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at the broader economic picture over the United States is the world’s second largest cuts. Though the U.S. trade deficit, which
past decade. While a variety of job-market manufacturer, with 17.2 percent of global was $62.9 billion dollars at the end of
gauges show the economy improving, the output, and the third largest exporter. February, is often cited as the outward
middle class has largely not benefited from According to the Commerce Department, culprit driving these disproportionate
the country’s economic recovery. From U.S. exports supported 7.1 million jobs economic impacts throughout the country,
World War II through the 1970s, virtually in 2013. Overall goods and services many economists argue that a trade
all working Americans saw paychecks exports combined, totaling $2.3 trillion, balance should not be viewed as a simple
and incomes rise; however, those gains supported more than 11.3 million. Further, scorecard determining trade’s winners and
have become uneven since the 1980s and the U.S. is the top destination for foreign losers. Rather, the underlying factors are
virtually stopped for some families over direct investment with $384 billion in much more nuanced and region/industry
the course of the past 15 years. Americans inbound investment in 2015 alone. That specific. Take, for example, research
at the middle of the income ladder now figure is more than double second-place assessing the normalization of trade
earn less, adjusted for inflation, than they Hong Kong and almost triple third-place relations with China. In a paper for the
did in 2000. According to the U.S. Census China. For consumers, free trade provides National Bureau of Economic Research,
Bureau, 47.7 million Americans – or 14.8 a net overall benefit by increasing the economists David Autor, David Dorn and
percent of the population – were living availability of more affordable goods. Gordon Hanson concluded that the parts
in poverty last year, about the same as In The Payoff to America from Global of the country dependent on industries
the previous year. Median income last Integration, economists with the Peterson most exposed to significant import
year – $53,700 per household – was Institute found that greater choice and penetration from China - like Tennessee
also statistically unchanged from 2013. access to affordable goods generated and its furniture manufacturing sector -
Meanwhile, real income is still lower than via global trade liberalization generated have been hit the hardest. The paper went
it was before the most recent recession, between $2,800 and $5,000 in additional on to conclude that local labor-market
or even the 2001 economic downturn, income for the average American and adjustment to trade is “stunningly slow,”
with low-and middle-income households between $7,100 and $12,900 for the with labor-force participation remaining
suffering the most. While high- income average household. An additional study depressed and unemployment elevated for
earners are taking in 2.8 percent more concluded that these economic benefits a decade or more after the initial import
than they did in 1999, the poorest tenth of are disproportionally concentrated among shock. This helps explain, at least in
Americans saw their incomes drop by 16.5 low and middle income earners because part, why trade is such a polarizing issue
percent, after inflation, during that period. these groups tend to focus the majority of in different parts of the country. It also
These numbers stand in stark contrast to their spending in more trade-dependent highlights how other ancillary factors to
those in corporate America. From 1999 sectors, such as food and clothing. trade, like workforce development, are
through 2014, U.S. annual corporate also contributing to the evolving economic
profits after taxes rose about 250 percent The issue with trade liberalization, environment.
to nearly $1.7 trillion. however, is that the net benefits for
the U.S. are not evenly distributed Looking at recent trade agreements
Against this macroeconomic backdrop, throughout the whole of the United like the North American Free Trade
it is appropriate to assess the impact States. In some regions of the country Agreement (NAFTA) and the U.S.-
of free trade on the U.S. economy from reliant on traditional industries like steel, Korea Free Trade Agreement (KORUS),
both a business and individual consumer automobile and textile production, free the unbalanced impact of free trade
perspective. Broadly speaking, most trade has had a detrimental impact. This is evident. Since NAFTA entered into
economists agree that free trade provides has, among other economic outcomes, force in 1994, the U.S. has lost more
a net overall benefit to the U.S. economy. resulted in the realignment of industries than 4.5 million manufacturing jobs.
