Talking past the obvious regarding our trade deals

Posted by mmcmullan on 09/18/2013

President Obama is talking economics this week. Something he said during his Monday address from the White House Rose Garden gave us pause:

“We sell more goods made in America to the rest of the world than ever before.”

And here he is again, speaking today at the Business Roundtable:

We know that we can do even more when it comes to exports, which is why I’m out there negotiating the Trans Pacific Partnership (TTP) and now a Transatlantic Trade (sic) Partnership (TTIP) that will allow us to create a high standard, enforceable, meaningful trade agreement with essentially two-thirds of the world markets, which is going to be incredibly powerful for American companies who, up until this point, have often been locked out of those markets.

The president seems to be willfully ignoring the larger picture: What’s the point in increasing exports if we do nothing to address the exploding number of imports? The trade deficit was $540 billion last year. The year before that, it was $559 billion. The year before that, $500 billion. You get the idea.

We keep spending our wealth outside of our borders, an afflication perpetuated by a silly trade stance, which is: We keep trading production capacity for more and more consumption (and only slightly cheaper prices at big-box retailers). We know competitors like China and Japan game the trade system by manipulating their currencies, but we sit on our hands. Yet we're content to let them slide with a few admonitions.

We need to get serious about currency manipulation. In fact, we needed to get serious about it yesterday: A full stop to currency manipulation by select countries, including China (a pie-in-the-sky dream, but worth considering for context) would create at least 2.2 million American jobs over the next three years. Writes Robert Scott of the Economic Policy Institute:

This policy would boost GDP, reduce unemployment and in budget terms cost nothing.  It would, in fact, substantially reduce the federal deficit. No other policy could achieve this jobs trifecta.

This policy would boost GDP, reduce unemployment and, in budgetary terms cost nothing. It would, in fact, substantially reduce the federal deficit.  No other policy could achieve this jobs trifecta. - See more at: http://www.epi.org/blog/president-currency-manipulation-stroke-pen/#sthash.L1mFKR31.dpuf
This policy would boost GDP, reduce unemployment and, in budgetary terms cost nothing. It would, in fact, substantially reduce the federal deficit.  No other policy could achieve this jobs trifecta. - See more at: http://www.epi.org/blog/president-currency-manipulation-stroke-pen/#sthash.L1mFKR31.dpuf

The president should take a serious look at the bipartisan currency manipulation legislation being passed around the House of Representatives. H.R. 1276, the Currency Reform for Fair Trade Act, would add currency manipulation to the list of actionable offenses around which American businesses could build a trade case. Has your legislator signed up to support it yet? If not, click here and send them a letter.

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