Today, the Seattle City Council will vote on a resolution expressing concern about the Trans-Pacific Partnership trade agreement currently being negotiated, and the Seattle Times editorial board thinks that’s just plain silly:
The council’s ordinance sends a head-scratching message about the importance of trade. No American city, arguably, is more dependent on the import-export business than Seattle. The Port of Seattle is an engine of family-wage jobs. Overall, 30 percent of Washington’s exports — nearly $27 billion worth — went to countries participating in the TPP. Stronger U.S. trade ties with those 11 other countries would undoubtedly add to the total, especially in Japan, Malaysia, Vietnam and New Zealand.
Uh-huh. So, here’s the thing about “free trade” as defined by agreements like the TPP: it isn’t free. Sure, goods are free to cross borders, and financial capital is free to cross borders. And since goods-plus-capital equals jobs, the TPP frees more jobs to cross international borders.
But you know what’s not free to cross borders? Labor. And since jobs are mobile and labor isn’t, free trade agreements like TPP and NAFTA and all the rest end up distorting the economy in a way that advantages capital and disadvantages labor. I’m not making shit up here. The same neoclassical economic theories that argue for free trade will tell you that if capital is free but labor mobility remains constrained, then the labor market can never reach a state of natural equilibrium. Capital can (and will) arbitrage the price difference between various labor markets, artificially suppressing wages for all.*
Good for profits, not so good for workers.
Of course, that doesn’t mean we can’t have free trade. We could open our borders to all comers, and vice versa, allowing labor to move to where the good jobs are. We could actually allow the entire market to be free. But that’s not likely to happen. Or, we could all openly acknowledge that trade agreements disadvantage labor, and insist that they come with policies designed to ameliorate the harm and redistribute the profits more broadly. You know, if we actually gave a shit about workers.
But let’s not pretend that, on their own, free trade agreements are good for American workers. Because apart from those workers directly employed in import-export (and let’s be honest, mostly import), they’re not.
* Not to be construed as an actual endorsement of neoclassical economic theory.