Last week, I attended the annual Coalition for a Prosperous America’s legislative fly-in to Washington, D.C. for the second time. My fellow CPA members and supporters came from California to New England and from Washington State to Florida, and we met with over 100 Congressional and Senate offices. As chair of the California chapter, I headed up one of the two teams from the western United States, and my team met with Congressional staff and one Congressmen at a dozen offices. It was obvious that CPA’s influence is growing as we had more scheduled appointments than last year, and our appointment times were twice as long.
We delivered the message that balanced trade needs to be at the forefront of our national strategy. We now have a trade deficit with 88 countries, and our trade deficit with every one of our trading partners is worse than it was prior to concluding trade agreements with these countries. In 2013, we had a trade deficit in goods of $703.2 billion and services, but because we still have a trade surplus in services, our deficit in goods and services went down to $471.5 billion. One problem with services is that many of the services we now export are services being performed for American manufacturers that have set up manufacturing plants in other countries. An additional problem is that over 40% of our trade deficit is with China alone, and this is unsustainable.
Since our U. S. Gross Domestic Product (GDP) is the sum of Consumption plus Investment plus Government Procurement plus Net exports (exports – imports), our trade deficit reduces our GDP. For example, in 2011, our GDP was $15,094.4 trillion, and our trade deficit shaved 4% off our GDP (14% share of GDP for exports minus 18% share of GDP for imports.)
“Our members reported a major improvement this year in congressional willingness to reconsider bad trade policy,” said Michael Stumo, CEO of the Coalition for a Prosperous America. “We were effective in countering the relentless efforts by the wealthy special interest groups who work hard to offshore our industries, our jobs and our sovereignty. The Administration’s efforts to push outdated, economy-killing concepts of trade policy has been stonewalled by the left and the right in Congress. Now they are in disarray.”
“It has become impossible to defend the current neo-liberal trade policy which ignores balance of trade,” continued Stumo. “We will start pushing that concept harder this year as we work with Congressional allies.”
I was happy to see that Congressional offices showed a heightened sensitivity to preserving states rights, American national sovereignty, and legislative branch authority over trade. The Trans-Pacific Partnership (TPP) being negotiated would allow foreign tribunals to pass judgments on “investment agreements” between the U. S. federal government and investors from TPP nations. This would make the laws and policies of the 50 states to be subject to international tribunals rather than our Congress and judicial system.
Also, the TPP would create binding policies on future Congresses as it pertains to patent and copyright laws, land use, food and agriculture, and product standards. It would also govern our nation’s policies concerning natural resources, the environment, labor laws, and government procurement policies, along with financial, health care, energy, telecommunications and other service sector regulations.
“Congress is increasingly loathe to transfer its authority over trade and domestic policy to the executive branch and give up its right to full transparency and amendments,” said Stumo. “Trade negotiators have steadfastly refused to pursue balanced trade, a fix for currency manipulation, and multiple other changes to fix the mistakes of the past.”
I have written the following four articles in the past year that were published on the Huffington Post regarding the dangers of the TPP as currently negotiated:
“The Trans-Pacific Partnership Would Destroy our National Sovereignty” (March)
“Why the Trans-Pacific Partnership Would Hurt American Manufacturers” (May)
“The Trans-Pacific Partnership Trade Agreement Would Harm Our Environment” (July)
“Why we must stop Fast Track Authority from being granted” (January 9, 2014)
In addition to pointing out the harm that has been caused by our current trade policies and what is wrong with the TPP, we presented CPA’s “Principles for a 21st Century Trade Agreement: Fixing Past Mistakes,” which advocates trade strategies that would create “Smart Trade not Dumb Trade.” Congress should require that future trade agreements provide:
Balanced Trade: Trade agreements must contribute to a national goal of achieving a manageable balance of trade over time.
National Trade, Economic and Security Strategy: Trade agreements must strive to optimize
value added supply chains within the U.S. – from raw material to finished product – pursuant to a national trade and economic strategy that creates jobs, wealth and sustained growth. The agreements must also ensure national security by recapturing production necessary to rebuild America’s defense industrial base.
Reciprocity: Trade agreements must ensure that foreign country policies and practices as well as their tariff and non-tariff barriers provide fully reciprocal access for U.S. goods and services. The
agreements must provide that no new barriers or subsidies outside the scope of the agreement nullify or impair the concessions bargained for.
State Owned Commercial Enterprises: Trade agreements must encourage the transformation of state owned and state controlled commercial enterprises (SOEs) to private sector enterprises. In the interim, trade agreements must ensure that SOEs do not distort the free and fair flow of trade –
throughout supply chains – and investment between the countries.
Currency: Trade agreements must classify prolonged currency undervaluation as a per se violation of the agreement without the need to show injury or intent.
Rules of origin: Trade agreements must include rules of origin to maximize benefits for U.S. based supply chains and minimize free ridership by third parties. Further, all products must be labeled or marked as to country(s) of origin as a condition of entry.
Enforcement: Trade agreements must provide effective and timely enforcement mechanisms, including expedited adjudication and provisional remedies. Such provisional remedies must be permitted where the country deems that a clear breach has occurred which causes or threatens injury, and should be subject to review under the agreements’ established dispute settlement mechanisms.
Border Adjustable Taxes: Trade agreements must neutralize the subsidy and tariff impact of the border adjustment of foreign consumption taxes.
Perishable and Cyclical Products: Trade agreements must include special safeguard mechanisms to address import surges in perishable and seasonal agricultural product markets, including livestock markets.
Food and Product Safety and Quality: Trade agreements must ensure import compliance with
existing U.S. food and product safety and quality standards and must not inhibit changes to or improvements in U.S. standards. The standards must be effectively enforced at U.S. ports.
Domestic Procurement: Trade agreements must preserve the ability of federal, state and local
governments to favor domestic producers in government , or government funded, procurement.
Temporary vs. Permanent Agreements: Trade agreements must be sunsetted, subject to renegotiation and renewal. Renewal must not occur if the balance of benefits cannot be restored.
Trade negotiators agree to language based upon expectations and judgment in pursuit of national goals.
Labor: Trade agreements must include enforceable labor provisions to ensure that lax labor standards and enforcement by contracting countries do not result in hidden subsidies to the detriment of U.S.-based workers and producers.
We CPA members also delivered a petition signed by over 80 liberty groups across the country objecting to Fast Track and the Trans-Pacific Partnership on constitutional grounds. “Tea Party and other liberty organizations have learned how American sovereignty is at risk as we transfer domestic authority to international governance systems and tribunals,” continued Stumo. “They are not fooled by phony free trade claims as a rationale to permanently give up our sovereignty.”
After this legislative fly-in, the outlook is more promising that CPA will be successful in forging a new consensus on trade and economic policy that balances trade, creates jobs, grows our economy and protects American sovereignty. It was a pleasure to take advantage of my rights as a citizen to express my opinions and those of an organization of which I am a member to our elected representatives. You can help ensure that this success happens sooner than later by supporting the Coalition for a Prosperous America.
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