CLEVELAND, Ohio
– Ohio lost 112,500 jobs in 2015 resulting from the United States’
trade deficit with countries that are part of the Trans-Pacific
Partnership agreement, according to an
analysis by the Economic Policy Institute.
That places Ohio sixth, in terms of the percentage of jobs lost to
trade with TPP countries, among the 50 states and the District of
Columbia ranked in the report released Thursday by the liberal
Washington, D.C.-based think tank. The lost jobs represent nearly 2.2
percent of employment in Ohio, according to the analysis.
The total number of lost jobs includes those directly and indirectly
impacted by the trade deficit with TPP countries. It also includes the
number of jobs EPI says would have been created through the multiplier
or “respending” effect had trade with those countries been more
balanced.
The TPP is a free trade agreement between the United States and 11
partnership countries, including Canada, Mexico, Japan, Singapore and
Malaysia. While the countries have reached final agreement on the trade
accord, it probably will not go into effect for several months. The
agreement must clear several hurdles, including final ratification by
Congress.
Early reaction to EPI’s report has predictably reflected the opposing
views of TPP’s supporters and opponents. Opponents, including unions,
have said the analysis is spot-on. Supporters, including the Obama
Administration, which has championed TTP, have questioned its findings.
For example, a spokesman for the Office of the United States Trade
Representative, said the report’s methodology is flawed. The report
includes some estimates based on an analysis of government data.
“The method EPI uses to create these numbers was given ‘Four
Pinocchios’ by The Washington Post’s independent fact checker last year
for being a ‘whopper’, yet they continue to use it,” wrote a USTR
spokesman in an email to The Plain Dealer. “The International Trade
Administration’s most recent official numbers show that 263,356 jobs
were supported yearly by exports of goods from Ohio and that 58% of
those goods went to TPP countries.
“It’s unfortunate that opponents of trade, like EPI, continue to use
faulty data to avoid having an honest debate about expanding American
made exports through TPP,” he wrote.
Robert E. Scott,
the senior EPI economist and director of trade and manufacturing policy
research, who co-authored the report, said the analysis to which the
USTR spokesman referred had nothing in common with the one done by EPI.
“USTR is citing a critique of a different analysis done by a
different group—it’s unclear what bearing it has on our report,” he
wrote in an email. “Our study is based on a widely-accepted
macroeconomic model of the effects of trade flows (exports and imports
on domestic output).”
Scott said the government spokesman had cited the ITA job figures so
out of context that his comments were “shocking, ignorant and
gratuitous.”
“This statement absurdly ignores the role of imports in international
trade and employment,” Scott wrote. “To talk about jobs supported by
exports without discussing the jobs supported by imports is like keeping
score in a basketball game by reporting only the points scored by the
home team. It might make you feel good to hear that the Cavaliers
scored 100 points, but you would have no way of knowing whether they won
or lost the game.”
Scott said crucial to the issue of job loss and the trade deficit is
currency manipulation, which “occurs when a country artificially
depresses the value of its currency.”
“Currency manipulation is one of the key driving forces behind the
high and rapidly rising U.S. trade deficit with the 11 other members of
the TPP,” states the report, co-authored by
Elizabeth Glass,
an EPI trade and manufacturing policy research assistant. “In 2015, the
U.S. deficit with TPP countries translated into 2 million U.S. jobs
lost, more than half (1.1 million) of which were in manufacturing.”
The report says that the TPP should include “a set of restrictions
and/or enforceable penalties against member countries that engage in
currency manipulation.”
“Without such provisions against currency manipulation, the TPP could
well follow other trade agreements and leave even greater U.S. trade
deficits in its wake,” the report states.
Such concerns about currency manipulation are unfounded, according the USTR
website.
“We have worked with macroeconomic authorities of TPP countries to
secure a joint declaration that recognize our mutual interest in
addressing unfair currency practices,” it states.
Richard Trumka, president of the AFL-CIO, said that is not enough.
“EPI’s new report quantifies what a mistake it was to leave currency
rules out of the Trans-Pacific Partnership,” he wrote in a news release.
“The trade deficit with TPP countries – attributable in large part to
misaligned currency – cost America’s working families 2 million jobs in
2015, more than half in manufacturing,”
“Omitting currency rules from the TPP benefits Wall Street, making
the TPP a tool for off-shoring jobs, not for job creation,” he wrote.
“If Congress is waiting for more evidence that TPP is a bad deal, this
is it.”
The Obama Administration says the trade agreement would be good for workers.
“With the TPP, we can rewrite the rules of trade to benefit America’s middle class,” states
whitehouse.gov. “Because if we don’t, competitors who don’t share our values, like China, will step in to fill that void.”
However, the EPI report says the middle class has already been hard hit by “unfairly traded goods from TPP member countries.”
“Seven of the 10 states with the highest job losses (as a share of
total employment) are in the Midwest or Southeast, in states where
manufacturing (especially of motor vehicles and parts) predominates,”
the report states.
Those states are:
- Michigan (214,600 jobs lost, equal to 5.12 percent of employment)
- Indiana (103,800 jobs, 3.54 percent)
- Kentucky (53,700 jobs, 2.92 percent)
- Alabama (46,000 jobs, 2.32 percent)
- Tennessee (61,000 jobs, 2.19 percent)
- Ohio (112,500 jobs, 2.16 percent)
- Mississippi (22,000 jobs, 1.86 percent)
The other states on the list suffered major job losses, but they were
influenced “by the collapse of the oil industry and related sectors,”
according to EPI.
- Oklahoma (35,300 jobs, 2.10 percent)
- Wyoming (6,800 jobs, 2.34 percent)
- Alaska (6,300 jobs, 1.83 percent)
The report is based on the analysis of government data, including
that from the U.S. Census Bureau, the U.S. International Trade
Commission and the Labor Department’s Bureau of Labor Statistics.
“Wages lost because of direct and indirect job cuts from the trade
deficits with the TPP member countries would have supported an
additional 759,700 respending jobs,” the report states. “The direct,
indirect, and respending jobs displaced by the U.S. trade deficit with
TPP member countries totals 2,025,800 jobs lost.”
