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  • Trading Up to Create Better Jobs

    According to a recent USA Today/Gallup poll, creating good jobs should be the number one priority for the next President. One of the best ways to create good jobs is to expand free trade. Consider the following numbers:

    • In the five years after the North American Free Trade Agreement (NAFTA) took effect on January 1, 1994, total U.S. employment increased by 11.1 million jobs. NAFTA wasn’t responsible for all those new jobs, but it obviously didn’t cause any overall U.S. job losses, either.
    • In the five years after the U.S. joined the World Trade Organization (WTO) on January 1, 1995, total U.S. employment increased by 11.9 million jobs. This trade deal created the biggest global tax cut in history as 128 countries around the world slashed their tariffs.
    • In the five years after China joined the WTO on December 11, 2001, total U.S. employment increased by 9.9 million jobs.

    No one denies that free trade has an impact on the kinds of jobs available to Americans. For example, data from the U.S. Bureau of Labor Statistics show that since China joined the WTO, the U.S. has lost 213,000 sewing-machine operator jobs paying $11 an hour. But we’ve also added 537,000 new jobs for registered nurses paying $33 an hour.

    All those new nursing jobs aren’t entirely the result of trade with China, of course. But the money Americans save by having the freedom to buy low-priced imported shoes and t-shirts from China and elsewhere does not vanish into thin air. It creates new, better jobs for other Americans. It’s exactly the kind of stimulus Washington is always promising, but we don’t have to mortgage our future to do it—and it actually works.

    Saying that “free trade destroys jobs” does not tell the whole truth. After each of the three biggest free trade deals of the last 20 years was passed, the U.S. economy added millions of jobs. Those were trades well worth making.

    Posted in Featured [slideshow_deploy]

    4 Responses to Trading Up to Create Better Jobs

    1. stk2470 says:

      Thank you for this. I had been wondering how these trade agreements affected our economy. I am wondering how ever how has it affected our trade deficits? Have they increased it or decreased it?

      • Dan Poole says:

        Free Trade Agreements increase our trade deficit, but that's only a bad thing if you take a discredited, Mercantilist way of thinking. Back in the 1600s, every nation wanted a trade surplus, and European nations thought wealth was finite because they thought the only way to increase wealth was through more land or more gold. It wasn't until Adam Smith came along that European and American leaders started to realize that wealth is not a zero-sum acquisition. Wealth is created through capital investments. Land and gold are obviously important, but they aren't the end all be all. Liberals, of course, are still stuck in the debunked mindset that wealth is a zero-sum acquisition, hence the constant demands to cut the pie more equally instead of growing the pie.

        Free trade is all about growing the pie. The nations that have trade surpluses can make further capital investments that create even more wealth and prosperity, while the nations with trade deficits are the beneficiaries of cheap products, which saves them money and allows them to buy more goods and services, which grows the economy. Trade deficits can only be a problem when a nation is in deep debt, and indeed, the United States faces that problem. Instead of making capital investments, the investors buy U.S. Treasury notes. But the answer isn't to stop free trade, because even if the U.S. had a trade surplus, the debt remains the same. The answer is to cut spending by eliminating all these tyrannical agencies and completely reforming Social Security, Medicaid, and Medicare.

    2. Roy Lawson says:

      "Free Trade Agreements increase our trade deficit, but that's only a bad thing if you take a discredited, Mercantilist way of thinking."

      Or it's a good thing if you smoke crack. After years of job loss and massive debt – which is financed or paid for with US assets – I can't believe you still hype this nonsense. You are trying to suggest that employment went up since NAFTA – but so did our population! You can't attribute free trade to those jobs, or any single other factor.

      What we can measure is the deficit. Only people really bad at math believe that these growing and never-ending trade deficits are a good thing. This is exactly the same type of BS that lead to the housing crises. You are perpetrating lies and talking points, and ignoring simple economics.

      How are deficits paid for? That's the key question you need to ask. And you aren't, because you aren't having an economic discussion. You are laying down political talking points and you have a political objective.

    3. Tom Lynn says:

      What about the disparities in fairness of the trade between the US and China?

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