by Dick Morris
TPP: More Bad Trade Deals
But this dismal experience with China and Mexico has not soured the Obama administration—or Hillary—on free trade deals. Obama, with Hillary’s support, has approved free trade deals with Colombia, Peru, Chile, and a host of other countries. But the big player is the TPP—joining us to 11 countries on the Pacific Rim: Singapore, Brunei, New Zealand, Chile, Australia, Peru, Vietnam, Malaysia, Mexico, Canada, and Japan.
To win in 2016, we must exploit the fault lines revealed by the Democratic Primaries. None is greater than the TPP, which Bernie Sanders has denounced and Hillary helped to negotiate (although she now says she’s against it). James Hoffa (the younger) spoke on behalf of the Teamsters, Steelworkers, Food and Commercial Workers, Machinists, and Communication Workers in denouncing TPP. Hoffa said, “Bum trade deals like NAFTA have killed upwards of 1 million U.S. jobs, many of which moved abroad. And that’s the concern with the looming TPP. These big business handouts continue to hollow out the manufacturing base of communities and destroy middle-class jobs in their wake.”22
The goal of the TPP goes far beyond the elimination of tariffs (we already eliminated them for Canada, Mexico, Chile, and Peru, who account for the vast majority of our trade with the 11 TPP partners). The TPP takes control of a host of issues away from Congress and the executive branch and vests the power in international courts established to police the deal. For example, regulation and labeling requirements for genetically modified foods (GM) would no longer be the subject of state or federal legislation or FDA or USDA oversight. Instead, the decisions governing what our consumers will see on the food labels will be made by the TPP administration—with no right of appeal.
We can see how this international usurpation of our sovereignty can hurt when we look at the issue of protecting dolphins. In recent years, environmentalists and naturalists have grown increasingly concerned about the dolphin death rate in the Pacific Ocean. Area nets, which catch everything within their parameters, snare large numbers of tuna, their intended target, but also a lot of dolphins are caught as collateral damage. Dolphins were becoming an endangered species as a result. Concerned activists spurred research that led to a new net design that lets dolphins escape while catching the tuna. Fishermen, particularly in Japan, were reluctant to have to replace all their nets and, at first, wouldn’t do so. Activists met with US and European tuna companies and persuaded them to put “dolphin safe” labels on all tuna caught with the new nets. As a result, most fishermen switched to the new nets. Virtually every can of tuna sold in the United States now has the dolphin safe label and dolphin deaths are way down.
But in 2015, the WTO, on a complaint by Mexico, ruled that the dolphin-safe labels violated the free trade agreements and could not be used in the United States. So they will start disappearing from the shelves and the dolphins will start dying again. What is our recourse? Our courts? Federal or state regulators? Congress or state legislatures? All are neutered by the WTO agreement and none can overrule their decisions. The TPP extends this loss of our national sovereignty to international organizations.
Hillary helped to negotiate the TPP and, in her book, Hard Choices, endorsed it as the “gold standard” in trade agreements. She said the deal was “important for American workers, who would benefit from competing on a more level playing field.” She also called it “a strategic initiative that would strengthen the position of the United States in Asia.”23 But when Hillary makes a promise, be sure to cash the check quickly. Once her polls or political objectives change, her position is also bound to change. After she announced for president in 2015 and leftist Senator Bernie Sanders (D-VT) said he’d run against her, she sensed the need to move to the left to avoid being upended in the primary. So Hillary flip-flopped and came out against the deal saying that its final text fell short of the “gold standard” she wanted to hold it to. And this about a treaty she negotiated! If she wins, we know what will happen. She will insist on some largely cosmetic changes in the treaty language, declare it fixed, and—presto—be back on board advocating it.
Trade takes a big bite out of US manufacturing. But plans are afoot to do the same with the service industry, which accounts for more than 80% of US jobs and has, so far, been largely immune to foreign competition. Obama is working hard on a new Trade in Services Agreement (TISA) that will do to the service sector what NAFTA, WTO, and TPP are doing to the manufacturing sector. Even as trade agreements like NAFTA and the currency manipulation of countries like China have more than decimated America’s manufacturing sector, we have survived because our service industries have done very well. It’s easy to make something somewhere else and ship it here. But it’s a lot trickier to deliver services when you are not on location.
Since World War II, manufacturing employment has dropped from 33% of all jobs to 12% while the service sector has risen from 24% to 50%. As we have lost millions of manufacturing jobs, we have gained tens of millions of jobs in the service industries. A big reason for the disparity is that it has been harder to import services from abroad than it is to import products. But with the Internet and other modern communications capabilities, it may be getting easier for foreign-owned firms to compete in delivering services to American consumers.
Enter the TISA that is designed to facilitate trade in services. A key obstacle to the importation of services from abroad is the difficulty in importing workers from other countries into the United States. Our current immigration laws, while filled with loopholes, do a lot to constrain the importation of foreign workers to replace Americans. But Obama is about to try to change all that. While the TISA is still being secretly negotiated by 50 countries, leaks from Julian Assange’s WikiLeaks expose some of the contents of the never-made-public draft treaty.
