November 19, 2013: White House catching a lot of TPP grief these days

Posted by mmcmullan on 11/19/2013

Good morning,

Happy Tuesday! Everybody and their mother is giving the Obama administration grief these days about its trade proposals, particularly its plans for the Trans-Pacific Partnership (TPP). This is the massive trade deal being worked out between the U.S. and a dozen countries lining the Pacific rim, including the world’s third-largest economy, Japan.

So what’s everyone’s problem? Techies are concerned about the loss of intellectual property rights. Congress doesn’t like being shut out of the negotiations. And, as we’ve noted often, the American auto industry doesn’t think we should reward currency manipulators (like Japan) that threaten manufacturing jobs with more access to the U.S. market.

But wait, some say. Isn’t American manufacturing’s beef with “currency manipulators” a little like the pot calling the kettle black? Isn't it similar to quantitative easing, a policy of the Federal Reserve for the last few years?

That misses an important point: It’s not just cheap easy money buoyed by large cash reserves that defines a currency manipulator. It’s the existence of a large trade surplus as well. And, as evidenced by another record-breaking monthly trade deficit with China, the United States certainly doesn’t have one of those.

Elsewhere around the web:

Walmart’s been making all kinds of headlines this week. Yesterday the Internet’s collective ire was awoken when a story spread about one Walmart setting up a Thanksgiving food drive for its poorly paid associates. Today, Cotten Timberlake at Bloomberg writes that the discount retailer, famous for keeping the Chinese export industry alive, is slashing already low prices in advance of what is predicted to be a weak holiday sales season.

Walmart is not alone. Too much stock heading into 2014 means a lot of retailers will be offering deep discounts on a range of high-end items. So: Got your eye on a new TV? This might be a good time to buy it, but make sure it’s American-made.

Remember when we told you about all the policy changes discussed at China’s third plenary -- opening financial markets, rolling back government control of state-owned enterprises, etc.? Well, it would be wise to temper expectations where quick change and smooth transitions are concerned. Bob Davis at the Wall Street Journal reports:

Under the Chinese system, the Communist Party sets overall policy direction, but central and provincial government agencies are charged with putting the plans into effect. As in many big government bureaucracies, China's ministries are rife with conflicting interests and jealousies, wedded to traditional policies and frequently beholden to interest groups that benefit from the status quo. Its ministries have focused on economic growth as the No. 1 goal, at Beijing's direction, helping to create a 30-year boom, but also producing environmental problems, dangerous debt levels and housing bubbles.

And don’t forget:

There’s more to the monthly jobs report than just numbers. There are people behind the data, and their stories deserve to be heard. Do you have one to tell? Have you – or your friends, family, or neighbors – started looking for work recently? Have you stopped? Send in your jobs report to info [at] aamfg [dot] org, tweet it to us at @keepitmadeinUSA, or contact us via Facebook. And read the ever-updating report right here.

Happy Tuesday, America.

-AAM

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