Trade Myth 3:
Trade Agreements are bad for American workers. Trade agreements such as NAFTA and Permanent Normal Trade Relations with China have resulted in the loss of millions of American jobs. (This is Bernie Sander’s argument, and he has consistently over the years followed the lead of certain trade unions in opposing all international trade agreements.)
Trade agreements are actually good for most American workers. The reduction of tariffs and non-tariff barriers results in lower costs for goods, benefitting all consumers. . In addition, trading partners such as China and Japan that realize a trade in goods surplus with the United States invest most of the trade surplus in the United States, driving down interest rates and increasing U.S. employment. U.S. export-oriented manufacturing industries, agricultural producers and service sector providers benefit in particular from trade agreements. Employment increases resulting from trade agreements more than offset job losses in old technology, labor-intensive industries such as garment and footwear manufacturing (labor-intensive, old technology jobs are destined to disappear in any event as a consequence of automation). Workers who lose employment because of trade agreements should receive adjustment assistance under existing law and be retrained for new technology jobs.