Trade Agreements Beneficial
The fundamental error in Rob`s analysis is the assumption that trade deficits increase total unemployment in the United States. Over the past 25 years, we have implemented a large number of trade agreements. During this period, the U.S. trade deficit generally fluctuated in line with the U.S. economic performance. The deficit increases when times are good and contract when the economy slows. These results underline the importance of quality. A naïve approach that only examines the impact of trade agreements on prices (uncorrected on quality) could wrongly conclude that trade agreements do not affect consumers. At least for trade agreements implemented by the EU, the overall effect translates into quality changes. Once we have adjusted prices to quality, we find that trade agreements have reduced quality-adjusted prices by almost 7%. There are already some 400 free trade agreements in the world (including free trade agreements in the planning phase).
They are complex and create what is called a “spaghetti effect.” In addition, the negotiations expect multilateral free trade agreements to be concluded that are only considerable in terms of the economic dimension, the population that covers them and the number of countries in which they participate. In addition to existing agreements, global economic partnerships are increasingly complex and complex. This is why international trade rules established in free trade agreements (FTA) must be used strategically. Jeff also says that the jobs created by trade agreements are “better paid and higher than displaced people.” And these trade agreements create jobs — the figures mentioned above on job loss are all clear estimates, the difference between the jobs created by exports and the jobs lost because of imports. But while some export jobs may be profitable, research, for example on trade in China, has found that average weekly wages in importing industries pay 17% more than jobs supported by exports to China. That is true because the United States exports large quantities of low-wage agricultural raw materials to China and we import huge quantities of electronics, where average wages are much higher. The situation is similar for the TPP.