The most ambitious trade deal since NAFTA seems further than ever from being ratified and enacted.
Sens. Elizabeth Warren and Bernie Sanders, prime-time speakers at the Democratic National Convention Monday, made a point of denouncing the Trans-Pacific Partnership (TPP). Hillary Clinton has already said she opposes it (as does her Republican opponent, Donald Trump). Delegates on the floor chanted, “No TPP!”
The paradoxes are abundant. For one thing, Secretary Clinton’s husband oversaw the implementation of the first big managed-trade agreement, NAFTA, more than 20 years ago. And the party’s sitting president, Barack Obama, has tirelessly backed TPP. Still, it seems ever less likely that the agreement, involving 12 nations, will be enacted by the United States.
Earlier this month, Interior Secretary Sally Jewell visited the region to stump for the agreement. And the Washington Council on International Trade and Association of Washington Business put out a study saying TPP could have added $8.7 billion to state exports and 26,400 direct jobs if it had been in force in 2015.
If true, neither is a number to turn up our noses at. Still, $8.7 billion represents only about 10 percent of the state’s total merchandise trade last year. Which bolsters my argument that TPP would be a modest, but real, boost for state exports. TPP would not be “huuuuuge.” Its intellectual property protections would likely be a bigger help for state technology companies.
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Let’s stipulate that because of Boeing and the aerospace cluster, Washington is unusual. It enjoys the largest per-capita exports in the nation. It is, trade boosters tell us, the most trade-dependent state. That also makes it the most trade-vulnerable state.
But none of this really cuts to the heart of the matter for a gathering political majority. These managed-trade deals (not “free trade”) have encouraged companies to send work overseas to lower-wage countries. Some elite sectors in leading states have been clear winners, but in the main the deals have likely hurt job creation and definitely held down wages nationally. Meanwhile, the corporate toffs who helped craft these deals are richer than ever. TPP would only be more of the same.
This critique is incomplete to the extent that it leaves out the entry of China into the World Trade Organization and its disruptive effects. But the reality for both parties is that trade doesn’t enjoy the support it did in 1992.
Today’s Econ Haiku:
The sky is still up
So are minimum wages
Chicken Little’s blue