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Proposed trade pact with Asia produces hope, fear among Ohio manufacturers

Published: Wed, July 25, 2012 @ 12:09 a.m.




Fearful that the United States may be brushed aside and overshadowed by China in Asian and South Pacific markets, the Obama administration last November moved to embrace a new trade agreement with several countries there, creating both concern and optimism within the U.S. manufacturing industry.

The Trans-Pacific Partnership Act aims to create a free-trade group with countries such as Vietnam, New Zealand and Malaysia, among others. An early outline for the agreement calls for retaining high-quality American jobs by increasing U.S. exports to a region of expanded growth that accounts for more than 40 percent of global trade.

The parameters of the final agreement will have many implications for Ohio, where in 2010, 27 percent of manufacturing jobs depended on exports to trans-Pacific markets, said Mousa Kassis, an international trade adviser at Williamson College of Business at Youngstown State University.

Heavy machinery, agricultural products and chemical equipment were a few of the products exported to Asia and the South Pacific by Ohio manufacturers, who employed 371,000 people to meet demand in 2010.

“Many of the countries in that region and in Southeast Asia wanted a U.S. partnership in order to face Chinese advancement,” Kassis said. “However, from an economic standpoint, many here feel that these sorts of agreements always lead to a loss of manufacturing jobs. Usually, outsourcing is the fear.”

Like other free trade agreements designed to promote economic growth, the Trans-Pacific Partnership would ostensibly improve market competition. Many experts believe the underlying goal is to reduce China’s footprint and help the U.S. and other countries taking part in the negotiations to increase their exports.

Still, others contend that such agreements place undue pressure on U.S. manufacturers who are forced to compete with the lower labor and environmental standards of foreign countries that enter free-trade deals.

But Kassis maintains that such assertions are difficult to quantify.

“You cannot always determine or see what effect these free-trade deals will have,” he said. “But in Ohio where you have something around $28 billion worth of product leaving the state for these markets, agreements like [the Trans-Pacific Partnership] must be kept on the table; it’s something you want to keep an eye on.”

Asia has become a key destination for U.S. manufactured goods. Growing economies have made trans-Pacific countries the fourth largest export market for the U.S., with $775 billion worth of goods delivered in 2010, according to the Office of the U.S. Trade Representative. Total exports increased by 25.5 percent from 2009 and account for 61 percent of all U.S. exports.

Youngstown-Warren area AFL-CIO President Bill Pidisak said that no matter what countries are involved in a free-trade agreement, lawmakers must work assiduously to craft a deal that ensures a level playing field for American workers. He added that “fair trade is all we want.”

For that reason, U.S. Sen. Sherrod Brown, D-Ohio, joined three other senators demanding greater congressional oversight in negotiations. Though Congress has constitutional authority to regulate trade and commerce with foreign nations, for the past several decades, Congress has delegated to the executive branch the authority to select trading partners and negotiate deals.

In June, Brown and the other senators wrote a letter demanding greater transparency in the process.

“Groups essential to the success and legitimacy of any agreements are not being provided the opportunity to provide meaningful input on negotiations that have broad policy ramifications,” wrote the senators. “The lack of transparency and input makes passage of trade agreements more contentious and controversial.”

Kassis attributed any level of negotiating secrecy to the Obama administration’s desire to keep China out of the new trading bloc.

For some, keeping China out of the trade agreement is a bad idea. When economies from South Korea to Thailand revived and regional product-sharing matured, China embraced an activist economic diplomacy to open its markets to the rest of Asia. The benefits were deemed mutual, and now other countries such as India are souring on American efforts to build an exclusive partnership, Kassis said.

Still, if the trans-Pacific partnership is crafted carefully, the market liberalization could serve as a counterweight to China and help create more jobs in places like the Mahoning Valley. Between 2010 and 2011, both Mahoning and Trumbull counties combined to create 843 new manufacturing jobs. If future trade accelerates because of a new agreement, companies here and elsewhere could restructure to meet new demand and add more jobs.

“I think it will be interesting, especially considering all the development we’ve seen as of late, to see the

direction these negotiations take,” Kassis said.


1SunnySkies(20 comments)posted 3 years, 11 months ago

Here we go again. Haven't we learned anything since NAFTA? The average monthly salary of a person in Vietnam is $150 US dollars. What exactly does Obama think we are going to export from union paid American workers that these (and other southeast asian people) can afford? Cars? Washing machines? Sure, it looks politcally great to sign another Act. $775 billion worth of goods exported in 2010? What exactly were they? (Military related?) Need way more info.

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2casper77(136 comments)posted 3 years, 11 months ago

Free trade? Do these Congressmen know what Free trade is? Seems to me these Free trade agreement are one way streets ,where the other country get the Free trade but they handcuff us with our goods. .You got to ask yourself ,who will benefit from these agreements, who will get the inside track on the companies that will benefit from the agreements and buy their stocks? Can you say our Congress!!! whatever happen to WE THE PEOPLE...

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3iBuck(231 comments)posted 3 years, 11 months ago

Lots of words leaving out the most important info. Yes, these deals are kept out of the media until they're done deals (this one was apparently "done" back in 2006) and it's too late for Americans to object or ask for reforms.

How much reciprocity is in this deal?

If this is an "Act", what's the bill number, so we can look it up in thomas.loc.gov? Ahhh, here we go, it's Trans-Pacific Partnership Agreement, (referred to in HR2832), which suggests that, like NAFTA and GATT, it is not a "treaty", but an "executive agreement", so the standards for ratification are much lower, but it can also be over-turned by a simple majority vote of congress at any time, even after it is initially adopted.

And, as usual, it's already been passed years before most of the public got word of it.

merely refers to the TPPA, the reference buried in something else, the better to hide it from critics (e.g. TAA is a scam -- sounds good but a total waste and does little for the actual individuals displaced from their employment).


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4TERRI_USA(30 comments)posted 3 years, 11 months ago

Lessons never learn and just repeating history. The lesson say if you do not learn history you will end up repeating it.
Wal-Mart in the 1970 had about 90% American made products. After a free trade with China, Wal-Mart have about 5% American made products. So free trade creates Ameriocan jobs, try to convice all thos Americans who lost their jobs to China. :(

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5southsidedave(5189 comments)posted 3 years, 11 months ago

It's a global economy my friends, nothing to do but watch it develop. The BRIC nations will soon have GDP that far exceed that of the U.S.

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6Traveler(606 comments)posted 3 years, 11 months ago

Dont we learn our lesson from nafta.

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7chuck_carney(499 comments)posted 3 years, 11 months ago

Sherrod 'the Herod' Brown is fundamentally changing his tune. He used to say he would repeal NAFTA, GAT, etc. if he were elected. Now he wants transparency (which means being able to see how American workers will be getting screwed.)

How will workers respond in November?

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