We already know that the North American Free Trade Agreement of 1993 didn't really work out as promised. NAFTA has fallen short of generating the jobs and the deeper regional economic integration its advocates promised decades ago. While trade relations have broadened and U.S. manufacturers created supply chains across North America that have made companies more globally competitive, the benefits have not trickled down to average Americans.
Edward Alden, a senior fellow at the Council on Foreign Relations, notes that wages haven't kept pace with labor productivity and that income inequality in the United States has risen in recent years, in part due to pressures on the U.S. manufacturing base. To some extent, he says, trade deals have hastened the pace of these changes in that they have "reinforced the globalization of the American economy."
Source: CFR Backgrounders: NAFTA's Economic Impact
Many opponents of NAFTA and other trade agreements make even stronger arguments.
Thea M. Lee, the deputy chief of staff at the AFL-CIO, which opposes NAFTA and lobbies against other free-trade agreements unless they include provisions that raise labor and environmental standards, said that NAFTA forced "workers into more direct competition with each other, while assuring them fewer rights and protections." CFR Backgrounders
And what about Mexico?
One lofty, unrealized promise of NAFTA was that the treaty would narrow the gap between the per capita incomes of Mexico, the United States, and Canada. Per capita income in Mexico rose at an annual average of 1.2 percent over the past two decades, from $6,932 in 1994 to $8,397 in 2012, far slower than Latin American countries such as Brazil, Chile, and Peru. NAFTA was also expected to discourage Mexican emigration to the United States, yet despite the 2007–2009 recession and increased deportations, Mexican-born people living in the United States doubled since 1994 to 12 million in 2013, writes Jorge G. Castañeda, a professor at New York University and former foreign minister of Mexico. Industries excluded from NAFTA—such as telecommunications, television, and transportation—allowed Mexico's wealthiest to become even richer; the country now claims the world's richest man, Carlos Slim Helu.
CFR
Instead of learning our lesson, it would seem we are going to let the rich and powerful do it all again with Fast Tracking of the Trans-Pacific Partnership. While it is being negotiated in secret key sections of the deal have leaked to the public via Wikileaks. What we have learned is very worrisome.
The TPP would allow multinational fossil fuel companies to sue governments that hurt their profits by keeping carbon pollution in the ground. This is an agreement basically being written by Big Oil, and it's designed to make pollution more profitable.
If we need further insight into how the TPP trade deal might affect the United States, we can look at the Free trade agreement between the U.S. and the Republic of Korea (also known as KORUS FTA) which went into effect three years ago in March of 2012. Negotiations actually began back in 2006, concluded in 2007, and it was first signed on June 30, 2007, with a renegotiated version signed at the end of 2010. It is interesting to note that in 2008, then candidate Obama sided with U.S. auto labor unions in opposing KORUS.
The U.S. goods trade deficit with Korea has more than doubled in the full first three years since the U.S.-Korea free trade agreement (FTA) went into effect. In those three years U.S. goods exports to Korea have dropped 6 percent, or $2.7 billion, while goods imports from Korea have surged 19 percent, or $11.3 billion compared to the year before implementation. Source: OurFuture.org
On this point, even Forbes, mostly a cheerleader for the FTA, agrees.
This is not to say that the KORUS FTA has been all peaches and cream. U.S. Chamber of Commerce President Tom Donohue went to Seoul last year to scold the Koreans for not doing enough to encourage imports of American goods and services, as KORUS requires them to do. The response was a collective yawn. Source: Forbes
The U.S. trade deficit in March was the widest it has been in over six years.
Bloomberg Business addresses the argument that the March's abysmal trade numbers are a result of the labor dispute at the Port of Los Angeles which wasn't resolved until March.
“The ending of the port strike seemed to really only have a material effect on imports, not on exports,” said Michael Feroli, chief U.S. economist at JP Morgan Securities LLC in New York and the second-best forecaster of the trade balance over the past two years, according to data compiled by Bloomberg. “When we smooth through the data, it looks like the trend in imports is moving higher whereas the trend in exports looks kind of soft.”
Many experts believe a major cause of the increasing trade deficit is that the U.S. dollar is so strong, raising the cost of American-made goods and services overseas. This is the result of currency manipulation by other countries such as China who deliberately devalue their currency thus creating a trade advantage.
A strong dollar is good for Wall Street, bad for the trade deficit, American jobs, American-based businesses and 99 percent of Americans. But it has reached the point where it is hurting the profits of some major U.S. multinational corporations. This chart from Forbes, “Strong Dollar Haunting Huge Companies From P&G To McDonald’s,” tells the story:
The mighty greenback has been a common theme in earnings reports from behemoths that make a large chunk of their money outside the country. Why? A stronger dollar means sales abroad translate into fewer dollars back home, a reality that is making its way into many corporate forecasts after the dollar rose 6% against other major currencies in the fourth quarter and has climbed another 3% in 2015. Source: OurFuture.org
It would seem that any reasonable trade deal would address the issue of currency valuation. Maybe it does, but since it is being negotiated in secret and despite the best efforts of progressives led by Elizabeth Warren and Bernie Sanders, is likely to be fast tracked, most of us won't know until it is too late to do anything about it.