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“Obamatrade” Would Hurt SC

PRIOR CRONY CAPITALIST TRADE DEALS HAVEN’T HELPED PALMETTO STATE || By FITSNEWS || This website has written previously in opposition to “Obamatrade” – a.k.a. efforts by the administration of Barack Obama to bypass Congress in crafting crony capitalist trade deals with Pacific Rim nations. We support free trade, but that’s…

PRIOR CRONY CAPITALIST TRADE DEALS HAVEN’T HELPED PALMETTO STATE

|| By FITSNEWS || This website has written previously in opposition to “Obamatrade” – a.k.a. efforts by the administration of Barack Obama to bypass Congress in crafting crony capitalist trade deals with Pacific Rim nations.

We support free trade, but that’s not what Obama wants via his proposed “fast track authorization” for the so-called Trans-Pacific Partnership (TPP).  What he wants instead is to appoint 600 corporate “trade advisors” to negotiate deals with foreign countries in secret – deals which would never be publicly debated and which Congress has no authority to amend.

Do you think for one second such agreements would be crafted in the best interests of U.S. taxpayers?  Or U.S. workers?  Or U.S. consumers?  Of course not …

This is more of big government “spreading the wealth around” – in the wrong direction.

Even the hard-core free traders over at the Cato Institute have criticized the deal for doling out “special privileges to foreign corporations” and “subsidizing discretionary outsourcing” – meaning we’re going to pay companies to ship away jobs that could be done in America at a comparable cost.

Cato also correctly pointed out how Obamatrade “weakens the rule of law.”  That’s especially troubling to ponder in light of the recent “Republican” cave on Obama’s executive amnesty proposals … which has only emboldened the administration to contemplate future power grabs.

BARACK OBAMA
BARACK OBAMA

But the biggest, most basic problem with Obamatrade is its bad economic math: Namely the lower consumer costs it promises come at a steep price – if the results of prior trade deals are to believed.  In fact since fast track was first authorized back in 1974, there’s been a steady erosion of middle class earnings.

“U.S. workers without college degrees have lost roughly 12.2 percent of their wages – even after accounting for the benefits of cheaper imported goods,” columnist Leo Hendrey, Jr. wrote recently for Reuters.  “This means less, not more, consumer demand for U.S. manufacturing and service-sector firms.”

What sort of impact would Obamatrade have on the South Carolina economy?  Judging from the impact of prior deals (detailed on this fact sheet), it won’t be pretty.

Since the passage of the North American Free Trade Agreement (NAFTA) in 1994, the Palmetto State has shed more than 117,000 manufacturing positions.  Meanwhile more than 71,000 South Carolina jobs have been certified as having been lost due to offshoring or imports since NAFTA.

The effects aren’t going away, either.  Since 2009, South Carolina’s trade balance with Mexico and Canada has fallen by $2 billion.

Adverse impacts are also being felt from the 2011 trade deal with South Korea – which has created a ballooning trade deficit and a huge reduction in exports of South Carolina’s top two agricultural products (chicken and turkey).

Nationally, the trade deficit with Korea has surged by $7.6 billion in just two years – with chicken and turkey exports plunging by 45 and 44 percent, respectively.

There’s also an important regulatory angle to consider.  Under the terms of deals like TPP, foreign corporations would no longer be bound by federal and state courts in resolving disputes – but rather foreign tribunals comprised of unelected private attorneys.  In other words our laws could be ignored – and our taxpayers forced to subsidize judgments awarded by these unaccountable tribunals.

On all these fronts, South Carolina simply cannot afford Obamatrade … which we’ll be continuing to make clear in the days and weeks to come.

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25 comments

The Colonel March 9, 2015 at 9:55 am

If you like your trading partner, you can keep your trading partner…

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The Colonel March 9, 2015 at 10:13 am

Is this the same Obama that attacked Hillary Clinton for supporting the “boon” of NAFTA? Why yes, yes, it is: http://www.politifact.com/truth-o-meter/statements/2008/feb/25/barack-obama/she-never-said-boon/

Is this a program that Obama has already made (false) claims indicating it will be a boon to unemployment and US trade? Why yes, yes it is: http://www.washingtonpost.com/blogs/fact-checker/wp/2015/01/30/the-obama-administrations-illusionary-job-gains-from-the-trans-pacific-partnership/

Is this a program that even Democrats realize will be a disaster? Why yes, yes it is: http://www.huffingtonpost.com/robert-reich/why-the-transpacific-part_b_6422088.html

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Rocky March 9, 2015 at 11:28 am

Now you know every politician is against the other guys ideas until they win. Did anyone notice that wierd statement from Lindsey Graham that he never sent an email? Seriously? I think someone’s got to show some Lindsey emails. Either he’s full of crap or a liar. Even GT uses email.

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The Colonel March 9, 2015 at 11:36 am

I can believe that Ms Lindsey doesn’t use email – he has people to do that for him. It is rather odd though.

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RogueElephant March 9, 2015 at 12:17 pm

CYA pure and simple. “I never sent that email.”

