I try to be bipartisan, though like all Americans I have my socially conditioned leanings. So when I ask this question, "Do Free Trade Agreements help or hurt American workers and our small businesses?" I try to have no preconceived agenda for the response. I, like many of my fellow countrymen, want to understand what neither political party can seem to adequately explain. How does free trade affect us? Where should I stand on this issue? So I looked for a simple list of pro's and con's and I stumbled upon two articles online the "Green Garage Blog" and a blog called "The Balance". Two different leans on the same issue, but both contained the same data to argue for and against TPP and NAFTA. Needless to say, it still didn't bring much clarity for me as an American if TPP, NAFTA, CAFTA-DR and other trade agreements are made with the greater good of the American worker and Small Business in mind. So I am looking at it from my vantage point, as a small business that acts as a facilitator to free trade, Customs House Brokerage (Imports) and Freight Forwarder (Exports).
As a Freight Forwarder, I support exporters going into foreign countries and I see first-hand the effects of a strong US Currency, taxes and duties on US product competitiveness world-wide. As a Customs Broker, the US proves to have some of the lowest import taxes and duties for goods coming into our consumer cultures driven by cheap goods.
Free trade deals between the US and foreign countries are designed to give US Exporters a competitive edge, to mitigate the negatives aspects of our strong currency, higher labor and manufacturing cost for our top export commodities such as Aircraft, Automotive, and food products to historical trade partners as well as new and emerging markets. So if you look at it from this perspective free trade is good! Right?
But every trade agreement is a two-way street. So let's look at the other side of my business, Imports, shall we?
Consumer products such as Electronics, Foreign Vehicles, and Oil are amongst the top imports into the United States market. With cheap imports we increase competitiveness, a win for the US consumer, We also drive the creation of new small import businesses. That's good, right?
Here's the downside. US Exports are directly impacted by US Currency as strong US dollar decreases our competitiveness. High cost of living creates higher labor cost, so large manufactures of US export products are enticed and in some cases encouraged to off shoring job opportunities. Both white collar and blue collar alike. That's bad, right?
Imports feed the US consumer market with inexpensive items that allow the American worker a greater variety of products at a cheaper cost, but also create trade imbalances that directly affect our national trade deficit. Poor work and environmental conditions in some of these countries are bolstered by these agreements. Import taxes and duties are another income for the US Government outside of taxes on American families and Businesses. So in essence these deals first add to the deficit before aiding it.
Long Story Short, the devil is in the details and not the sound bites. I've come to terms that the answer is local and should not be party driven. If your Congressperson or Senator cannot answer in detail how TPP, NAFTA and other trade deals effect your job and your community in a way you can understand than you should question who's negotiating on your behalf? You wouldn't hire a realtor who didn't know the difference between a rental or a purchase? The better your representative vocalize how particular trade agreements can affects your local economy the better these deal can and will be made will be for the American people as a whole.
As my father always said, "pay me know or pay me later, either way you are going to pay". This proverb also rings true for trade.
Resources:
https://www.thebalance.com/free-trade-agreement-pros-and-cons-3305845
http://greengarageblog.org/12-important-pros-and-cons-of-free-tradefrom
Helpful Links:
http://www.state.gov/e/eb/tpp/bta/fta/c26474.htm
http://www.epi.org/publication/ib244/
This blogger graduated from Goldman Sachs' 10,000 Small Businesses program. Goldman Sachs is a partner of the What Is Working: Small Businesses section.