A bad time to sideline trade talks
This would have been a good opportunity to talk about trade, but growing tensions between the countries, regarding the skies above the East China Sea, have decidedly shifted the topic of conversation.
That’s a bummer; today would have been a good day to do it, in light of the monthly Commerce Department report that shows the U.S. trade deficits with China and Japan are more of the same … and more of the same is bad.
Unfortunately, such trade deficits could grow even larger unless the Obama Administration insists on a rule barring currency manipulation in the Trans-Pacific Partnership (TPP) trade talks. Sure doesn’t look like one’s coming though, and we might end up with another trade deal that does more harm than good. Writes David Cay Johnston in an opinion for Al Jazeera America:
The new pacts are being negotiated by the same narrow group of multinational corporate interests that in two decades of badly negotiated trade deals lost more than 5 million American jobs, half them to China.
Last year the U.S.’s total trade deficit with just five countries with whom we have “pro-trade” pacts — Canada, China, Japan, Mexico and South Korea — exceeded half a trillion dollars. That amounts to 3 percent of the U.S. gross domestic product transferred out of the United States to these trading partners — a loss of wealth facilitated by the 1993 North American Free Trade Agreement, our 1999 bilateral trade agreement with China and the 2012 South Korea Free Trade Agreement.
How much have we lost in uneven trade to China alone? We’ve said it before quite a bit, but here’s Johnston again:
Clinton sold Americans on liberalized trade with China, saying of the deficit in 1999 that “over time, clearly it will shrink with this agreement.” On the basis of the first nine months of this year, the 2013 deficit is likely to be about $316 billion, roughly the same as in 2012 but more than triple the inflation-adjusted deficit in 1999.
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