Written by Agis   

Trade policy may not be the foremost issue in voters’ minds during this election season. Yet, trade policy has a direct impact on the national debt, unemployment, and the overall health of the economy. In that the United States’ current trade policy adds to the deficit, anyone who cares about programs such as Social Security, Medicare, and Medicaid ought to pay close attention to what the presidential candidates have to say on the subject.

In the first presidential debate of 2012, President Obama and Mitt Romney professed an ardent desire to support small business owners. Yet, in October of 2011, the president acted against the interests of small business owners by signing a trade deal with South Korea, Colombia, and Panama known as the Transpacific Partnership (TPP). In deciding to sign TPP, the president had the enthusiastic support of Republican leaders including John Boehner (http://tinyurl.com/98jg3uw) and Mitt Romney (http://tinyurl.com/8gdq7fx). The American people often get frustrated when political leaders find it difficult to agree on policy, but they ought to be downright scared when political leaders from both sides of the aisle agree on something so wholeheartedly.

TPP closely resembles the North American Free Trade Agreement (NAFTA) of 1993 (http://tinyurl.com/96o6nb6). When examining the effects of NAFTA, there is every reason to conclude that TPP will significantly harm small business in America, and it is likely to harm a far greater number of Americans than it will help.

When NAFTA was presented to the American people in 1993, they were assured that NAFTA would create American jobs and help small business owners. The head of General Electric (GE) went so far as to assure Congress that, if the trade deal were passed, the company would hire additional American workers. Instead, GE laid off 2,108 American workers after the company shifted production to Mexico (http://tinyurl.com/9cehlnl).

According to the Economic Policy Institute (EPI), “only a small number of multinational companies have benefited from NAFTA, while many workers and small businesses in a broad swath of industries based in the United States, Mexico, and Canada have suffered extensive harm from this flawed agreement (http://tinyurl.com/clm6t9z).” EPI reports that the U.S. trade deficit with Mexico and Canada has increased by 378% or 63 billion dollars since 1993. Whenever an American company opens up shop in a foreign country, it adds to the trade deficit.

Less is said about trade deficits than is said about the national debt. Yet, economic data indicate that, when a trade deficit exists, it is likely to usher in budget deficits (http://tinyurl.com/bwoyvqo). The reasons behind this aren’t at all obscure. If American companies are exporting goods and services at a brisk pace, they will hire additional workers. When more Americans are employed, more Americans are paying taxes and spending money. This means additional revenue for the federal government. Likewise, when exports are slow, Americans will lose jobs and pay less in taxes and will be more likely to rely on assistance programs like Medicaid.

If it’s true that trade deals like NAFTA and TPP hurt the American economy, why do these deals have bipartisan support? One may wonder whether lobbying by Political Action Committees (PACs) is a factor in this. In an article written in 1993, it was reported that …

"A business coalition calling itself USA*NAFTA got thirty-five Fortune 500 companies to serve as “captains” in the lobbying drive for NAFTA. The captains contributed a total of $7.2 million in “soft money” to both parties in the most recent election cycle. Seven captains -- including representatives from DuPont, BankAmerica [now 'Bank of America'], United Technologies, American International Group [AIG – does the name sound familiar?], and AT&T -- were invited for coffee at the White House by President Clinton (http://tinyurl.com/9cehlnl)."

United Technologies is a multinational defense contractor. Not only have they moved jobs to Mexico, they have exerted pressure on their suppliers to follow their lead. The head of a Minnesota company called Tolerance Masters reported that a United Technologies subsidiary “induced” him to move production to Mexico (http://tinyurl.com/bmj5o4x).

When these trade deals are presented to the American people, politicians will say that the deals will enhance America’s competitiveness in the global marketplace. But, as pointed out in the New York Times, “[m]ost lobbying is pro-business, in the sense that it promotes the interests of existing businesses, not pro-market in the sense of fostering truly free and open competition (http://tinyurl.com/8e7v5jy).” This makes perfect sense: wouldn’t a lobbying firm be more interested in promoting the interests of its clients than creating free and open competition?

GE has been a strong supporter of TPP (http://tinyurl.com/9ywqqwn). As was the case with NAFTA, spokespersons for GE assure the American people that this will mean more American jobs. GE is one of that “small number of multinational companies” mentioned earlier, and stands to profit from the deal. In the current election cycle, GE has donated more money to Mitt Romney than to any other political candidate. His campaign has received $214,450. But it’s just as important to note that the second largest beneficiary of their largesse is Barack Obama, who has received $75,150. There’s something peculiar about donating money to both sides of a political contest, because one would think that donating money to a candidate is a way of stating a preference for that candidate over his or her opponent. But if both candidates are working on your behalf, then it makes sense to donate to both campaigns.

And it is worth noting that, on the list of people who’ve received the most money from GE, Number 3 on the list is Democrat Congressman Jim Himes of Connecticut. He sits on the powerful Financial Services Committee that is charged with maintaining oversight over companies such as GE (http://tinyurl.com/8d2wlre).

Who are some of the other multinationals who stand to benefit from TPP? According to U.S. News and World Report, TPP “gives American companies such as Citigroup, Goldman Sachs, FedEx, UPS and MetLife, increased access to South Korea's $580 billion services market (http://tinyurl.com/8zoavo2).” Let’s put this in perspective:


Donor Recipients (rank out of all recipients, $) Citigroup Mitt Romney (1, $418,263) Barack Obama (2, $138,292)
FedEx Mitt Romney (1, $45,150) Barack Obama (4, $23,742)
Goldman Sachs Mitt Romney (1, $891,140) Barack Obama (2, $137,974)
MetLife Mitt Romney (1, $171,450) Barack Obama (2, $31,264)
UPS Barack Obama (1, $26,238) Mitt Romney (2, $17,500)
www.opensecrets.org

John Castellani, the head of the pharmaceutical lobby PhRMA, is another TPP supporter (http://tinyurl.com/bvlj68l). Barack Obama is the largest recipient of cash from PhRMA lobbyists, receiving $1,178,076 in the current election cycle, followed closely by Mitt Romney who has received $1,070,012 (http://tinyurl.com/aglyg). Unnoticed by many Americans, firms in South Korea are ramping up preparations to make that country a more hospitable location for foreign companies seeking to OUTSOURCE pharmaceutical manufacturing (http://tinyurl.com/cts75me, http://tinyurl.com/cr4xwvb).

Back in 2007, after a debate with other candidates seeking the Democratic nomination, Obama promised that, “In my first week in office, I will notify Mexico and Canada that the US is withdrawing from NAFTA. We need a president who knows what the right thing is to do the first time, not in retrospect. And I think that we need to go forward to trade that’s based on workers’ rights, human rights and environmental quality principles. No one else on this stage could give a direct answer because they don’t intend to scrap NAFTA (http://tinyurl.com/coxz25o).” Obviously, this is a promise he did not keep. And, just as obviously, he seemed to believe back then that withdrawal from NAFTA is in the best interest of the American people.

In summary, both the Republican and Democratic parties receive money from the same small group of multinational companies. The interests of multinationals are in conflict with the interests of the American people. What is needed is for the American people to disavow their allegiance with the two major political parties and encourage new political parties – parties that are not beholden to corporate paymasters – to step up. Equally importantly, it is time to take severe measures to stop the trading of money for influence.

Agis
newindependentwhig.blogspot.com