Despite decades of nearly identical promises of TPP, the US repeatedly fails to enforce or adopts unenforceable LABOUR STANDARDS in
Trade Agreements.

25 years too late: -- the US is finally attacking CURRENCY MANIPULATION   
     Here's the relevant clip
http://www.c-span.org/video/?c4535863/schumer-amendment

Video & Transcript of full meeting ( see below for transcript of Schumer Amendment) 
http://www.c-span.org/video/?325525-1/committee-markup-foreign-trade-legislation
this video is an eye-opener of the positive legislation in the TPP.

Text of the TPA: http://waysandmeans.house.gov/uploadedfiles/tpa_bill_text.pdf

Elizabeth Warren fires back at Obama

Committee meeting on Trade Legislation Markup, TPP, TPA*, TAA & Customs

*TPA is the ability to fast-track future Trade Agreements under the Trans-Pacific Partnership (TPP)
 

 

TRANSCRIPT of SCHUMER AMENDMENT

I HAVE SAID ALL ALONG THAT I THINK THIS AMENDMENT IS IMPORTANT ON ITS OWN. IT WORKED OUT AN AGREEMENT WITH CHAIRMAN HATCH, FOR WHICH I SEE THANK YOU, TO OFFER THIS AMENDMENT. BE ASKING FOR A VOTE -- WE WILL NOT BE ASKING FOR A VOTE. I DISCUSSED IN RECENT WEEKS AND FOR YEARS NOW I BELIEVE CURRENCY MANIPULATION IS A MOST SIGNIFICANT EMERGING TRADE CHALLENGE THIS COUNTRY FACES.

ACCORDING TO THE PETERSON INSTITUTE FOR NATIONAL ECONOMICS, MORE THAN 20 COUNTRIES HAVE INCREASED THEIR FOREIGN EXCHANGE RESERVES BY AN ANNUAL AVERAGE OF $1 TRILLION IN RECENT YEARS. THE BUILDUP KEEPS THE CURRENCY SIGNIFICANTLY UNDERVALUED AND INCREASING THEIR TRADE SURPLUS. THAT HAS RESULTED IN DEFICITS GOING UP FROM ABOUT 200 BILLION TO $500 BILLION A YEAR. CORRESPONDING U.S. JOB LOSSES IN THE MILLIONS. WHEN CURRENCIES MANIPULATED, IT HURTS BOTH EXPORTS, THEY ARE MORE EXPENSIVE OVERSEAS, AND OUR PRODUCTS ARE UNDULY LOWER-PRICED HERE.

CHINA IS THE MOST -- THEY HAVE PERFECTED CURRENTLY MANIPULATION TO A FINE ART. THEY ARE AT THE FRONT OF THE LINE WHEN IT COMES TO THIS ACTIVITY. THIS ADMINISTRATION SEES IT AS A GEOPOLITICAL NECESSITY TO ENSURE THAT THE UNITED STATES DOESN'T SEE GROUNDS FOR CHINA IN THAT REGION OF THE WORLD. IF THE GOAL IS TO LURE COUNTRIES AWAY, IT MAKES PERFECT SENSE THAT AS PART OF THE OVERALL EFFORT, WE ALSO SHOULD DEAL WITH CHINA HEAD ON TO SHOW THEM WE WILL NOT CONTINUE BUSINESS AS USUAL IN OUR RELATIONS WITH THEM.

WHILE I'M SKEPTICAL OF IT AS A WHOLE, I DO NOT DISPUTE THAT IT WILL GROW THE GDP OR CORPORATE PRODUCTS FOR MANY MULTINATIONALS. THE TRADE AGREEMENT OF THE LOAN WILL NOT PROVIDE THE TOOLS WE NEED TO COMBAT THE SPECIFIC CHALLENGE OF CURRENCY MANIPULATION, WHICH HAS SUCH A TANGIBLE A DETRIMENTAL IMPACT ON MIDDLE-CLASS JOBS AT HOME.

