The new-style agreements increase worldwide demand for products made by American corporations all over the world, enhancing corporate and financial profits but keeping American wages down.
Robert Reich | March 15, 2016 12:14 pm
I used to believe in trade agreements. That was before the wages of most Americans stagnated and a relative few at the top captured just about all the economic gains.
The old-style trade agreements of the 1960s and 1970s increased worldwide demand for products made by American workers and thereby helped push up American wages.
The fact is, recent trade deals are less about trade and more about global investment.
Big American corporations no longer make many products in the U.S. for export abroad. Most of what they sell abroad they make abroad.
The biggest things they “export” are ideas, designs, franchises, brands, engineering solutions, instructions and software, coming from a relatively small group of managers, designers and researchers in the U.S.
The Apple iPhone is assembled in China from components made in Japan, Singapore and a half-dozen other locales. The only things coming from the U.S. are designs and instructions from a handful of engineers and managers in California.
Apple even stows most of its profits outside the U.S. so it doesn’t have to pay American taxes on them.
Recent “trade” deals have been wins for big corporations and Wall Street, along with their executives and major shareholders, because they get better direct access to foreign markets and billions of consumers.
They also get better protection for their intellectual property—patents, trademarks and copyrights—and for their overseas factories, equipment and financial assets.
That’s why big corporations and Wall Street are so enthusiastic about the Trans Pacific Partnership (TPP)—the giant deal among countries responsible for 40 percent of the global economy.
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