Manufacture This

The blog of the Alliance for American Manufacturing

Richard McCormack on Trade Adjustment Assistance.

The post below is an opinion piece written by award-winning journalist Richard McCormack, the founder and publisher of Manufacturing & Technology News. McCormack also served as the editor of the 2013 book on revitalizing manufacturing, ReMaking America. You can follow him on Twitter at @RichardAMc.

American manufacturers and their workers need to prepare themselves for more hardship thanks to President Obama's high-stakes trade push. Even Obama himself says so.

The Senate passage of Trade Promotion Authority on May 22 was preceded by a "sweetener" — the reauthorization of the $950 million Trade Adjustment Assistance (TAA) program for workers who lose their jobs due to the federal government's free-trade policy.

For decades, the TAA program has been the key program promoted by Democrats and Republicans as a means to ameliorate the manufacturing workers who are the "losers" associated with the country's trade policy of lowering tariffs on foreign imports and trade agreements that result in the exportation of jobs. The final push for the latest Trade Promotion Authority (TPA) is contingent on TAA, a program that Obama states is necessary to help the prospective losers of his trade agenda: highly skilled, well-paid manufacturing workers. 

"If you look over my interviews, you will see I've said there are losers" due to proposed Trans-Pacific Partnership trade agreement, Obama told NPR's Marketplace in an interview. "We have to take account of those losers. The question is, are there a lot more winners than losers? And the answer in that case is, yes."

While the House rejected TAA in a vote on Friday, a revote is now expected to take place on Tuesday. 

Obama — who headed to Capitol Hill on Friday morning in a last-minute push for his trade agenda — believes it is fine for the United States to continue losing manufacturing jobs. "It may be that as a consequence of this trade deal, there are particular markets, there are particular niche parts of the economy, where we've got to provide help to transition [workers], and to retool and adapt. That's part of the reason why part of this package includes trade adjustment assistance," he said.

There is no analysis from the administration or America's trade negotiators as to which industries are being traded away.

Nor is it possible to convince people like Obama that the trade policy pursued by the U.S. government for the past 30 years has created an order-of-magnitude larger number of losers than winners. No amount of argument, facts and evidence will ever convince the ruling elite that trade has been the primary factor behind the decline of the U.S. economy and American wages. There is no way they will ever admit that the scourge of riots in Baltimore is linked to manufacturing's decline (and thus their trade policy). There is never an acknowledgment that surging imports have completely eliminated the most important, high-tech industrial sectors of the economy.

Obama and his advisers still think that it's okay to lose manufacturing jobs. But what they haven't realized is that one manufacturing job represents the tip of the American employment iceberg. Each manufacturing job supports highly skilled workers in R&D, design, market research, production engineering, maintenance, accounting, legal, logistics and distribution. Entire supply chains depend on those manufacturing jobs that Obama cavalierly dismisses.

It is important to note that outsourcing has not abated. American factories continue to be closed in favor of cheaper foreign locations. In looking at recent Department of Labor TAA filings, thousands of American workers are still losing their jobs to outsourcing and import surges. The loss of so many good jobs due to trade is never reported in the media.

  • On May 28, Trade Adjustment Assistance was granted to 49 displaced workers at the Alcoa Technical Support Center. Those workers lost their jobs doing research on light metals because "Alcoa's primary production is being curtailed due to flooding of the market with low-cost metal from China," says the TAA petition application.
  • On May 26, 19 workers at Emerson Electric Co. involved in making electrical analyzers, transmitters and circuit boards lost their jobs because production shifted to China and Mexico.
  • On May 14, 170 laid-off workers at Graham Packaging Plastic Co. in Chicago were granted TAA benefits because their jobs making plastic bottles and containers were outsourced to Mexico.
  • On May 7, 421 workers who lost their jobs making medical devices at Teleflex Arrow International were granted TAA benefits because their jobs were outsourced to Mexico and the Czech Republic.
  • On April 14, 2015, 400 General Mills workers in New Albany, Ind., received TAA benefits because "primary ingredients are shipped in from Mexico."
  • On April 23, more than 1,300 workers at the John Deere plant in Waterloo, Iowa, were granted TAA benefits because "there have been plants open in other countries."

There are dozens of other filings currently being investigated by the TAA program, including from American Standard (139 workers losing their jobs as production moved to Mexico); Newell Rubbermaid (210 workers making levelors whose jobs moved to Mexico); Teleflex Medical In. (600 workers making class 3 medical devices and supplies, losing their jobs to a shift in production to Mexico), etc., etc., etc.

When does the evidence of America's decline caused by free-trade policies and indifference to manufacturing — and the fact that China is now the world's largest economy based entirely on its embrace of manufacturing — become too overwhelming to ignore?