Let’s start with this: Right now, the trade playing field is tilted badly against America. Our markets are almost entirely open – I believe the average tariff we levy on imports is just 1.4% — while the countries we trade with are not nearly so welcoming. Their average import duties are three or four times as high on average (and in some key situations much higher still). But on top of that, their businesses are not saddled with the same (worthy!) labor and environmental standards that ours are.
This is not good for America — and it causes American CEOs to do something in their shareholders’ interest that they might rather not: shift good jobs abroad, both for the lower labor costs and to avoid the higher tariffs. Japan charges a 30% duty on cars and/or auto parts manufactured here . . . but ZERO tariff on the same cars and parts manufactured in Mexico.
So this sucks. And should be fixed.
And then there’s NAFTA — which did a lot of good for American exporters and their American workers . . . and for American consumers – but that absolutely did not live up to its “side agreement” provisions with regard to worker and environmental standards.
That sucks, too, and should also be fixed.
OK? The status quo that American workers have been stuck with for a very long time is rotten and should be fixed.
And that is the whole point.
There are a lot of important but smaller points to be debated and negotiated, but the big point is that patriotic Americans who care about a fairer playing field for American workers and American businesses, large and small, should want to fix the status quo.
Perfection is unrealistic, but major strides toward fairer trade, with lower barriers to our exports and higher, more enforceable labor and environmental standards? That’s something we should not just support but demand.
And that’s exactly what the President and his team have been working for years now to get.
The TransPacific Partnership – TPP – would cover our trade with 11 nations. And because Mexico and Canada — our NAFTA partners — are two of those 11, it is also our chance, after two decades, to fix NAFTA. NAFTA’s unenforceable “side agreement” provisions would be folded into the body of the treaty itself, and so for the first time be enforceable.
The details are of course super important. But there’s little reason for me to believe that this President — a Marxist according to some, the most liberal in our history according to others, an enemy of Wall Street according to yet others — is secretly working to make things worse for American workers or to weaken our hard-won Democratic health, safety, and environmental regulations.
So my take on this is: let’s give the President the same “fast track” Trade Promotion Authority — TPA — in negotiating the TPP that Congress has given every Democratic president and every Republican president (with the exception of Richard Nixon) since FDR.
At the end of the day three things will be true:
(1) There will be things in the deal we don’t like.
(2) Even so, it will be a major improvement over the status quo.
(3) And in case it’s not, Congress can — and should — vote it down.
And then there’s this:
China is not a party to the TPP. They are busy trying to organize global trade their own way. If we don’t seize the chance to do it “our way,” it will be a great gift to the Chinese at the expense of our own workers. Nothing against our Chinese friends – but why would we want that?
Here an opposing view. It is completely well-intentioned, of course. But it has not changed my own.
One last note:
I emailed a friend who heads a labor union. We are not close friends, and it is not a giant union; but we run into each other a lot and it is definitely a meaningful well known union . . . so when I heard on a conference call how passionately opposed he was to fast-track and TPP, I emailed asking him to call me so I could better understand his concerns. He didn’t call, so I emailed a few days later to make sure he saw the first email. He emailed that he had, but was traveling, and would call. I emailed that he could call while in transit — a great way to spend down time waiting for planes or whatever — but that I looked forward to it, whenever. Another week has passed.
Not to make too much of this — he’s busy, I’m busy, you’re busy, we all drop balls — but I do think there is an understandable but reflexive inclination among progressives to oppose trade deals, given their very real flaws (especially as regards the non-enforceable NAFTA provisions) — and that labor leaders, especially, will not be inclined to be seen by their members as weak in any way in protecting their members’ interests. And rightly so.
But they shouldn’t protect the rotten status quo, either.
So if the TPP, once it’s finally negotiated and submitted to Congress, would, on balance, improve the lot of America’s current and future workers, as hoped — well, at that point, those same labor leaders should come on board and urge its passage.
My two cents.
Where would we be without my friend Mel to pass along three-minute gems like this? (Viewers are counseled: Be Sure To Watch The Dog’s Expression When The Plate is Removed.”)
Quote of the Day
Markets are very good at what they do, in part because they harness greed and envy (in fact, all of the Seven Deadly Sins except sloth) and turn them into positive virtues.~Rocky Mountain Institute newsletter
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