IF WE DO NOT DO IT NOW, WHEN? WE HAVE WAITED A LONG TIME. WE HAVE BROAD BIPARTISAN SUPPORT. THIS BILL WILL RIDE ALONGSIDE IN NOT IN IT. MANY OF YOU KNOW I HAVE LONG BEEN AN ADVOCATE ON THIS ISSUE AND WORK TO FIND SOLUTIONS FROM MANY DIFFERENT ANGLES. I HAVE BEGGED AND PLEADED WITH ADMINISTRATION AFTER ADMINISTRATION. I HAVE NEGOTIATED WITH FIVE FOR DIFFERENT TREASURY SECRETARIES BEGINNING WITH SECRETARY SNELL -- SNOW. IT IS NOT DIFFERENT. DO SOMETHING ON CURRENCY. YOU HAVE TAKEN THE POSITION THAT COUNTRY NEGOTIATIONS IS APPROPRIATE TO ON THE NOTHING GETS DONE.

OTHER COUNTRY JUST RESISTS CHINA PARTICULAR. THE IS CURRENCY MANIPULATIONS AS A DIPLOMATIC TOOL TO GET SOMETHING ELSE RATHER THAN FORCE EXISTING LAWS TO PROTECT THE AMERICAN WORKERS, WHICH TO ME IS -- I'VE COME TO THE EXCLUSION IF YOU WANT TO PROTECT AMERICAN WORKERS FROM CHINA, DIFFERENT THAN THESE COUNTRIES, WE NEED TO PASS THIS AMENDMENT.

WHERE TO STRENGTHEN THE MECHANISM FOR THE TOOLS THAT ARE IN PLACE BUT ARE NOT CURRENTLY GETTING USED. MANY OF YOU HAVE SUPPORTED IN THE PAST AND ARE FAMILIAR WITH IT. OVER 60 VOTES ON THE FLOOR OF THE SENATE SEVERAL YEARS AGO. OH IS BIPARTISAN.

THE COMMERCE DEPARTMENT FINDS THAT SUBSIDIZED IMPORTS ARE CAUSING ECONOMIC HARM TO AMERICAN MANUFACTURERS AND WORKERS, THE MINISTRATION MOST IMPOSE DUTIES TO COUNTER BILL THE AND IF IT INFERRED ON FOREIGN PRODUCERS AND EXPORTERS BY THE SUBSIDIES. RATHER THAN ENFORCE EXISTING LAW, ADMINISTRATION AND THE PREVIOUS ONE, PREFERRED TO USE THE THREAT OF CURRENT COMMUNICATION MEASURES AS A DIPLOMATIC TOOL TO ACHIEVE OTHER NONECONOMIC GEOPOLITICAL GOALS. AS A RESULT, THEY HAVE TO FIND WHAT QUALIFIES AS AN EXPORT SUBSIDY. THE HAVE EXCLUDED CURRENCY MANIPULATION EVEN THAT IT IS AS PLAIN AS THE NOSE ON YOUR FACE. THAT IS WHY IT IS DONE.

 OUR AMENDMENT WOULD REQUIRE THE COMMERCE DEPARTMENT TO INVESTIGATE WHETHER CURRENCY UNDER EVALUATION BY GOVERNMENT PROVIDES THE DOUBLE SUBSIDY IN THE U.S. REQUESTED SUCH AN INVESTIGATION. IT DOES THIS BY PUTTING IN PLACE A NEW RULE IS SIMPLY SAYS EXPORT SUBSIDY MAY EXIST THROUGH CURRENCY MANIPULATION AND SHOULD BE INVESTIGATED. PERIOD.

WE HAVE WORKED LABORIOUSLY. IT IS COMPLIANT. WE'RE USING EXISTING MECHANISMS AND MAKING SURE THAT THEY APPLY TO CURRENCY, THE SAME MECHANISM PEOPLE HAVE USED ON OTHER ISSUES . WE'RE MAKING SURE THAT HAPPENS WITH CURRENCY. THIS IS THE ENFORCEABLE MECHANISM.

WE MUST SHOW CHINA WE'RE NOT MISSING AROUND AND GET SOMETHING DONE.

MEMBERS OF THIS COMMITTEE, I HOPE YOU FEEL AN OBLIGATION AS I DO, ESPECIALLY OUR OVERSIGHT ROLE. WE HAVE AN OBLIGATION TO ENSURE TOOLS ARE IN PLACE TO PROTECT AMERICAN WORKERS AND THAT THEY ARE BEING USED APPROPRIATELY. TO MY CAUSE OF HISTORY WORK ON THIS ISSUE AND SUPPORT FOR THIS PROPOSAL, THIS IS OUR BEST OPPORTUNITY FOR THE MOST APPROPRIATE OPPORTUNITY TO SHOW THAT WE ARE SERIOUS ABOUT COMBATING THE TRADE. YOU KEPT THIS BIPARTISAN.

