from me.

      10/22/16 7:14 AM | Comment Link

    • bloodypitchfork said...

      16

      Pardon my off subject post, but today, the best news I’ve read in a decade came to light.

      https://theintercept.com/2016/10/21/major-new-court-ruling-says-even-the-president-cant-declare-torture-lawful/?comments=1#comments

      The reason I post this is, a few months back, one of Peter’s subject matter related to a corporation called CACI Premier Technologies. At the time, I went to their website, and read the entire thing..every single page. What I didn’t know at the time, was CACI was being sued by 4 victims of torture at Abu Ghirade. Turns out, this indidious corporation was HIRED by the USG to perform the “alleged” torture. Now, the Intercept has identified CACI as the company in question in this case. My point being, I just went back to their site, and found a page where you can make “suggestions” for their webpage. I did. Here….

      http://www.caci.com/webapp/Apps/Feedback.aspx

      I “suggested”, their “What We Do” list was incomplete. Either intentional or not, they forgot to include…ahem…TORTURE. I also suggested to whoever reads my suggestion, to get down on their pathetic knees and pray to god for forgiveness, for supporting a scum sucking, degenerate employer who TORTURES HUMAN BEINGS FOR>>>MONEY.

      I also suggested, that whoever the CACI employees were who perpetrated these war crimes, now that torture has been ruled to be completely illegal, they broke the law, and may possibly face prosecution.
      Make my fucking day.

      Anyway, while I ain’t holding my breath, this ruling DOES set a precedent, in the future, that anyone in the USG who thinks they can order torture, or perpetrates it, can and WILL be legally held accountable as torture has now been defined..ILLEGAL. THAT..is a BIG DEAL.

      One thing more. Maybe the rest of you here, can also go to that site, and verbally burn them alive. All I know, I’m spreading this news as far and wide as I possibly can. I want to see this fucking corporation BURN.

      ps.. on every single page of their site, they have a corporate motto… “A CULTURE OF GOOD CHARACTER”

      right. I suggested they might reconsider changing it now, as the entire planet will soon make CACI’s motto the laughing stock of the world.

      10/22/16 7:43 AM | Comment Link

    • Mitch said...

      17

      Pitchfork,

      I see why you are… And they should be concerned.

      ( “Who are ‘They’? They probably live in LA. Who are ‘They’?)
      ( always loved that line in an old song )

      But…

      A small ship….nice cruise in the gulf. Water launch.
      And….
      Thanks to Killary…

      The whole fucking world knows that there is a four minute window…..FUCKING STUPID !!!!!!
      ( you saw that screw up at the debates?)

      There is a little town in Kansas…. All….repeat ALL …communications of the US pass through it.
      One…. Say 20,000 feet up…. Comms gone…. If it was in a bigger K.T. Size….. Most of Canada…all the way to damn near Costa Rica….rockies to Manhattan…..goes dark…..
      No power….no more.

      Only ones that MIGHT have lights….west coast….maybe.

      And my horses become some of the most valuable things around….. And a bucket to carry water in.

      And, refugees become the most dangerous thing out there….seen them up close. People get real weird when they are desperate.

      Russia… They split their comms in to different sectors….. And put them underground…..go figure

      Also….with all the wonderfully, intelligent, calm. And don’t forget rational people our government keeps “reaching out”. ( fucking hate that term…sounds so….FAKE)…to…..with….dagger, dum-dum, and drone…the immediate response will be…. Dark Ages type shit. .

      All of that… Though…… Is nothing I have any control over….other than….get another horse….

      M

      10/22/16 10:26 AM | Comment Link

    • Mitch said...

      18

      Btw…

      Pitchfork…..

      I saw the shot at my age……

      I’m an old soul…..ok?????

      M

      10/22/16 10:28 AM | Comment Link

    • Mitch said...

      19

      Pitchfork,

      Hmmmmm….

      Your CACI post…..

      Makes you wonder about what else they don’t put on their resumes…..huh?

      Maybe…..domestic operations……

      Pretty clear they have a big zero on the morals standard….

      And…. They would clearly entrenched in political thinking…..
      The go after the person who confronts them….rather than do some soul searching to see what caused them to be targeted….hmmmmmmm

      Hmmmmmmmmmm

      How are those tapes????

      Just a thought…..

      Hmmmmmm,,,

      M

      10/22/16 10:34 AM | Comment Link

    • Mitch said...

      20

      Pitchfork….

      Btw….

      A little thought for you.

      Search GSG4… Little company.
      One of their most famous former employees….

      The bastard who shot up the club in Florida.

      They are the same company that just turned the dogs loose on the protesters in the North.

      You might find out out who know owns CACI.

      Maybe.

      M

      10/22/16 10:53 AM | Comment Link

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