Knowing of your concerns with unfair global trade policies, I wanted to take this opportunity to update you on my efforts to fight against so-called "free" trade agreements that have exported millions of American jobs overseas.
I have voted against every free trade agreement before Congress. I was a leader in the fight against the North American Free Trade Agreement (NAFTA), the creation of the World Trade Organization (WTO), and privileged trading status for China. While supporters of these agreements promised they would benefit workers, farmers, businesses, and the U.S. economy, the reality has been very different.
USA is Number 1....In Creating Jobs Overseas
These "free" trade agreements have decimated the U.S. manufacturing capacity. T he U.S. has lost over 5 million family wage manufacturing jobs including 52,000 here in Oregon, and closed over 54,000 factories in the past ten years , according to the Bureau of Labor S tatistics . U.S. trade policy has made it easier for multinational corporations to chase the cheapest wages and lax environmental standards around the world at the expense of U.S. workers . According to the U.S. Bureau of Economic Analysis, b etween 2000 and 2009 , multinational corporations laid off 2.9 million Americans but created 2.4 million new jobs overseas. This is a serious crisis that must be addressed by Congress.
Lessons from NAFTA
In 1994, economic advisers to President Clinton predicted that if the U.S. passed NAFTA we would enjoy trade surpluses between $9-12 billion throughout the 1990's and into the following decade. I was a leader in the House fight to stop NAFTA and predicted the U.S. would lose thousands of jobs, see an exploding trade deficit with Mexico, and experience increased illegal immigration.
Unfortunately, my predictions came true. According to the Economic Policy Institute, NAFTA has directly displaced more than one million U.S. jobs ( 14 ,000 in Oregon), we had a trade deficit with Mexico totaling $97.2 billion last year, and illegal immigration has increased as Mexicans seek to escape lower wages and government corruption . I have long pushed to repeal NAFTA . I introduced legislation back in 1995 to withdraw the U.S. from NAFTA. I also was a cosponsor of a bill to withdraw the U.S. from the WTO and have voted several times in support of withdrawing the U.S. from the WTO.
Three More FTA's: More of the Same
In a time of record unemployment, President Obama signed three NAFTA-style job killing free trade agreements (FTA's) with South Korea, Panama, and Colombia . A Republican led House of Representatives aided him by passing these three FTA's that were negotiated by both the Bush and Obama Administrations. I voted against all three .
The South Korea FTA will send over 159,000 U.S. jobs overseas according to the Economic Policy Institute . The FTA contains a loophole that allows 65% of the content of goods that receive benefits under the FTA to come from China , Vietnam, perhaps even Communist North Korea who exploit cheap labor. This could mean the end of the U.S. textile and auto parts industries .
T he Panama FTA would make it easier for U.S. corporations to avoid paying taxes. Panama is the second largest tax haven in the world with over 400,000 corporate subsidiaries setting up shop there to keep money in secret banks. For example, Merck a company that received $2.8 billion in U.S. tax subsidies from 2008-2010 and paid a net negative tax rate in 2009 despite reaping over $5 billion in profits, has a subsidiary in Panama. In a time when the U.S. is suffering from large deficits we should be doing all we can to close foreign loopholes exploited by profitable U.S. and multi-national corporations, not make it easier for them to dodge all U.S. taxes.
The U.S. does not stand to benefit much economically from the Columbia FTA. Colombian farmers, who can't compete with our subsidized agricultural goods , will have little choice but to turn to coca production , f acilitat ing the collapse of their agricultural economy in favor of illegal drug production.
Export Goods Not Jobs
Our trade policies all have the same fundamental flaw; they open up U.S. markets to foreign goods , but fail to open up comparable foreign markets to U.S. exports. The United States has had 35 years of consecutive annual trade deficits, totaling $7.8 trillion. Last year our trade deficit was $498 billion. The causes and consequences of the trade deficit must be documented and a plan must be developed to eliminate the trade deficit within the next 10 years. I've introduced the End the Trade Deficit Act , legislation to establish an Emergency Commission to review the impacts of the trade deficit and place a moratorium on new FTAs until the Commission has issued a final report and delivered it to Congress and the President .
Stop Chinese Trade Manipulation
L ast year , the U.S. trade deficit with China was $273 billion or 42% of our total international trade deficit. For every $1 in goods the U.S. exports to China, we import $4 of goods from China. The U.S. trade deficit with China alone has cost us 2.8 million jobs. While we suffer massive trade deficits, China enjoys a trade surplus of nearly $275 billion.
China unfairly manipulate s their currency , which gives them an unfair advantage . A recent report by the Economic Policy Institute found that if the U.S. forced China to revalue its currency it would create 2.25 million jobs , and reduce U.S. unemployment by one full percentage point. I have cosponsor ed the Currency Reform for Fair Trade Act and am working with my like-minded c olleagues to force a vote on this important legislation. This bill would require the U.S. T reasury to take action against countries like China that illegally manipulate their currency and impose retaliatory tariffs on their imports. Since China joined the WTO they have not played by the rules and it is time for the U.S. to defend American workers and businesses by enforcing our trade laws.
You can rest assured that I will continue to fight for a trade policy that protects the economic interests of small businesses and our manufacturing sector, and creates jobs for American workers . For far too long, multinational corporations have dominated the conversation on trade policy to suit their bottom line, which are increased corporate profits not investment in America and its workers.
Sincerely,
Rep. Peter DeFazio
Fourth District, OREGON
A letter from my congressman responding to an email I sent him a while back. Enjoy.
