CPA Corrects Speaker Ryan’s Comments on Trade Agreements

Speaker Paul Ryan (R-WI.) spoke recently in support of free trade agreements (FTAs) at a Pennsylvania town hall meeting 

Speaker Paul Ryan (R-WI.) spoke recently in support of free trade agreements (FTAs) at a Pennsylvania town hall meeting broadcast on television (and now available on YouTube here). The Speaker was asked by Coalition for a Prosperous America (CPA) member and Penn United Technologies CEO Bill Jones what the new Congress can do to help U.S. industry which is fighting against unfair and aggressive trading practices by other nations, leading to severe economic hardship for business and employees, especially in manufacturing.  Speaker Ryan’s reply included the claim that free trade agreements have benefited U.S trade. “You add up all the countries we have trade agreements with, we have a surplus with them,” Ryan said to Jones.

The CPA believes that Speaker Ryan has not studied the details of trade performance under FTAs. The record clearly shows that our FTAs have delivered little for the U.S. economy and in many cases have worsened our trading position. U.S. Census Bureau data clearly shows that our deficit in merchandise trade with the 20 nations with whom we have FTAs totaled negative $64 billion in 2015, five times greater than the pre-FTA deficit of $13 billion. (See Table below.) For example, our balance with Mexico went from a surplus of $1.7 billion in 1994 before NAFTA, to a huge deficit of $61 billion in 2015. Our deficit with South Korea more than doubled in just three years after signing the KORUS agreement, from a $13 billion to a $28 billion deficit in 2015.

“Free trade agreements are a sucker’s game for the U.S.,” said CPA President Michael Stumo. “Experience has shown they end up as little more than a cloak beneath which our trading partners aggressively ramp up their U.S. market penetration while our exports rise modestly if at all. FTAs do not empower us to eliminate the trade mercantilism and cheating practiced by many of these partners, such as currency misalignment, subsidies to state-owned enterprises and non-tariff barriers.”

The CPA believes that free trade agreements should be put on the back burner while we focus on directly addressing unfair trading practices. Our fundamental goal should be balanced trade. The elimination of unfair trading practices will help reduce U.S. imports, increase U.S. exports, and move us towards a healthier economy, more and better jobs, and higher incomes.

For more CPA commentary on trade agreements, go here. 

Jan. 23, 2017