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The Colonel March 9, 2015 at 12:21 pm

Probably

ROcky March 9, 2015 at 4:49 pm

That’s what the ex-wife used to say when I’d nail her for violating visitation.

snickering March 9, 2015 at 10:35 am

South Carolina should just Legalize Pot and make boatloads of money instead of guessing what policies, practices benefit whoever. Go back to the basics and you will get the answer you want and need. I still have contempt for all Republicans and Tea Baggers who elected Haley for a second term. After they fix Pot Growing without Impunity STFU about things you’re guessing will happen. Buck Up Republicans and Tea Baggers and get rid of the Worst Governor South Carolina has ever had. Otherwise you’re just Yes Men to Haley whom Satan Worships..So long to my many Stupid friends.

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Bible Thumper March 9, 2015 at 11:07 am

The Trans-Pacific Partnership is a proposed tariff reduction treaty among twelve countries. If the USA does not take the lead in free trade then China will.

“600 corporate “trade advisors” to negotiate deals with foreign countries in secret…” There are many more than that currently regulating the current tariffs and restrictions that exist between the US and the eleven other countries.

South Carolina is uniquely positioned to benefit from free trade agreements.
1. We have a first class port.
2. Most of Boeing Planes manufactured in SC are exported. Tariff reduction could only help.
3. SC is a world leader in tire manufacturing. Many are exported. Most of the heavy equipment tires manufactured in SC are exported. Tariff reduction could only help.
4. SC leads the country in the export of Automobiles. Most BMW vehicles are exported. I visited BMW’s Greer factory. They export to 140 countries. I saw the rack that carried owners manuels for at least 50 languages.

“Congress has no authority to amend.”
First Congress can debate it for a limited time. Passing any trade agreement among many countries with each countries legislature amending it would be impossible. In fact, it has never been done before among any group of countries in the history of the world.

The benefits of Free markets and Free trade are the most difficult things to explain. The bureaucrats lose all their power. No one is in charge. The benefits to consumers is difficult to calculate. Tariffs often have short term benefits and then industries become dependent and no longer competitive. But history has proven in the long run, countries with free trade policies prosper more.

The lose of manufacturing jobs is manly due to automation. This is a good thing. It frees labor to pursue other more useful occupations. No one would suggest that farm machinery was a bad thing and yet three fourths of our population used to be employed in agriculture. No one complains about the lose of farm jobs.

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Rocky March 9, 2015 at 11:25 am

Well said. However, on point of correction, given improving train technology and efficiency – the great falicy of some is that all this “container” traffic through the new Panama Canal blah blah blah. In terms of just in time delivery – it is somewhat better to offload in LA, put containers on trains that can be delivered to their destination in 48 to 72 hours versus an additional 5 – 9 day transit through the Canal, up through the Gulf of Mexico, around Florida and up to Savannah or Charleston.

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Bible Thumper March 9, 2015 at 11:30 am

Some TPP countries are in South America who might use Charleston harbor.

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The Colonel March 9, 2015 at 11:32 am

Eerrrh, not so much – it all depends on the commodity and the distribution plan. A RO/RO is far better off delivering cars to the east coast before unloading if the cars are intended for the east coast market. The same is true for any “labor intensive reload commodity”.

Ship miles are also far cheaper than train or truck miles for a given volume/tonnage. For a “ship load” of TV’s destined for Best Buy – it’s debatable whether it would be cheaper to transload to a train then ship across the country to their distribution center in Perth Amboy, NJ.

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Rocky March 9, 2015 at 3:18 pm

Good point. But it’s like canals against railroads at that point. Say it’s just in time car parts for a plant in TN?

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Centrist View March 9, 2015 at 11:50 am

“The lose (sic) of manufacturing jobs is manly due to automation. This is a good thing. It frees labor to pursue other more useful occupations.”

Problem with that theory is that other occupations have also been automated to some degree, with their own set of job losses. Automation is implemented for tasks that are repetitive and where a person does the same thing over and over. To wit:
– When you drive up to a gas pump to fill ‘er up, do you use a self serve pump or have an attendant fill your tank?
– When you need cash, do you always go into a bank and get it from a teller, or do you use an ATM machine?
– When you get groceries, to you always get checked out by a cashier, or do you ever check yourself out in the self-service line?
-When you plan a vacation, do you use a travel agent or an online software system such a Orbitz or Expedia?

And when the farm hands lost their jobs decades ago, they got other jobs in factories. That could not be repeated today because of the reduction in factory labor content that has occurred over the last few decades.

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Trans Asian March 9, 2015 at 11:14 am

IT’S ADAM AND EVE, NOT ADAM AND STEVE!!!!!!

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Republicans are Stoooopid March 9, 2015 at 11:17 am

Legalize pot and we will have all the money we need.

