H. Ross Perot, the independent candidate for US president in 1992, said if NAFTA, the North American Free Trade Agreement, were passed you would hear a “giant sucking sound” as jobs left the US for Mexico.
Well, there was no giant sucking sound caused by an immediate job loss after Clinton won the election and NAFTA was passed in 1994; but since then NAFTA has caused the destruction of hundreds of thousands of good middle class manufacturing jobs in the US that were sent to Mexico, causing the erstwhile holders of those jobs in the US to be displaced to lower class service jobs.
The so-called Trans-Pacific Partnership, or TPP, as secret as it is, is apparently little more than another trade agreement among nine nations, including the US, Canada, Japan, Australia, Vietnam, Peru and others, and most likely will produce the same results in the US as NAFTA, hollowing out even more middle class manufacturing jobs that have survived in the US.
According to capitalistic economic theory, free trade raises living standards for everyone if trade restrictions between nations are removed since it allows nations with particular natural resources to specialize in producing what they can at the lowest cost, thus providing more and more goods for everyone at the lowest cost. The fly in the ointment is that providing goods at the lowest cost does little good if consumers do not have enough disposable income to purchase them.
NAFTA has shown a sure result of free trade agreements is they punish and benefit certain sectors of various societies, causing in the US the crony capitalists at the top of large manufacturing corporations to be enriched while the productive workers at the bottom of their corporations lost their jobs and paid the price for supposed economic progress.
For sure we do not need any more economic progress like this.
The Trans Pacific Partnership is a similar bad idea that will enrich the elite rich at the expense of the middle classes of the rich nations signatories to the agreement, exacerbating the ghastly global inequality that has grown exponentially from year to year since at least 1980.
On the face of it free trade agreements involving only a few nations, three in the case of NAFTA and nine in the case of the TPP, are a bad idea because of what they do to world peace, having been designed to enrich the nations of the free trade agreement at the expense of nations not members of the agreement.
If you want to do free trade it should include all nations on Earth to avoid fostering unnecessary international conflict. Any short run gains for the perpetrator nations are sure to be offset by the reprisals of the victim nations.
Do everything you can to make sure we in the US do not hear “slow sucking sounds” as more middle class manufacturing jobs are sent to Vietnam.
Richard John Stapleton is an emeritus professor of business policy and ethics who writes on business and politics at www.effectivelearning.net.
Once again Professor Stapleton has demonstrated his sure grasp of economy theory and politics. Thanks!