The TPP Is Another Job Killing Trade Deal—So Why Are Both Parties Supporting It?
Factory owners in the United States say that the Trans-Pacific Partnership—which is being negotiated this week in Brunei—will force them to lay off workers. Yet opponents in Washington are few and far between.
Wigwam Mills has been making socks in Sheboygan, Wis., for more than 100 years. This is quality footwear sold at sporting goods stores and specialty outlets, not the cheaper, flimsier items you might find at a big box store. Wigwam has more than 200 skilled and semi-skilled workers—some of whom are second- or third-generation employees.
The TPP has supporters on both sides of the political aisle.
The company is a rarity, a survival story that inspires flag-waving. It endures in an industry that has seen similar plants close or move overseas where labor and real estate is cheaper and environmental regulations less stringent. It’s a holdout from a time when the United States dominated the sock market.
A pair of socks made in Sheboygan by Wigwag Mills. Photo by Wigwam Wills.
That wasn’t so long ago, says Robert Chesebro Jr., Wigwam’s president and CEO. He points out that in 1990, less than 10 percent of socks sold in the United States were imported. Today, it’s the opposite: 90 percent are imports.
The small percentage of the sock market still supplied by U.S. manufacturers could decrease even more if the United States joins the latest global trade deal, the Trans-Pacific Partnership (TPP). The partnership, which has been called “NAFTA on steroids,” would establish a free-trade zone between the United States and 11 other countries, including Vietnam, Australia, and Singapore. Japan will also join the agreement, meaning TPP countries will account for nearly 40 percent of global gross domestic product and about one-third of all world trade.
Critics say that if the TPP is approved, the United States will lose jobs as even more major companies move their operations overseas.
Bringing it home
Michael Stumo, CEO of the advocacy group Coalition for a Prosperous America, said that of the Americans who lose their jobs as a result of the TPP, about one-third will never work again, one-third will find lower paying positions, and only one-third will eventually find a comparable position.
“We’ve created a consumer mindset that has almost no social conscience.”
“There will be much more poverty, meaning your infrastructure suffers and the divorce rate goes up. This puts stress on kids and causes social problems,” he said. “If you want to have a successful economy, you want to capture as much of the value in the supply chain as you can.”
That means bringing manufacturing back to the United States and supporting products made in this country.
Mitch Cahn, owner and founder of Unionwear, a uniform manufacturing company in Newark, N.J., says both can be done. In 1992, he took over an empty factory in a crime-blighted neighborhood. Today, his building stands on what he calls “one of the safest blocks in Newark.” He has 115 employees, about 75 percent of whom have been there for 10 years or more. There are only 15 parking spaces on site, but that’s not a problem: Most of the employees walk to work or use public transportation.
“From our factory rooftop, we can see dozens of houses where our employees live. We can see their kids playing outside. We can see them walk home from school,” Cahn said.
A former Wall Street money mover, Cahn decided to open his manufacturing company because he “wanted to add value and create value instead of just moving it around.” He rents out sections of his 75,000-square-foot building to businesses related to uniform manufacture, like screen printers and a sewing contractor. That reduces his transportation costs and carbon footprint.
Still, he says, products made in the United States are often more expensive than their foreign counterparts. Many of his company’s products are sold to labor unions, government departments, and those in the anti-sweatshop crowd, like nonprofits and universities.
“Right now, no one buys a made in the USA product by accident. It’s still more expensive, about 25 percent more expensive,” he says.
Mark Andol, whose two New York stores sell only American-made products, says customers recognize that the quality of his products makes up for the price. When Andol opened his first store in tiny Elma, N.Y., in 2010, he had 50 products he could boast were American-made, including the packaging. Today, Andol’s stores stock more than 5,000 items produced by 350 U.S. companies, and his Made in America stores have become tourist destinations.
“We try to lead with quality. Everyone else leads with price,” Andol said. “Most businessmen are about making money and I’m about making livelihoods.”
The agreement will give unprecedented powers to multinational corporations.
Andol knows firsthand what can happen when companies take their businesses overseas. He ran his own general welding and fabricating business from 1989 until 2007, when a major customer decided to give its business to a Chinese company that was marketing the same products for $3 less per piece. Andol had to lay off 38 of his 69 employees, including family members and three friends he’d known since kindergarten.