THE ORIGINAL BILL WITH SENATOR GRAMS AND COLLINS AND SESSIONS AND MYSELF. SENATOR GRASSLEY HAS BEEN A VOCAL COMPONENT OF THIS ISSUE IN THE PAST. SENATOR ISAKSON AND CARVER HAVE VOTED AND ARE SUPPORTIVE OF IMPROVEMENTS IN THIS SPACE. I KNOW I'M FORGETTING SOME OTHERS. FORGIVE ME.

CHINA'S TRADE ECONOMIC POLICY OF UNDERMINING THE GLOBAL MARKET PLACE WHICH MAJOR CEOS QUIETLY ADMIT TO EVERYONE OF US THEY CANNOT SAY IT PUBLICLY, BUT THEY KNOW WHAT IS GOING ON.

THE APPROPRIATE TIME IS NOW. I URGE MY COLLEAGUES TO SUPPORT THIS 14TH AMENDMENT. >>

ORRIN HATCH

THANK YOU. I UNDERSTAND HIS SEAL HERE -- ZEAL HERE. DETERMINE WHETHER SOME CURRENCY MISALIGNMENT IS EFFECTIVELY A SUBSIDY EITHER DIRECTLY OR INDIRECTLY TO A COUNTRY'S EXPORTS. IF SO, THE SANCTIONS CAN FOLLOW. I ACTUALLY ASKED MY COLLEAGUES TO VOTE AGAINST THIS AMENDMENT. IT COULD BE BASED ON PRESUMPTIONS WITHOUT SUPPORT.

CURRENCY FUNDAMENTALS. AN AMENDMENT WOULD ALLOW SO MANY FREEDOMS AND ARRIVING AT A DETERMINATION INCLUDING INDIRECT SUBSIDIES RAISED ON SOME MEASURE OF UNDER EVALUATION THAT IT WOULD PROVE ENTIRELY INEFFECTIVE . AT LEAST THAT IS MY VIEW. EITHER IT COULD OR WOULD NOT BE MADE. IT COULD LEAD TO TRADE DISPUTES. I'M CONCERNED ABOUT IT. I UNDERSTAND MY COLLEAGUES SINCERITY ON THIS. WITH THAT, ANYONE ELSE CARE TO COMMENT? >>

SOMEBODY ELSE & OTHERS

I WANT TO COMMEND SENATOR SHUMAN FOR ADVANCING THIS SOLUTION TO THE ISSUE OF CURRENCY MANIPULATION. I THINK IT IS PRETTY CLEAR. THERE IS NO ISSUE THAT HAS CONSUMED MORE TIME THAN THESE DEBATES IN CURRENCY MANIPULATION . IT IS A SENSITIVE ISSUE. A GHOST OF THE HOW -- HEART OF -- IT GOES TO THE HEART OF HOW WE GROW AND PROTECT AMERICAN JOBS. IT REFLECTS DISCUSSION WITH RESPECT OF HOW THIS IS GOING TO AFFECT FEDERAL RESERVE PRACTICES AND THE LIKE. I THINK SENATOR SCHUMER HAS FIGURED OUT HOW TO INGEST THE KEY QUESTION, WHICH IS TO DEAL WITH CHINA, WHICH CLEARLY MANIPULATED IN PAST AND GETS AN UNFAIR ADVANTAGE. THIS LEVELED THE PLAYING FIELD FOR AMERICAN INDUSTRY AND A PRACTICAL FACTION. I HOPE MY COLLEAGUES WILL SUPPORT THE AMENDMENT. I APPRECIATE MY SEATMATE ALL THESE YEARS WORKING WITH SO MANY OF YOU ON BOTH SIDES OF THE AISLE TO COME UP WITH A PRACTICAL APPROACH AT THIS POINT. >> ANY FURTHER COMMENTS? >>

