Free Trade Agreements Dominate Media
by Craig Harrington on September 8, 2011 - 12:43pm
In the past several weeks the major news media has seen a dramatic increase in the amount of press coverage given to free trade agreements. Major and mid-level media outlets have taken up the cause of stalled FTAs that are currently held up by partisan roadblocks in Congress.
The popular news site Politico ran an opinion piece on its front page titled ?Politics of trade hurt job creation? promoting the merits of new free trade agreements with Panama, Colombia and South Korea as a solution to our jobs crisis.
The article claims that the three deals would provide 250,000 jobs for this country across every economic sector. The author argues that for every additional $1 billion of goods exported from the United States 6,000 jobs are created or supported. By this logic, if the trade deals could increase exports even marginally they would be worth their weight in jobs.
Unfortunately, the author and the rest of the media have missed the point of their own logic. If exports create jobs, and exports have been proven to create jobs, would not imports take jobs away? That is the logical conclusion we should draw from the discussion, is it not? If you export a good that means you employed someone to make it here. If you import a good that means you are essentially paying someone to make it someplace else.
Will the Colombia, Panama and South Korea free trade agreements boost exports? Yes. Will they create some jobs? Likely.
Will these deals also increase imports and in so doing simultaneously take more jobs away? Absolutely.
According to estimates from within the Obama administration, the Korea-US Free Trade Agreement (KORUS) will boost exports to Korea by $5 billion. At the same time they will increase imports from Korea by as much as $20 billion.
We will gain jobs in a handful of sectors, likely for only a short period, while losing jobs in a host of other sectors. The KORUS deal is particularly unsettling because it deals with a highly developed technologically intensive nation. The United States will likely enjoy higher surpluses with undeveloped nations like Colombia and Panama ? countries with whom we already have trade surpluses ? if it enacts free trade agreements with those nations.
However, our annual deficit of nearly $11 trillion with South Korea will increase at a much higher rate than our surpluses with two insignificant Latin American economies.
In 100 percent of cases the United States carries trade deficits with highly developed countries. If those nations are already export-intensive economies, as is the case with South Korea, those deficits are enormous. The United States carried an annual deficit of $30 billion with China before the People's Republic was admitted to the WTO and before the United States signed on to a Permanent Normal Trade Relations (PNTR) pact with Beijing.
In the last decade of ?free trade? with China our import deficits have grown ten-fold. We have exported nearly $3 trillion of our economy to the boom towns of China in the past ten years. The American consumer has paid for China's astronomical growth in the past decade and will continue to do so until trade with that nation is brought into balance.
The media heralds ?free? trade because the enormous multinational companies who own the media conglomerates make money on both ends by having loose borders and easy access. They give the American people a handful of jobs that would not have existed without ?free trade? to distract from the millions that are taken away by the same policies.
We do not need more free trade or more free trade agreements. We need governments that plan ahead for the mutual benefit of their people. Most of all we need a media willing and able to speak independently and tell the truth about free trade.
This Work, Free Trade Agreements Dominate Media, by Craig Harrington is licensed under a Creative Commons Attribution-ShareAlike license.
Copyright ? 2011 EconomyinCrisis.org
