The Wall Street Journal is reporting that congressional negotiators have struck a deal that would move forward ratification of trade deals with South Korea, Panama and Columbia. As part of the compromise, the Trade Adjustment Assistance program would be renewed. This is the federal program that offers retraining to workers displaced by trade deals.
More trade with South Korea would likely be a net win for Washington state. That nation is our fourth largest trading partner. Exports have risen from $1.6 billion in 2005 to $2.7 billion last year. They stood at nearly $3.3 billion in 2008. Panama accounted for $315 million in Washington exports in 2010 and Columbia $56 million.
The losers yet to be known. South Korea, especially, has large, high-skilled clusters in technology that offer cheap workers; it is also a heavily export-based economy. Columbia’s biggest agricultural export is coffee (a boon to Starbucks and others?), so potential damage to Washington agriculture may be slight.
As for the retraining program, the effectiveness is open to debate. Some studies have questioned whether it really works, and the workers displaced by trade deals almost always end up with lower-paying jobs. The ghost of Ross Perot haunts us, especially with 14 million unemployed and millions more underemployed.
The trade deals would help President Obama in his goal to double U.S. exports in five years — yet this hasn’t been done since the late 1940s. Neither party is able to make a compelling case for expanded trade now that so many Americans see themselves as net losers.
UPDATE: The White House released a statement from Press Secretary Jay Carney: “”President Obama has fought for an ambitious trade agenda that doubles exports in five years, levels the playing field for American workers, and reflects American values. As part of that agenda, he has fought for Trade Adjustment Assistance for those American workers who lose their jobs due to increased imports or outsourcing. As a result of extensive negotiations, we now have an agreement on the underlying terms for a meaningful renewal of a strengthened TAA. The President embraces these critical elements of TAA needed to ensure that workers have the best opportunity to get good jobs that keep them in the middle class. Now it is time to move forward with TAA and with the Korea, Colombia, and Panama trade agreements, which will support tens of thousands of jobs.”
Today’s Econ Haiku:
When Wall Street’s happy
Your 401(k) smiles, too
Trust the playerz, right?