Press Release: Sept 15, 2010 Contact: Bryan Buchanan (202)
U.S. Exports Grew More With Non-FTA Countries; New Study Also
Exposes Flaws in Methodology Used in Widely Cited Corporate Reports Touting FTA
WASHINGTON, D.C. – A new report from Public
Citizen reveals that the growth of U.S.
exports to nations with which the United States does not have Free Trade Agreements (FTA) has
outpaced the growth of exports to the 17 U.S. FTA partners, with both services
and goods FTA exports lagging. This comes as the corporate interests that
dominate private sector representation on the President’s Export Council, which
meets Thursday, have reframed their support for more NAFTA-style trade pacts as
critical to promoting the president’s goal of doubling exports over the next
five years to create two million new American jobs.
are many ways to boost U.S.
exports and create American jobs, but the data show that more of the same trade
deals is not one them,” said Lori Wallach, director of Public Citizen’s Global
report unpacks the irregular methodology used in National Association of
Manufacturers (NAM) and U.S. Chamber of Commerce reports to show how results were
produced that promote the passage of three leftover Bush FTAs. A consistent and
corrected use of the corporate groups’ own methods show that past FTAs have
been associated with a substantial “export penalty.” For instance, once an
arithmetic error is corrected for, the Chamber’s own methods would project a $30
billion loss in U.S. exports
to Korea, Panama and Colombia over five years were these
all entitled to our own opinions about NAFTA-style trade deals, but we’re not
entitled to our own facts,” said Todd Tucker, research director for Public
Citizen’s Global Trade Watch and a report co-author. “U.S. government trade
data shows that the export growth rate to non-FTA countries is double that to
FTA partners, in contrast to corporate claims.”
the key findings of the report, “Lies,
Damn Lies, and Export Statistics: How Corporate Lobbyists Distort the Record of
Flawed Trade Deals” are:
Between 1998 and 2009, U.S. goods exports to FTA partner
countries grew by an annual average rate of only 0.8 percent while goods
exports to non-FTA partner countries grew by an average of 2.2 percent. If 2009 is excluded (to replicate a recent Chamber study
that claimed that FTAs boost export growth), the average for FTA countries is 3.0
percent vs. 4.2 percent for non-FTA countries.
Defenders of the past U.S. FTAs regularly claim that
these pacts’ existence helped avoid a worse falloff in trade related to the
global economic crisis. In fact, in 2009, exports to FTA countries shrank 21.1
percent, while exports to non-FTA countries shrank 18.4 percent.
If the difference between the FTA and non-FTA export
growth rates for goods for each year were to be put in dollar terms, the total
FTA export “penalty” would be $72 billion.
States has suffered large and growing trade
deficits with its major FTA partners and with the group of FTA nations as a
whole trade. Even as trade flows declined
because of the economic crisis, as of 2009, the United States had a $54 billion
trade deficit in goods, excluding oil, with its 17 FTA partners. The president cannot achieve net U.S.
job creation through export growth by establishing more FTAs that increase
imports more than exports. Trade
officials have occasionally admitted the unfortunate deficit-boosting trend of
U.S. FTAs: In an October 2006 speech to
a Korean audience, Bush administration official Karan Bhatia said that it was a
myth that “the U.S.
will get the bulk of the benefits of the FTA. If history is any judge, it may
well not turn out to be true that the U.S. will get the bulk of the
benefits, if measured by increased exports.” He added that, in the instance of Mexico
and other countries, “the history of our FTAs is that bilateral trade surpluses
of our trading partners go up.”
Contrary to recent corporate claims, the trade balance
in non-oil manufactured goods with U.S. FTA partners over 2008-2009 was
a deficit of $97 billion. The NAM reported
that “over the past two years FTAs have resulted in a U.S.
manufactured goods surplus of nearly $50 billion.” To achieve this outcome, the
NAM used “total export,”
data, a measure including billions of “re-exports” of foreign products
transshipped through U.S.
ports but not made by U.S.
workers. When the domestic export data employed by the U.S. International Trade
Commission is used, the opposite result is produced.
The data show that the United
States had an increased agricultural trade deficit with
the bloc of 17 FTA partners, dispelling the frequent claims made by proponents
farmers have been the beneficiaries of NAFTA-style FTAs.
Since the U.S. began implementing NAFTA-style
FTAs in 1994, the country has lost 4.9 million manufacturing jobs, as 43,000
American manufacturing facilities closed.
are real people behind these numbers,” said Travis McArthur, trade and finance
researcher for Public Citizen’s Global Trade Watch and co-author of the report.
“That’s why an honest, data-based discussion about the economic impact of FTAs
based on the NAFTA model is critical, especially as the president considers how
to meet his goal of doubling U.S.
second section of the report thoroughly examines each of several recent reports
and claims by the Chamber of Commerce and the National Association of
Manufacturers and reveals irregularities that show the corporate lobby groups’
finding to be unreliable. For instance, Chamber reports claiming major export
benefits from U.S. FTAs calculated FTA export growth using a non-weighted average of averages, which greatly overvalues
large percentage gains of tiny trade flows, and then compared this to a weighted average of non-FTA countries’
export growth. It also used two different time period measures for FTA and
non-FTA exports which further bias the outcomes.
Barack Obama strongly criticized the NAFTA trade pact model and made commitments
to trade policy reform during his presidential campaign. Despite this, some Obama
administration officials have argued that implementing President George W. Bush’s
FTAs with Korea, Colombia and Panama is the way to meet Obama’s export-boosting
goals. The findings of this report show this view is not supported by the data
on past FTAs’ performance.
administration should focus on implementing President Obama’s trade reform
commitments,” said Tucker. “As this report shows, that approach would be more
likely to produce export-expanding trade deals than would adopting the leftover
Bush agreements as Obama’s own.”
Click here to view full report.