Trade Summit: Bad Trade Policies Could Create Global Depression

[Omaha Steve]

Full story: http://blog.aflcio.org/2006/07/12/trade-summit-bad-trade-policies-could-create-global-depression/

Economy, Legislation & Politics

Jul 12

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Trade Summit: Bad Trade Policies Could Create Global Depression

The latest figures for the U.S. trade deficit are in, and they’re bad. Again.

The Commerce Department reported today the nation’s trade deficit in May rose to $63.8 billion, from $63.3 billion in April. The U.S. trade deficit last year was a staggering $726 billion. More than a quarter of it—$202 billion—is with China.

The timing of the report coincided with a trade summit here in Washington, D.C., where more than 150 academics, business executives, union leaders and policy researchers discussed strategies to prevent the trade crisis from tripping a global economic downfall.

Sponsored by the AFL-CIO and the U.S. Business and Industry Council (USBIC), the summit highlighted how the combination of a soaring trade deficit and currency manipulation by countries such as China have created a crisis in the global economy that could pull the United States and the world into a 1930s-type depression—unless political leaders muster the courage to change the global trading rules.

Although the public is concerned about trade issues, political leaders don’t seem to have gotten the message yet, according to pollster Celinda Lake and author David Sirota. Lake, CEO of Lake Associates, found that more than half of Americans (53 percent) know someone who has been laid off and say outsourcing jobs is the main cause of the layoffs.

Lake points to an article in Foreign Affairs magazine by pollster Daniel Yankelovich, which asserts voter concern over trade is at the tipping point of becoming a major campaign issue. Yankelovich’s survey shows Americans are more concerned about the impact of outsourcing than they are about terrorism. Some 87 percent of Americans say they are concerned about jobs being outsourced, and 81 percent give the government bad marks for addressing outsourcing.

According to the survey, the only thing holding back voters from making trade a top issue is the belief by 52 percent of Americans that it is “unrealistic” to believe that government will do anything to change the situation.

That could change quickly, Sirota told summit participants. Each time a plant closes, it raises several issues related to trade policy’s impact on a community, such as pensions being slashed. Even immigration is a trade issue. In the debate over immigration, few people raise the point that since the North American Free Trade Agreement (NAFTA) went into effect more than a decade ago, 20 million more people have been driven into poverty in Mexico, fueling an increase in migration to the United States.

Sirota said these issues are ripe for a political party with courage to address:

The trade issue illustrates the disconnect between opinion makers and the real world. The party that gets out in front of the issue in a way that deals with the problems of ordinary people will build a political majority for years to come.