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Rocky March 9, 2015 at 11:17 am

I love these little thought provoking articles. Clearly either FITS has not studied comparative advantage (i.e. I don’t need US workers making little plastic cars for Lucky Charm boxes at $1.75 an hour) or – heck – let’s just go back to installing steep tarrifs, we can all pay $95 for a plastic strainer and $175 for a wire wisk, and call it a day. I hear this “middle class” earnings down, yada yada yada. Last summer the Fed Reserve San Fran released a study (for you that don’t know each Fed Reserve Bank has a staff of economic researchers who publish some great work) – inwhich they found “growth in median weekly earnings for all full-time workers. These earnings have increased 15% from $678 in 2007 to $780 in 2014.” if you see those earnings increases, yet see a drop in prices for consumer goods that can be manufactured cheaper – that is generally a good thing since it allows us to consumer beyond our own internal product productivity frontier. Simply put, that frontier is expanded by allow those with comparitive advantage in country, to make and sell to another. Goods are classfied as either capital intensive or labor intensive. A Boeing airline in Charleston is capital intensive. And as you might expect, Boeing isn’t losing out business to South Korea. Little plastic cars in your cereal box are not very capital intensive, they don’t require much technology – just molten plastic, injection molds and little hands to put them together. Hence they’re made in China.

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Bible Thumper March 9, 2015 at 11:26 am

Thank God. I thought I was going to be all alone on this. The posters here want to be free to buy pot, but think it’s a good idea for the government to tell them what country they can buy from or tax them for the privilege and don’t care that our exports are taxed by other counties.

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Rocky March 9, 2015 at 3:17 pm

Just think it would help the poorer parts of the state. A little Garnett Green, some Estil Uphoria. Some Plantation Powerful. Little Sea Island Delight.

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Bullshit write up March 9, 2015 at 11:23 am

“Namely the lower consumer costs it promises come at a steep price”

Yeah, that’s just what we need, “free marketers” bitching about cheaper TV’s, phones, etc.

The free market yields good & bad on a local basis but in the big picture it enhances people’s lives overall. If you want to pick and choose and think you’re central planning is better than the rest, feel free to line up and fail like all others before you.

Mercantile China will suffer the same fate as all similar economic models. If they want to give away their shit for nothing, let them.

Also, if you don’t like the the free movement of goods across borders stop claiming you’re for “liberty”.

This whole write up smacks of the desire for “managed trade” to me. It’s similar to Republican non sense about “our central planning is better than Dems because we say we are for “limited gov’t” but we really aren’t”.

Picking and choosing winner/losers is what it all sounds like to me…crony style, you just want trade managed in your specific manner-and in that regard you’re no different than Obama.

Free trade is just that, it’s not even complicated.

“if the results of prior trade deals are to believed. In fact since fast track was first authorized back in 1974, there’s been a steady erosion of middle class earnings.”

Bullshit, “wet sidewalks cause rain”, that’s your argument.

The nation has been losing it’s standard of living depending on which metrics you use, but it started in 71′ with the disconnection of money to gold and the continual debasement of the currency as policy, disproportionately affecting middle class & the poor because while electronics get cheaper food gets more expensive.

Sure, there are jobs displaced and people are getting skinned(mostly those lacking in skill), but let’s not bemoan the days of $1500 cell phones made in the US of A.

“This means less, not more, consumer demand for U.S. manufacturing and service-sector firms.”

Yeah, I want to hear about the woes of the “little guy” and American business in general from a CFR member that was in the running for the head of the DNC as he rails against free trade.

A guy whose career prior was running a telecom with a host of gov’t subsidies and monopoly protection, I’m sure.

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Dan Ruck March 9, 2015 at 11:48 am

What’s the beef? Nikki Haley makes secret deals, gives away millions, and no one in South Carolina complains. Why beef about Obama doing the same?

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soxinsc March 9, 2015 at 1:09 pm

Because it’s Obama. Duh.

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TSIB March 9, 2015 at 2:07 pm

Your hero Rand Paul is all for fast-tracking the TPP.

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Rocky March 9, 2015 at 3:19 pm

Hey, we just had an intellegent exchange of ideas with you know who? #$)%*(#!!!!!

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NotTrustingObama March 9, 2015 at 3:31 pm

This is managed trade not free trade. Obama has said that he wants to write the rules for the world’s economy, and that is exactly what he is doing. The question is will Congress subject any treaty that Obama submits to the full weight of Congressional scrutiny as the Constitution provides, or will they give him what Mitch McConnell called, “an enormous grant of power.”

If you trust Obama to do a great deal for America, then you should support fast track, but if you don’t, then you should demand that your members of Congress hold any agreement he reaches to the highest levels of scrutiny and a two-thirds vote for ratification.

Finally, for those of you who are adherents of Adam Smith, check out this from his, “An Inquiry into the Nature and Cause of the Wealth of Nations”

“The proposal of any new law or regulation of commerce which comes from this order [CORPORATE OWNERS] ought always to be listened to with great precaution, and
ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes
from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it:”

–Adam Smith, An Inquiry into the Nature and Cause of the Wealth of Nations, vol. 1, pt. xi, p.10 (at the conclusion of the chapter)(1776)

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