Trade advocates put numbers behind support for new pacts

Trade advocates are digging deep into the numbers to make their case for approving trade promotion authority (TPA) and the Obama administration’s broader trade agenda.

Three groups on Thursday released reports bolstering their case that new global deals include higher standards than previous pacts like the oft-cited 1994 North America Free Trade Agreement, which has been blamed for U.S. job and wage losses.


Third Way, the U.S. Chamber of Commerce and the National Association of Manufacturers — long-time proponents of trade negotiations with Europe, Latin America and Asia — detailed their evidence that new trade deals, like the Trans-Pacific Partnership (TPP), will actually help the nation's workers and businesses of all sizes.

Third Way found that trade balances had declined in 13 of 17 nations where the United States had inked pacts since NAFTA, with the trade in goods rising by more than $30 billion a year.

"Many policymakers and interest groups reflexively oppose new trade deals because of the hangover from NAFTA," the Third Way study said. "But post-NAFTA, trade deals were negotiated with higher standards."

Third Way said that their data "show that negotiators learned their lessons from NAFTA and that new deals, by increasing the U.S. balance of trade in goods and not just services, have definitively helped."

But Dean Baker, co-director at the Center for Economic and Policy Research, questioned Third Way's report, saying that "most of the trade deals were signed right as the United States was reaching its peak deficit (2006) or in the years just after."

He concluded that their "methodology would lead you to find smaller trade deficits in the years following an agreement even if the U.S. trade balance with these countries worsened compared to other countries."

Congressional lawmakers are expected to introduce TPA legislation soon, possibly by the end of the month, and the "debate will center on whether trade deals help or hurt the middle class."

House Ways and Means Committee Chairman Paul RyanPaul Davis RyanRevising the pardon power — let the Speaker and Congress have voices Paul Ryan will attend Biden's inauguration COVID-19 relief bill: A promising first act for immigration reform MORE (R-Wis.) said last week that, "the American worker can compete with anybody—if given a fair chance. And only a trade agreement can give you that fair chance." 

In the Chamber’s data, the U.S. has a trade surplus with its 20 free-trade agreement partners, including large surpluses in manufactured goods, services and agricultural products.

“The benefits of these agreements for American workers, farmers, and companies are hidden in plain sight,” said Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber.

“This report casts light on how these market-opening agreements have succeeded in boosting economic growth, ensuring accountability and fairness in our trade relations, and improving conditions for the creation of good U.S. jobs.”

Brilliant said trade deals especially help 300,000 small and medium-size companies that account for 98 percent of all U.S. exporters and one-third of goods exports.

But he said that new trade deals won't "become a reality without renewal of TPA."

Manufacturers said that trade agreements will help give the more than 256,000 manufacturers in the United States more access to the world’s consumers by knocking down trade and other barriers.

They say that the 20 nations within the 14 trade deals "account for less than 6 percent of the world’s population and less than 10 percent of the global economy, but purchase nearly half of all U.S. manufacturing exports."

“Without TPA, American manufacturers are standing on the sidelines while other countries negotiate deals that don’t include, and may disadvantage, the United States," the NAM study said.

President Obama acknowledged during his State of the Union address that "past trade deals haven't always lived up to the hype."

But said he expected much more out of the deals being negotiated.

"I'm asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren't just free but are also fair," he said.

Still, Lori Wallach, head of Public Citizen's Global Trade Watch, said that the notion that newer deals have higher standards is "just factually wrong" and there is no reason to expect that the TPP will produce better results than in the past.

She said the deal with South Korea does include higher standard labor and environmental chapters but that "we are getting slammed by a massive new trade deficit" since it into effect in 2011.