SOTU preview: Making trade work for America

Posted by mmcmullan on 01/23/2014

We’re just a few days away from President Obama’s 2014 State of the Union address.

And as promised: Each day, from now until the SOTU, we’ll offer up a piece of what we consider to be the entire manufacturing puzzle. It is our hope that next Tuesday we'll hear President Obama offer ideas and plans on how we can fit these pieces into place to rebuild America's manufacturing sector.

Today: Making Trade Work for America.


What has happened to the middle class? It’s been treading water for the past decade or two; wages are stagnant, making it increasingly hard to move up in America.

Okay. Old news. So what’s to blame? Your pals at the Alliance for American Manufacturing (AAM) would argue that a chief culprit is America’s trade stance – or, more specifically, the bad trade deals we’ve made.

Please don’t misunderstand: Trade done right is to the benefit of everyone. The rise of an interconnected, global economy has spread wealth around the world, lifting billions of people out of poverty. But it hasn’t been a clean and clear shift; unfettered trade has enriched some more than others, and the American middle class has financed it.

And that’s a problem. The jelly in your donut, the peanut butter in your sandwich, the interesting parts of books and movies when all the action heats up? Yes. That all comes in the middle. Coincidence? I think not.

AAM wants America’s trade agenda to work for our whole economy. That’s why we’ve got some bones to pick with our current trade stance – if our ever-widening trade deficit is any indication, it’s one based on America’s presumed endless ability to consume. That’s a dumb assumption.

The Obama administration seems to recognize this as a problem – it’s what’s gotten the president out on the stump, singing the praises of a healthy American manufacturing sector full of well-paid workers – but so far it’s policy prescriptions meant to help that vision along have been poorly planned and non-existent, in that order.

We’ll start with poorly planned: The White House has been super-jazzed about its plans for doubling exports in a short period of time. But doing so won’t mean much if our imports increase at an even faster clip. Look at our relationship with China, our single-largest trading partner. It reached an all-time high in 2012, and is almost assuredly going to be even higher when the final data for 2013 arrives. Point is: We’re still sapping our economic strength through overconsumption. Instead of ramping up exports without focusing on imports, we should be trying to halve our trade deficit.

Now, on to non-existent: There’s a reason we run gargantuan trade deficits with other countries. We do a pretty shoddy job of demanding fair play at the bargaining table. China, for instance, has used currency manipulation to subsidize its exports at the expense of our own for years, while Washington has sat on its hands. Studies have forecasted millions of jobs and billions of dollars for our economy to be gained if global currency manipulation were eliminated … but the administration has kept the issue at arm’s length nonetheless, despite the opportunity to address it in current trade negotiations or by backing current legislation on Capitol Hill.

We need to make trade work for American manufacturers and the workers they employ. Will we hear of a tougher trade regime from President Obama on Tuesday?

1 comment

Trade

How can we have a fair agreement when , 1) we manufacture very little here. 2) We will never be price competitive. 3) What can third world companies buy with a wage of $.28 an hr. 4) American Corporations have become so greedy, they won't be bringing back manufacturing jobs. Overseas they have no regulations, they pollute all they want, pay no benefits or safety issues. They pay no taxes. Store all their profit off shore and use it to buy our government officials.
The American worker has taken all the concession we can. We don't want to have to live like a third world country, just to get manufacturing back in the USA.
Through our corporate own Government, most states have passed right to work laws, busted unions, repealed a lot of laws pertaining to labor, labor safety and negotiating power.
Trade agreements have never benefited the American worker.
We're fighting a whole different monster. One with tons of money and no morals. From where I stand, they're pointing us toward a two tiered country...and guess who's on the bottom?

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