 I CAN TO OFFER AN AMENDMENT THAN THE TRADE PROMOTION AUTHORITY TO THE. THIS'LL BE NARROWLY TARGETED TOWARD ANY OBJECTIVE. I'M A COSPONSOR. I VOTED FOR IT IN 2011. SCF THE SINGLE ONE OF THE COMMITTEE MEETINGS. HE HAD MORE HAIR THANEN. HE ASKED ABOUT CURRENCY MANIPULATION. I THINK IT AFFECTS TRADE. FRANKLY, IT WAS SOMETHING THE OFFICE TYPICALLY HANDLES. IT IS SOMETHING DONE BY TREASURY. IT SHOULD AND CAN BE ADDRESSED. IT IS A NARROW OBJECTIVE. WE'RE TALKING ABOUT INTERVENTION. SOME OF YOU FOLLOW THEIR WORK. INCREASE U.S. TRADE DEFICIT EACH YEAR. THE DEAL TRADE IS TO BE -- WE SELL PRODUCTS TO OTHER COUNTRIES. THE HOPE IS WE USE THAT MONEY TO BUY THEIR PRODUCT AND VICE VERSA . THAT IS BALANCED TRADE. WHEN A COUNTRY IS AN EXAMPLE AND ENCOURAGES THE DEPRECIATION OF THEIR CURRENCY, YOU HAVE THIS IMBALANCE. WE SEE THIS IN TERMS OF THE TRADE DEFICIT. IT IS DRIVEN BY ENERGY AND CHINA. A LOT OF THIS GOES TO THE MANIPULATION WE HAD SEEN. GOT TO ADDRESS IT AND DO IT IN A THOUGHTFUL WAY AND DO IT IN A WAY TO AVOID DISPUTES THAT THE CHAIRMAN TALKED ABOUT. I CAN TO SUPPORT THAT AMENDMENT. >>

I UNDERSTAND THE SENATOR'S POSITION. >> WE HAVE APPLIED DIPLOMATIC PRESSURE. DIALOGUE AFTER DIALOGUE. OFTEN CHINA TAKES ONE STEP FORWARD AND TWO STEPS BACKWARD. IF THEY PETITIONER REQUEST AN INVESTIGATION, IT DOESN'T PRESUPPOSE AN OUTCOME. I THINK IT IS CONTRIBUTED BEST CURRENCY IS CONTRIBUTED TO SOMETHING ALMOST UNKNOWN A GENERATION AGO. PUTTING TOGETHER THEIR BUSINESS PLAN AND SHUTTING DOWN PRODUCTION IN DAYTON, OHIO OR ASHEVILLE, NORTH CAROLINA AND MOVING IT OVERSEAS. CURRENCY CONTRIBUTES TO THAT STRUCTURE AND BUSINESS PLAN. THIS IS A CHANCE TO TAKE AWAY ONE OF THOSE INCENTIVES FOR COMPANIES TO FOLLOW THAT ROUTE. >> MR. CHAIRMAN?

 I WANT TO SPEAK IN FAVOR VERY BRIEFLY. >> SURE. >> AS THE SENATOR KNOWS BECAUSE HE WAS TRADE REPRESENTATIVE, THERE'S A BILL TO ILLUMINATE THE U.S. TRADE REPRESENTATIVE. HE LEARNED THAT ONE DAY WHEN IN THE OFFICE OF THE TRADE REPRESENTATIVE. YOU DO NOT GET A TRADE DEAL -- YOU FAILED. THE INCENTIVE IS TO GET A DEAL AT ANY COST. NO DEAL IS PERFECT. IT REQUIRES CONGRESS TO GO BACK AND TAKE WHAT WE HAVE LEARNED AND TO OCCASIONALLY MODIFIED WHAT THE AGREEMENT WAS. THERE'S ONE THING I THINK WE ALL KNOW HERE -- THE CHINESE MANIPULATE CURRENCY. THE QUESTION IS, ARE WE GOING TO DO SOMETHING ABOUT IT? ARE WE GOING TO CHANGE? IF YOU THINK THIS APPROACH IS FAIR, THEN SUPPORTED. THIS IS NOT THE ONLY THING THAT WE COULD LOOK AT. THIS IS WHAT WE NEGOTIATED. NOW WE KNOW THIS, THEREFORE WE SHOULD CHANGE THAT. LET'S CHANGE THAT. I ENCOURAGE MEMBERS TO SUPPORT IT. >>

