Last updated on October 1, 2025
In the 1980s, the United States pursued an open trade policy with a simple refrain: trade with the world made everyone in America wealthier.
However, the pendulum is swinging back. The US has lost 5 million manufacturing jobs in 20 years due to trade liberalization with countries like China, Japan, Mexico, and the EU. Now, free trade is increasingly seen by both parties in Washington as a way to increase profits for the 1% who don’t need it, while outsourcing jobs and reducing wages for the other 99%.
A comprehensive free trade agreement with the EU only traps us in a world where big businesses get richer and where lobbyists, not voters, dictate policy.
Indeed, during negotiations for a US-EU trade agreement in 2013, 90% of negotiations were held with corporations and lobbyists, who crafted rules and regulations in their favor, whilst pushing public interest groups like environmentalists and unions to the sidelines.
Big businesses even fabricated studies. During negotiations, FedEx slid $20,000 to the Atlantic Council think tank to write a study that concluded a trade agreement was beneficial.
Thankfully, blowback from the public ended in talks in 2016, narrowly averting disaster.
Today, a similar trade agreement would be crafted by and for big business. It would benefit corporations at the expense of the public in two ways.
First is by Crowding Out Small Businesses.
Small businesses are thriving in the US and the EU. In fact, small businesses employ 61 million workers in the US and 100 million workers in the EU.
Unfortunately, a trade agreement reduces tariffs and makes it easier to do business across the Atlantic, allowing corporate powerhouses to easily replace local businesses residing overseas.
Large firms setting up shop would spell disaster across the US and EU. Due to their de facto monopoly power, large corporations lead to lower incomes, less employment, and more poverty than the small businesses they replace. Economists at Yale even found they retain fewer jobs during recession.
Thus, it’s no surprise that the NAFTA trade agreement between the US, Mexico, and Canada caused 2 million Mexican farmers to be kicked out by transnational corporations, all while raising prices on commodities like tortillas.
Ultimately, the official impact assessment by the European Commission concludes a US-EU trade agreement would lead to a loss of 680,000 jobs in the EU and 325,000 in the US.
Second is by Neglecting Developing Countries.
The developing world is succeeding right now, posting a 4.3% yearly GDP increase. US and EU is a huge driver, as the European Commission finds the EU or the US is the top trading partner for more than half of the globe.
Unfortunately, a shift by the US and EU towards each other inevitably means a shift away from the rest of the world, with trade and investment diverted. Trade isn’t infinite afterall.
That’s why, empirically, the US-Australia trade agreement diverted $53 billion of trade from the rest of the world, all while not creating any new net trade.
A global analysis by the Trade Justice Movement concluded a trade agreement today would decrease Latin America’s GDP by around 3 percent and Africa’s economy would shrink by 4 percent.
At the end of the day, small businesses and developing countries need us most. Now is not the time to decide to craft a free trade agreement with the EU. It hasn’t worked in the past and it won’t work now.
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