{"id":415,"date":"2013-03-19T19:31:33","date_gmt":"2013-03-20T02:31:33","guid":{"rendered":"http:\/\/savingusmanufacturing.com\/blog\/?p=415"},"modified":"2013-03-19T19:31:33","modified_gmt":"2013-03-20T02:31:33","slug":"how-to-fix-americas-economy","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/tradepolicy\/how-to-fix-americas-economy\/","title":{"rendered":"How to Fix America’s Economy"},"content":{"rendered":"

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Last week, I participated in the \u201cFly-in\u201d for the Coalition for a Prosperous America<\/a> (CPA) in Washington, D. C.\u00a0 I was part of several teams that held 105 meetings with legislative assistants for Congressional Representatives and Senators.<\/p>\n

We presented informational flyers on the following topics<\/a> that would help fix America\u2019s economy:<\/p>\n

Trade Deficits<\/strong> \u2013 In 2012, the U. S. trade deficit was $735 billion, and our trade deficit with China hit an all time high of over $300 billion. This means that we currently consume more than we produce, and we need to reverse this dynamic and produce more of what we consume.\u00a0 The goal for successful trade is balanced trade, not more trade.\u00a0 We aren\u2019t going to solve this problem with just doubling exports while we continue to increase our imports at a faster rate.\u00a0 Trade deficits are our biggest jobs, growth and fiscal problem.\u00a0 Congress should establish a national goal for balancing trade by the year 2020. Persistent trade deficits are not \u201cfree trade, but are \u201cdumb trade.\u201d<\/p>\n

Foreign Currency Cheating<\/strong> \u2013 currency manipulation is trade cheating because it is both an illegal tariff and a subsidy.\u00a0 China, South Korea, Japan, Taiwan, and Singapore have manipulated their currency values.\u00a0 However, China\u2019s currency is estimated to be at least 35% undervalued so our exports to China cost 35% more than they should to the Chinese.\u00a0 In the past two Congresses, one bill addressing the problem passed the House, and one bill passed the Senate, but we need a similar bill to pass both Houses and be signed into law.\u00a0 Senator Levin is introducing a new bill this week.<\/p>\n

The ENFORCE Act<\/strong> \u2013 we need to stop the evasion of countervailing and antidumping duty orders by such means as \u201ctransshipment\u201d where goods covered by an Order are shipped to a third country before import to the U.S., with falsified U.S. customs documentation claiming the product to be origin of that third country. Other goods covered by an Order are shipped directly with fraudulent paperwork claiming that they were produced in a country that is not covered by the Order or have incorrect import classification codes or inaccurate descriptions that falsely identify the imports as goods that are not subject to an Order.<\/p>\n

The ENFORCE Act would establish a formal process and reasonable deadlines for action when the Customs and Border Protection is presented with an allegation of evasion, require CBP to report on its enforcement activities, and order the retroactive collection of duties on entries that illegally evaded duties.<\/p>\n

Country of Origin Labeling<\/strong> (COOL) \u2013 On March 8, 2013, te USDA announced it is proposing a new COOL rule that will comply with the WTO request to provide more information to consumers and\/or reduce the burden on imported product.\u00a0 The\u00a0\u00a0\u00a0 proposed rule would require labels for muscle cuts of meat to identify the country where each of the three production steps \u2013 birthing, raising, and slaughtering \u2013 occurred.<\/p>\n

Foreign Border Taxes<\/strong> (aka Value Added Tax \u2013 VAT) Over 150 countries have at VAT, but the U. S. is one of the few countries that doesn\u2019t.\u00a0 VATs are \u201cborder adjustable\u201d and range from 13% to 24% (average is 17%).\u00a0 This means that our exports are taxed with a VAT when our goods cross that country\u2019s border. Thus, when we negotiate a trade agreement that lowers or eliminates tariffs, a VAT can be added by our trading partners that is a \u201ctariff by another name.\u201d\u00a0 Trade agreements do not address VATs when tariffs are lowered, and the WTO allows VATs.\u00a0 Other countries use the VATs to reduce their corporate taxes to help their manufacturers be more competitive in the global marketplace. VATs are rebated to manufacturers in foreign countries for products that are exported, and the result is a $500 billion hole in U. S. Trade.\u00a0 We need reject trade agreements that do not neutralize the VAT tariff and subsidy and consider implementing a U. S. consumption tax system to erase this foreign advantage and reduce domestic taxes on income and jobs.<\/p>\n

Trans-Pacific Partnership<\/strong> \u2013 We need \u201cSmart Trade\u201d not \u201cDumb Trade\u201d so a summary of CPA\u2019s \u201cPrinciples for a 21st<\/sup> Century Trade Agreement\u201d was presented that would fix past mistakes in trade agreements. CPA recommends that new trade agreements must include the following principles to benefit America:<\/p>\n