I STRONGLY SUPPORT THIS AMENDMENT, I THINK. I THINK IT IS VERY CLEAR WHEN YOU HAVE -- WE'RE TALKING ABOUT A LEVEL PLAYING FIELD. IT IS ONE THING TO HAVE MONETARY POLICY. IT IS ANOTHER TOP GOVERNMENTAL POLICY TO MAKE YOUR CURRENCY SO YOU GET A COMPETITIVE ADVANTAGE. IT GIVES YOU A 20% ADVANTAGE OVER MANUFACTURERS OR FARMERS. THAT IS NOT A LEVEL PLAYING FIELD. WHAT THEY'RE AMENDMENT DOES IS ALLOW US TO BE ABLE TO DETERMINE IF THAT IS WHAT THE CURRENCY POLICY IS DOING IN ORDER TO GET THAT 10 OR 15 OR 20% ADVANTAGE. AS SENATOR PORTMAN SAID, WE ARE FOR A LEVEL PLAYING FIELD. WHEN YOU FIX YOUR CURRENCY VALUE SO THAT YOUR MANUFACTURERS AND PRODUCERS AND FARMERS HAVE AN ADVANTAGE, THAT IS WRONG. I THANK YOU FOR BRINGING IT FORWARD. >>

I WILL BE BRIEF. I KNOW WE HAVE A LOT TO DO. I WOULD TO JOIN IN SUPPORT OF THE AMENDMENT. AND AN WANT TO SIMPLY EXPRESSED FRUSTRATION. I THINK IT IS EVIDENT WHAT HAS HAPPENED OVER A LONG PERIOD OF TIME ON A WHOLE RANGE OF FACT THIS IS THAT CHINA, FOR EXAMPLE, IS ENGAGED IN. WHEN CHINA CHEATS, WE LOSE JOBS. VERY SIMPLE. WHEN THEY CHEAT ON CURRENCY, PURPOSELY UNDERVALUE IT AS A PERNICIOUS AND DESTRUCTIVE IMPACT, I REMEMBER SITTING WITH SECRETARY GEITHNER IN MY OFFICE AND RAISING THIS ISSUE. IT SEEMS THAT OVER THE OVER, ADMINISTRATION HAS SAID THAT THEY UNDERSTAND THE PROBLEM. THE WANT TO DO SOMETHING ABOUT THE PROBLEM. I APPRECIATE THAT. I THINK THE TIME FOR RAISING IT AND PUSHING IT AND TAKING IT IN SMALLER STEPS IS OVER. I THINK WE NEED TO TAKE A MORE DECISIVE AND DETERMINED ACTION TO GET THE RESULT WHICH AMERICANS EXPECT AS TO. THEY DO NOT EXPECT US TO CREATE SOME MAGIC WAND. THEY DO EXPECT US TO TAKE EFFECTIVE STEPS TO REMOVE A PROBLEM. I THINK THIS IS HURTING OUR WORKERS AND LITERALLY COSTING US JOBS. >>

ADMINISTRATION REPRESENTATIVE

 I DON'T DISAGREE THIS IS A PROBLEM. I JUST DO NOT THINK THIS IS THE RIGHT SOLUTION. WE HAVE YOUR VIEWPOINT ON THIS. >> THANK YOU. >>  WE SHARE THE CONCERNS OF MANY IN CONGRESS REGARDING CURRENCY PRACTICES. WE HEAR YOUR CONCERNS ABOUT THE CURRENCY PRACTICES. UNFAIR CURRENCY PRACTICES HURT OUR WORKERS AND OUR FIRM. THAT IS WHY THIS ADMINISTRATION HAS TAKEN GREAT LENGTHS AND MEASURES IN TERMS OF ENGAGING WITH PARTNERS AND A NUMBER OF OTHERS, INCLUDING THE G7 AND IMF, TO PRESS THIS ISSUE.

THERE HAVE BEEN REAL PROGRESS WHICH AFFECT CURRENCY. IT HAS DEPRECIATED BY OVER 30% ON A REAL EFFECTIVE BASIS SINCE 2010. JAPAN HAS NOT INTERVENED SINCE 2011. THERE HAS BEEN MEASURABLE PROGRESS.

