Less than two months after claiming victory in the US Presidential election, Donald Trump has distanced himself from many of the most extreme, controversial policies presented during his campaign. In one particular area, however, Trump has remained resolute: upon taking office, he plans to withdraw the US from the Trans-Pacific Partnership (TPP) free trade agreement; an agreement formed over seven years by 12 nations, including Australia.
A cornerstone of the country’s economic policy since the end of World War II, free trade has provided a range of crucial benefits, from cheaper goods to sturdier diplomatic relations, but it has come at a price. While attention remains focused on the role automated systems and virtual intelligence will play in the future of work, free trade agreements have opened the door to international workforces, particularly from China (who are not part of the TPP), which are disrupting the livelihood of citizens and stirring up the kind of uncertainty that paved the way to Trump’s success.
The issue isn’t just confined to the US, of course. In Australia, the China-Australia Free Trade Agreement of 2015 permitted Chinese companies to import their workforce without first offering the jobs to locals.
Conventional wisdom proposes that those dispossessed by international workforces will go on to find newer jobs in more relevant, expanding industries, but this isn’t proving to be the case. In their study The China Shock, researchers David H. Autor, David Dorn, and Gordon H. Hanson revealed that workers are remaining in the trades that they know best, taking less pay and facing more risk as a result.
This wisdom fails because countries under such agreements are fashioned as markets, and a market is defined by its bottom line. That some will suffer as a result is a cost the market expects. They’re write-offs.
Those who fear losing their jobs view their country as a nation. A nation values the security and wellbeing of its citizens. That’s why they vote for Brexit: thinking it will protect their way of life, without fully understanding the consequences. That’s why they vote for Trump: to protect their jobs, even if his economic policies are short-term, with the Penn Wharton Budget Model predicting that “by 2040, growth would actually stop and the economy would start to contract…”
When you live paycheque to paycheque, and all you know is the now, what other option do you have?
It’s a question we have yet to answer, and that’s terrifying. The most vulnerable jobs are already on their way out. Many more will follow over the next 10-15 years. Gone to time, to progress, or an automated machine.
We tell the soon-to-be unemployed that it’s going to be ok. That we can re-skill them, and they can acquire new jobs…but can’t tell them what those jobs will be.
Nobody knows.
Free trade has become a scapegoat to mask this uncertainty.
As Daniel Arbess, policy analyst, investor, and Founder of Xerion Investments states in the CNBC interview below, this certainty is one faced by all countries, even China, where the industries that buoyed it to superpower status are already beginning to stall.
https://www.youtube.com/watch?v=KegaCWDHmPQ
Indeed, even though the TPP is perceived as a competitor to Chinese economic dominance, the dismantling of the agreement would wound the push towards globalism so fundamentally, that even China itself would feel the impact. If this occurs, the repercussions could flame tensions between the world’s largest economies. “Making things difficult for China politically will do (Trump) no good,” stated an editorial in China’s government-controlled newspaper, Global Times.
Free trade, if we look beyond specific policy, is ultimately a positive. The automation of work certainly will be. Progress is marvellous. It is unstoppable. But we can’t let that cloud our view of the human toll that it will take.
In 2017, The 8 Percent will be focusing more on the future of work: on what it means for employees and employers, on exciting technological advancements, and on what it will take to ensure this monumental step forward in our species’ progress does not mark a giant step back for those who will struggle to feel valuable as we head towards the unknown.