I’m not sure I agree Alex. Krugman’s point in the passage you quote is that trade agreements etc are not really determinants of overall employment levels, since any negative/positive impact they have on overall employment can be counteracted by macro-monetary/fiscal measures (though of course, as you observe and I am sure Krugman would agree, trade agreements etc may have effects on where and what the jobs are, moving them from the rust belt to Brooklyn, say).
I don’t see what’s wrong with that point in itself. It doesn’t at all imply that government shouldn’t also be concerned with where/what the jobs are. For example, couldn’t Krugman also hold that it would be a good idea to stimulate demand by starting a deficit-financed training programme in the rust belt, say, rather than just by reducing nationwide interest rates?
(Did you have in mind the further issue of monetary versus fiscal measures to increase demand, with the thought that monetary measures are necessarily nationwide and undirected, by comparison with fiscal measures that can proceed via eg directed training programmes? But on this I would expect Krugman to be on your side; as a good Keynesian won’t he think that fiscal measures are in any case generally more macro-effective than monetary ones?)