Im-Politic: Immigration Realists Should Love this Corporate Cheap Labor Lobby Immigration Study

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Business Roundtable, Cheap Labor Lobby, China, Im-Politic, Immigration, Jobs, national security, Open Borders, OPT, Optical Practical Training program, student visa, tech jobs

You have to hand it to the Business Roundtable (BRT) – an organization comprised of the CEOs of America’s largest companies. It’s not often that a lobby group puts out a study that undercuts its own message in no less than three ways. But that’s exactly what the Roundtable has accomplished with its new report warning about the consequences of Trump administration actions deemed likely to reduce the numbers of foreign students that come to study in the United States.

The focus of the BRT’s concern is the Optional Practical Training (OPT) program, which allows foreign students to work temporarily for employers for years after their graduation. The Roundtable and other supporters of issuing lots of these visas portray them as a valuable way for domestic U.S. businesses to improve their (and the nation’s) competitiveness by increasing their access to the best talent on the planet. As a result, they argue, programs like OPT boost these students’ incentives to study in the United States and thereby become eligible to enhance its well-being to begin with.

Opponents charge that OPT hands employers yet another means of hiring less expensive foreigners over equally capable but more expensive native-born workers, and thus suppressing wages for all workers in the technology-heavy industries in which these visa holders are highly concentrated. OPT and programs like it have also been criticized (including by the Trump administration) for enabling large numbers of students from China gain cutting-edge tech skills that Beijing can ultimately used to undermine American economic and national security interests, and for providing these students and the Chinese government with golden opportunities to spy on American industry.  

The BRT’s case for the biggest possible OPT program rests entirely on its supposed economic benefits. But these exclusively economic arguments are their own Achilles Heel.

First, the damage the BRT claims the U.S. economy will suffer from a hypothetical (but in my view, reasonably assumed) 35 percent reduction in OPT visas by 2020 and a consequent 60 percent decline in participation in OPT by 2020 is laughably small. Chiefly, by 2028, according to the BRT, the economy will be a cumulative $52 billion smaller in inflation-adjusted terms than otherwise, and the cumulative number of jobs lost by native-born Americans will hit 255,000.

These numbers may sound big, but keep in mind: They represent not annual losses but the estimated total damage over ten years from OPT cutbacks. And they’re laughably miniscule given that the United States currently produces goods and services (the activity that generates the “size of the economy,” or gross domestic product, figure) at an annual, rate of nearly $18.7 trillion in real terms, and that this economy is currently supporting nearly 150 million jobs.

Second, logically speaking, the reverse proposition is also true: If the economic losses resulting from cutting back on the OPT program are so infinitesimal, then so is the economic contribution made by the program at its current size. In fact, it’s reasonable to conclude from the BRT report that if OPT was eliminated completely, the U.S. economy (rightly) wouldn’t even notice.

Third, the BRT’s complete neglect of the national security dangers posed by the OPT program looks like an implicit confession that they’re considerable. Are the BRT’s CEOs telling us that they shouldn’t be considered at all? That reducing them is worth no cost at all? That enhancing national security isn’t even worth the itsy-bitsy price that the BRT itself reveals OPT curbs would entail? 

Of course, none of these conclusions reflects well on the Roundtable, or on the corporate Cheap Labor Lobby of which it’s a card-carrying member. That’s why I’m hoping that immigration and national security realists share it with as many recipients – including government decision-makers – as possible. If this is the best that the Open Borders movement’s Big Business branch can do to tout the OPT program, it’s fate will quickly be sealed.

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(What’s Left of) Our Economy: The Real Messages of that Business Letter Opposing Tariffs on China

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American Chamber of Commerce in China, Business Roundtable, China, currency manipulation, National Association of Manufacturers, offshoring, protectionism, tariffs, Trade, Trump, U.S. Chamber of Commerce, US-China Business Council, {What's Left of) Our Economy

Forty-five American business groups have just sent a letter to top Trump administration officials urging them not to impose “sweeping tariffs” on China in response to its longstanding and widespread theft of U.S. “trade secrets and other intellectual property.” That’s not especially newsy, since large elements of the American business community have long opposed any measures that would rock what they consider to be a highly profitable boat – the business they do with the People’s Republic.

Here’s what’s much more newsworthy: The list of signers is missing some of the leading lights of the U.S. trade association world, including the Business Roundtable, the National Association of Manufacturers, and two leading China-specific groups – the US-China Business Council, and the American Chamber of Commerce in China (which is distinct from the U.S. Chamber of Commerce, an organization that did sign).