 WITH RESPECT TO THE AMENDMENT, WE ARE OPPOSED TO THE LEGISLATION. FIRST OF ALL, IT RAISES QUESTIONS OF A CONSISTENCY WITH OUR INTERNATIONAL OBLIGATIONS. I THINK THERE ARE OTHER COUNTRIES THAT COULD MIMIC OUR PROVISIONS, BUT AT THE SAME TIME, TARGET OUR COMPANIES AND WORKERS. THAT WOULD PRESENT A REAL CONCERN. THEY COULD DESIGN PROVISIONS THAT USE A DIFFERENT STANDARD. THERE'S NO SINGLE UNIVERSAL STANDARD THAT APPLIES TO CURRENCY VALUATION. UNILATERAL MEASURES WILL BE PERCEIVED AS BEING  COUNTERPRODUCTIVE AND ALL THE PROGRESS WE HAVE MADE. IT WILL IMPEDE AND IMPAIR OUR MULTILATERAL AND BILATERAL EFFORTS. WE ARE CONCERNED THAT UNILATERAL MEASURES WILL IMPAIR OUR ABILITY TO MAKE PROGRESS IN THE CONTEXT OF -- A CURRENCY OBJECTIVE. I THINK OUR PARTNERS WILL BE CONCERNED ABOUT NEGOTIATING SOME SORT OF CURRENCY PROVISION GIVEN THAT THEY MAY SEE UNILATERAL MEASURES AS WELL. >>

THANK YOU SO MUCH FOR YOUR OPINION. >> I WANT TO SAY THANK YOU TO SENATOR SHUMER FOR HIS LEADERSHIP. WE HAVE HEARD OVER AND OVER AGAIN ABOUT CHINA TAKING BABY STEPS. WE'RE AT A POINT NOW WHERE WE ARE FULLY ENGAGED IN A GLOBAL ECONOMY. IT IS JUST NOT ENOUGH. WITH ALL DUE RESPECT ON WHAT IS COMING. WE WANT OUR TRADING PARTNERS. WE WANT JAPAN TO KNOW THAT IT IS NOT OK TO MANIPULATE CURRENCIES. PEOPLE LOOK AT CHINESE PRODUCTS AND SEE A LOWER PRICE AND DO NOT UNDERSTAND A GOOD CHUNK OF THAT IS BECAUSE THEY CHEAT. THIS IS ANOTHER TO INTEGRATE A WAY TO DO SOMETHING ABOUT IT. I THINK IT IS LONG OVERDUE. I URGE A STRONG BIPARTISAN VOTE. >>

 WITH ALL DUE RESPECT, WE HAVE TRIED THE DIPLOMATIC ROUTE OVER AND OVER AGAIN FOR 10 YEARS. WE TOOK A TRIP TO CHINA ALONG WITH SENATOR COBURN 10 YEARS AGO AN EFFORT TO GET SOMETHING DONE. THIS HAVE TO DO SOMETHING THAT MIGHT ACTUALLY SOLVE THIS PROBLEM. I HAVE LOST FAITH IN THE DIPLOMATIC BACK AND FORTH.

I ASKED FOR THE A'S IN EA'S -- AYES AND NAYS. [ROLL CALL VOTE] >> AYE. >> NO. >> NO BY PROXY. >> AYE. >> NO. >> NO. >> AYE. >> AYE. >> AYE. >> AYE. >> NO. >> AYE. >> AYE. >> AYE BY PROXY. >> AYE. >> AYE. >> AYE BY PROXY. >> NO. >> MR. CHAIRMAN, I'D LIKE TO -- >> I MEANT TO GO NO. TALLY UP THE VOTE. 18 AYES, 8 NAYS. >>

Hatch: YOU KNOW HOW TO SMOTHER ME. [LAUGHTER] >> Schumer: WITH LOVE, MR. CHAIRMAN. >> IS THAT THE NEW YORK TYPE OF LOVE? [LAUGHTER]

 

Made-up job gains from the Trans-Pacific Partnership

The study used to "justify" the Trans Pacific Partnership is the  Peterson Institute for International Economics book.  Nowhere in this book does it says 650,000 jobs would be created.

Petri of the Institute says: "it’s completely misleading to suggest there would be both a gain in income and a gain in jobs." --  "mainstream economists do not believe that the number of jobs is significantly affected by trade policy".

Expect strong support from Republicans for the TPP, though many Democrats remain skeptical or hostile.

The touted gain of $77 billion in income, by 2025, amounts to just a 0.4 percent increase in the pre-trade-deal baseline for the United States’ $20-trillion gross domestic product. You read that right—0.4 percent.

 The correct number of jobs created is zero, not 650,000, according to the very study used to calculate this number.

But it is our contention that this will outsource more jobs from the US, as Corporations find it easier to open foreign Pacific subsidiaries, -- reducing the number of US jobs available.



 

2 years after NAFTA -- a financial meltdown in Mexico and collapse of the peso evaporated any job gains from NAFTA.
The Peterson economist who generated the forecasts famously said he would stay away from job forecasting in the future.

