While the buzz word on the hill is taxes, you can also add trade. This week Congress has the three pending trade agreements before them- Panama, Columbia and Korea. Just like taxes, there are two sides to the trade issue.
While Myron Brilliant, senior vice president for International Affairs at the U.S. Chamber, supports the agreements, saying they will be a jobs generator, others disagree.
Senator Bob Casey (D-PA), Chairman of the Joint Economic Committee, recently chaired a hearing titled, “Manufacturing in the USA: How U.S. Trade Policy Offshores Jobs”. The Committee examined the impact the country's current trade policy has on the U.S. economy and the manufacturing sector. Senator Casey addresses the Chamber's positive endorsement and warns of the unintended consequences of such agreements.
LL: How many jobs do you think are in the balance of being off shored?
Sen. Casey: We’ve already lost over 5 million manufacturing jobs since 2001. And it’s not just manufacturing jobs that are being offshored – we know that legal services and information service jobs are moving overseas. Professor Alan Blinder of Princeton University has estimated that 22 to 29 percent of all US jobs will be offshored or will be offshorable over the next 2 decades – adding up to 30 to 40 million additional U.S. jobs lost.
LL: What do you think of the three pending NAFTA-style agreements on the table right now?
Sen. Casey: Since NAFTA’s passage, U.S. trade policies have steadily chipped away at Pennsylvania’s manufacturing sector. From 1997-2010, manufacturing went from 16.4 percent of Pennsylvania’s Gross State Product to 12.1 percent. In total, Pennsylvania has lost nearly 300,000 manufacturing jobs.
Despite these alarming statistics, advocates for trade deals promise significant economic benefits. From exploding export potential to direct job creation, proponents argue a significant net positive from these agreements every time they are considered.
In reality, instead of creating opportunities for Pennsylvania, our trade policies do little more than off-shore good-paying jobs while giving our trading partners unlimited access to our market.
LL: Which industries would be hurt the most?
Sen. Casey: Broadly, free trade agreements have not had a beneficial impact on US jobs. The year after NAFTA passed, the US saw its trade deficit with Canada explode and its trade surplus with Mexico turn into a trade deficit. The NAFTA model provides a strong incentive for all producers to move out of the US and export back home.
LL: What do you say to the Chamber of Commerce who is in favor of such agreements?
Sen. Casey: Taken in the whole, free trade agreements have not been good for Pennsylvania, having offshored hundreds of thousands of jobs.
LL: We had another company (General Motors) announced they will be expanding its relationship with China-based SAIC Motor Corp. What to you think of this expansion? While it may be good for the American Taxpayer who bailed them out? How many jobs could the American workforce be losing?
Sen. Casey: I am is opposed to companies expanding partnerships with explicitly state-owned companies. We should not be rewarding China’s policy of grooming national champions.
LL: What strategies do you think need to be employed to encourage China to adjust its exchange rate?
Sen. Casey: In my travels around Pennsylvania, business owners and workers take every opportunity to tell me about how China’s policies have created an uneven playing field. One basic step that should be taken immediately is to pass legislation to force action against China’s currency manipulation. The Senate will soon take up currency manipulation legislation that should be quickly passed, signed into law and implemented.
LL: What are the benefits of the Trade Adjustment Assistance Program?
Sen. Casey: American workers have taken it on the chin as a result of unfair, unbalanced trade policy that benefits countries like China and India and results in the loss of American jobs. The Trade Adjustment Assistance program helps workers get back on their feet by providing the necessary training to help them compete in today’s global economy.
Questions? Comments? Email us atNetNet@cnbc.com
Follow on Twitter @ twitter.com/loriannlarocco
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @ www.facebook.com/NetNetCNBC
A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."