Commentary: Demonizing free trade agreements

Although free trade deals can cause short-term job losses, the long-term economic gains far outweigh the costs.

   If there’s one thing that the recent, divisive United States presidential election has shown, it’s that the general public in this country—as reflected by Republican president-elect Donald Trump and former Democratic candidate Hillary Clinton—rejects free trade agreements without truly understanding them.
   The widely held belief is that trade agreements, such as the North America Free Trade Agreement and others, send American jobs overseas.
   No doubt these agreements, which reduce or eliminate tariff and non-tariff barriers to trade, have caused the shift of some U.S. manufacturing abroad, resulting in the loss of those jobs.
   In reality, however, many labor-intensive products formerly made in the United States have been overtaken by cheaper imports—with or without free trade agreements. Technology advancements have also replaced their fair share of American jobs.
   The problem is that many Americans forget where their big-brand items actually come from. They seem to be under the impression that the origin of their products starts at the store shelf. Price ultimately drives how Americans purchase their goods, and if it’s an import, so be it.
   Others argue against free trade because of labor and environmental concerns. Both are fair points, but the reality is that these agreements, which take years to negotiate, give the U.S. an opportunity to constructively address these kinds of injustices once the countries are parties to them.
   This leads us to one of the biggest and most important trade agreements reached by the United States in many years: the Trans-Pacific Partnership (TPP). In addition to the United States, the TPP includes 11 other Pacific Rim countries, representing a combined 40 percent of global GDP.
   In the waning days of the Obama administration, TPP may now fail to reach fruition, despite calls from leading trade associations for Congress to approve the far-reaching agreement before the end of the year. After the ferocity of the presidential election campaign, during which both candidates lambasted the deal, Capitol Hill lawmakers may not have the stomach to even vote on it in the final months of 2016.
   And unfortunately, the missed U.S. trade opportunities will be felt throughout the economy.
   The U.S. International Trade Commission in its analysis of TPP found that as many as 18,000 taxes against U.S. exports would be eliminated or phased out once the agreement is implemented, resulting in an increase of American-made exports of $57.2 billion by 2032. That also translates to American jobs.
   Without TPP, other countries will gladly step in to ship their exports to these markets, and yes, we will continue to import tons of goods from our former TPP partners.
   Meanwhile, as U.S. Trade Representative Michael Froman warned, “China is moving ahead aggressively with its own agreement, the Regional Comprehensive Economic Partnership, or RCEP, which covers 16 countries stretching from India to Japan. Unlike TPP, it doesn’t have binding and enforceable labor and environmental regulations. It doesn’t provide for the free flow of data across borders. It doesn’t put disciplines on state-owned companies so they have to play on the same playing field fairly with private firms.”
   Is this the trade world the United States wants?
   American shippers should contact their lawmakers and tell them free trade agreements are good for local, national and global economies. Yes, they impact jobs in the short term, but they provide much greater long-term economic benefit. The jobs lost to FTAs should be replaced with retraining programs that get American workers prepared for existing and future jobs, not the manufacturing jobs of the 20th century.