In his much-anticipated jobs speech last night, President Barack Obama called for Congress to pass several trade deals as a way to boost employment.
“Now it’s time to clear the way for a series of trade agreements that would make it easier for American companies to sell their products in Panama and Colombia and South Korea,” Obama said, “while also helping the workers whose jobs have been affected by global competition.”
Many of Obama’s critics disagree with this idea, arguing that such trade deals do just the opposite of what Obama claims, helping the wealthy at the expense of the poor and costing Americans their jobs. Organizations such as the AFL-CIO maintain that experience with the North American Free Trade Agreement, which went into effect in 1994, proves what a job-killer such pacts are.
[EXPAND More]Such disputes are hardly new, and Peter Drucker was quite familiar with them, as we’ve pointed out. But for Drucker, the notion that free trade kills U.S. jobs was unfounded.
“There is . . . talk that all of our jobs are being exported overseas,” Drucker said during a lecture delivered at Claremont Graduate University. “This is simply nonsense. . . . Actually, foreign investors in this country have created four and a half times as many manufacturing jobs as we have exported.”
As we’ve noted, Drucker believed that innovations in manufacturing and farming have invariably led to much smaller workforces in those sectors. As a result, Drucker said, the natural instinct is to erect trade barriers and stifle the free movement of goods and services. But in the end, he concluded, that will do little good.
“The new protectionism . . . will achieve nothing,” he wrote, “because ‘protecting’ aging industries does not work.”
What do you think: On balance, do free-trade agreements create jobs for Americans or kill them?