PUBLIC CITIZEN: Trans-Pacific Partnership (TPP): Job Loss, Lower Wages and Higher Drug Prices

 

back to Overpopulation
 

 

--- NAFTA cost U.S. workers almost 700,000 jobs.
--- Since the Korea–U.S. Free Trade Agreement, America's trade deficit with Korea has grown more than 80 percent, the equivalent of a loss of more than 70,000 additional U.S. jobs.
--- Since China’s admission to the World Trade Organization, the U.S. goods trade deficit with China increased $23.9 billion (7.5 percent) to $342.6 billion and millions of jobs Outsourced.

Trade deals that fail to include Chinese currency manipulation or labor standards:
•    minimum wage,
•    unions,
•    healthcare,
•    workers comp. ,
•    EPA environmental standards,
•    legal recourse  
are really about corporate profits at the expense of American workers.

Tell your representatives - "no fast-track of the Trans Pacific Partnership".

About the only way now, to create jobs here, is to impose big TARIFFS on these imported goods.
LETS GET OUR OWN MANUFACTURING BACK by making an EVEN PLAYING FIELD.

Expect strong support from Republicans for the TPP, though many Democrats remain skeptical.
THE ORIGINAL ARTICLE (Glenn Kessler, Washington Post):    

Secretary of State John F. Kerry: “Estimates are that the TPP [Trans-Pacific Partnership] could provide $77 billion a year in real income and support 650,000 new jobs in the U.S. alone.” –, in an opinion article titled “Alliances for Peace,” Jan. 14, 2015

Secretary of Agriculture Tom Vilsack: “Completing the Trans-Pacific Partnership provides the opportunity to open up markets, lower tariffs and, according to the Peterson Institute, increase U.S. exports by $123 billion and help support an additional 650,000 jobs.” – , in an interview with the Greater Baton Rouge Business Report, Jan. 26, 2015

The Fact Checker frequently warns readers to be wary of claims by politicians that various policy initiatives will yield tens of thousands of jobs. Such claims are often based on studies that rely on a variety of assumptions, any of which can be called into question. So we were interested when we received a call from a reader who wondered how the administration calculated that a proposed international trade agreement, known as the Trans-Pacific Partnership, would support some 650,000 jobs.

The Obama administration is on a full-court press to complete negotiations on the trade pact, involving 12 Pacific Rim nations, and also win from Congress the authority for an up-or-down vote from lawmakers, which officials say is necessary to close the deal. The TPP is one of the few areas in which the White House can expect strong support from Republicans, though many Democrats remain skeptical or hostile.

The Fact Checker of course takes no position on whether the proposed trade deal is good or bad. But we were curious about how this number was calculated.

The Facts

Notice that Vilsack referred to the Peterson Institute for International Economics, which is a well-regarded centrist think tank that focuses on international economic policy. The Peterson Institute advocates for free-trade agreements but also for programs that aid people who may be hurt by globalization.

The Peterson Institute in 2012 published a book titled “The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment,” by Peter A. Petri, Michael G. Plummer and Fan Zhai. The book does include an estimate that, by 2025, the United States would experience a gain of $77 billion in income from TPP, as well as a $124 billion increase in exports. (More on those numbers, which are expressed in 2007 dollars, below.) But nowhere in the book does it says 650,000 jobs would be created.

Asked about the statistic on 650,000 jobs, the White House referred us to the Office of the U.S. Trade Representative. USTR spokesman Matthew McAlvanah directed us to page 58 of the book. “They do not provide an estimate on jobs,” he acknowledged. “However they do provide a methodology that one could use.”

Essentially, the book suggests that an income gain of $121,000 would be “roughly equivalent to creating an extra job.” So the Obama administration took the figure of $77 billion and divided it by $121,000, which yields 636,000. Rounded up, that becomes 650,000.

There’s just one problem: Petri says this is the incorrect way to use his research, especially when officials such as Kerry combine the jobs figure in the same sentence as the income prediction: “The TPP could provide $77 billion a year in real income and support 650,000 new jobs in the US alone.”

That’s because the calculation on jobs can only be done if one assumes that wages have been frozen and there is no income gain, Petri said. So it’s completely misleading to suggest there would be both a gain in income and a gain in jobs.

Petri said that his book did not discuss job gains because mainstream economists do not believe that the number of jobs is significantly affected by trade policy.

