In California, Curbing Trade Might Have Its Trade-Offs What would happen to the U.S. economy if the next president sparked a trade war and the flow of goods was cut off? One place to look for an answer: California.
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In California, Curbing Trade Might Have Its Trade-Offs

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In California, Curbing Trade Might Have Its Trade-Offs

In California, Curbing Trade Might Have Its Trade-Offs

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ROBERT SIEGEL, HOST:

Donald Trump and Hillary Clinton have both come out against a proposed trade agreement known as the Trans-Pacific Partnership. It would be among the U.S. and 11 other countries, and the Obama administration insists it would improve the economy. In a few moments we'll hear Treasury Secretary Jack Lew make a case for it.

ARI SHAPIRO, HOST:

First a look at what trade agreements have meant for California. It has more factory workers than any other state in the nation, but there are far fewer of them than there used to be. Ben Bergman of KPCC reports as part of our project with member stations about America's role in the world, A Nation Engaged.

BEN BERGMAN, BYLINE: Inside a sprawling warehouse just outside downtown L.A., a line of seamstresses sew high-end blouses. This city is still the garment capital of the U.S. even though only a fraction of the apparel workers who once worked here are left. Since 1990, the number of U.S. apparel manufacturing jobs has fallen by 80 percent.

ILSE METCHEK: The charts and the statistics are really frightening.

BERGMAN: That's Ilse Metchek, head of the California Fashion Association. She's worked in the industry for half a century, and she says she's seen firsthand the devastating effects free trade agreements have had across the country.

METCHEK: Absolutely terrible. When NAFTA was put into place, the years thereafter, we lost 50,000 jobs.

BERGMAN: Metchek says trade has been a one-way street for American workers, a flood of cheap imports. And in terms of exports, there are almost none. I asked her to name a company that makes clothes in L.A. and sends them overseas. She couldn't do it. She says the Trans-Pacific Partnership would make things even worse because it sets rules for 12 countries but not China.

METCHEK: It's an open door for China to ship to the United States duty free.

BERGMAN: Still, Metchek doesn't like the anti-trade rhetoric that's dominated this campaign from Donald Trump or Hillary Clinton.

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DONALD TRUMP: We're going to start making things again. We're going to start up our manufacturing businesses.

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HILLARY CLINTON: I believe we can still make it in America and export from America.

BERGMAN: Metchek finds that kind of talk naive.

METCHEK: Just because you close trade doesn't mean factories are coming back.

BERGMAN: The apparel factories that do remain in the U.S. make high-end fashion - $300 designer jeans, $160 T-shirts. But as for the clothes most people wear, Metchek says there's no way you can make them cheaply enough in the U.S.

METCHEK: I think the biggest problem is of course that we have a concept that if we make it here, the world would want it. The world is not waiting for American product. We're kidding ourselves.

BERGMAN: At least in apparel. But in more advanced manufacturing, it's a different story. The world often is waiting for made-in-USA goods.

In Orange County, Calif., a carbon fiber core rolls through a long machine as a worker gives one last quality control check. We're at the factory of CTC Global which makes conductors that improve efficiency and power lines. Chief Operating Officer Marv Sepe says more than 80 percent of the company's products are exported.

MARV SEPE: So anything that would hamper our ability to sell into foreign markets would impact us greatly.

BERGMAN: CTC global is typical of the factories that now dominate Southern California. It's not making T-shirts. It's making high-value products that get shipped all over the world. It's also lean, with just 130 workers. That's why it's cost effective for the company to still make its conductors in the U.S.

SEPE: We've done a very good job of automating the process. We can have a minimal number of people producing the maximum amount of product.

BERGMAN: That's not a popular thing to say, but most economists agree. It's automation, not trade, that's to blame for most of the job losses in manufacturing. But that doesn't play as well on the campaign trail as what Trump says.

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TRUMP: Other people are taking your jobs, and our jobs are disappearing. They're going to other countries.

BERGMAN: Though she's considered less protectionist than Trump, Clinton came out last year against the Trans-Pacific Partnership, the largest trade agreement in history.

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CLINTON: What I know about it, as of today, I am not in favor of what I have learned about it.

BERGMAN: Sepe is still holding out hope the treaty will be ratified. He says it would help open new markets to sell his conductors, so he's dismayed both Clinton and Trump oppose it.

SEPE: If you are not selling enough product in the United States and you need to go into foreign markets, why would you cut that off? Ninety-five percent of the world's consumers are outside of the United States. We need to go out and compete worldwide.

BERGMAN: And competing means California shouldn't close its doors to bringing in goods from other countries, says Kevin Klowden, an economist at the Milken Institute.

KEVIN KLOWDEN: Imports are still more important because we are the main gateway for manufactured goods from China into the United States.

BERGMAN: When operations at West Coast ports ground to a halt last year because of a labor dispute, LA's economy took a big hit. Klowden says it's proof of how important trade has become, supporting a vast number of workers who transport and process all that stuff we buy from China.

KLOWDEN: If the slowdown had turned into a full strike, it potentially could have pushed the Los Angeles area into recession.

BERGMAN: And that's what he says could happen if the U.S. got into a trade war with China. For NPR News, I'm Ben Bergman in Los Angeles.

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