Donald Trump is portrayed in the mainstream media as the primary critic of the Trans-Pacific Partnership (TPP). This is ironic since the coalition against the TPP is dominated by progressives.
In a June 28 speech attacking free trade deals and globalization, Trump cited the work of the Economic Policy Institute (EPI) more than a dozen times. EPI is a respected progressive think tank focused on economic justice for workers. EPI president Lawrence Mishel commented on Trump in interviews and a blog post. “No one likes to be associated with a bigot and a scam artist,” he said.
However, Mishel is glad to see a debate in the mainstream media over globalization’s role in eliminating good jobs and undercutting wages. EPI studies show that the TPP won’t be a good deal for American workers.
Mishel said the problem now is that globalization is considered to be the only culprit in undermining our standard of living. Mishel noted that the EPI has issued reports that demonstrate that there are other factors that have weakened the ability of blue-collar and white-collar workers to obtain decent paychecks over the last four decades. These factors were the result of intentional policies pushed by the corporate elite.
There’s excessive unemployment created by Federal Reserve Board policies, which were friendly to the finance sector and bondholders. There’s government “austerity” (cutting services, privatization, etc.) at the federal and state levels — which has mostly been pushed by GOP governors and GOP-dominated state legislatures — that has slowed down the economy and stunted wage growth. There’s also the decimation of collective bargaining, which is the single biggest reason that middle class wages have faltered. Meanwhile, the minimum wage is now more than 25 percent below its 1968 level, even though productivity since then has more than doubled. Trump doesn’t mention these factors.
Mishel said, “Trump describes the evolution of trade policy as if it was driven by Democrats alone. In fact, NAFTA was originally George H. W. Bush’s proposal. NAFTA was passed over the direct objection of House Democrats, two-thirds of whom voted against it. Trade policy has been primarily driven by corporations and their trade associations working with Republican allies. While trade has been an internally divisive topic for Democrats, it has been a point of unity among Republicans for the most part.”
Trump “pulled a bait-and-switch” in his talk where he cited the EPI studies, Mishel said. Trump talked about trade and then suddenly claimed that America’s real problems are business overregulation and excessive taxation of U.S. corporations. How courageous! This has been the traditional corporate policy agenda for decades. It has failed over and over again to spur economic growth and increase wages.
Mishel also noted that the controversy over the TPP isn’t really about trade.
“Instead it’s a treaty that will specify just who will be protected from international competition and who will not,” he said. “And the strongest and most comprehensive protections offered are by far those for U.S. corporate interests. For example, the biggest winners from trade agreements have traditionally been U.S. corporations that rely on enforcing intellectual property monopolies for their profits — pharmaceutical and software companies, for example.
“Then there’s the investor-state dispute settlement (ISDS) arbitration panels set up to allow multinational corporations to enforce their claims when any nation does something that might cost them money. It’s an anti-democratic process that leads governments to bend over backwards to not antagonize business interests.”
Trump doesn’t talk about the big protections for U.S. corporations or the ISDS process. He claims both the U.S. corporate elite and workers are being hurt. He says U.S. negotiators are “stupid” and being tricked by the sneaky Chinese, Mexicans and other trading partners.
Dean Baker, macroeconomist and co-director of The Center for Economic and Policy Research, challenges Trump on this. He does agree with Trump that China and Mexico and many other countries are running trade surpluses with the United States and that those surpluses have cost the jobs of millions of American workers. The trade deficit also undermines the U.S. economy.
However, he doesn’t think that U.S. negotiators are “stupid.” He notes:
“Let’s take the case of China, where we have the largest trade deficit. Our trade negotiators are not especially focused on the trade deficit with China. They want China to grant more access to its financial markets to Goldman Sachs and other banks. They also want more access for our telecommunications companies, our insurance companies and our retail and restaurant chains. They want China to do a better job enforcing Microsoft’s copyrights and Pfizer’s drug patents.
“When it comes to our trade deficit, our trade negotiators are getting conflicting signals. Unions and workers in the U.S. would like China to raise the value of its currency to reduce its competitive advantage. But GE and other U.S. companies that produce goods in China and export back to the United States aren’t anxious to see their costs rise due to a higher valued Chinese currency. The same logic applies to Wal-Mart that has spent years developing a low cost supply chain in China and other developing countries.”
Trump poses as a tough guy when he beats up on vulnerable scapegoated minorities. But he leaves the corporate elite untouched.
This opinion column does not necessarily reflect the views of Boulder Weekly.