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Guess Who’s Winning the Argument on Trade?


Guess Who’s Winning the Argument on Trade?

Kathy Kiely

(BillMoyers.com Editor's Note: In the midst of a presidential campaign that has been more about Donald Trump’s braggadocio, Hillary Clinton’s emails and their respective health records than the nation’s future, at BillMoyers.com we’re hoping to generate some discussion and debate on issues that aren’t being talked about enough by the candidates. We’re going to some of the nation’s leading experts for their insights and in this post, interview the AFL-CIO’s Thea Lee about trade.)

Call her the Dismal Scientist who came in from the cold.


International trade of tangibles is addressed in only 5 of the 30 TPP chapters, so this article’s focus on trade is misleading. Regulatory capture, addressed in 25 TPP chapters, is the real issue in current “trade deals” that will accelerate environmental degradation and wealth transfer from the 99% to the 1%.

Although cheap imports filling landfills is indeed a major concern, it is secondary to transferring judicial authority from governments to corporations.


Yes, labor is right about “free trade,” but apparently Democrats are fine with it. Before launching her campaign, Hillary Clinton was working hard on selling the TPP to Congress. We weren’t surprised, since her husband had signed on to NAFTA. (Months later, she claimed to oppose it…) Democrats chose Clinton as their candidate, indicating that they must be OK with the TPP.


Many of those who ridicule climate change deniers correctly point out that 99% of all PhD meteorologists agree that carbon dioxide is associated with rising global temperatures. However free-trade opponents do not consider the fact that that 99% of all PhD economists agree that free-trade and the TPP in particular will greatly benefit America and raise standards of living .
Protectionism is the progressivism of fools. Gandhi was a great statesman but a horrible economist. Just as the ignorant in the USA argue that American workers who earn $15 per hour should not have to compete with Chinese workers who make $2 per hour, Gandhi thought that Indian workers should not have to compete with American and European workers who have the benefit of modern machines. As a result India adopted protectionism. In 1947 the per capita income of India was similar to countries such a South Korea. By 1977 the per capita income and standard of living in South Korea was ten times that of India. India has since largely abandoned protectionism and has benefited immensely from free trade. Just as David Ricardo proved would be the case when he developed the concept of comparative advantage.
Protectionism can save jobs. In the USA the best measurement of the cost per job saved to the rest of the country is about $1 million per job saved. Saving one job might provide $100,000 in gains to the worker and the employer who benefit from the protectionism, but cost the rest of the country $1,000,000. Since the million dollars is just one third of one cent per person in the USA, no one notices it.
To save a million jobs via protectionism would cost the country a S trillion which would be about the same impact as a very severe recession. To save 10 million jobs via protectionism would cost the country a S10 trillion. That would make the USA a poorer country than Mexico. That would mean it would be likely the people born in the USA would be going to Mexico to work as servants and dishwashers. The degree of impoverishment that would result from that much protectionism is usually only associated with severe natural disasters or wars.

“…Equally unhelpful in terms of addressing the income and wealth inequality are various non-tax factors. Issues such as minimum wage laws, unwed mothers, globalization, free trade, unionization, problems with our education system and infrastructure can increase the income and wealth inequality. However, these are extremely minor when compared to the shift of the tax burden from the rich to the middle class. It is the compounding effect of shift away from taxes on capital income such as dividends each year as the rich get proverbially richer which is the prime generator of inequality…”


“So you could certainly imagine a different kind of economic structure where you bought fewer things but nicer things, they lasted longer, they were better quality, your community had more resources, you had better schools, you had nicer parks, you had better roads because you’re paying taxes in the community where you live and you’re supporting things." -Thea Lee

Yeah, I can imagine that other economic structure Dr. Lee describes. It’s called socialism.


Thea Lee has been right on this issue since NAFTA. Over time, her analysis has been joined by Joseph Stiglitz, Paul Krugman, Larry Summers (!?!??) Dean Baker, among others, and now Martin Wolf, an influential economist with the Financial Times of London, not to mention millions of voters, millions more workers, and thousands of organizations of civil society.

Equally notable is that the countries that advanced most in the global economy paid no attention at all to our free trade orthodoxy, just as we industrialized the US in the 19th century paying no attention at all to free trade orthodoxy.

It’s clear that free trade and our NAFTA-style trade language are designed to benefit global investors and multinational corporations.


It’s funny that you should mention South Korea since its protectionist history is well-known. In fact, when we look at developing nations that actually developed (a small list) we find that protectionism was always part of that progress, including the economy of the USA.

One might do better to look at S. Korea’s focus in the Sixties on heavy industry and its efforts to address the income disparity (rural vs. urban) that caused, its large investments in infrastructure and its not always smooth transition to high value-added capital intensive markets and compare all of that to what has happened, or not happened, in India.