We all know the story Pinocchio: Every time he told a lie, his nose grew. The same thing has happened to Public Citizen, which is often considered “influential on the left in the trade debate.” A March 13 press release on trade-related job-loss statistics by Public Citizen failed the Washington Post’s famous Pinocchio test.
The Post categorically examined the organization’s assertion on job loss inflicted by the U.S.-Korea Free Trade Agreement and concluded that its math does not hold up. According to the Post Fact Checker,
“[Public Citizen’s] methodology for calculating these Korea FTA [related job loss] numbers mirrors its assertion that the United States is running a trade deficit, not a surplus, with all FTA partners. Some lawmakers have adopted Public Citizen’s math, saying the administration is “cooking the books” on trade…. As we often say, two wrongs don’t make a right. While the White House’s math on 70,000 jobs was fishy, there is no reason for Public Citizen to try to replicate it — and then manipulate it even further…. And while Public Citizen buries caveats in its news releases, that 85,000 number has been cited as an actual job-loss figure by lawmakers, making it even more irresponsible. We suggest the organization stop making this calculation — and rely on real facts if it wants to challenge trade deals.”
Upcoming congressional consideration on Trade Promotion Authority and the pending Trans-Pacific Partnership has raised the intensity of trade policy debate more than ever. In this political environment where trade and job creation are vigorously debated, it is vital to have a correct understanding of the dynamic relationship between international trade and employment based on facts, not sloppy math.
Here is the most important fact: Since the Korea Free Trade Agreement was launched, manufacturing jobs in the United States have grown by 420,000, according to the Bureau of Labor Statistics.
The truth is that trade agreements such as the Korean Free Trade Agreement create opportunities for job growth in both countries, no matter which direction the goods and services are flowing. Exports create jobs, but imports create jobs, too.
Historically, the highest levels of U.S. employment growth tend to have occurred during periods when U.S. imports exceeded exports. One especially rigorous study by The Heritage Foundation of the relationship between job growth and trade found that imports from China in just two sectors (apparel and toys) supported more than a half-million jobs in the U.S. economy. It turns out that Public Citizen press release not only was inaccurate, but its entire argument was based on a false premise, that exports are good and imports are bad. As Pinocchio learned, it’s better to tell the truth.