Assange’s revelations make it obvious that the TISA is a backdoor attempt to allow unrestricted immigration into the United States and, indeed, to remove the power to regulate most immigration from Congress or the president. Under the proposed deal, foreign workers could be transferred from a foreign location to a domestic one simply as the company wishes. Immigration limits would not apply. So Sheraton International, for example, could move its kitchen or hospitality staff from hotels in Singapore to facilities in the United States and nobody could stop them.
The principle of free flow of labor is fundamental to the European Union, central to its efforts to create a common market where labor and goods can flow freely, just as they do from state to state in the United States. But applied internationally, they amount to a total override of our immigration or work-permit laws. Since virtually any company could make such a transfer, it obliterates our national boundary and permits free flow across it.
In our current political situation, where the parties are often at war with one another over immigration policy, this treaty removes the power to regulate our borders from Congress, or even the president, and makes them totally open. Since this proviso would be included in a treaty, which has the effect of the “law of the land” according to the US Constitution, it could not be abrogated or even modified by an act of Congress or by the president. Even US courts would have to apply the provisos of the treaty rather than American or state law. This override is a deliberate effort by the Obama administration to remove immigration from the control of the American people and our government. It would set up permanently open borders.
The TISA would also restrict American laws governing worker safety, environmental regulations, and consumer protections. It would treat all these rules as impediments to trade in services and subject them to being struck down—with no appeal—by an international body. TISA would also “restrict our ability to license health care facilities, power plants, waste disposal facilities and even university and school accreditation,” according to Professor Jane Kelsey from the Faculty of Law at University of Auckland in New Zealand.24
Kelsey also points out that TISA will be “expected to lock in and extend their current levels of financial deregulation, lose
the right to require data be held onshore, face pressure to authorize potentially toxic insurance products and risk legal challenge if they adopt measures to prevent or respond to another crisis.”25 Public interest groups opposing the TISA cite a litany of top corporations that are pushing the agreement including Microsoft, JP Morgan Chase, CHUBB, Deloitte, UPS, Google, Verizon, Wal-Mart, Walt Disney, and IBM.26
When Obama sought approval of the TPP, he asked Congress to grant him “fast track” authority over trade agreements, which limited the Senate to an up or down vote on the treaty with no amendments of filibusters permitted. He did so because he had a hope of getting the power—he got it—with the relatively mild TPP in the offing. But his real goal was to pass the TISA and to jam it through on an up or down vote. Otherwise, why put free flow of workers into a trade bill? It has nothing to do with trade. Besides, the United States already has free trade under NAFTA with Canada and Mexico and under bilateral treaties with Peru and Chile, 4 of the 11 countries in the TPP. And these 4 account for over three-quarters of our trade with the 11 countries in the deal. We didn’t need a free trade treaty to have free trade with them.
But a TISA agreement, breaking entirely new ground, would change everything. Obama is putting it into a trade bill so he can take advantage of fast track to jam it through. Setting up free flow of service workers would eliminate the only advantage US workers have over foreign competition. Under TISA, workers from high tech firms to McDonald’s would be subject to low wage competition from foreign workers for whom employers would not be obliged to purchase Obamacare (since they aren’t Americans). This would create a built-in advantage for non-American workers of about $3,000 a year per worker (the estimated fine for not covering a worker in your employ under Obamacare).
Conservatives and establishment Republicans usually back free trade deals because of an ideological commitment to free trade, going back to the theories of Adam Smith, so they have been reluctant to crack down on Chinese currency manipulation or to oppose TPP or TISA. But they misunderstand the issue. We are not talking here about free trade. We are talking about blatant cheating by currency manipulation where China is concerned and about an open-door immigration policy masquerading as a trade deal in TISA.
Antiestablishment Republicans and Democrats can both rally under the banner of opposing TISA and other free trade deals. Under free trade, each country does what it does best and cheapest, creating a global free market to the benefit of all. But when one country is only pretending to produce goods more cheaply by manipulating its currency, the rules do not apply. But let’s face it—trade is being used to hold down the American worker to maximize profits for business and lower prices for the consumer. Both parties are complicit in the deal and both get campaign contributions to perpetuate it. But this deal is a major cause of income inequality. The poor and middle class keep getting poorer. The other half of this process of impoverishing the American working class is immigration, which keeps wages low and unemployment of Americans high so as to benefit business profits and Democratic vote getters.
Immigration
Even when we succeed in keeping jobs in the United States despite our porous trade policy, they do not necessarily go to American workers. Immigration will be the key issue in the 2016 election. More and more, Americans are learning that our national safety in a world of terrorism hinges on our immigration policies. And as Americans realize that immigrants are taking away their jobs and stagnating their incomes, it will be the central economic issue as well.
