Bernie Sanders on Free Trade: Down With It!

Presidential Candidate Bernie Sanders actively opposes American trade agreements claiming that they undermine U.S. industry, hitting home with the American industrial belt. But what plans does Sanders have on interacting with other countries in a global market?

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Democratic presidential candidate, Sen. Bernie Sanders, I-Vt, speaks during a rally at Michigan State University, Wednesday, March 2, in East Lansing, Mich. | AP Photo

Mostly trailing in the current United States presidential election, Presidential Candidate Bernie Sanders took a major win in Michigan on March 8th due to his stance on trade policy. Sanders claims that free trade agreements like North American Free Trade Agreement (NAFTA) and the Trans-Pacific Partnership (TPP) do more harm than good to the American public because of job outsourcing, undermining American industry, causing millions of job losses.  Sanders says by learning from the history of free trade agreements, we can see that they are ineffective and need reformation.

The three most recent trade agreements the U.S. has made promised the creation of more jobs at home when in reality there has been a loss of jobs. NAFTA, enacted in 1993, promised 200,000 jobs for American and resulted with 682,900 jobs lost, according to the Economic Policy Institute (EPI). The EPI also reported that due to the permanent normal trade relations status titled to China in 1999, America lost 2.4 million jobs to China. Most recently, the 2011 U.S. – Korea Free Trade Agreement promised to create 280,000 jobs in America but has so far resulted in the loss of 60,000 jobs.

“We have lost almost 60,000 factories in our country and millions of good-paying jobs since 2001,” Sanders wrote in his op-ed.  This is the outcome of American corporations outsourcing their factories to China and other low-wage countries, because free trade agreements allow them too. Josh Nichols of The Nation points out in his article that free trade agreements have outsourced jobs from Michigan, Ohio, Missouri, Illinois, Wisconsin, Indiana, and Pennsylvania; the region once known as America’s Industrial Belt, today commonly known as the Rust Belt due to the amount of abandoned industrial factories. Sanders’ position on trade is how he won the Michigan people, reflecting their sentiment from job losses in their region due to factory outsourcing.

America’s next major trade agreement is the TPP, which was signed on February 4, 2016. The Obama Administration claims that the TPP will create 650,000 new jobs in the long run. The TPP’s goal is to “promote economic growth; support the creation and retention of jobs; enhance innovation, productivity and competitiveness; raise living standards; reduce poverty in our countries; and promote transparency, good governance, and enhanced labor and environmental protections.”

The Washington Post did a fact check on how the Obama Administration calculated the TPP’s job creation estimations and found that in the long run, trade agreements do not really effect employment numbers. Citing “The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment,” by Peter A. Petri, Michael G. Plummer and Fan Zhai, the Post concludes that the Obama Administration is just playing out a desired outcome of the TPP. The Post asked author Peter Petri what job creation would actually look like, to which he says, “Employment could be negatively affected by the adjustment implications of a trade agreement. 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… 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.” Petri points out that part of the TPP should be the creation of new, more productive jobs to replace the old, less productive jobs that are outsourced.

However, Sanders feels that the creation of new, more productive jobs is a false dream. “The TPP is simply the continuation of a failed approach to trade – an approach which benefits large multinational corporations and Wall Street, but which is a disaster for working families,” Sanders wrote in an op-ed in The Guardian. “The TPP must be defeated, but our overall trade policy must also change for corporations to start investing in America and creating jobs here again, and not just in China and other low wage countries.”

Sanders is winning the American, mid-western, working class by targeting the inefficiencies of free trade agreements, using estimates of huge job losses as the base of his stance. Even though it is not proven that these trade agreements are the absolute source of job losses in America, Sanders is right to point out that American corporations should also be making new jobs in America to displace the effect of job losses in America due to outsourcing.

The only way a trade agreement can be successful is if it provides new industries for less developed nations, promotes the creation of more productive industries in developed nations, and has net gains all around. Sanders is quick to shame free trade agreements, but he has yet to provide any alternatives to be enacted that provide the same benefits. His goal for the moment is to have corporations create more jobs at home to make up from the losses of free trade agreements. But who knows, the TPP might just be as beneficial as the Obama Administration wants us to believe.

Reference:

http://www.theguardian.com/commentisfree/2015/apr/29/so-called-free-trade-policies-hurt-us-workers-every-time-we-pass-them

http://www.epi.org/publication/nafta-legacy-growing-us-trade-deficits-cost-682900-jobs/

http://www.epi.org/publication/china-trade-outsourcing-and-jobs/

http://www.epi.org/blog/korea-trade-deal-resulted-growing-trade/

http://www.thenation.com/article/bernie-sanders-wins-in-michigan-thanks-to-trade-policy/

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/october/summary-trans-pacific-partnership

https://www.washingtonpost.com/news/fact-checker/wp/2015/01/30/the-obama-administrations-illusionary-job-gains-from-the-trans-pacific-partnership/

 

 

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2 Responses to Bernie Sanders on Free Trade: Down With It!

  1. sfhorn13 says:

    So despite the benefits of trade agreements, the TPP briefing we read for class does say that the agreement is not likely to affect overall employment in the US as it will involve adjustment costs and transition costs that include wage cuts even as US wages increase. Even though the agreement will add new jobs to replace those lost in less-efficient sectors, there’s no guarantee that these jobs will be placed in the same geographic areas or require the same skills as the obsolete jobs. Thus, workers in the “rust belt” might remain unemployed if they are unable to relocate or retrain. There’s the tension we see brewing as part of election year.

  2. zsilver94 says:

    Sanders says he does not oppose international trade, however he would rather have fair trade instead of free trade.

    So what constitutes fair trade Mr. Sanders?

    From his statements about the issue, it is clear he believes that fair trade would involve having our trade agreements renegotiated to include only countries that have similar wages and standards of environmental stability as the U.S.

    This proposition is utterly ridiculous since it would severely harm trade with poorer countries who need to improve their social welfare and thus would shut off the economic opportunities that the U.S. economy can offer.

    Sanders believes that we should stop trading with the majority of the world’s population because it is essentially a crime of not being as wealthy as we are.

    This idea does not make common sense from a humanitarian standpoint. These countries won’t get rich without being able to export goods and services with other countries. Also poor countries will not be able to benefit from the advances in environmental conditions that lead to economic development and technological changes. Cutting off or restricting trade with poor countries is the wrong way to go about making the world better economically overall, especially if you care about the incomes and working conditions of poor people.

    From Sander’s thoughts, I can infer that he would prefer free trade in theory, however I do not think he actually knows how much good it can do for the whole world economy even though he is a huge proponent of raising the social welfare of poorer individuals and countries.

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