The Trans-Pacific Partnership (TPP) is a very special trade agreement. It is so special that our government officials who are negotiating it want to keep it completely secret from us. It's like a special Christmas present so they want it to be a surprise! And to make sure it's a surprise, they won't even let a single member of Congress see what they are negotiating. However, hundreds of corporations have been given access to the draft text.
This should give you some idea of our government's trade agenda. President Obama says that he wants to create jobs through trade, but this agreement is more likely to cost jobs here than to create them. Leaked drafts of parts of the agreement indicate that our negotiators are trying to increase patent protection for pharmaceutical companies, for example. This will not create jobs, although it may make our big drug companies and their shareholders richer.
When our government tells us such an agreement will create jobs in the U.S., they are saying that the agreement will increase our exports faster than imports. So, for the TPP, they are saying that we will increase our exports to Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and now possibly Japan faster than our imports from these countries. That is unlikely. We were promised the same thing with NAFTA two decades ago, but it didn't work out that way at all.
Of course the most important thing our government needs to do to create jobs here is to stimulate the economy by spending more money. Private demand for goods and services has not recovered sufficiently from the Great Recession, and so we still have more than 21 million people who are unemployed, working part time involuntarily, or have given up looking for work. Unfortunately, because of the power of both ideology and special interests, our government is going in the wrong direction, weakening the economy by reducing spending.
There is one way in which we can increase exports more than imports, and that is by lowering the value of the U.S. dollar against the currencies of our trading partners. A lower dollar would mean that our exports are more competitive and imports more expensive. This would reduce our trade deficit, and that would definitely create jobs here, including manufacturing jobs. Our trade deficit has come down lately -- it has fallen from 5.7 percent of GDP at its peak in 2006 to about 3.6 percent today. But this is overwhelmingly because of the Great Recession and the weak recovery since the recession officially ended nearly four years ago. When the economy returns to normal growth, imports will shoot up, because the dollar is overvalued.
Of course our most powerful corporations are fine with an overvalued dollar. Wall Street likes it because it keeps inflation lower. Other big corporations, and Wall Street too, like it because it means they can buy things (and labor) cheaper around the globe. As with our trade agreements, the big corporations that dominate our government don't care so much about jobs or whether we have a manufacturing sector. So you do not hear much debate about what an overvalued dollar has done -- or continues to do -- to our economy and employment.
Our rulers have a vision of the United States extracting more monopoly rents from other countries, increasingly developing nations, through greater patent and "intellectual property" protection. Their big banks want to grab more financial services markets overseas too. There is lots of money to be made for the "1 percent," even if our domestic economy remains sluggish, our infrastructure and educational system deteriorate, and jobs -- even more, good jobs -- remain scarce at home. That is their so-called "free trade" agenda.