Maybe I should always be grateful when a Mainstream Media figure deals with U.S. trade policy. Heck anything’s better than the neglect typically shown for this topic. I’d be even more grateful if the detailed look occasionally taken at this subject reflected some actual thought, rather than the repetition of talking points and slogans. That’s why Lydia DePillis’ long piece yesterday in the Washington Post on the Trans-Pacific Partnership (TPP) left me so dissatisfied.
Actually, DePillis deserves credit on several counts. Unlike, say, Washington Post editorial board members, she treated TPP critics’ calls for including provisions against currency manipulation and for stronger labor standards as something other than nefarious protectionist ploys. She also recognized that fixing America’s schools isn’t a remotely promising idea for offsetting the damage inflicted by trade deals on much of the workforce.
But given that the nation – and the Mainstream Media – now has nearly a quarter-century’s worth of experience with the current, post-Cold War phase of U.S. trade policy, what’s most striking is how many immensely important points DePillis, and so many of her colleagues, still routinely miss. For now, let’s just focus on currency and labor standards.
First, the author writes that currency manipulation by China, and by prospective first-round TPP signatories Japan and Singapore, has played a role in widening U.S. trade deficits, and that the new agreement should do something about this exchange-rate protectionism. She absolves trade liberalization as such for the problem. Yet when the U.S. government repeatedly signs liberalization deals with manipulating countries (not just the still-unfinished TPP, but numerous agreements with China over the years), then this strategy deserves blame for worsening the trade gap. The same goes for continuing to sign trade deals with countries that engage in any of the other predatory trade practices so common in the global economy.
Another currency manipulation fundamental overlooked by DePillis: It’s not just manipulating countries that want the practice kept out of the TPP. It’s also offshoring U.S. multinational companies. When foreign governments keep exchange rates artificially low, the products these firms make in those countries for export to the United States are kept artificially less expensive and thus more competitive versus American-made products. In other words, currency manipulation is a foreign subsidy from which the multinationals benefit. That’s why they’re fighting tooth and nail to preserve the do-nothing currency status quo. And that’s why no TPP currency manipulation language that’s ultimately acceptable either to manipulating countries or to the offshoring lobby could possibly shield domestic companies from its effects.
Similarly, it’s good that DePillis recognizes that Washington’s record in enforcing labor provisions in trade deals has been “abysmal.” Step Two is to learn that even American governments that wanted to right by U.S. and foreign workers would face obstacles that look insurmountable. Chiefly, even in relatively small TPP countries, like Vietnam, national manufacturing complexes are enormous.
According to a 2013 World Bank report, the country boasted about 50,000 manufacturing companies in 2011. The number had roughly quintupled since 2000, and has doubtless grown since. How many American or other inspectors will be needed to inspect their factories on an ongoing basis to ensure that whatever labor standards become part of TPP are met? And what happens when the agreement admits Bangladesh? Or Indonesia? Or China?
But maybe I shouldn’t be so hard on DePillis. After all, many of these points in her article clearly reflect what she’s been told by the “progressive” TPP critics she’s interviewed. If most of the deal’s opponents in and out of Congress keep trafficking in the myth that the TPP would be fine if it simply included language that ostensibly addresses certain outstanding issues, and even sets up means of enforcing new rules, why shouldn’t reporters buy in as well?