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How Obama's Support For Job-Killing Trade Deals Could Cost Him The Presidency

Touting free trade deals as job creators in the very part of the country that has lost jobs to outsourcing is terrible politics and terrible policy.
 
 
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 While on a bus tour this week across a midwest ravaged by deindustrialisation, President Barack Obama has ironically been touting job-killing free trade agreements.

 

Mitt Romney deemed the road trip, which goes through an archipelago of shuttered factories and mills, as Obama's "Magical Misery Tour", though the former governor and CEO would undoubtedly promote the same free trade policies even more fervently. Obama won Minnesota, Iowa and Illinois in 2008, but is set to lose them in 2012 if he remains on the free trade bandwagon. Last week, he visited Michigan, the epicentre of American manufacturing's decimation.

A May report from the liberal Economic Policy Institute (pdf) finds that the North American Free Trade Agreement (Nafta), which was primarily touted as a job creator, has cost the US 682,900 jobs, 61% of them in manufacturing. Many jobs have moved south to Mexico, resulting in a switch in the two countries' trade deficit. In 1993, the US had a $1.6bn trade surplus with Mexico; in 2010, the tides turned and Mexico held a trade surplus of $97.2bn over the US.

The consequences of Nafta have not been positive in Mexico, either: the US has seen a historic flow of Mexican immigrants across the border, driven by the closure of plants unable to compete with transnational companies, the elimination of peasant agriculture, and rising consumer prices have driven a wave of immigrants across the US border. This convoy of economic refugees has weakened only recently, mostly due to the downturn.

It shouldn't be surprising that free trade agreements are unpopular, though politicians don't seem to comprehend it. According to the findings of an underreported November 2010 poll by the Pew Research Center, only 35% of Americans say that free trade agreements have benefited the US, while 44% say the country has been harmed. The study even found that Republican support for free trade has plummeted from 44% in November 2009, to a rock bottom 28% in 2010.

"Support for free trade agreements is now at one of its lowest points in 13 years of Pew Research Centre surveys," the report concludes. Indeed, 63% of Tea Party-leaning Republicans have a negative outlook on Nafta – more than any other group polled.

Obama once seemed to understand the deep-seated popular opposition to free trade. During the 2008 election, he released a mailer attacking Hillary Clinton, whose husband signed Nafta: "Is Hillary Clinton running away from her own record on trade deals that have cost Ohio nearly 50,000 jobs?"

But once again, Obama's ham-handed efforts to "reach across the aisle" alienates the left while failing to appease rank-and-file Republican voters.

We have a service economy with the manufacturing middle hollowed out. Elites consider financial services to be our contribution to the new global economic order: Mexico and China make stuff; we package and sell opaque financial instruments. The financial crisis was the product of a government more concerned with defending this status quo and protecting profits on Wall Street than with creating and defending well-paying American manufacturing jobs.

But Obama's support for free trade and Wall Street consistently fails to win over corporate America. Big finance and the Chamber of Commerce continue to work tirelessly to undermine his presidency, no matter what he sacrifices in the way of working people's well-being.

It's not clear that the media or anyone else is picking up on the mundane details of Obama's new talking points. But if they do, the president's push for free trade agreements with South Korea, Panama and Colombia is unlikely to be well received: the Minnesota Fair Trade Coalition estimates that 57,000 Minnesotans are at risk of offshoring or displacement under a Korea deal.

 
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