Avarice, Apathy and the TPP
By Richard Cucarese
America is once again at a crossroads. We have witnessed the constant dilution of a once strong industrial base. We’ve agonized at the greed of profit over people or purpose as Wall Street and its corporate raiders dissected once mighty manufacturers, leading them to bankruptcy courts, their legions of pensioners into the rolls of the impoverished and its employees into the ranks of the chronically unemployed. Over the past two decades, the catalyst for job loss and the shuttering for over 75 thousand factories have been offshoring and the implementation of massive Free Trade Agreements (FTA’s).
Throughout our country’s history, we have strived to keep our markets open with measures of free trade. Since the 1990’s, “Mega Deals” such as NAFTA, CAFTA and the most recent Korean FTA (KORUS) have been implemented to do just that. In retrospect, they have failed miserably in the protection of American jobs, and the protection of environmental, safety or labor standards.They have also contributed to the illegal dumping of cheap goods on America’s shores, exacerbated by the allowance of currency manipulation.
Hailed as the trade deal of the 21st century, the gigantic, twelve member Trans Pacific Pact (TPP) seems to be heading us down this road again. The U.S., Canada, Mexico, New Zealand, Chile, Brunei, Malaysia, Peru, Australia, Singapore, Japan and Vietnam have all signed on to participate.
President Obama says the language of the agreement contains safety measures for labor, the environment and other aspects, but if the KORUS agreement is any indication of what Americans are in store for, it is highly doubtful they will work against emerging market nations such as Vietnam. I use KORUS as an example, since many of the crafters for the TPP also did the framework for KORUS. Although KORUS was started under the Bush Administration, it was signed in 2011 by President Obama, who hailed the agreement as a job creator, and the potential for our goods to be exported. A White House fact sheet put out by the Obama Administration claimed KORUS would support 70 thousand jobs and the export of goods would add 10 billion dollars to our coffers.
Four and half years later, the numbers are much more sobering. KORUS has had a net loss of 90 thousand jobs between 2011–2015. Exports to Korea have only increased 0.8 billion, while our trade deficit with Korea has increased by almost 30 billion dollars.
Thee TPP partners us with Vietnam, whose dossier includes a plethora of child labor and environmental violations. They are also a violator of point of origin issues, as well as South Korea who may join the TPP at a later juncture. Point of origin is a big sticking point with U.S. corporations and labor organizations, because violators such as China nerfariously circumvent tariffs by routing their products (such as steel) through countries such as Vietnam. Once they do this, the host country relabels the product as its own.
The rule of origin standards are also a contentious issue. When NAFTA was passed, 62.5% of a product had to originate from an FTA to qualify for trade benefits. The US-Australia FTA reduced it to 50% and KORUS reduced it to 35%. Thee TPP will remain at the anemic levels of KORUS, which means that 65% of content can come from elsewhere. The question remains as to why the US Trade Representative, Michael Froman, has allowed these numbers to decrease so dramatically in each FTA. This is not the way to create or even sustain levels of employment domestically.
Currency manipulation, the artificial inflation or deflation of a currencies exchange rate has also hurt our ability to trade fairly with countries. China’s currency manipulation began concurrently with their inclusion into the World Trade Organization. Japan, who will be a partner in the TPP, has also been a frequent abuser of currency manipulation. The International Monetary Fund has jurisdiction in disputes of this nature, but they as well as the WTO lack the will to handle the complaints meritoriously. The U.S. could play hardball by implementing harsh tariffs, but that is highly unlikely since Japan holds 1.24 trillion of our debt, and China holds another 1.2 trillion.
Wall Street, in its wanderlust for easy money is ready to pounce on the TPP, since it has been leaked that ratification of the FTA would roll back reforms to pre-2008 levels. There should be an outcry on all these issues from the masses of America, but we are sadly faced with the apathy of an arms thrown up, “what can we do?” attitude.
There was a time when the manufacturing might of the United States was on display around the world. The area in which I grew up produced many world renowned goods, crafted by generations of men and women who took pride in their labors and the care to deliver the best products money could buy. Our main industry in Fairless Hills, Pennsylvania was steel.
The U.S. Steel mill in which I began my career boasted a workforce of over 9,000 Steelworkers. Today, there are 80 Steelworkers left there. Much of our business was taken away by the dumping of steel on our shores from Japan, Korea and others. Many neighborhoods in the Trenton and Lower Bucks County area were decimated and have never recovered. The TPP will exacerbate this erosion, and the only people reaping the rewards will be in corporate and Wall Street boardrooms.
In a few weeks, I’ll be taking my wife and five children to New York to see a building constructed with steel from our plant, the magnificent One World Trade Center. I’m proud to tell my family, as many before me have had the chance to say, “I helped make this.” Can you imagine a time in our country when those words may not be uttered? If the TPP passes, it may be sooner than we think.
