Trade and Jobs: Policy and Political Issues
Cunningham, Richard O., Canada-United States Law Journal
Our discussion on jobs and trade comes at an interesting and important juncture. The March 2012 release of jobs data showed that for the third month, the U.S. has added more than 200,000 jobs, yet the March unemployment rate remained at 8.3%. (1) Consumer sentiment--however meaningful that may be--is also up, as is consumer borrowing, which is more significant. (2) In January, the U.S. trade deficit surged to a three-year high. (3) While the market indicators of recovery are positive for now, prospects for bringing manufacturing jobs back to the United States, and even for maintaining such jobs at current levels, present a more somber picture.
I want to begin today by talking a bit about the general direction of U.S. trade policy under the Obama Administration, focusing in particular on the goals of increasing exports and manufacturing jobs. I will analyze the TPP--the Trans-Pacific Part--the trade negotiation that has largely taken the place of the Doha discussions and that is now portrayed as the main hope for trade liberalization on an international level, though it is only plurilateral, not multilateral. I will talk about the challenges the TPP faces and why it may therefore not be the transformative agreement for U.S. jobs to which the Obama Administration aspires. Finally, I will try to assess what all of this--the U.S.'s trade policy on a domestic and international level--means for U.S. jobs and businesses.
II. U.S. TRADE POLICY
U.S. trade policy, I am sorry to say, has not, under the current Administration, been the highest priority nor the subject of extensive thinking until recently. The Obama Administration had not (and some may say it still has not) set a clear national strategy in what it wants to achieve, in terms of taking a disciplined and dedicated approach to identifying what sectors have strategic importance for America in the long term, or how trade policy interplays with business growth and the creation or maintenance of U.S. jobs. The preoccupation with other issues, together with the current U.S. political gridlock, has prevented meaningful addressing of the hard steps the country will need to take in order to reach long run goals. Therefore, until quite recently, trade policy has evolved haphazardly from a combination of focuses on retaining manufacturing jobs, increasing exports, dealing with China on currency and other issues, etc. Part of this lack of priority for trade policy had to do with the country's emergence from a focus on terrorism, followed by the 2008 recession and a need to take a series of drastic short-term measures to cushion the economic impact.
In simplified terms, the gist of the Administration's trade policy is this: (1) to meet the President's National Export Initiative goal of doubling U.S. exports by 2015, particularly by bringing manufacturing back to the U.S.; (2) to jumpstart and encourage exports by using government institutions such as the Export-Import Bank; and (3) to negotiate the TPP to assure U.S. economic presence in the Pacific, achieve some of the concessions and protections that were to be addressed in the Doha Round, and reduce or eliminate barriers existing abroad in customs, regulatory measures, intellectual property (hereinafter "IP") protection, and other behind-the-border impediments. (4) There are other ambitions of the Obama Administration--such as revamping the corporate tax law to enhance U.S. competitiveness and keep from losing investment to other countries, and using World Trade Organization (hereinafter "WTO") litigation to make its major trading partners, especially China, comply with trade obligations. However, for purposes of this presentation, I will focus on three aspects of the current U.S. trade policy.
First, on the national level, the Administration's National Export Initiative has as its goal the doubling of exports by 2015. (5) This is a program based on the view that, with greater exports, jobs will increase. …