FREE TRADE VS. PROTECTIONISM

by Crista Huff

(originally posted April 27, 2016)

In the context of the debate between those for and against the Trans-Pacific Partnership (TPP) trade agreement, pro-TPP factions like to portray TPP opponents as being “protectionist”. That’s a calculated slander, similar to when Tea Party and GOP activists are labeled “racist”, in an attempt to get opponents to back down and shut up. 

What does “protectionist” really mean? It’s a word that implies that a person is looking out for America’s best interests. Why would that be a bad thing? We routinely look out for our families’ best interests, our communities’ best interests, our companies’ best interests. But when it comes to America, are we supposed to throw her under the bus, in favor of every other country in the world?

We’ve already seen what happens when we allow other countries to run roughshod over our economy via past trade agreements like NAFTA and KORUS: job loss, currency manipulation, illegal immigration, an increased welfare state, business foreclosures, illegal dumping, and U.S. companies outsourcing work to foreign countries.

So far, the TPP’s potential U.S. economic impact looks dismal, as evidenced by reports from both neutral and pro-TPP organizations.

According to a report from the Economic Policy Institute (EPI) on March 3, 2016, “U.S. trade deficit with the TPP countries cost 2 million jobs in 2015, with job losses in every state. Currency manipulation is one of the key driving forces behind the high and rapidly rising U.S. trade deficit with the 11 other members of the TPP.” With regard to the lack of currency manipulation protections in the TPP, the EPI states, “Without such provisions against currency manipulation, the TPP could well follow other trade agreements and leave even greater U.S. trade deficits in its wake.” (Sources: Cleveland.com, 03-03-16 and Economic Policy Institute, 03-03-16)

In an April 2016 report, the Center for Economic and Policy Research blasted previous economic analyses of free trade agreements, saying they “not only failed to predict major changes in the trade balance, they also have been largely unsuccessful in identifying the industries that win and lose following the implementation of recent trade pacts. In other words,” the paper adds, “the unpredicted impact of the rise in the trade deficit was far larger than any of the predicted effects from these models.” (Source: New Paper Finds Unpredicted Rise in Trade Deficit Overwhelmed Predicted Impact of Reduced Trade Barriers in Korea-US Free Trade Agreement)

“Three years into the U.S.-Korea [Free Trade Agreement], the U.S. goods trade deficit with Korea was up more than 90 percent as exports fell 7 percent and imports surged,” reports Public Citizen.

“Our trade deficit with South Korea last year, from January through November, was $26 billion dollars!” says Sen. Jeff Sessions (R-AL).

The World Bank, a pro-TPP organization that has every motivation to portray the TPP in a good light, has determined that the TPP will only add 0.04% of economic growth to U.S. GDP. That’s four-tenths of one percent!

“The White House’s own study, a study they commissioned, … conducted by The Peterson Institute for Economics, claims that TPP will decrease the growth of manufacturing in the United States by 20% by 2030. This 20% reduction in potential growth as a result of the TPP would result in around 120,000 fewer jobs than would have been created otherwise. A more critical study by the economists at Tufts University …  recently found that TPP would cost up to 400,000 jobs in the United States!” (Source: Sen. Jeff Sessions)

More recently, the TPP’s potential harm to the Canadian auto and dairy industries was reiterated in an April 2016 report issued by the C.D. Howe Institute, “Better in than Out? Canada and the Trans-Pacific Partnership”. The report also projects the TPP to “negatively impact industrial sectors, including textiles and apparel, the chemicals-plastics-rubber complex, and metal products.”

I am a stock market professional. I’ve studied corporate balance sheets, industry performance, and the economy, for 28 years. I also outperformed the U.S. stock market averages in each year that I published public portfolios. If trade agreements were good for jobs & manufacturing, I would know it! If trade agreements helped my neighbors acquire good-paying jobs — or any jobs at all! — I would know it!

Protectionism should be an American priority.

The Trans-Pacific Partnership is not a panacea to the ailing U.S. economy. Previous free trade agreements have been sucking the lifeblood out of the middle class by eliminating the common man’s ability to support his family.

Yet with the TPP, we’re apparently recycling those same job-killing policies, because nothing’s changed! When the U.S. welcomes trading partners who manipulate currencies, produce polluted seafood, condone rampant slavery, and persecute their citizens under Sharia Law, the U.S. ends up appearing as desperate as an addict in a crack house.

At an April 2016 press conference in Germany, President Obama said that he anticipates the TPP moving forward after the U.S. primary election season, with a TPP vote taking place during a lame-duck session of Congress. (Inside U.S. Trade, 04-25-16)

Will Congress agree to ratify the TPP? The odds increase for a “NO” vote as the months pass, as industry groups cry “foul!” over not getting what they wanted from the TPP, as Congresspeople cry “foul!” over the prospect of a lame-duck vote, and as citizens pressure Congress with anti-TPP sentiment.

Stay engaged. We’re just a few short months away from permanently defeating the TPP.

* * * *

Crista Huff is a stock market expert and a conservative political activist. She is the Chief Analyst at Cabot Undervalued Stocks Advisor; owner/operator of Goodfellow LLC, an outperforming stock market website; and she works with End Global Governance and issues groups to defeat the Trans-Pacific Partnership trade agreement. Send questions and comments to research@goodfellowllc.com.

* * * * *

Investment Disclaimer

Release of Liability: Through use of this website viewing or using you agree to hold www.GoodfellowLLC.com and its employees harmless and to completely release www.GoodfellowLLC.com and its employees from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur.

Goodfellow LLC and its employees are not paid by third parties to promote nor disparage any investment. Recommendations are based on hypothetical situations of what we would do, not advice on what you should do.

Neither Goodfellow LLC nor its employees are licensed investment advisors, tax advisors, nor attorneys. Consult with a licensed investment advisor and a tax advisor to determine the suitability of any investment.

The information provided herein is obtained from sources believed to be reliable but is not guaranteed as to accuracy or completeness. When information is provided herein from third parties — such as financial news outlets, financial websites, investment firms, or any other source of financial information – the reliability or completeness of such financial information cannot be guaranteed.

The information contained on this website is provided for informational purposes only and contains no investment advice or recommendations to buy or sell any specific securities. This is not an offer or solicitation for any particular trading strategy, or confirmation of any transaction. Statements made on the website are based on the authors’ opinions and based on information available at the time this page was published. The creators are not liable for any errors, omissions or misstatements. Any performance data quoted represents past performance and past performance is not a guarantee of future results. Investments always have a degree of risk, including the potential risk of the loss of the investor’s entire principal. There is no guarantee against any loss.