Aug
26
2011

Corporations Want to Create Jobs (and Other Myths)

New York Times reporter Jennifer Steinhauer takes a look (8/26/11) at U.S. trade deals with South Korea, Colombia and Panama that are currently languishing in Congress. The piece calls them "free-trade" agreements, which is generally misleading: Trade deals usually involve complicated horse-trade negotiations regarding tariffs, patent protection and the like–meaning they make trade in some ways less free.

But more important are the other assumptions in the piece:

The three free-trade agreements, which originated with the Bush administration, would eliminate tariffs on cross-border transactions, expanding exports of American goods by about $12 billion a year, according to estimates by the United States International Trade Commission. Under the agreements, American service providers would be able to compete in the three countries, ostensibly adding new jobs to the American economy. Because of this, they are widely supported by the U.S. Chamber of Commerce and other business trade groups.

First is the assumption that these deals do something special to increase U.S. exports. A study from Public Citizen last year found more export growth to countries that don't have "free trade" agreements with the United States. (Todd Tucker joined us on CounterSpin to talk about it at the time.) And the estimates of export growth haven been called into question as well.

"Ostensibly adding new jobs to the American economy" seems like a rather generous leap of faith. Critics have consistently argued that these deals will cost jobs– even the New York Times concluded last year that the Korea pact "is likely to result in little if any net job creation in the short run, according to the government's own analysis."

Lastly–is there any reason to suspect that the "U.S. Chamber of Commerce and other business trade groups" support these trade deals because they create U.S. jobs? As Dean Baker put it:

Corporations do not exist to create jobs, nor do they claim this as a goal. Invariably, corporate CEOs will say that their responsibility is to produce returns for shareholders as they announce large layoffs. If the Chamber of Commerce is supporting these deals, it is because it believes that they will increase profits, end of story.

About Peter Hart

Activism Director and and Co-producer of CounterSpinPeter Hart is the activism director at FAIR. He writes for FAIR's magazine Extra! and is also a co-host and producer of FAIR's syndicated radio show CounterSpin. He is the author of The Oh Really? Factor: Unspinning Fox News Channel's Bill O'Reilly (Seven Stories Press, 2003). Hart has been interviewed by a number of media outlets, including NBC Nightly News, Fox News Channel's O'Reilly Factor, the Los Angeles Times, Newsday and the Associated Press. He has also appeared on Showtime and in the movie Outfoxed. Follow Peter on Twitter at @peterfhart.