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Reed College professor pitches the benefits of globalization before the Portland Business Alliance at its Dec. 18 breakfast forum.

COURTESY PBA - Reed College economics professor Kimberly Clausing (left) and Maria Ellis, executive director of the Pacific Northwest International Trade Association, at the Dec. 18 Portland Business Alliance breakfast forum.Trade-dependent Portland and Oregon businesses received three gifts this holiday season.

First, the Port of Portland announced that container shipping will resume in January after a three-year absence.

Then Congressional Democrats announced they had struck a deal with the White House on the U.S.-Mexico-Canada Agreement, the replacement for the North American Free Trade Agreement that President Donald Trump upended after taking office.

And shortly after that, Trump and China announced a "phase-one" trade agreement that could deescalate the growing trade war and could increase U.S. exports to China over the next two years.

The announcements came after years of warnings that the local and state economies were being hurt by the lack of container shipping and the international trade disputes inflamed by Trump's tough negotiating stands. And they won't return everything to normal. Container vessels will only call on the port every 35 days instead of every week, like before.

The Wall Street Journal editorialized that the U.S.-Mexico-Canada Agreement is worse than NAFTA in some respects, complaining that has mandates that could increase the cost of some products.

And many of the tariffs imposed by Trump and China over the past few years remain in place.

Reed College economics professor Kimberly Clausing argued that much more could and should be done to increase commerce and travel between nations before the monthly Portland Business Alliance breakfast forum on trade on Wednesday, Dec. 19.

"Basically, I'd like to see the opposite of the policy experiments we've been having for the past couple of years," said Clausing, the author of the new book "Open: The Progressive Case for Free Trade, Immigration, and Global Capital."

In her talk and book, Clausing argued that the "put America first" policies pursued by Trump are doing more harm than good. She believes that tariffs and restrictions on immigration are bad for the economy, and are especially hurting lower-income workers by increasing the cost of goods and limiting the job-creating potential of immigrants.

"Blaming foreigners and immigrants for our problems is wrong," she said.

According to Clausing, although the economy is doing well, not all households are benefiting. Income inequality is increasing, contributing to the homeless crisis in cities like Los Angeles, where many workers can no longer afford to live.

But Clausen said that blaming a country like China or immigrants for taking American jobs is not the answer. There are many other factors to consider, like technological advances that are making some traditional jobs obsolete.

"Some studies say lower-priced goods from China may have caused the loss of 1 million to 2 million American manufacturing jobs over the past decade. But 6 million jobs are lost and created every quarter in the churn of the economy, and very few of them are trade related," Clausing said.

Instead of looking at trade and immigration as a zero-sum game, Clausing said that with reasonable regulations, both can benefit the country. She was especially supportive of more immigration, saying newcomers do jobs that Americans shun, like agricultural work and elder care. Clausing also said immigrants start new businesses at a higher rate than those who have lived in the country all their lives, creating more employment for everyone.

Although Clausing was critical of Trump's policies, she said those on the left also misjudge the benefits of trade, noting that U.S. Sen. Bernie Sanders criticized NAFTA when he ran for president in 2016.

The forum was moderated by Maria Ellis, executive director of the Pacific Northwest International Trade Association and the PBA's director of federal affairs. She said noted how timely it was because of the developments in Washington, D.C.

Despite Clausing's criticisms, her comments were not as pessimistic as some of the speakers at the previous PBA forum on trade, which was held on June 19. Then, Port of Portland Chief Commercial Officer Keith Leavitt warned, "The headwinds of uncertainty are out there."

The fallout was predicted to be grim because the economies of Oregon and the Portland region are so dependent on trade. China was the state's largest trade destination by value in 2018, accounting for more than 20% of shipments, according to the U.S. Census. That was thanks in large part to the computer components produced by Intel and other high-tech companies in Washington County. Canada is the state's second-largest trading partner.

That forum was preceded by even more ominous warnings raised at the 2019 Portland-Vancouver region economic forecast presented by the Portland State University Northwest Economic Research Center on Thursday, May 30. There, Ellen Zentner, the chief U.S. economist for Morgan Stanley, said continuing trade tensions with China could trigger a worldwide recession. She said the two countries must make progress resolving their differences by the G20 summit of leading industrialized countries, held in June 2019 in Osaka, Japan — something that did not happen.

But recession fears have eased as 2019 nears its end, thanks in part of the recent progress on U.S.-Mexico-Canada Agreement and the China trade talks.


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