Economy in Crisis | 24 August 2015
Disastrous TPP being pushed to wrap up by mid September
Paola Casale
The Trans Pacific Partnership (TPP) is not dead. Even though talks failed last month in Hawaii and the 12 countries couldn’t come to an agreement, the last few legislative days left are being used up wisely. Canada’s chief negotiator, Kirsten Hillman, visited the U.S. capital last Thursday to push forward the TPP and try to finish it up by mid-September. We shouldn’t only be concerned over the TPP, but two other similar yet even larger and more secretive deals known as the Transatlantic Trade and Investment Partnership (TTIP) and the Trade in Services Agreement (TISA).
Why are they bad? Well if you ask Belgium who has approved a process of drawing up a motion demanding an end to the TTIP negotiations, or New Zealand who has a group of people filing a lawsuit against the Trade Minister of their country over the secrecy behind the TPP, or Australia who is seriously considering walking away from the deal; they will all say its disastrous for the world.
How will they affect America directly? We have physical proof of the damage similar trade agreements did to us. For example, the North American Free Trade Agreement has been nothing but a disaster for the U.S. Just by taking a look at the auto industry, we see how thousands, if not millions, of auto jobs have been shipped down south.
The Motor City, Detroit, was one of the most affected cities. Detroit was once a manufacturing giant. It was the 4th largest city in the U.S. with a high employment rate and endless blue collar job opportunities. Now it is the 18th largest city, in bankruptcy and no hope of recovery is in sight.
Just how did NAFTA cause such a disaster? Well when you compare our wages to Mexican wages, you can see just why companies would rather close up shop here and move there. Chrysler pays its workers $48 per hour when all benefits and profit sharing are included. GM and Ford pay between $57 and $58 per hour. In Mexico, these car companies pay an average of $8 an hour including wages and benefits.
Economists expect a 50 percent increase in auto production in Mexico and only a sad 3 percent in the U.S. within the next 7 years. In the past decade, 18 factories have closed in the U.S. and Canada and went to Mexico.
Those factories could’ve been jobs for us. They could’ve been good paying jobs for American families to be able to get back on their feet. They could’ve been the economic boost that we have been waiting for. But instead, we are left with a bankrupt city with many more on the same path.
Now by looking at our most recent trade agreement: the U.S.-Korea Free Trade Agreement (KORUS), we can see that we were deliberately lied to. The office of the USTR called KORUS a “model for trade agreements for the rest of the region.” However, since implementation, we have already lost 40,000 jobs and our trade deficit increased. USTR estimated that the U.S. trade balance with South Korea would improve by about $4 billion to $5 bullion. After one year of KORUS taking effect, our trade deficit actually fell $3.5 billion.
If its true that only 33 percent of Americans truly want more free trade agreements, then we need to be out in the streets protesting like the rest of the world is doing. The truth of the matter is that multinationals are are pushing for these free trade agreements in order to save a buck. They will outsource their jobs in order to save on production and labor costs.
We were fooled with NAFTA in 1994, we were fooled with China in 2001, fooled with CAFTA in 2005, fooled with KORUS in 2012, but we cannot be fooled again with the TPP, TTIP, or TISA. Contact your Representatives and Senators and let them know that you don’t support these free trade deals!