Under the current free trade regime, the and corresponding production and jobs Critics argue that KORUS has continued
9
at the broader economic picture over the United States is the world’s second largest cuts. Though the U.S. trade deficit, which
past decade. While a variety of job-market manufacturer, with 17.2 percent of global was $62.9 billion dollars at the end of
gauges show the economy improving, the output, and the third largest exporter. February, is often cited as the outward
middle class has largely not benefited from According to the Commerce Department, culprit driving these disproportionate
the country’s economic recovery. From U.S. exports supported 7.1 million jobs economic impacts throughout the country,
World War II through the 1970s, virtually in 2013. Overall goods and services many economists argue that a trade
all working Americans saw paychecks exports combined, totaling $2.3 trillion, balance should not be viewed as a simple
and incomes rise; however, those gains supported more than 11.3 million. Further, scorecard determining trade’s winners and
have become uneven since the 1980s and the U.S. is the top destination for foreign losers. Rather, the underlying factors are
virtually stopped for some families over direct investment with $384 billion in much more nuanced and region/industry
the course of the past 15 years. Americans inbound investment in 2015 alone. That specific. Take, for example, research
at the middle of the income ladder now figure is more than double second-place assessing the normalization of trade
earn less, adjusted for inflation, than they Hong Kong and almost triple third-place relations with China. In a paper for the
did in 2000. According to the U.S. Census China. For consumers, free trade provides National Bureau of Economic Research,
Bureau, 47.7 million Americans – or 14.8 a net overall benefit by increasing the economists David Autor, David Dorn and
percent of the population – were living availability of more affordable goods. Gordon Hanson concluded that the parts
in poverty last year, about the same as In The Payoff to America from Global of the country dependent on industries
the previous year. Median income last Integration, economists with the Peterson most exposed to significant import
year – $53,700 per household – was Institute found that greater choice and penetration from China - like Tennessee
also statistically unchanged from 2013. access to affordable goods generated and its furniture manufacturing sector -
Meanwhile, real income is still lower than via global trade liberalization generated have been hit the hardest. The paper went
it was before the most recent recession, between $2,800 and $5,000 in additional on to conclude that local labor-market
or even the 2001 economic downturn, income for the average American and adjustment to trade is “stunningly slow,”
with low-and middle-income households between $7,100 and $12,900 for the with labor-force participation remaining
suffering the most. While high- income average household. An additional study depressed and unemployment elevated for
earners are taking in 2.8 percent more concluded that these economic benefits a decade or more after the initial import
than they did in 1999, the poorest tenth of are disproportionally concentrated among shock. This helps explain, at least in
Americans saw their incomes drop by 16.5 low and middle income earners because part, why trade is such a polarizing issue
percent, after inflation, during that period. these groups tend to focus the majority of in different parts of the country. It also
These numbers stand in stark contrast to their spending in more trade-dependent highlights how other ancillary factors to
those in corporate America. From 1999 sectors, such as food and clothing. trade, like workforce development, are
through 2014, U.S. annual corporate also contributing to the evolving economic
profits after taxes rose about 250 percent The issue with trade liberalization, environment.
to nearly $1.7 trillion. however, is that the net benefits for
the U.S. are not evenly distributed Looking at recent trade agreements
Against this macroeconomic backdrop, throughout the whole of the United like the North American Free Trade
it is appropriate to assess the impact States. In some regions of the country Agreement (NAFTA) and the U.S.-
of free trade on the U.S. economy from reliant on traditional industries like steel, Korea Free Trade Agreement (KORUS),
both a business and individual consumer automobile and textile production, free the unbalanced impact of free trade
perspective. Broadly speaking, most trade has had a detrimental impact. This is evident. Since NAFTA entered into
economists agree that free trade provides has, among other economic outcomes, force in 1994, the U.S. has lost more
a net overall benefit to the U.S. economy. resulted in the realignment of industries than 4.5 million manufacturing jobs.
Under the current free trade regime, the and corresponding production and jobs Critics argue that KORUS has continued
9
