I received many questions and comments regarding Obama’s Trans-Pacific Partnership Fiasco vs. Mish’s Proposed Free Trade Alternative.
While most do see Obama’s Trans-Pacific Partnership (TPP) as a fiasco, many question my alternative proposal:
An excellent free trade agreement would consist of precisely one line of text:Â All tariffs and all government subsidies on all goods and services will be eliminated effective June 1, 2015″.Â
Even some “free trade” advocates disagree with my follow-up statement “I firmly believe the first country that fully embraces free trade would come out ahead, regardless of whether or not any other country reciprocates.“
Worry Over Loss of Manufacturing Jobs
Reader Pina is worried over the loss of jobs. He writes …Â
 I realize that most economists advocate tariff free trade but how is this in the interests of workers who had careers in the rust belt who have watched their jobs migrate to China, India and other countries. Yes, American multinational corporations like the cheap labor and modest regulation in the third world but is this really best for the American worker?
Seen and Unseen
For starters, employment in manufacturing and some service industries is down everywhere due to hardware and software robotics. Tariffs or not, many manufacturing jobs have vanished and are never coming back.
Initially, those jobs left the US because of wage differentials, now they are simply gone.
Moreover, and more importantly, it is a mistake to look at manufacturing (or any trade) in a vacuum. We lost manufacturing jobs, but cheap goods from China provided millions of trucking and shipping jobs and allowed the expansion of massive numbers of retail jobs and construction jobs to build all the stores and malls everywhere.
Standards of living have soared. Even the poorest of families tend to have cell phones, internet services, and huge digital TVs.
Were the price of goods to double to save manufacturing jobs how many could afford to buy such things?Â
Productivity and Free Trade
The Library of Economics and Free Trade has an excellent article on the subject. It’s title is simply Free Trade.
Here are a few snips, emphasis in italics is mine. I encourage you to read the entire article.Â
