Casey Column: Trade Deals Forfeit Jobs

By:  Bob Casey

WASHINGTON, DC U.S. Senator Bob Casey (D-PA) released the following column, which ran in the Scranton Times-Tribune earlier this week:

Trade Deals Forfeit Jobs

Pennsylvania has played an important role in America's manufacturing and commercial heritage.

During World War II almost one-third of the nation's steel came from Pennsylvania, which was a full 20 percent of global production at the time.

As then-Gov. Arthur James put it, Pennsylvania was truly the "arsenal of America."

It didn't stop with the end of the war.  Afterward, these manufacturing facilities were used to make American products and fuel the growth of a thriving middle class.

Unfortunately, these plants are now mostly gone due in part to our failed trade policies. 

Over the last 30 years, we have seen trade deficits soar, currency manipulation go unchecked, lavish subsidies by foreign governments go ignored and exploitation of workers in other countries go overlooked.

Today, manufacturing remains critical to job creation. In fact, manufacturing remains the commonwealth's largest source of good-paying jobs with chemical, primary metal products, fabricated metal products, food products and machinery making up the top-five manufacturing sectors supporting Pennsylvania families.

That is why I am concerned about the pending trade agreements with South Korea, Colombia and Panama. 

A review of the impact of past trade agreements offers little comfort.

In 1994 Congress passed the North American Free Trade Agreement, creating the world's largest free trade zone.  Since NAFTA's passage, U.S. trade policies have steadily chipped away at Pennsylvania's manufacturing sector. 

In total, Pennsylvania has lost 300,000 manufacturing jobs since NAFTA was implemented.

Despite these alarming statistics, advocates for trade deals, including the pending agreement with South Korea, promise significant economic benefits.

We heard the same thing in 1993 when NAFTA supporters promised to deliver hundreds of thousands of jobs across the U.S.  Leading economists at the time projected NAFTA would bring 170,000 new jobs in the near term alone.

These gains were not realized. Instead, since NAFTA was signed into law through 2002, 525,094 workers were certified as displaced under NAFTA according to the Department of Labor. With this rosy prediction for NAFTA in mind, a close look at the Obama administration's projections for the South Korea agreement should give us pause.

Also troubling is the issue of South Korea's currency. South Korean currency manipulation remains an unaddressed problem. As we've seen with China, an intentionally weakened currency leads to a fundamentally unbalanced trade relationship and brutal conditions for U.S. companies.

That is why I have been so vocal on the need for the administration to do more to crack down on China's currency manipulation that is hurting Pennsylvania manufacturers and shipping jobs overseas.

In a June 17 report, the Economic Policy Institute calculated that if Asian currencies were strengthened to appropriate, market-determined levels, U.S. gross domestic product would increase as much as $285.7 billion (or 1.9 percent), creating up to 2.25 million U.S. jobs.

Unfortunately, as with other NAFTA-style free trade agreements, the Korean trade agreement is silent on currency. This is unacceptable considering that South Korea devalued its currency twice, once in 1988 and again in 1998.

We must take the time to ask the tough questions of the three pending trade deals, especially the agreement with South Korea: 

  • Will the agreement create a substantial number of new jobs?

I am concerned it will not. If previous agreements, like NAFTA, are any indication, the South Korea agreement will lead to job losses, especially in the critical manufacturing sector.

  • Will this agreement help create a level playing field?

It will not. The agreement fails to addresses critical issues, like currency manipulation, that hurt American businesses.

  • Does the agreement provide new opportunities for American manufacturers to export?

Proponents have overstated the benefits. Certain industries and firms are likely to benefit while others will not.

What is clear is that in its failure to address non-tariff barriers to trade, the agreement leaves American firms unprotected and on an unlevel playing field.

In these uncertain times, job creation must be our top priority. 

In reality, instead of creating opportunities for Pennsylvania, our trade policies do little more than off-shore good-paying jobs while giving our trading partners unlimited access to our market. 

Manufacturing is the heart and soul of Pennsylvania and of our nation's economy.   Our future success depends on developing policies that allow our people to create and compete in the global production of goods.

We must examine these pending trade agreements with these thoughts in mind.