For immediate release:
Sara Haimowitz, Development Director
Coalition for a Prosperous America
[email protected]; 202 688 5145
CPA Analysis of Obama’s SOTU Request for Fast Track
President Obama asked Congress for Fast Track trade authority in his State of the Union address last night. The Coalition for a Prosperous America (CPA) advocates a new direction in trade policy focusing upon balanced trade, a comprehensive US competitiveness strategy, and producing more of what we consume here.
We oppose Congress ratifying the past, wrongheaded trade strategy which produces trade deficits, job loss, and incentives to offshore manufacturing for re-import into the US.
Brian O’Shaughnessy, Chairman of Revere Copper Products in Rome, New York said,
”My company supplies copper sheet, strip and coil to many industries in the US and abroad. I used to support trade agreements but no more. The President needs to pursue balanced trade rather than the same old deficit producing trade deals. That is why I oppose Congress giving him Fast Track authority.”
Mr. O’Shaughnessy is CPA’s Chief Co-Chair and Manufacturing Co-Chair.
Burl Finkelstein, Executive Vice President of Kason Industries in Newnan, Georgia said,
“My company supports trade when it is balanced and preserves US sovereignty. After forty years of trade deficits that have hollowed out the US economy, we need a new approach. If we fixed trade policy, my company could hire thirty to fifty percent more workers. Congress should not give President Obama Fast Track authority because we need trade to work for US producers, not just importers.”
Mr. Finkelstein is a CPA Board Member.
CPA has analyzed the President’s comments in the SOTU address to point out inaccuracies.
Obama: “21st century businesses, including small businesses, need to sell more American products overseas.”
CPA Analysis: The President continues to mislead by focusing upon exports only, not net trade. Just like any business, America needs to sell more than it buys to grow. Businesses live on net profit while America lives on net exports.
Obama: “Today, our businesses export more than ever, and exporters tend to pay their workers higher wages.”
CPA Analysis: Again the President only looks at half the equation, exports. Not the net. Further, businesses that export pay higher wages simply because they tend to be bigger companies than those producing only for the local market. We have lost many of those industries that export due to trade agreement offshoring.
Obama: “China wants to write the rules for the world’s fastest-growing region. … Why would we let that happen? We should write those rules.”
CPA Analysis: This argument makes no sense. We already wrote the rules for the World Trade Organization. Bill Clinton and George W. Bush used these same arguments in 1999 to support China’s bid to join the WTO. Thereafter our trade deficit with China skyrocketed. Now we want more rules in an agreement China is not a party to rather than building our own economic strength and enforcing China’s multiple breaches of the WTO?
Obama: “That’s why I’m asking both parties to give me trade promotion authority to protect American workers, with strong new trade deals from Asia to Europe that aren’t just free, but fair.”
CPA Analysis: The Obama Administration trade negotiators are trapped in 1950’s view of tariffs and quotas. They have no plan for a “free and fair” trade agreement. Modern foreign trade cheating guts the American economy through currency manipulation, consumption taxes applied at the border, and massive industrial subsidies including state-owned enterprises. The Obama Administration has refused to address those issues.
Obama: “Look, I’m the first one to admit that past trade deals haven’t always lived up to the hype, and that’s why we’ve gone after countries that break the rules at our expense.”
CPA Analysis: True, past trade deals passed due to hype, not good economic strategy. But the administration has not gone after those countries that break the rules. The National Trade Estimate published by the US Trade Representative contains hundreds of pages of rule-breaking. They should be filing a trade case every week, but are not.
Obama: “But ninety-five percent of the world’s customers live outside our borders, and we can’t close ourselves off from those opportunities.”
CPA Analysis: This is a false implication that our sales will expand to those low wage markets, and that those sales will exceed lost domestic market share to our very rich consumers. The biggest consumer market in the world is right here in the US. We sell access far too cheaply in trade negotiations. The other false implication is that no new trade agreement means we close ourselves off. We already trade with the TPP and TTIP countries and most of them are already in the WTO, which was supposed to be the free trade nirvana of growth and prosperity.
Obama: “More than half of manufacturing executives have said they’re actively looking at bringing jobs back from China. Let’s give them one more reason to get it done.”
CPA Analysis: False implications and misleading data. A recent study by the Information Technology and Innovation Foundation found that manufacturers are not, on balance, reshoring. The TPP would actually promote offshoring more US manufacturing to sell back to US consumers.
Summary: The arguments used for Fast Track trade authority, the Trans-Pacific Partnership and the Trans-Atlantic Trade and Investment Partnership are recycled from the hype of past trade deals. That past strategy has failed by causing a massive and unprecedented transfer of industries, jobs and wealth out of the U.S.
CPA favors a true 21st Century Trade Strategy (outlined here). Therefore we will vigorously oppose Fast Track trade authority for President Obama.