How America's Trade Policies Cost 585,000 Jobs
From the summary of a new study from the Chamber of Commerce, "Trade Action or Inaction: The Cost for American Workers and Companies:"In recent months, the United States has taken a number of trade actions – and refused to take others – that have a negative impact on U.S. companies, their workers, and the economy. We examine three of these:
1. The failure to implement the U.S.-Colombia and the U.S.-Korea free trade agreements,
2. The “Buy American” provisions in the American Recovery and Reinvestment Act of 2009 (“Recovery Act”), and
3. The failure to implement the trucking provisions of the North American Free Trade Agreement and Mexico’s resulting retaliation against U.S. exports.
At the request of the United States Chamber of Commerce, we estimate these three trade actions/inactions would have a negative effect on U.S. companies and their workers, and that employment losses could total as much as 585,800 jobs (see chart above).
15 Comments:
"The failure to implement the trucking provisions of the North American Free Trade Agreement and Mexico’s resulting retaliation against U.S. exports."...
Well the biggest cause of fatal auto accidents in Laredo, Tx and other parts of south Texas is the Mexican truck driver and his rig of questionable quality...
Be careful what you wish for...
The latest Texas data on traffic deaths is 1.7 deaths per 100 million vehicle miles traveled. Those Mexican rigs are very efficient at killing you Texans.
Well Michael one has to take those particular state stats with a rather large grain of salt...
Why? There's lots of money involved and some of that money originates with Texas legislators...
The most informed people to talk to are those who underwrite auto insurance policies in those areas...
Mind you Michael I'm not against the idea of the Mexican trucks coming up but there are some problems...
Note this Sep. 2 posting on one of the local Laredo television channels: Report states concerns over Mexican truck and bus safety
You might find this interesting: Crash Contributing Factors
I'm all about free trade, but I really can't understand how people can argue that Mexican drivers & their vehicles should be held to a lower standard than US drivers & vehicles.
U.S. trade policies are often stupid (ie., trading with countries that peg their currency to the dollar) but NAFTA makes a lot of sense for many reasons. For every one dollar we spend with Mexico we get 75 cents back. This compares to China where we get only 25 cents back.
If we use the reasoning of U.S. Chamber of Commerce, based upon BLS statistics, then our trade relationship with China cost 2,345,350 jobs in 2008. This based on 8.75 jobs for every 1 million dollars of transactions in the U.S. manufacturing sector. If China's trade ratio was the same as Mexico's then 1,172,675 jobs would be created in the U.S.
According to the Chamber website U.S. intellectual property industries "account for more then 50% of all U.S. exports". It is very disappointing that the U.S. China Economic and Security states that 80% of all business software and 90% of all music and dvds in use in China in 2008 have been pirated.
For every one dollar we spend with Mexico we get 75 cents back. This compares to China where we get only 25 cents back.
It's more fair to say that for every dollar we spend on imports, we get a dollar worth of goods and services back. With Mexico, this is in exchange for only 75 cents worth of goods in return; while Mexico re-invests the other 25 cents back into America in the hopes of growing American businesses, so that at some future point the investments can be used to pay off purchases of other goods and services.
I'd say America is getting an excellent deal, because the IOUs we exchange have a risk of not returning real value to those who trade with us.
In theory. I agree with free trade.
In practice, one Asian nation after another has vaulted into the bigtime following mercantile precepts, not free trade.
Several of the posts above seem to suggest that only low wage countries or those practicing mercantilism succeed at trade. Does that really explain why U.S. became the largest economy in the world? Does it adequately explain why Germany with very high wages is the world's #1 exporter by value?
If nations with high standards of living were totally disadvantaged by trade, wouldn't living standards to be dropping precipitiously in Europe, Canada, Austrailia, NZ, Hong Kong, & the U.S.? How could these countries have ever succeeded to begin with?
The one variable missing in this discussion is differences in productivity. These countries are catching up not because of mercantilism but because they are starting from so far behind. The same thing happened to Germany & Japan after WWII that is happening to China & India.
At the time, the rise of Germany & Japan caused considerable angst however, their rise did not mean the demise of the U.S. economy but more opportunities for everyone. Considering that German militarism was the dominant geo-political issue of the first half of the 20th century, trade with Germany has helped to create peace, a considerable benefit as any veteran of WWI or WWII or their descendants can attest.
QT-
Of course, you make good points.
Still, the China model is not free trade or true free enterprise, and they appear set to dominate the globe in 30 years.
Theories are fine, but my theory is that there is more than one way to skin a cat.
Meow.
"Estimated"
Show me a list of the jobs, with details, and I will believe.
This is just statistical wanking.
Benny,
It doesn't matter if the cat is black or white as long as it catches mice.
At current growth rates, China & India are expected to surpass the U.S. in economic performance in this century. If you divide 72 by the growth rate, the result is the # of years it takes for the size of the economy to double. It is easier to grow a small # than a large # so one imagines that the present growth rates will not be a linear projection.
The other thing that the U.S. does better than any nation on earth is innovation.
The very things that hold China back are lack of property rights, lack of political freedom, lack of innovation, lack of basic health care, pollution, and tremendous social upheaval. We can't even begin to imagine the scope of change in China as the largest human migration in human history is underway.
Does the rise of China spell the demise of the U.S.? I think you're selling Uncle Sam short there, buckaroo.
I find projections of this nature to be difficult to measure; the number of jobs that *would* have been created is a tough nut to project.
Note that I am not saying it is wrong, just difficult to measure; similar to measuring the likely murder rate if incarceration rates were different.
It may be more productive to talk about how current tax policies (double taxation of foreign income, for example) play havoc w/ economic growth and general employment.
Letting big, huge businesses keep more of what they earn is immediately seen as clear, unmistakable evidence that large suitcases of money change hands between lobbyists and lawmakers, while wage-earning tax payers are left in the lurch.
I find projections of this nature to be difficult to measure; the number of jobs that *would* have been created is a tough nut to project.
Does the rise of China spell the demise of the U.S.? I think you're selling Uncle Sam short there, buckaroo.
Given their current style of government and their unwillingness to change it, it is a concern. The U.S. should be able to respond in a military capacity should that country try to further topple the U.S.
At the time, the rise of Germany & Japan caused considerable angst however, their rise did not mean the demise of the U.S. economy but more opportunities for everyone
As far as I know, there aren't 1.4bn people led by a stubborn Communist government that is unwilling to change its situation in Germany or Japan.
Our politicians need to hold their feet to the proverbial fire and stop only when they change.
"The U.S. should be able to respond in a military capacity should that country try to further topple the U.S."
Are you seriously suggesting that the U.S. should take military action against a nation that has committed no act of military aggression? Upon what basis, success? a communist governemt? Have you been attending the Joe Biden school of diplomacy?.
I thought you folks on the left accused president bush of being a cowboy. The position is so extreme, ill-considered and animated by animous that it is quite frankly incredible.
Recommend that you augment your education to include some courses in international relations, and modern history if you interested in this subject. At present, your basis of understanding seems painfully limited.
Great post! I used it today in ECON 385 - International Economic Policy at your alma mater.
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