Trade Showdown Looms in Lame-Duck

By Joe Guzzardi
July 13, 2016
 
Shortly after the November presidential results are final, Congress will wrestle to resolve a lingering, contentious debate. The Obama administration’s top lame-duck priority is the Trans-Pacific Partnership agreement (TPP). The 12-Asian rim nations’ deal that would involve 40 percent of the global economy is one of the hottest campaign trail issues that may not be settled until 2016’s final months. Republican Donald Trump is vigorously against TPP, and recent anti-trade convert Democrat Hillary Clinton is also opposed. Ironically, while Clinton was Secretary of State, she endorsed TPP 45 separate times in public speeches she delivered at various domestic and international forums.
 
For now, however, TPP is off limits for congressional action. Senate Majority Leader Mitch McConnell vowed that he won’t pursue it before the election. But the lame-duck showdown that looms will pit the big business champion U.S. Chamber of Commerce, leading pro-trade congressional Republican powerhouses like Senate Finance Chairman Orrin Hatch against anti-trade Democrats like Vermont Senator Bernie Sanders and the Senate’s third-highest ranking Democrat, Chuck Schumer. Last year, Sanders lambasted TPP and said that bad trade deals are a major reason for the American middle class’ collapse and the nationwide increase in income inequality. Sanders insisted that poor trade deals have forced United States’ workers to compete with desperately poor worldwide workers, and pointed to Vietnam where Nike manufactures more than 350 million pairs of athletic shoes annually, but pays its employees an average 56 cents an hour.
 
Most Americans are also among the opposed. They’ve have heard many times before the lofty assurances of how beneficial trade deals will be for them. Even though it was first debated in the early 1990s, the most glaring example of broken promises is still fresh in Americans’ minds: the North American Free Trade Agreement (NAFTA). Experts argued that NAFTA would make Mexico richer, and that a wealthier Mexico would send fewer illegal immigrants to the U.S. But today the U. S. has three-times more illegal immigrants than it did 25 years ago. While the Mexican economy is somewhat improved, the lost U.S. manufacturing jobs have decimated the American middle class. The Pew Research Center found that in 1991, while NAFTA was working its way through Congress, 56 percent of Americans were classified as middle class. By 2015, the total had dropped to 50 percent. During the same period, the upper income bracket nearly doubled from 5 percent to 9 percent.
 
As Harvard economist George Borjas wrote, reality has caught up with globalists who promised that eliminating borders would create huge wealth. People can see the unintended—or at least the unadvertised—consequences that NAFTA and other unfair trade agreements have had. The elites are better off, but most Americans aren’t.
 
A recent Rasmussen poll confirms how angry Americans are about lousy trade deals that have pushed their interests to the side. Two-thirds of likely voters feel that government and big business collude to work against them; 50 percent want NAFTA renegotiated. A majority want jobs returned to America and are willing to pay higher prices for U.S. manufactured goods.
 
President Bill Clinton claimed that NAFTA would create 200,000 new American jobs each year. Instead, since NAFTA an estimated one million American jobs have been lost, trade deficits have soared, and income inequality has risen at an alarming pace. With more than 90 million Americans currently detached from the labor force, the nation can’t afford another trade fiasco. Given the known of failures previous deals, TPP poses a risk not worth taking.
 

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Joe Guzzardi is a Californians for Population Stabilization Senior Writing Fellow. Contact him at [email protected] and follow him on Twitter @joeguzzardi19