White House: US trade deals don’t send jobs overseas

A new report from the White House on Friday shows that U.S. businesses didn’t send jobs overseas after forging new trade agreements in the past.

The analysis instead concludes that the United States shipped jobs abroad after China made deals with other countries, countering long-held beliefs of many liberal Democrats and labor unions that U.S.-led trade sparked a sell-off of American jobs.

Jason Furman, chairman of the President Obama’s Council of Economic Advisers, called the report’s finding “striking,” as he sought to bolster arguments that the United States must take the lead in brokering trade deals or cede power to China.

{mosads}“It illustrates that the trade agreement is about the choice about whether the United States is moving forward in defining our roles or whether we’re waiting and letting China do that,” Furman told reporters on a call.

“In particular we find that past free trade agreements that the United States enters into have not increased outsourcing because they’ve raised labor standards abroad and because they have allowed our companies to access foreign markets without locating there,” he said.

He said that when the United States enters trade deals barriers drop with those partners, making it easier for businesses to produce their products here, instead of locate there, and export them to those countries.

But, he said, that when China enters into a trade deal, U.S. companies see an opportunity to move to that trading partner country to gain better access to the Chinese market.

“Trade agreements with China offer countries preferential access to the vast Chinese market while accepting low labor and environmental standards,” the report said.

The report hits as Obama is trying to strengthen his case within his own party that global trade agreements help create higher-paying jobs for middle-class workers and, in turn, boost economic growth.

The report goes on to say that by increasing enforceable labor standards that lead to wage increases “the United States can potentially curb the outsourcing of American jobs.”

The report takes a deeper dive into a broader range of the economic benefits of trade amid a heated battle for votes on Capitol Hill and as negotiators work to complete the 12-nation Trans-Pacific Partnership (TPP).

Other highlights of the report show that expanded trade lowers overall tariffs, creates higher-paying export-focused jobs and leads to higher productivity.

Furman said that the potential of TPP “is quite large” and could churn up $75 billion a year in economic benefits in the United States.

He said he would be remiss as an economist if he didn’t suggest that “we pick that up and put it to work for better jobs and the economy.”
 
Still, the report is unlikely to sway a majority of House Democrats who are opposed to TPP.

On Thursday, one group of Democrats said that after taking a close look at the TPP draft and reviewing studies of the prospective outcomes “we have concluded that the TPP will not contribute to economic growth, create additional American jobs or raise wages, or set high standards for labor rights or the environment.”