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Batavick: Global trade benefits United States, too

In an August 2016 Pew Research Center poll, respondents were asked, "In general, do you think free trade agreements between the U.S. and other countries have been a good thing or a bad thing for the United States?" About 50 percent thought them a good thing, 42 percent a bad thing and 8 percent were unsure. So, which thinking is correct? Are the North American Free Trade Agreement that President Donald Trump wants to renegotiate and the Trans-Pacific Partnership he just abandoned good or bad for the country?

There is no doubting the damage done to certain manufacturing jobs since NAFTA began in 1994. Our trade deficit in goods with Canada and Mexico increased from $2 billion in 1994 to $60 billion in 2015, and by 2016 over 700,000 U.S. jobs had been lost to factories in Mexico and beyond. Pennsylvania alone saw 150,000 jobs disappear. This pinpoints why the Quaker State could be found in Trump's victory column because of his campaign promises to fight back against free trade and globalization.

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However, in a 2012 survey among 41 economists by the Initiative on Global Markets, 85 percent agreed that "Freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment."

Huh? Didn't these economists listen to any Trump or Bernie Sanders speeches that claimed just the opposite? What are we missing?

It appears that we have been getting only half the story, and it's been from politicians out to inflame voters and win elections. Trade agreements do definitely damage certain job sectors like steel and textiles, but they benefit others, like the estimated 11.5 million U.S. workers who support companies exporting to the U.S. These are the people laboring on our docks, driving our trucks and trains, and working in warehouses where imports are stored before shipping.

What's more, wages are about 13 percent to 18 percent higher for these jobs relative to all others in the U.S. economy. The Federal Reserve estimates that for every dollar spent on an item imported from China, roughly 55 cents pays for U.S. services required to put it in your hands.

Then there are the U.S. industries that are totally reliant on exporting to other markets. Take cotton, for instance. The U.S. is ranked third in world production, behind China and India, and we lead the world in cotton exportation. This $25 billion-a-year industry employs over 200,000 of our fellow Americans. Who buys our raw cotton? China is the largest market, followed by Mexico and Turkey. We also sell to Colombia, Ecuador, Peru, Guatemala, El Salvador and Vietnam.

Look in your closet to see where your clothing was made. I bet your answer includes most if not all of the above countries. So when we buy a shirt made in China or Guatemala, there is a good chance we are also buying American, if only in part. Similar stories can be told for tires, solar panels and many other products that contain U.S. exports.

Statistics can be used to show NAFTA destroyed jobs, as did China's joining the World Trade Organization. But economists respond that, in the case of China, only 20 percent of the manufacturing job loss can be blamed on its highly competitive imports. The other 80 percent was caused by automation. Streamlined factory processes and robotics have eliminated many routine blue-collar jobs in the U.S. Today, we require a highly skilled workforce not just for manufacturing, but for service industries like information technology and health.

On balance, Trump made a terrible mistake in abandoning the TPP trade deal. Change and the new global economy are facts of life. When the automobile came on the scene, untold numbers of buggy makers, horse breeders, oats sellers and stable hands would eventually lose their jobs. Today, new trade patterns have caused employees in certain industries real harm, but most other Americans have benefited by buying cheaper goods and honing skills to qualify as workers in this new economy.

Trump also erred in promising to bring back lost factory jobs. Sure, he can jawbone some corporations like Carrier to keep their operations in the U.S., but the results are bound to be temporary, and he can't jawbone every contemplated move in every industry.

Living in a global economy requires giving students the skills to adapt and prevail and retooling displaced workers for new sectors of employment. This is not easy, but neither is staring down a tsunami of inevitable change.

Frank Batavick writes from Westminster. His column appears Fridays. Email him at fjbatavick@gmail.com.

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