Since the membership of the U.S. Chamber in particular is so all-inclusive, it’s possible that its name on the letter was thought to suffice for many companies belonging to those other groups that are absent. But these companies have never been shy about practicing double- and even triple-counting. So it’s also possible that the above absences indicate that the American business community – and especially the multinational companies that have so powerfully influenced U.S. Trade policy with China for decades – is seriously divided on the tariff issue.

What’s also noteworthy is the letter’s statement that “Tariffs would not only affect Chinese shippers but also harm U.S. companies that sell component pieces of final products exported from China.” In other words, the letter is implicitly acknowledging that many of its signers have been among those companies that have long spearheaded the offshoring of American jobs and entire supply chains to China.

Their offshoring focus of course explains much of their staunch opposition to vigorous Washington responses to such cut-and-dry protectionist Chinese practices as currency manipulation: Although this trade predation has damaged America’s domestic production base, these businesses’ China-based operations have been major beneficiaries.

Similarly, the strong interest of so many of these companies in continuing to coddle China’s mercantilism at the domestic economy’s expense explains the seeming paradox of their main policy message to President Trump: On the one hand, they “continue to have serious concerns regarding China’s trade policies and practices” and admit that their persistence endangers “U.S. global competitiveness, innovation, productivity, and cybersecurity.”

And on the other, they insist that American countermeasures be limited to steps – like “measured, commercially meaningful actions consistent with international obligations” and working “with like-minded partners to address common concerns with China’s trade and investment policies” – that have been tried for years, and that so far have produced nothing but failure.

(What’s Left of) Our Economy: Big Business Still Favors A TPP Fast Track – for Everyone Else

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Business Roundtable, Congress, fast track, Michael Froman, National Foreign Trade Council, Obama, offshoring lobby, Orrin Hatch, Paul Ryan, Ted Cruz, TPA, TPP. Trans-Pacific Partnership, Trade, Trade Promotion Authority, {What's Left of) Our Economy

A funny thing has happened to the Offshoring Lobby groups that pushed so hard (and successfully) for Congress to give President Obama fast track trade negotiating authority. Now that they’ve seen the text of the Trans-Pacific Partnership (TPP) trade deal whose passage they’ve also urged, several have decided they don’t like the core provision of fast track trade negotiating authority.

Central to the case for fast track – now officially known as Trade Promotion Authority (TPA) – is that preventing Congress from monkeying around with the final text of trade agreements negotiated by presidents and their aides is vital to persuading America’s interlocutors to negotiate seriously. If American lawmakers could amend the deal at will, why would foreign leaders put forward their best offers, especially if they might anger powerful domestic constituencies?

That’s what U.S. Trade Representative Michael Froman has made unmistakably clear. In a late-2014 article in Foreign Affairs, Mr. Obama’s chief trade diplomat wrote, “By ensuring that Congress will consider trade agreements as they have been negotiated by the executive branch, TPA gives U.S. trading partners the necessary confidence to put their best and final offers on the table.”

The Republican leaders who have supported the president’s trade agenda agreed as well. According to Senate Finance Committee Chair Orrin Hatch of Utah, TPA “allows for trade deals to be submitted to Congress for an up-or-down vote, an incentive for negotiating nations to put their best offer forward for any deal.” And before he was elected Speaker and chaired the House Ways and Means Committee, Wisconsin’s Paul Ryan contended (in an article co-authored with Texas Republican Senator and current presidential candidate Ted Cruz, “By establishing TPA, Congress will send a signal to the world. America’s trading partners will know that the U.S. is trustworthy and then put their best offers on the table. America’s rivals will know that the U.S. is serious and won’t abandon the field.”

When Congress was considering fast track, moreover, leading business groups strongly echoed this line. As specified in a statement from the Trade Benefits America coalition that spearheaded the pro-fast track lobbying campaign, fast track historically ”has provided our trade negotiating partners with a degree of comfort that the United States is committed to the international trade negotiating process and the trade agreements we negotiate.”

One of the coalition’s major members, the National Foreign Trade Council (NFTC), was even more explicit: “Without U.S. trade negotiating authority, other countries will be unwilling to negotiate with the United States for fear that U.S. commitments and concessions would not hold weight.  In particular, they would be unwilling to put important politically sensitive concessions on the table.”

