The strange bedfellows of Democratic President Barack ObamaBarack Hussein ObamaA needed warning for Yemen's rebels — and for our allies and enemies alike What Joe Biden can learn from Harry Truman's failed steel seizure Biden: A good coach knows when to change up the team MORE and the Republican Congressional Majority Leadership seem hell-bent on writing the White House a blank “fast track authority” check for the largest trade deal in world history – the proposed Trans-Pacific Partnership agreement.   To woo us, their spinmeisters boast the TPP will spur American exports to stimulate sorely needed economic growth.

In truth, the American economy will suffer severely.  This is because the TPP will hammer two main drivers of economic growth – domestic investment and “net exports.”


Domestic investment will fall because the TPP will push even more American factories offshore to Asia.  Indeed, it is precisely the advantages offered by moving their production offshore that motivates America’s multinationals to lobby for the trade pacts to begin with.  Sadly, the Administration has publicly identified increasing offshore investments by U.S. companies as a top TPP goal.

As for net exports, they represent the difference between how much a nation exports to the world and how much it imports.  Here, while exports to Asia may indeed rise with the TPP, America will be flooded by even more imports produced by sweat shop labor in factories built with American capital that have little or no environmental protections.  

We have seen this movie before.  Since the South Korean Free Trade Agreement was signed in 2012, the U.S. trade deficit with South Korea has soared.  In fact, shortly after South Korea won the FTA lottery, it erected new barriers to U.S. auto and auto parts exports.

Similarly, China’s 2001 entry into the World Trade Organization blew open the doors to American markets.  Since then, over 60,000 American factories have closed, and we now owe trillions of dollars to the world’s largest authoritarian nation.

If these “free trade pacts gone bad” have taught us anything, it is that a strong manufacturing base is essential to our prosperity. Manufacturing jobs tend to pay higher wages – and therefore help raise a nation’s standard of living. 

Moreover, factories provide the critical foundation for a community’s job base and tax bases as each manufacturing job supports as many as 7 additional jobs throughout the economy – the highest multiplier of any sector.  Of course, when a big multinational corporation like Boeing or Caterpillar moves its production offshore chasing the benefits of the latest new trade deal, the rest of the supply chain – and the community -- withers.

It’s not just economic prosperity put at risk by free trade pacts.  It is also our national security.  Here, TPP proponents argue the pact will strengthen America’s alliances with its Asian allies while providing those allies with the economic growth needed to finance their defense expenditures.  The more sobering reality is this:

The continued erosion of America’s manufacturing base under the onslaught of trade pacts has so severely harmed the U.S. tax base that both the defense budget and the military preparedness of American forces are now in great jeopardy.  At greatest risk is America’s so-called military “pivot” to Asia that was supposed to counter-balance the increasing aggression of a rising China.

Ironically, the White House wants to continue to play the “China villain” card in support of the TPP.  The presidential spin: “If America doesn’t write the trade rules in Asia, a protectionist China surely will.” 

Of course, injecting a “villain” into any trade debate is a well-worn propaganda technique.   With the North American Free Trade Agreement (NAFTA), proponents used the specter of narco-terrorism and increasing instability in Mexico to bolster their case – ironically, illegal immigration boomed in the wake of NAFTA’s passage. 

Similarly, the specter of a “Bolivarian revolution” styled after the socialist villains of Venezuela’s Hugo Chavez and Cuba’s Fidel Castro were deftly used to seal the deal for the 2005 Central American Free Trade Agreement. It is all just scare tactics yet in certain quarters, it seems to resonate.

All of these observations bring us back to the question: Should Congress should approve “fast track” for the White House?  In fact, there is absolutely no need for this – despite protestations Congress might encumber any final deal with too many restrictions that the other signatories might not be willing to stomach. 

Here, we have to remember America is the world’s most lucrative market.  That gives us the greatest bargaining power.  If the other nations in this treaty are unwilling to allow the U.S. to go through its due diligence in the sunshine, then all Americans should wonder whether the deal is really in their interest.   And, if this deal is not in our nation’s best interests, it shouldn’t be passed simply because it had the cover of fast track consideration.

Navarro is a professor of economics and public policy at the Merage School of Business, UC-Irvine.  His Netflix documentary film chronicles the damage done by China’s entry into the World Trade Organization and its implications for American prosperity and security.