Fair Trade or Free Trade?

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As a matter of priorities, the Berks County Patriots (BCP) Legislative Committee focuses on state issues, realizing to invest time debating national issues is like being the preverbal fly on the elephant’s petute. Of course, being politically neutral we could also say the donkey’s petute. But one issue that has gotten press this month is HR 1314 Trans-Pacific Partnership (TPP) and Trade Adjustment Assistance (TAA).

So here’s where we are. The four congressmen representing parts of Berks County voted for both. TPP passed. TAA failed. While unions did not support TPP for fear of more jobs going off shore, the hard line conservatives, upon considering the presidents negotiating track record, do not want the president to negotiate with any country or foreign businesses for the next 1-1/2 years for any reason.

Being neither a union apologist nor a protectionist, I support free trade if it’s fair trade and in the best interest of our country.

To reflect briefly to an article I had published in 1995 regarding the unintended consequences of the General Agreement on Tariffs and Trade (GATT) which was first discussed in 1947 and negotiated during the United Nations Conference on Trade and Unemployment Conference and was continuously renegotiated through 1994.

North American Free Trade Agreement (NAFTA), negotiated in 1994 was purported to produce American jobs and a trade surplus with Canada and Mexico. Does anyone remember Ross Perrot’s giant sucking sound?

Ironically much of what was thought to be trade favorable to the United States was a ruse when considering much of what we sent to other countries was machinery which later produced the merchandise on our shelves. Coupled with that was the subsidized farm produce which was profitable to the farmer, but not in the best interest of the taxpayer.

So since those trade agreements some twenty five years ago, what is the bottom line?

• We have accumulated a $11.2 trillion trade deficit

• 55 thousand factories have closed

• 5 to 6 million manufacturing jobs gone

So what is the current round of unintended consequences? To be sure, jobless minorities in center cities need little excuse to riot in the streets. The non skilled and semi skilled jobs are gone. They feel abandoned. China has now immerged from a military threat to an economic power thanks to years of sweetheart deals.

We can lay blame for the changing circumstances of job loss and trade deficit to many causes – automation/robotics, union demands and labor costs and PA, with no RTW law, has its jobs head south. Additionally, we have that unelected shadow government such as OSHA dictating work place requirements and DER and EPA issuing environmental dictates with little consideration for the consequences. Then there are workers’ benefits earned over the years such as vacations, healthcare, pensions, minimum wage, holidays, while China has practically none of that. Additionally, China’s manipulation of their currency and ignoring our patent laws virtually cloning anything they choose (knock offs) as Wal-Mart fills their shelves with Made in China merchandise has exacerbated the imbalance of trade. Understand that fair trade and free trade are not mutually exclusive. The worker and USA companies simply can’t compete on an unlevel playing field.

Our capitalist system expects corporate heads to reward stock investors with a fair return on their investment. So when a corporate head decides to go off shore to keep stock holders happy he keeps his job. He has to deal with short term circumstances or join the unemployed.

So now when we read the headline "white cop shoots black felon" or hear pundits blame the rise of fatherless center city youth as the cause and effect circumstances that precede the looting, think as that youth thinks. The factory down the street that provided a non skilled or semi skilled worker with a job is gone. On the other hand his unemployed running mates resort to gangs, looting, crime, drugs or even public assistance, but still wear bling-bling around their neck. That youth coming on behind sees no light at the end of the tunnel or no job down the street. In his eyes, he sees no incentive to get an education and follows the path of least resistance. So now where do we asses blame? Failing schools, fatherless youth, racist cops or is it no manufacturing jobs that provided non skilled or semi skilled workers an alternative to an abhorrent lifestyle. How about all of the above?

I wrote to Berks County Congressman Costello and Congressman Pitts for an explanation regarding their yes vote on TPP and TAA.
Congressman Costello did not reply, but Congressman Pitts’ office did.
The rationalization was:

• The TPP negotiations have been ongoing for years

• As to why behind closed doors – It’s as matter of not showing your hand until you got the best deal you can.

• Now that it’s been formulated the public will know and congress will evaluate it and vote up or down without amendments. If rejected, congress can offer amendments later and the president can do further negotiating, but Congress has the final say. (That’s comforting unless Pelosi returns as speaker of the house and all bets are off).

• It was also noted that China is opposed to TPP and is working on its own TPP with other countries

One can only wonder what influence corporate heads have with the politics of it all when their focus is the bottom line and allow the consequences to be other people’s problem.

So that’s an overview of a complex problem. Unintended consequences are not so simplistic. Trade agreements, manufacturing jobs gone, dysfunctional families, racism? As one might say, pick your poison. But at least it’s understandable how TEA parties can be frustrated attacking the 800 pound D.C. gorilla with minimal finances to argue their case.

Rod Miller
Berks County Patriots
Legislative Chairman