Denver Direct: Trade Treaty Un-American

Sunday, February 9, 2014

Trade Treaty Un-American

Stop the TPP free trade madness and protect Buy American provisions

By Roger Simmermaker

February 7, 2014

There never seems to be a shortage of potential free trade deals that need to be disposed of but this is what we must do if we as Americans want to protect our jobs, sovereignty, and independence.

In the 1990s it was NAFTA, which turned our 1993 trade surplus with Mexico ($2.5 billion) into a massive trade deficit ($181 billion by 2012) and made our trade deficit with Canada even worse.

Today, it’s the Trans-Pacific Partnership (TPP), which would lock us into an undesirable agreement with eleven other countries: Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, and Singapore.

Right off the bat, it’s important to know that the TPP would make any “Buy American” or “Buy Local” laws or preferences illegal. The benefit, we are told, in waiving Buy American procurement policies is that we would avoid potential “Buy Malaysia” laws from Malaysia, “Buy Singapore” laws from Singapore, etc.

Theorizing over potential trade retaliation threats from other countries is not a valid reason to avoid or sacrifice Buy American laws on the altar of the global economy. Consider the recent $1.1 trillion budget passed by Congress. When Congress was expected to vote on and pass a pro-Buy American amendment to exclude Canadian companies from our multi-billion-dollar clean water infrastructure market, Ottawa officials downplayed simultaneous Buy Canadian policy threats.

Even if we were able to muscle our way in and win procurement contracts in other countries, the U.S. procurement market is over seven times larger than the markets for Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, and Vietnam combined. And I would argue winning U.S. bids in other countries won’t be likely since we have higher standards of living and therefore pay higher wages than most other countries – potentially making our contract bids more expensive.

Especially in today’s economy, we need to be using American tax dollars to strengthen American manufacturers so they can hire more American workers and reduce the jobless rate in this country. Using U.S. tax revenue to strengthen foreign manufacturing firms makes little sense to most Americans, and rightly so.

With TPP, we would also be disposing of other regulations that have worked to provide us with a safer consumer environment and raise U.S. living standards. For example, when our government buys something as simple as printing paper, we wouldn’t even be able to specify that we prefer to use recycled materials or non-toxic dye. We would do well to pay attention to common-sense environmental standards in trade agreements. Anyone that disputes that need only look at the smog from China that has worked its way across the Pacific to plague Los Angeles.

The TPP would also seek to aggressively reduce tariffs that protect our domestic factories from cut-throat global competition from predatory foreign trading “partners” of which there is never a shortage. In one of the early stages of the TPP negotiations, potential member countries called for elimination of all trade tariffs by 2015. Such a stipulation would fly in the face of our U.S. Constitution, which gives our Congress the power to “regulate” commerce (trade) with foreign nations.

We’ve passed enough free-trade agreements already (three in the past year alone) and the results have not been favorable to the United States if you go by the basic definition of a “good” or “beneficial” trade agreement. A beneficial trade agreement should simply be defined as one that results in the trade surpluses for the United States, not trade deficits.

According to Paul Craig Roberts, Assistant Secretary of the Treasury in the Reagan Administration, a trade deficit “means that foreigners have even more surplus dollars with which to buy up more US assets” and “is a way to redirect a country’s revenues and profits into overseas hands.” At that time, foreign companies owned 1.3% of all US corporate assets. By 2008 that figure had risen to 14.2 percent. It’s clearly past time to reverse direction, and one of the best ways to do that is to reverse the trend towards ever-more free-trade agreements.

Supporters of the TPP and free trade in general will try to tell you that America was founded upon free trade, but this is simply not the case. The Tariff of 1789 was the first major Act ever to pass Congress, and allowed the collection of tariff duties on various imports to fund the cost of government. Tariffs were advocated by Presidents George Washington, Abraham Lincoln, Theodore Roosevelt, and William McKinley, just to name a few.

Former presidential candidate Pat Buchanan, a self-described protectionist, often points out: “From 1870 to 1913, the US economy grew more than 4% a year. Industrial production grew at 5%. The Protectionist Era was among the most productive in history. When it began, America was dependent on imports for 8% of its GNP. When it ended, America’s dependency had fallen to 4%. The nation began the era with an economy half the size of Britain’s and ended it with an economy more than twice as large as Britain’s.”

In 1896, the GOP Platform stated “We renew and emphasize our allegiance to the policy of protection, as the bulwark of American industrial independence, and the foundation of American development and prosperity.” Even the 1972 GOP Platform rallied against outsourcing (a key component of free trade), saying “We deplore the practice of locating plants in foreign countries solely to take advantage of low wage rates in order to produce goods primarily for sale in the United States.”

Right now, President Barack Obama is trying to get fast track authority so he can negotiate the TPP free trade deal and have Congress vote on it with limited debate, no amendments, and a mere up or down vote. He should be denied fast track authority, as all presidents should. Why? The first words of our Constitution say that “All legislative power shall be vested in a Congress.” If Congress can’t amend legislation and only vote yes or no, they clearly do not have all legislative power, since allowing amendments would be an increase in the legislative power of Congress.

As a nation, we need to return to our roots and secure the American market for the American producer. Free trade works against doing that, and that is why the Trans-Pacific Partnership needs to be stopped. We don’t need fast track and we don’t need more free trade!