The Peterson Institute for
International Economics (PIIE) has discredited itself repeatedly with promised
benefits from NAFTA and other free trade agreements that failed spectacularly,
but it is back with more of the same to promote the Trans-Pacific Partnership.
And the media continue to lap it up and regurgitate it uncritically.
A typical example of this media
complicity is a March 23 article in the Dodge City, Kansas, High Plains
Journal entitled, “Senate struggles to advance Obama's trade promotion authority.”
The Journal article, which is
tilted to support Trade Promotion Authority (TPA, also known as Fast Track) and
the Trans-Pacific
Partnership (TPP), says, “According to an analysis supported by the Peterson
Institute, a TPP agreement provides global income benefits of an estimated $223
billion per year by 2025.” “Real income benefits to the United States are an
estimated $77 billion per year,” the PIIE continues. “The TPP could generate an
estimated $305 billion in additional world exports per year, by 2025, including
an additional $123.5 billion in U.S. exports.”
More PIIE in the sky
Sounds great, doesn’t it? Simply
rush the TPP pact through on the TPA Fast Track and America will be rolling in
green in no time. Well, as the common wisdom advises, if it sounds too good to
be true — it probably is. Especially if the carnival barker making the pitch is
the same fast-talking fellow who last year tricked you into signing a contract
without reading the fine print obligating you to indentured servitude for life!
In case you didn’t notice, the PIIE “experts” promoting TPP are the same
carnival barkers that made the same types of promises for NAFTA, CAFTA, the
WTO, and other trade agreements.
Back at the time of the great battle
over NAFTA, for instance, NAFTA supporters regularly cited studies by PIIE
economists Gary Hufbauer and Jeffrey Schott to show that NAFTA would provide a
huge boost to U.S. jobs and exports. In their influential 1993 PIIE paper,
“NAFTA: An Assessment,” they predicted that under NAFTA “U.S. exports to Mexico
will continue to outstrip Mexican exports to the United States, leading to a
U.S. trade surplus with Mexico of about $7 [billion] to $9 billion annually by
1995.” Moreover, they said that the U.S. trade surplus with Mexico would rise
to $12 billion annually between 2000 and 2010.
That was the PIIE promise, but what
was the reality? In 1993, the year before NAFTA went into effect, the United
States had a $1.66 billion trade surplus with Mexico; by 1995, the first year
after NAFTA had entered into force, that changed to a $15.8 billion deficit .
The deficits have escalated ever since, soaring to $24.5 billion in 2000, $49.8
billion in 2005, and $74.7 billion in 2007. From 2010 on, the deficits have
been running in the $60+ billion range annually.
Instead of hundreds of billions of
dollars surplus, we’ve gotten more than half a trillion dollars in trade deficit
with Mexico. As we have reported previously:
In 1993, the year before NAFTA, we
imported around 225,000 cars and trucks from Mexico. By 2005, our imports of
Mexican-made vehicles had tripled to 700,000 vehicles annually, and in 2012
Mexico’s export of vehicles to the United States surpassed 1.4 million.
Chrysler, Ford, and GM transferred major production facilities (and jobs) from
the United States to Mexico.
The record with Canada, our other
NAFTA partner, is similar. In 1993, our annual trade deficit with Canada was
$10.7 billion; by 1995 it had ballooned to $17.1 billion, and by 2005 to $78.4
billion.
So how does the PIIE come up with
its rosy statistical predictions for the TPP? The same way they came up with
their bogus NAFTA numbers, most likely. They simply invent them. The
“prestigious” PIIE’s repetitive spectacular failures calls to mind the quip
popularized by Mark Twain: “There are three kinds of lies: lies, damned lies,
and statistics.”
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Comments
TTP would be another disaster like NAFTA,
WTO, etc. These offshored US jobs paying over $25 per hour. This next one will offshore US jobs paying
over $10 per hour. Where do we go then ?
Nobody else is this stupid.
Germany protects their core industries like
automobiles and lots of production machines and they will continue to have an
economy. They have tariffs. They tax foreign goods coming in to be purchased by
Germans.
German voters insisted on keeping their own
family owned bakeries and breweries, resulting in world-class baked goods and
beer. They didn’t offshore their $25 per hour jobs. They did get hurt with excessive immigration
and alternative energy costs, but they have stopped the solar and wind mal-investment
and are becoming cautious on immigration.
It’s expensive there, but there is still a middle-class.
US voters need to clear their heads and state
our terms to our politicians. We need to
insist on a return to our free market system.
Norb Leahy, Dunwoody GA Tea Party Leader