Last week, however, some of these organizations were changing their tune. In a statement calling for Congress to pass the TPP, the Business Roundtable declared that it also wanted to administration “to quickly address the remaining issues that impact certain business sectors in order to ensure the broadest possible benefits to all sectors of U.S. business, which will enable the broadest support possible for the TPP.” Huh? It’s true that Congress can attempt to clear up purported ambiguities in the text when it writes implementing legislation, but as for changing the text itself? Sorry, but that’s a no-no under TPA. Unless the Roundtable wants to reopen the entire negotiation?

Similarly, the NFTC reported that it is “encouraged by discussions that are underway between Congress and the Administration to address provisions in the agreement in order to further improve trade and investment liberalization, and strengthen the system of international trade and investment disciplines and procedures, including dispute settlement, for all of American business. Early resolution of areas for improvement identified by the business community will speed approval by Congress in 2016.”

With due respect, what on earth are they talking about other than the aforementioned clarifications and interpretations that unfortunately are entirely unilateral, and have no standing under the new TPP regime?

It seems that when the Offshoring Lobby touted the importance of banning Congressional amendments to TPP, it meant all amendments except its own. You can’t blame its organizations for seeking such blatant favoritism; it’s their job. Now we’ll see if Congress believes that enforcing the principle of equality under the law is its job.

Im-Politic: Polls on Trade Still Conceal Much More Than They Reveal

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Business Roundtable, Congress, fast track, globalization, Im-Politic, Jobs, Obama, polls, public opinion, TPA, TPP, Trade, Trans-Pacific Partnership, wages

With some of the political stars in Washington lining up for approval of new trade negotiation authority for President Obama, along with passage of new Pacific Rim and Europe trade deals once they’re concluded, it seems opportune to see how the public’s feeling. Unfortunately, the latest data should remind us once again that polling on trade is just about the least reliable form of polling we have.

One big reason has to do with clashing results, most recently revealed in two surveys conducted by the Chicago Council on Global Affairs and the Pew Research Center’s Global Attitudes Project. The Chicago Council’s findings came out in September, as part of its newest overall survey of public opinion on foreign policy issues, and should warm hearts (if such exist) in the offshoring lobby.

According to the Council, 65 percent of Americans regard “globalization, especially the increasing connections of our economy with others around the world [as] mostly good…for the United States” – up from a recent low of 56 percent in 2010, when the current economic recovery was still in its infancy. The share considering globalization defined this way as “mostly bad” was 34 percent – down from a recent (2010) peak of 41 percent.

Similarly, half of respondents favored “agreements to lower trade barriers provided the government has programs to help workers who lose their jobs” and 14 percent supported such deals even with no jobs programs. Those numbers are also up from recent 2010 lows of 43 percent and 13 percent, respectively.

Even better for the globalization cheerleaders, both the proposed Trans-Pacific Partnership (TPP) and a comparable deal with Europe garnered 60-plus percent approval ratings.

Not so good for supporters of the trade status quo were the Pew results, which came out in October. A somewhat different tack was taken, as the poll examined U.S. And foreign views of trade and globalization. It’s true that, according to Pew, 68 percent of Americans agreed this year that “ growing trade and business ties with other countries was a good thing” – up from a recent low of 53 percent.

But the more specific the questioning, the more dimly Americans viewed trade. Indeed, only 20 percent believed that it “creates jobs” versus 50 percent convinced that it “destroys jobs.” And only 17 percent viewed trade as a force that raised wages, versus 45 percent seeing trade as a wage killer. (BTW, it’s interesting to see how these American opinions compare with those abroad.)

It should be clear that the phrasing of questions has much to do with the answers produced. Neither the Chicago Council nor the Pew survey used wording as tendentious as that in a Business Roundtable poll from March. It found 75 percent public support for “the United States negotiating trade agreements to open foreign markets for American-made goods and services to ensure fair and enforceable rules for U.S. trade with other countries?” That’s about as valuable as asking whether the public favors “policies to make everyone happy, secure, and wealthy.”  More to the point — how many American trade deals have yielded those promised results?

But the more recent polls did nothing to inform Americans about the real-world choices presented by Washington’s trade policy, or about the deficit-boosting record and other consequences of two decades worth of signed trade deals and other decisions. So as they consider how to vote on trade agreements whenever they come up, lawmakers genuinely interested in voters’ views will have to discern them the old-fashioned way – by asking them directly.