On April 25, the Cleveland Plain Dealer ran a story with the sort of headline we have come to expect in recent decades: “Goodyear chooses Mexico, not Akron.” The story went on to report that Goodyear had chosen to build a $500 million plant to make premium tires in San Luis Potosi, Mexico, even though Akron, the city where Goodyear is still headquartered, had avidly sought the new facility, which will employ a thousand people. The men now running Goodyear had no qualms about spurning the city where they live to put the plant in a foreign land, and, if pressed, would likely justify their decision with bromides about the need to compete in a “global economy” and claims to be “citizens of the world.”
There was a time, of course, when the headline would have read, “Goodyear chooses Akron again.” Akron grew prosperous as the tiremaker to America, just as nearby Canton grew rich making roller bearings, Toledo thrived making glass, and other cities in Ohio and throughout the country found a rewarding place in an American economy that was based on Americans making goods for other Americans. The men then running companies like Goodyear, Timken, and Owens-Illinois felt an obligation to create jobs in their hometowns, or at least their own country, and this social pressure was coupled with the practical incentives offered by the tariff. The wealth created by manufacturing helped to create a large and prosperous middle class, and the communities shaped by manufacturing were profoundly connected to one another, a phenomenon described by Joel Garreau in his Nine Nations of North America. Garreau dubbed one of his nine nations “The Foundry.”
Today, America’s manufacturing economy is a shadow of its former self, as are many of the cities and towns that manufacturing made rich. Since manufacturing employment peaked in 1979, America has lost over seven million manufacturing jobs. Between 2000 and 2010, 55,000 American factories closed their doors for good. It is fashionable to attribute this job loss to automation and dismiss it as inevitable. But Sen. Jeff Sessions (R-AL) notes that trade specialist Clyde Prestowitz has estimated that 60 percent of the job loss in manufacturing was caused by America’s enormous trade deficits. Those deficits began to grow after we reduced tariff rates as part of the Kennedy Round of GATT, and then exploded after the United States passed NAFTA in 1993, joined the WTO in 1994, and granted most-favored-nation status to China that same year. Since the passage of NAFTA, we have run up over nine trillion dollars in trade deficits, and we recorded our highest monthly trade deficit in six years in March.
The American people have grown weary of this. A comprehensive Pew Research Center study of attitudes toward globalization, also cited by Sessions, showed that 50 percent of Americans believe that liberalized international trade destroys jobs, and 45 percent believe that it reduces wages, while just 20 percent believe that liberalized international trade creates jobs, and only 17 percent believe that it raises wages. Only the Italians were more skeptical than Americans of the benefits of globalization. Yet our political leaders are now working to bring us more of the same.
The vehicle is the Trans-Pacific Partnership (TPP), a new trade treaty covering 11 nations. President Obama is asking Congress to give him Trade Promotion Authority—what used to be called “fast track”—so that Congress will not be able to amend the TPP or any other trade agreement the President brings Congress through 2018. Despite campaigning against Obama’s over reach last November, most congressional Republicans are committed to giving Obama just what he wants. When the Senate voted on Trade Promotion Authority, only five Republicans—Sessions, Mike Lee (UT), Rand Paul (KY), Richard Shelby (AL), and Susan Collins (ME)—voted to turn down Obama’s request for more power.
There is little doubt that the TPP will cause the trade deficit to balloon and cost American jobs. It is modeled on the U.S. trade agreement with South Korea, which increased our trade deficit with that country by 50 percent the first two years after passage. And there are other reasons to be concerned. Senator Sessions notes that it is a “living agreement,” which means that the President will have authority to change it without further congressional approval, and these changes will supersede conflicting federal and state law. Just as ominously, Sen. Elizabeth Warren has claimed that key provisions of the TPP are being kept secret, a charge endorsed by Democratic trade negotiator Michael R. Wessel, a proponent of NAFTA and the WTO. Once again, constitutional government is being overshadowed by bipartisan subservience to an elite contemptuous of the country and its people.