Unemployment
Free trade’s multinational corporate bonanza
Obama touts the job benefits but the real winners are Big Pharma, Big Oil, and our favorite vampire squid.
(Credit: Maxx-Studio via Shutterstock / Citron) On Friday, more than five years after George W. Bush started pushing for the passage of free trade deals with South Korea, Colombia, and Panama, the agreements finally reached President Obama’s desk and were signed into law.
Some sectors of the American economy will benefit from a significant drop in tariff protections across the board, and some will not. But you can throw away all the studies conducted by supporters and opponents pinpointing exactly how many hundreds of thousands of net jobs will be added or lost. Determining the economic impact of trade agreements is fiendishly difficult, and the ideological predispositions of the various parties engaging in the free trade debt are far too fixed to have any confidence in their claims and counterclaims.
But that’s not to say we can’t declare a winner. If you want to know who benefits most from free trade, all you have to do is look at the list of co-chairs steering the U.S.-Korea FTA Business Council — the gold-plated blue chip clearinghouse for corporate support of the biggest of the three trade deals, the South Korea FTA. They include:
- Ted Austell, Vice President, Trade Policy, The Boeing Company
- Lisa Barry, Vice President and General Manager, Chevron
- Joseph Damond, Vice President, International Trade Policy, Pfizer, Inc.
- Matt Niemeyer, Vice President, Office of Government Affairs, Goldman Sachs
Laura Lane, Managing Director and Head of International Government Affairs, Citigroup, Inc
That is some multinational, deep-pocketed, globe-spanning power! The second largest U.S. oil company, the world’s largest pharmaceutical company, two of the most powerful U.S. financial institutions, and one aircraft maker that has long enjoyed a premier position in the U.S. military-industrial complex.
What Boeing stands to gain from the FTA is the easiest to discern. Boeing already sells around $2.4 billion worth of aircraft-related goods and services to South Korea, but faces tariffs ranging from 3 to 8 percent on many of its products. Lower tariffs mean higher profits for Boeing.
Pfizer’s case is a bit different. The influence of multinational pharmaceutical companies on the fine print of free trade agreements has always offered one of the most telling demonstrations of why there is nothing “free” about them. Among the provisions of the South Korea FTA are limitations on South Korea’s ability to authorize generic versions of foreign drugs, get access to safety data about those drugs, and, perhaps mody insidiously, determine which drugs South Korean healthcare plans will provide reimbursement for.
As I wrote, five long years ago:
… Negotiations of the pharmaceutical subcommittee involved with the free trade agreement currently being hammered out between South Korea and the United States were suspended on Tuesday afternoon, due to disagreements about the Korean government’s plan to change its drug reimbursement pricing system. The government wants to move to a “positive list” system, in which it will pre-announce which drugs it will pay for. Big Pharma hates this, because they’re afraid that it will mean that the most expensive, and profitable, drugs, will not make the list.
Simply put, Big Pharma uses free trade agreements to limit South Korea’s freedom to lower its own healthcare costs.
What about Citigroup and Goldman-Sachs? According to a detailed analysis by the United States International Trade Council, the South Korea FTA “would likely generate a substantial increase in U.S. exports of banking, securities, and asset management services to Korea. It would achieve this though such measure as removing obstacles to the “acquisition of existing Korean firms, reduced residency requirements for senior executives, and the elimination of minimum investment restrictions for foreign direct investment.” In other words, the big will just get bigger.
And finally, there’s Chevron. Chevron is already a big player in South Korea, a partner for more than 40 years with GS Caltex, the second largest energy company in Korea. Chevron is on record as supporting the free trade agreement because it will “strengthen investment protections” — which essentially boils down to making it easier for Chevron to legally defend itself from anything the government might do that it doesn’t like.
Employment at these multinational corporations may well increase as a result of the South Korean free trade agreement — although some of those jobs certainly will be in South Korea, not the United States.
The over-riding lesson that is to be learned here is that free trade agreements are crafted to serve the interests of multinational corporations, and those interests, we should have learned long ago, are not necessarily synonymous with the greater good for the largest number.
Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.
Whitman’s lesson for Romney
Layoffs at Hewlett-Packard show why business leaders aren't automatically a good fit for the White House
Mitt Romney and Meg Whitman (Credit: AP/Chris Carlson) When Meg Whitman ran for governor of California in 2010, the former eBay CEO told voters that her business background made her the right choice to boost job creation in a state troubled by high unemployment. Sound familiar? It’s the same spiel we hear from Mitt Romney every single day.
As a consolation prize for getting clobbered by Jerry Brown in the gubernatorial election, Whitman landed a plum job of her own — CEO of Hewlett-Packard, a company that, like California, has been going through some tough times. But this week Whitman made clear that as a business leader, her approach to job creation doesn’t quite mesh with her political promises. Multiple media outlets are reporting that HP is planning to cut its workforce by around 30,000 jobs — a number that accounts for 7-8 percent of HP’s total workforce.
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Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.
David Brooks, “structuralist”
The New York Times moderate says the welfare state is unsustainable, and buys himself a new $4 million home
David Brooks is everything that’s wrong with elite opinion in America. The president reads him and takes him seriously. That is why the opinions of venal faux “reasonable” clowns like Brooks matter. Brooks today sums up the new argument for not actually doing anything to alleviate worldwide unnecessary hardship: The problem is “structural,” not “cyclical”!
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Alex Pareene writes about politics for Salon and is the author of "The Rude Guide to Mitt." Email him at apareene@salon.com and follow him on Twitter @pareene More Alex Pareene.
Bush vs. Obama: Jobs
During George W.'s first term, big government boosted employment. For Obama, it's the opposite
George W. Bush and Barack Obama(Credit: Reuters/AP) There is a number buried in today’s government labor report that deserves closer examination: 35,000. That’s the net number of private sector jobs created during the Obama administration to date. That’s right, it’s a positive number. After the worst economic disaster to befall the United States in 80 years, that’s a number that maybe we should be applauding. Remember: The private sector hemorrhaged more than 2 million jobs in the first three months of 2009 alone. The hole was deep.
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Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.
Another jobs report downer
The U.S. economy underperforms again in April, creating only 115,000 jobs. You can almost hear Mitt Romney cackle
Job seekers wait in line during a job fair in Portland, Ore., on April 24. (Credit: AP/Rick Bowmer) The U.S. economy is stuck in spring mud. For the second month in a row, the United States labor market underperformed expectations. According to the Bureau of Labor Statistics, the economy created a lackluster 115,000 jobs in April. The unemployment rate fell one notch, to 8.1 percent, but for a distressing reason: The overall size of the U.S. labor force dropped by 342,000, a sign that hundreds of thousands of Americans simply gave up looking for work in April. The labor force participation rate fell to 63.6 percent, the lowest mark since 1981.
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Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21. More Andrew Leonard.
Healthcare’s foreign invasion
Obama risked a trade war with China about manufacturing -- so why isn't he outraged about medical jobs?
(Credit: gualtiero boffi via Shutterstock/Salon) Approximately 15 percent of all healthcare workers and 25 percent of all physicians in the United States were born and educated elsewhere. This means that 1.5 million healthcare jobs are “insourced,” occupied by foreign-born, foreign-trained workers brought into the United States on special visas earmarked for healthcare jobs. This number is 50 percent greater than the total number of jobs in the U.S. auto-manufacturing industry. It’s amazing to consider that in 2008 and 2009, the auto industry, which makes up just 3.6 percent of the U.S. economy, received a $97 billion bailout. If we estimate that each of these 1.5 million insourced healthcare jobs has an average wage of $60,000, that’s $90 billion a year in wages going to people brought into the United States to work rather than training Americans to do the same jobs.
Continue Reading CloseDr. Kate Tulenko is a physician with degrees from Harvard University, Cambridge University and the Johns Hopkins School of Medicine. The former coordinator of the World Bank's Africa Health Workforce Program, she currently serves as director of clinical services for a global health nonprofit. More Kate Tulenko.
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