Matthew Yglesias, who covers economics for the Obama-worshiping Vox.com, is puzzled. Why are American labor unions so passionately opposed to the president’s Pacific Rim trade deal? Among the reason for his mystification: his confidence that “the TPP actually does almost nothing to increase imports of foreign manufactured goods into the United States” that could cost union members their jobs.
Yglesias provides no evidence to support his proposition; perhaps he is swallowing the White House line that, since other economies negotiating the Trans-Pacific Partnership (TPP) are much more closed than the U.S. economy’s, an agreement is sure to bring down more foreign trade barriers than American. But even if this outcome were likely – and I’ve explained why it’s not – all Yglesias needed to do was to peruse the Census Bureau’s website. The trade data he would find make clear that the U.S.-Korea Free Trade Agreement has had exactly that import-super-charging effect.
The Korea deal (KORUS) matters because the Obama administration has described its “high standards” terms as the blueprint for TPP. And the numbers show that since it went into effect, goods from Korea have flooded into the U.S. market. Since KORUS’ March, 2012 implementation, American goods imports from Korea have increased on a monthly basis by 33.65 percent (through this past January – the latest detailed trade data available). U.S. goods imports from the world as a whole during this period? They’ve actually fallen – by 4.97 percent.
Now the sharp-eyed among you will note that the above is not really a fair comparison. For America’s imports have been greatly restrained recently by the domestic energy production revolution, and South Korea doesn’t have oil and natural gas to export. Yet if you strip oil out, you find that U.S. goods imports between March, 2012 and January, 2015 rose only 6.18 percent on a monthly basis – less than one-fifth as much as the Korea increase.
Moreover, there’s a pretty compelling explanation for why the approach that has clearly failed with Korea will deliver similar results if TPP is approved: Korea, Inc., the secretive web of relationships between Korea’s government and so-called private sector that aims above all to push exports and boost trade surpluses, has not only survived KORUS’ efforts to limit its pervasive use of non-tariff trade barriers and subsidies. It’s still flourishing. (Click here to see how utter inability to analyze these practices threw Washington’s official projections for KORUS and similar deals off wildly.) That’s mainly why TPP, which includes Japan and other Asian countries using similar strategies, looks bound to flop even more spectacularly. And why America’s unions, which actually know what they’re talking about, are much more trustworthy on trade deal results than remarkably un-curious journalists.