Illegal Immigrants Are Taking Our Jobs and Holding Down Our Wages
Illegal immigration threatens our national cohesion and identity and makes us vulnerable to crime and terrorism. But it also poses an economic threat to our workers. The Democrats and liberals don’t like to talk about the economic aspect of illegal immigration. They would much rather paint Republican opponents of open borders as racist of anti-Hispanic. Democrats do not want hardworking Americans to realize that illegal immigrants are taking our jobs and, by working for low wages, holding down pay for Americans.
Since 2000, virtually all the job growth in the United States has gone to immigrants with almost no increase in employment for those who were born in the USA. The Center for Immigration Studies reported that “government data show that since 2000 all of the net gain in the number of working age (16–65) people holding a job has gone to immigrants (legal and illegal).”27 (The Census Bureau divides employment data into two categories: Native-born Americans and foreign-born Americans. The latter includes both immigrants—legal and illegal—and naturalized US citizens.)
Since 2000, there are 127,000 fewer working-age native-born Americans holding a job while the number of foreign-born Americans who have a job has risen by 5.7 million during the same period. The center reported that “immigrants have made gains across the labor market, including lower-skilled jobs such as maintenance, construction, and food service; middle-skilled jobs like office support and health care support; and higher skilled jobs, including management, computers, and health care practitioners.”28 And the trend is increasing. In August 2015, for example, while 698,000 native-born Americans lost their jobs, 204,000 foreign-born Americans gained employment, according to the Census Bureau and Bureau of Labor Statistics data.
Beyond the sheer number of jobs diverted to foreign-born people, the influx of foreign-born workers has stopped wage growth among native-born Americans. We can’t get raises while millions pour over our borders who are willing to work for next to nothing. Workers cannot hold out for higher wages when legal and illegal immigrants are available to work for much less. The same incentive business owners have to outsource to low-wage countries operates within the United States to use cheap illegal labor.
The economic effect is deeply felt throughout the United States. In 2014, Americans who were born here saw their income drop by 2.3% while immigrants saw theirs rise by 4.3%. The US Census Bureau’s “Income and Poverty in the United States: 2014” report reveals that, between 2013 and 2014, foreign-born households saw their median incomes go up by $2,031, while native-born households experienced a moderate income decline of $1,311.
In the United States today, naturalized citizens make much more than their American-born counterparts, earning a median household income $59,261 in 2014 while native-born households made only $54,678. In fact, the data so clearly demonstrates that immigration depresses American wages and incomes that it points to the likelihood that employers in the United States want all the immigration they can get to hold down the wages they have to pay to native-born or immigrant workers.
Democrats want illegal immigrants to vote but not to work (so as not to rile their union supporters) while some establishment Republicans want them to work (for low wages) but not to vote! Liberal Democrats, like those who support Bernie Sanders, are getting the point that the establishment backing for open borders is motivated by a wish for higher profits and lower labor costs.
When establishment politicians like George W. and Jeb Bush back amnesty for illegal immigrants, they often say they favor immigration because our country was founded by immigrants and speak of keeping an open door to the rest of the world. But the truth is that their corporate sponsors and contributors see it as a way to keep down wages for tens of millions of American families. Even worse, the establishment Left says that opposition to immigration is racist, creating a facade of tolerance behind which to hide their desire to hold down wages and incomes for their employees.
There is an eerie resemblance between today’s immigration debate and the abolitionist views of Abraham Lincoln. Lincoln said there could be no upward mobility for wage-earning Americans as long as five million slaves could be forced to work for free. Now there will be none—and has been none—as long as 12 million illegal immigrants are willing to work for next to nothing. Why was Abraham Lincoln both antislavery and procapitalism? Why was he a Republican in the first place? Born to a subsistence farm family, he saw that since his father and family
ate all they grew that they were locked on the farm for all their days on Earth. He left the farm as a boy and went to work on Mississippi riverboats, freed from the never-ending treadmill of subsistence farming by the miracle of cash wages. But how could he get wages when slaves could do the job for free? He realized that slavery imperiled the gains for others who wanted to follow his lead. Slavery had to go for working class Americans to be free. What was true in Lincoln’s time is also true in ours. And so illegal immigration has to stop for wage-earning Americans to move up.
For all the liberal protestations of empathy for the working-class poor and their willingness to soak businesses by raising the minimum wage, it is only by cutting the flow of illegal immigrants that we can offer American workers real upward mobility. Liberals like to spread the myth that illegal immigrants take jobs Americans don’t want. Like what? Landscaping? Dishwashing? Cleaning hotel rooms? Construction? Data from the Center for Immigration Studies explodes this canard. The fact is that Americans do want these jobs. In fact, they take them when they can.
Native-born US citizens comprise
• 55% of maids and housekeepers
• 58% of taxi drivers and chauffeurs
• 63% of butchers and meat processors.
• 65% of grounds maintenance workers
• 65% of construction workers
• 71% of porters, concierges, and bellhops
• 75% of janitors
