Cleveland.com | Olivera Perkins, The Plain Dealer | Follow on Twitter
on March 03, 2016 at 7:00 AM, updated March 03, 2016 at 6:56 PM

Ohio lost 112,500 jobs in 2015 resulting from the U.S. trade deficit with TPP countries, according to a report released Thursday by the Economic Policy Institute in Washington, DC. (Economic Policy Institute)

CLEVELAND, Ohio – Ohio lost 112,500 jobs in 2015 resulting from the United States’ trade deficit with countries that are part of the Trans-Pacific Partnership agreement, according to an analysis by the Economic Policy Institute.

That places Ohio sixth, in terms of the percentage of jobs lost to trade with TPP countries, among the 50 states and the District of Columbia ranked in the report released Thursday by the liberal Washington, D.C.-based think tank. The lost jobs represent nearly 2.2 percent of employment in Ohio, according to the analysis.

The total number of lost jobs includes those directly and indirectly impacted by the trade deficit with TPP countries. It also includes the number of jobs EPI says would have been created through the multiplier or “respending” effect had trade with those countries been more balanced.

The TPP is a free trade agreement between the United States and 11 partnership countries, including Canada, Mexico, Japan, Singapore and Malaysia. While the countries have reached final agreement on the trade accord, it probably will not go into effect for several months. The agreement must clear several hurdles, including final ratification by Congress.

Early reaction to EPI’s report has predictably reflected the opposing views of TPP’s supporters and opponents. Opponents, including unions, have said the analysis is spot-on. Supporters, including the Obama Administration, which has championed TTP, have questioned its findings.

For example, a spokesman for the Office of the United States Trade Representative, said the report’s methodology is flawed. The report includes some estimates based on an analysis of government data.

“The method EPI uses to create these numbers was given ‘Four Pinocchios’ by The Washington Post’s independent fact checker last year for being a ‘whopper’, yet they continue to use it,” wrote a USTR spokesman in an email to The Plain Dealer. “The International Trade Administration’s most recent official numbers show that 263,356 jobs were supported yearly by exports of goods from Ohio and that 58% of those goods went to TPP countries.

“It’s unfortunate that opponents of trade, like EPI, continue to use faulty data to avoid having an honest debate about expanding American made exports through TPP,” he wrote.

Robert E. Scott, the senior EPI economist and director of trade and manufacturing policy research, who co-authored the report, said the analysis to which the USTR spokesman referred had nothing in common with the one done by EPI.

“USTR is citing a critique of a different analysis done by a different group—it’s unclear what bearing it has on our report,” he wrote in an email. “Our study is based on a widely-accepted macroeconomic model of the effects of trade flows (exports and imports on domestic output).”

Scott said the government spokesman had cited the ITA job figures so out of context that his comments were “shocking, ignorant and gratuitous.”

“This statement absurdly ignores the role of imports in international trade and employment,” Scott wrote. “To talk about jobs supported by exports without discussing the jobs supported by imports is like keeping score in a basketball game by reporting only the points scored by the home team.  It might make you feel good to hear that the Cavaliers scored 100 points, but you would have no way of knowing whether they won or lost the game.”  

Scott said crucial to the issue of job loss and the trade deficit is currency manipulation, which “occurs when a country artificially depresses the value of its currency.”

“Currency manipulation is one of the key driving forces behind the high and rapidly rising U.S. trade deficit with the 11 other members of the TPP,” states the report, co-authored by Elizabeth Glass, an EPI trade and manufacturing policy research assistant. “In 2015, the U.S. deficit with TPP countries translated into 2 million U.S. jobs lost, more than half (1.1 million) of which were in manufacturing.”

The report says that the TPP should include “a set of restrictions and/or enforceable penalties against member countries that engage in currency manipulation.”

“Without such provisions against currency manipulation, the TPP could well follow other trade agreements and leave even greater U.S. trade deficits in its wake,” the report states.

Such concerns about currency manipulation are unfounded, according the the USTR website.

“We have worked with macroeconomic authorities of TPP countries to secure a joint declaration that recognize our mutual interest in addressing unfair currency practices,” it states.

Richard Trumka, president of the AFL-CIO, said that is not enough.

“EPI’s new report quantifies what a mistake it was to leave currency rules out of the Trans-Pacific Partnership,” he wrote in a news release. “The trade deficit with TPP countries – attributable in large part to misaligned currency – cost America’s working families 2 million jobs in 2015, more than half in manufacturing,”

“Omitting currency rules from the TPP benefits Wall Street, making the TPP a tool for off-shoring jobs, not for job creation,” he wrote. “If Congress is waiting for more evidence that TPP is a bad deal, this is it.”

The Obama Administration says the trade agreement would be good for workers.

“With the TPP, we can rewrite the rules of trade to benefit America’s middle class,” states whitehouse.gov. “Because if we don’t, competitors who don’t share our values, like China, will step in to fill that void.”

However, the EPI report says the middle class has already been hard hit by “unfairly traded goods from TPP member countries.”

“Seven of the 10 states with the highest job losses (as a share of total employment) are in the Midwest or Southeast, in states where manufacturing (especially of motor vehicles and parts) predominates,” the report states.

Those states are:

• Michigan (214,600 jobs lost, equal to 5.12 percent of employment)
• Indiana (103,800 jobs, 3.54 percent)
• Kentucky (53,700 jobs, 2.92 percent)
• Alabama (46,000 jobs, 2.32 percent)
• Tennessee (61,000 jobs, 2.19 percent)
• Ohio (112,500 jobs, 2.16 percent)
• Mississippi (22,000 jobs, 1.86 percent)

The other states on the list suffered major job losses, but they were influenced “by the collapse of the oil industry and related sectors,” according to EPI.

• Oklahoma (35,300 jobs, 2.10 percent)
• Wyoming (6,800 jobs, 2.34 percent)
• Alaska (6,300 jobs, 1.83 percent)

The report is based on the analysis of government data, including that from the U.S. Census Bureau, the U.S. International Trade Commission and the Labor Department’s Bureau of Labor Statistics.

“Wages lost because of direct and indirect job cuts from the trade deficits with the TPP member countries would have supported an additional 759,700 respending jobs,” the report stated. “The direct, indirect, and respending jobs displaced by the U.S. trade deficit with TPP member countries totals 2,025,800 jobs lost.”