“The reason we don’t project employment is that, like most trade economists, we don’t believe that trade agreements change the labor force in the long run. The consequential factors are demography, immigration, retirement benefits, etc.,” he said. “Rather, trade agreements affect how people are employed, and ideally substitute more productive jobs for less productive ones and thus raise real incomes.”

The same dynamic exists with the claim that the trade bill would increase exports by $124 billion by 2025. The Commerce Department estimates that about 5,500 jobs are supported by every $1 billion in exports, so in theory that also would yield about 650,000 jobs. But that calculation would ignore the fact that the Petri book found that imports would increase by virtually the same amount as exports, meaning the net number of new jobs is zero.

The mix of jobs would change, however. “Employment could be negatively affected by the adjustment implications of a trade agreement,” Petri said. “We estimate ‘job shifts’—employment moving from one sector to another—and in difficult labor markets such shifts can lead to transitional unemployment, retirement or wage cuts.”  But, he added, “in the case of the TPP such shifts will be small and slow, dwarfed by routine job separations and new hires in the economy. So adjustments and costs should be covered many times by gains. This makes possible strong transitional assistance for workers and communities that are adversely affected.”

Finally, let’s put these numbers in context. Petri’s book says that a gain of $77 billion in income amounts to just a 0.4 percent increase in the pre-trade-deal baseline for the United States’ $20-trillion gross domestic product. You read that right—0.4 percent.

Indeed, a gain of 650,000 jobs would also be just 0.4 percent of projected employment of 168 million people, Petri said. “The percentage change is small,” Petri acknowledged, which he said is what one would expect from a large and efficient economy such as the United States. (Vietnam, by contrast, would see a gain of nearly 14 percent in income according to Petri’s model.)

There is, of course, a long history of presidential administrations touting imaginary job gains from trade deals. “I believe that NAFTA will create 200,000 American jobs in the first two years of its effect,” then-President Bill Clinton said in 1993, when he signed supplemental agreements to the North American Free Trade Agreement. “I believe that NAFTA will create a million jobs in the first 5 years of its impact.”

Clinton was relying in part on analyses generated by the Peterson Institute. Two years later, after a financial meltdown in Mexico and collapse of the peso evaporated any job gains from NAFTA, the economist who generated the forecasts famously said he would stay away from job forecasting in the future.

In 2012, C. Fred Bergsten, the founder of the Peterson Institute, conceded the Institute had “big internal debates” over whether to calculate job numbers. “Congress always wants to know how many jobs they’re going to create,” Bergsten said. “As good economists, we all take the view I think that trade agreement does not unbalance, create, or destroy jobs, it alters the composition of the workforce.”

McAlvanah provided the following response:

“The Peterson Institute study provides a variety of different analytical pathways to estimate the job supporting potential of TPP.  Peterson provides estimates of both the increase to U.S. income and to U.S. exports as a result of TPP.  The methodology laid out in the Peterson study for calculating potential employment gains based on their projected increase in income suggests a jobs number just below 650,000.  A different approach is to use the sectoral value added estimates from the Peterson study.  This approach was used by the U.S. Chamber of Commerce to estimate approximately 700,000 jobs.  Another approach is to map the incremental increase in national economic output to a proportional increase in employment.  The Peterson study estimates an increase of 0.4 percent of GDP attributable to TPP.  Based on a 2025 working population of 168 million cited by Peterson, a 0.4 percent increase would be approximately 672,000 jobs.  It is also possible to estimate jobs supported by new exports by multiplying estimates of jobs per billion exports by the 124 billion dollars of increased exports projected in the Peterson study.”

We note his statement did not address the fact that the study itself did not offer these calculations — or that effects of one action, such as more exports, are canceled out by another action, such as imports.

The Pinocchio Test

Clearly, with the Peterson Institute refusing to play the game this time and cough up a jobs number, the administration decided to concoct its own. But, as we have shown, one cannot at the same time claim both a gain of $77 billion in income and a gain of 650,000 jobs; the same effects simply cannot happen at the same time.

Moreover, these are big numbers with virtually no context. It is pretty lame to use such huge numbers to tout what, in the context of the U.S. economy, amounts to minuscule changes in income —10 years from now.

Our advice remains: be wary whenever a politician claims a policy will yield bountiful jobs. In this case, the correct number is zero, not 650,000, according to the very study used to calculate this number. Administration officials earn Four Pinocchios for their fishy math.

Four Pinocchios