'Doubling U.S. Exports' Is Not A Sufficient Jobs Policy -- Not Even Close

[jtuck004]

In his January State of the Union Speech, President Obama first committed his administration to the goal of doubling U.S. exports within five years. Mr. Obama said that this will "create 2 million jobs, about the same number that the U.S. manufacturing sector has shed during this economic downturn." His administration spokesman said just the other day that "the U.S. is on track to hit this export target."

There are three problems with this pledge. First, doubling U.S. exports would create just 10 percent of the 22 million new jobs the country needs, and yet, combined with multiple new free trade agreements (FTAs), it seems to be the only specific jobs policy coming from the White House. Second, this strategy wrongly overshadows the more critical imperative of "import substitution." Third, the first three FTAs being proposed -- with South Korea, Panama and Colombia -- are very poorly negotiated and will cause even more American jobs to be lost overseas.

As the United States Business and Industry Council (USBIC) just concluded, "the President's decision to limit his trade-related recovery policies to export expansion efforts is too narrow, since the most promising source of the new orders needed by U.S.-based manufacturers and their workers are home market shares that have been lost to imports." And as the economist Clyde Prestowitz has determined, with plenty of supporting evidence, "the more free trade agreements the U.S. has entered into, the bigger America's trade imbalances have become and the less our allies have seemed to like or pay attention to us."

To appreciate why doubling U.S. exports and rushing into new FTAs isn't at all the combined overall trade and jobs policy required as a nation, all we need to do is look carefully at the pending FTA with South Korea, the largest of the three pending FTAs, and do so against the backdrop of the dismal results of NAFTA and China's entry into the WTO.
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More of this article here...

I usually enjoy articles where they use the term "bs" ;)

[inna]

1. K&R, this is critically important!

National Export Initiative or Just More Free Trade?
http://www.economyincrisis.org/content/national-export-initiative-or-just-more-free-trade

President Barack Obama on Wednesday renewed his vow to double American exports over the course of the next five years and said he plans to achieve that goal with the help of three stalled trade agreements negotiated under the Bush administration and left for dead in congress.
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Unfortunately, a very large portion of the plan also involves sticking with business as usual. Trade pacts with South Korea, Columbia and Panama are key pieces to the national export initiative. In addition, the president said in March that the plan also includes the proposed Trans-Pacific Partnership and completion of the Doha agreement.
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The president’s plan may in fact increase exports, possibly more than doubling them. However, many free trade critics would be quick to point out that if America’s past free trade agreements are any indication, the national export initiative will also lead to steep job losses.

Why Obama’s Export Plan Is Doomed
Hint: 'Free trade' agreements are not key to creating good jobs
http://www.inthesetimes.com/working/entry/6216/obama_export_plan_doomed_destined_to_deepen_job_losses/

OBAMA PROCLAIMS PUSH FOR EXPORTS
Obama's answer to the question seems to be that the trade deals—part of his National Export Initiative— will contribute to his plan for doubling U.S. exports over the next five years and producing 2 million new well-paying jobs. … But there are fundamental problems that severely undercut the credibility of Obama's formula for economic renewal:

1) CORPORATIONS AVOID U.S. JOB CREATION
~snip~
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I hate to say it, but there is virtually no reason to expect that Obama's plan for export expansion will succeed on its own terms. In fact, it will likely cost more jobs lost overseas and undermine wages at home.

Korea, US FTA Stirs Controversy in US Congress
http://ictsd.org/i/news/bridgesweekly/81830/

A deep fault line has emerged among members of the US Democratic Party over a pending free trade deal with South Korea. US President Barack Obama has said that he wants the pact, widely known as the KORUS FTA, to be finalised before November’s Group of 20 Summit in Seoul. For that to happen, however, Obama will have to overcome stark divisions within his own political party.
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A three-year impasse
The original KORUS FTA was signed by the Bush administration in June 2007. Since then the pact has stalled, unable to find the political momentum to move forward, and has not been ratified by legislatures in either country. At the G20 summit in Toronto in June, Obama vowed to push the deal through Congress – inciting the increasingly public debate within his own party. The US has two other outstanding FTAs in the works – one with Colombia and another with Panama. However, the pact with Korea – which would be the biggest US trade deal since the North American Free Trade Agreement (NAFTA) – has provoked the most controversy in recent weeks.

Obama risks party showdown on S.Korea deal
http://www.google.com/hostednews/afp/article/ALeqM5jXc3NbMVbqypa3su7mNSooP8lf_g

US President Barack Obama is risking a revolt within his own party as he presses ahead on a free trade agreement with South Korea, setting the stage for a showdown after November legislative elections. Organized labor, a critical support base for Obama’s Democratic Party, and several Democrats have already vowed to fight the deal which they say would hurt workers.
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The deal would be the largest for the United States since the the North American Free Trade Agreement (NAFTA) with Canada and Mexico in 1994. The United States and South Korea completed painstaking negotiations in 2007 but neither nation’s legislature has ratified it. Obama himself criticized the deal as a senator.
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Obama said he would send the agreement to Congress soon after November — the month of a Group of 20 summit in South Korea as well as congressional elections in which Democrats are seen as vulnerable to losses. Ironically, the rival Republican Party, while opposed to many of Obama’s key priorities such as climate and immigration legislation, may offer greater support than Democrats on the South Korea free trade agreement.

Lawmakers demand ’major changes’ to US-S.Korea trade deal
http://www.bilaterals.org/spip.php?article17748

More than 100 US lawmakers wrote to President Barack Obama Thursday demanding "major changes" to a landmark free trade agreement with South Korea, which they called a "job killing" pact.
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The US-South Korea FTA was signed between in June 2007 during the administration of Obama’s predecessor George W. Bush.…Neither country has ratified the deal, which would be the largest for the United States since the North American Free Trade Agreement (NAFTA) with Canada and Mexico, which came into force in 1994.

