From the Economic Policy Institute:
“The U.S. trade deficit with Japan has increased steadily over the past four years, reaching $79.9 billion in 2012, an increase of $13.4 billion (20.2 percent). Last month, the United States and Japan agreed on language that could allow Japan to join negotiations to enter the Trans-Pacific Partnership (TPP), a proposed free trade agreement with 10 other Asia-Pacific countries (a new round of negotiations on the TPP began in Singapore last week ).
Exports support U.S. jobs but the larger volume of imports displaces even more jobs. Trade deficits such as the one we have with Japan have cost the United States millions of jobs, most of them high-paying jobs in manufacturing. Signing trade deals is an ineffective way to create jobs, in large part because they usually result in higher trade deficits. One of the biggest causes of our trade deficits is currency manipulation, which acts as an artificial subsidy to other countries’ exports and a tax on U.S. exports. Japan has a history of currency manipulation, and Japanese Prime Minister Shinzo Abe announced that he intended to weaken the yen when he was elected in December. The yen has declined 11.9 percent since then.”
The US also has a trade deficit with China, but that’s not quite the truth. The US has a trade deficit with US corporations that do their manufacturing in China, such as Nike, Apple and Microsoft. The worse thing is that the Obama man may force US textile manufacturers to move their facilities to China, as well. On the other hand, it should be pointed out that there are plenty of US textile manufacturers in China, already.
The TPP is being negotiated by officials from the Obama administration. Obama’s policy preferences, like George W. Bush before him, have been to redistribute income and political power from the 99 to the 1 percent, or at least the slice of the 1 percent that Obama represents, such as the Crown Brothers of General Dynamics. That’s what the TPP is all about.
The TPP will off shore more US jobs and continue a deadly race to the bottom in order to support the Ponzi Scam known as Wall Street. That’s because US corporations must experience long-term rising share prices, which means profits must continually rise, more or less. And the best way for that to occur is if wage rates are reduced more and more. And so the TPP is an engine not only to get around the US Constitution (That’s another story), but also to depress wages and other compensation worldwide. So naturally Obama is aiming to destroy US textile jobs and redistribute the wages of the people who actually do the work to the 1 percent via higher corporate earnings, rising share prices and surging dividends.
Within the framework of the Trans-Pacific Partnership Agreement, the government of Vietnam is demanding “preferential rules of origin to use raw materials from China.” This includes yarn, thread and fabric.
Central American textile businesses are also worried that Vietnam will get more flexible terms to import its apparel into the US, such as an end to tariffs on apparel goods. In which case, some estimates suggest El Salvador alone will lose 200,000 textile jobs. These jobs are located in large part within Maquila zones, which are zones in which US companies are allowed to assemble goods and then export them duty free to the United States.
Once these zones were established, US corporations sent jobs to Central America. The difference between the old wages in the US and the new lower wages in Central America went into the pockets of corporate CEOs and rich shareholders. The people whose jobs were shipped away as part of the Democratic and Republican Party’s war against the 99 percent were lucky if they got unemployment insurance. The Central America Free Trade Treaty (CAFTA) did the same thing, only on a grander scale.
Nowadays, every year, the 1 percent legislatively steal about 32 percent of the income of the United States compared to about 7-8 percent thirty-two years ago. That means the 99 percent have less money to burn, which creates less jobs. And guess what else? The 1 percent destroy jobs by pressuring the government to enact more and more free trade treaties because they wipe out American jobs and redistribute the income from the lost jobs into their own pockets.
It just so happens that textile workers in the El Salvador Maquila zones earn .78 cents per hour, compared to .60 cents of their Vietnamese counterparts. However, the Maquila Zones in Central America have a cost advantage over their Vietnamese rivals since there are no tariffs for their products exported to the USA. If Vietnam is allowed to ship their apparel products into the US duty free, El Salvador will have a labor cost disadvantage vis-a-vis Vietnam.
Now here’s the real problem.
“U.S. textile manufacturers produce yarn, thread, and fabric for apparel, home furnishings, and for various industrial applications. In 2011, the U.S. textile industry generated $53 billion in
shipments and directly employed about 238,000 Americans, accounting for 2% of all U.S. factory jobs. Approximately one-third of U.S. textile production is exported, with the bulk of the exports
going to Western Hemisphere nations that are members of the North American Free Trade Agreement (NAFTA) or the Central American-Dominican Republic Free Trade Agreement
(CAFTA-DR), like El Salvador and Honduras.
Both free trade agreements provide that certain exports from member countries may enter the U.S. market duty-free only if they are made from textiles produced in the region. This has encouraged manufacturers in Mexico and Central America to use U.S.-made yarns and fabrics in apparel, home furnishings, and other products. Exports to the NAFTA and CAFTA-DR countries contributed to a U.S. trade surplus of $2.5 billion in yarns and fabrics in 2011.”
So the TPP has the potential to affect U.S. textile exporters in at least two ways. As mentioned earlier, it could enable Asian apparel producers, principally Vietnam, to export clothing to the United States duty-
free.” Roughly 40 percent of Nike’s products are produced in Vietnam. Guess what corporation is lobbying US politicians to support the TPP and eliminate the import duties from Vietnam?
“This (TPP) would eliminate much of the advantage now enjoyed by Western Hemisphere apparel producers in the U.S. market and, because Vietnamese manufacturers make little use of U.S.-made textiles,” will likely “reduce demand for U.S. textile exports,” killing US jobs, and redistributing income from the 99 to the 1 percent in the process. Second, it is possible the TPP will allow Western Hemisphere apparel manufacturers to use yarn and fabric made in any TPP member nations, such as China, which is where Vietnam gets its yarns and fabrics.”
In other words, Vietnamese apparel makers could wipe out El Salvador apparel makers, and that’s how Obama’s scam would destroy a couple of hundred thousand textile jobs in El Salvador. But this process would eliminate tens of thousands of US jobs in the textile industry, since the jobs in El Salvador are dependent on yarn, thread and fabric made in the USA.
In other words, Obama’s TPP scam is intended to make the 1 percent richer at the expense of the 99 percent, precisely because all free trade treaties are negotiated with this as the intended consequence. And this is just one of the income redistribution scams hidden within the negotiations of the TPP.