“Nobody realizes what is lost when one product goes overseas. It’s not just my people. It’s the guys who made the boxes for me and the company who made the staples and labels,” he says.
A bipartisan secret deal
The TPP’s specifics have been hammered out during closed-door conferences held throughout the world over the past five years. The 18th round took place in Malaysia in July. Leaked chapters of the agreement have caused concern among a diverse group of critics including the Sierra Club, Public Citizen, and numerous U.S. labor unions. The agreement will give unprecedented powers to multinational corporations and affect individuals in member countries in ways that are both unexpected and undesirable.
Yet surprisingly, the TPP has supporters on both sides of the political aisle.
“On health care, on transportation, on abortion, on just about any significant policy issue, the Republicans and Democrats are at a complete stalemate,” said Auggie Tantillo, a strategic consultant to the National Council of Textile Organizations, a lobbying group dedicated to the welfare of the U.S. textile industry. “On trade, there is an odd and convenient bipartisanship. You have these huge retailers and importers that are supporting the TPP on both sides of the aisle.”
Curt Ellis, communications director for the American Jobs Alliance, put it more bluntly: “Both Democrats and Republicans have been captured by the financial elite on Wall Street and are doing their bidding. Both parties are collaborating on the economic destruction of this country,” he says. “We can expect [U.S. House Speaker John] Boehner to hold Obama’s hand as they push us over the cliff.”
Of course, some would benefit from the TPP. During one round of negotiations, Chesebro said, one U.S. retailer argued that the TPP could save consumers money on socks—approximately 63 cents a pair. “How many people will be positively impacted by paying 63 cents less for a pair of socks?” he asked.
And to get those savings, product quality will likely suffer, says Tantillo. More importantly, working conditions in certain countries may worsen. Environmental concerns will be further ignored. Still, Tantillo doesn’t think many American shoppers will care.
“We’ve created a consumer mindset that has almost no social conscience,” he says. “If something goes on within U.S. borders, we’re quick to react to it and rightfully so. If it happens outside the United States, such as the disastrous factory collapse in Bangladesh, we’re like, ‘Whatever,’ as if there’s no connectivity.”
President Obama said he wants to see the TPP made law by October. He may get that wish if Congress grants fast-track authority allowing him to sign the agreement without pre-approval by Congress.
Taking a stand
Like other hometown American factories, Wigwam Mills is likely to take a hit from the Trans-Pacific Partnership, even though Sheboygan, Wis., 2,000 miles from the Pacific Ocean, is far from the international meetings where free trade deals are arranged. In the 1990s, this town of 50,000 was named “The Best Place to Raise a Family” by Reader’s Digest magazine. Sheboygan is known for its bratwurst, and this year’s 60th annual “Brat Days” featured carnival rides, a footrace, and an extreme eating competition.
The key to defeating the TPP at this point is to employ a “vampire strategy.”
Wigwam Mills factory employee Sue Procek is a Wisconsin native. She applied for a job at the company more than 30 years ago after seeing an ad for a sock pairer. Of course, she’d heard of Wigwam. Everyone here knows Wigwam.
“I heard it was a nice place to work and family-friendly and all that so I put an application in,” she said. She got the job. Procek is now a work distributor, divvying up product among workers—”the girls,” she calls them—who add finishing touches. The position is considered semi-skilled, and Procek, 56, also serves as secretary/treasurer for the local union. “I thought I could make a career here,” she said, “and I was right.”
Procek and her colleagues on the factory floor only learned about the TPP a few months ago. Chesebro, their boss, has long followed TPP negotiations, and he alerted employees to possible ramifications of its passage. “If this were to go through and increase our costs, we could lose 20 people,” Procek said. “That’s just us. One small place. Add 10 other plants and that’s 200 people. This could affect a lot of people.”
The key to defeating the TPP at this point is to employ a “vampire strategy,” according to Arthur Stamoulis, executive director of Citizens Trade Campaign: Drag it out of the shadows and into the sunlight, then watch it burst into flames.
If the American public knew the details of the TPP—which Stamoulis calls the “biggest corporate power grab so far this millennium”— they would not stand for it. There would be a popular uprising, he said, similar to the one against the World Trade Organization in 1999, at the so-called “Battle of Seattle.”
“People’s movements have stopped corporate power grabs like this time and time again. The more people learn about them, the more upset they become,” Stamoulis says. “It’s up to us to spread the word from the bottom up.”