Obama wants to finalize the deal before a Group of 20 summit in Seoul this November so that he can present it to Congress in the few months thereafter, despite concerns from US cattlemen and carmakers.

But 109 legislators from Obama’s Democratic party in the House of Representatives sent a joint letter to him, seeking talks with the president to address opposition to specific provisions of the FTA in the financial services, investment and labor chapters. They also "strongly object" to the non-tariff barriers to the Korean market that they said numerous US industries, including the auto, beef and textile sectors, faced. "At a time when our economy is struggling to recover from the worst downturn since the Great Depression, it is unthinkable to consider moving forward with another job-killing FTA," the lawmakers said. In addition, they said, implementing the FTA "without major changes will exacerbate the US trade deficit (and) further erode the US manufacturing base." The pact is "simply out of touch with what the overwhelming majority of American people want," they said.

Obama Sets Date for Job Killing Korean FTA
http://economyincrisis.org/content/obama-sets-date-job-killing-korean-fta

The South Korean trade pact has been stalled precisely because of concerns about potential job loss. As the largest proposed U.S. free trade agreement since the North American Free Trade Agreement, there is reason to believe that it could have the same negative consequences. Using past trade agreements as a model, the Economic Policy Institute projects that trade agreements with South Korea and another leftover Bush pact with Columbia would be very costly to the American economy. According to the study, the nation would lose 214,000 jobs by 2015, mostly in the form of well-paying manufacturing jobs. The trade deficit would rise by $16.8 billion, the study projects. There are other, more specific concerns holding the deal up as well….

Korea FTA Will Come at Expense of American Workers
http://economyincrisis.org/content/korea-fta-will-come-expense-american-workers

Just days after President Barack Obama reaffirmed his support for the Korean free trade agreement and laid out a clear timetable for its passage, critics of the deal have let their displeasure be abundantly clear. Labor, interest groups and even members of the president’s own party have assailed the deal as a job-killing redux of the North American Free Trade Agreement. Concerns over lack of market access for American automakers and beef producers, to investor’s rights protections, to potential job losses have led many allies to speak out publicly.

Labor leaders are concerned about the potential impact of the deal on the auto, steel, and other industrial sectors. They say the agreement would only worsen an already lopsided trading relationship with South Korea, which will lead to domestic job loss. "This flawed agreement is the last thing working people need," Richard Trumka, president of the AFL-CIO, said in a statement. … “With a fragile and incomplete economic recovery, and unemployment estimated to remain near 10 percent for the foreseeable future, we should not be putting in place new trade agreements that will speed up the offshoring of US manufacturing jobs," Trumka said.
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If passed, the trade pact, which was negotiated under the Bush administration, would become the first of Obama’s presidency and also the largest since NAFTA. However, with even Democrats speaking out against the deal, getting it through Congress could be easier said than done. “This is another flawed NAFTA-style trade agreement negotiated by the Bush Administration for the benefit of big corporations and at the expense of the American worker," Rep. Michael Michaud (D-ME), who heads an anti-free trade caucus in the House, said in a statement.

[dkf]

2. Am I imagining this author is recommending lowering corporate tax rates?

We are "destined for economic mediocrity unless large American corporations are provided with policies and incentives that generally mirror those available to them overseas."

[jtuck004]

3. Not sure. He could be talking about the billions the Chinese, among others, are spending

to attract companies to their countries.

That's a good question, however. How do you get people to invest in this country if they can get more for their money elsewhere? The developing countries are already bypassing us (China investing in Brazil, for example), so tariffs are unlikely to work. We have to let the previous tax cuts on personal income expire for the richest folks, but how do we make sure business gets investment? And how do we get Wall Streets greedy little paws out of it?

But until we have demand there won't be much increase in manufacturing. There is already excess capacity to provide the goods being purchased, and until that demand increases, no business is likely to build or re-build anything here.

And we do need to watch those trade agreements, cause while we are ironing out all the other stuff, we could lose even more.

[dkf]

4. Companies get more out of overseas investments because they pay less and don't have to provide

health coverage nor social security. Matching them means conceding worker protections not improving them.

[jtuck004]

5. Matching them with the standard non-worker-owned capital

means that, I agree. I am not so sure that employee-owned business, along the lines of Springfield Remanufacturing, means the same thing, because they keep much more of their capital and don't pay the boss $1000 for every dollar the workers make.

With the current system, where everyone from the stock speculator to the distant board of directors is sucking up the benefits of labor, I most certainly see how any job that can be out-sourced will be.

But how much protection do the 30 million unemployed and underemployed people have today? And when that number increases over the next year, how much protection will they have? These people have to go back to work or die. And the three trade agreements spoken about in the article are very likely to remove yet more jobs from our control.

I think the answer might be to retrain people's thinking, help them understand that they have to take control of the capital. By reducing the amount that is taken out for non-productive means and encouraging collective action they may be able to insure that their safety and health is considered.

I have not heard of any real solutions to this, just complaining. And people losing their jobs.

[econoclast]

6. 500 billion dollar a year jobs program - no government spending required!

Impossible? Not at all.

US imports of goods and services were about 2 trillion dollars. Two trillion dollars a year creating jobs in china and India and Mexico and Canada and Taiwan and japan. .......

That's all stuff WE bought!

If we changed just a little, say substituted one purchase in four to something made in America instead of something made abroad that would pump 500 billion dollars a year into the American job market.

Just one purchase in four.

[jtuck004]

7. You should email the WH and Paul Krugman with that one. n/t

[blue97keet]

8. Ya, double exports and quadrouple imports and get further in the debt hole.

[pscot]

9. Well, the President could use his bully pulpit

to urge Americans to buy American.