WASHINGTON, March 9, 2016 - The political environment for new trade agreements could hardly get more toxic. The frontrunners for the Republican and Democratic presidential nominations have been doubling down on their criticism of U.S. trade policy. The big question is whether the campaign rhetoric will make it politically impossible to get Congress to approve the Trans-Pacific Partnership.
Trade likely was a significant factor in the Michigan primary Tuesday where Sen. Bernie Sanders upset Hillary Clinton, and Donald Trump rolled to a double-digit victory in the GOP race. According to a CNN exit poll, voters who believe international trade takes away U.S. jobs favored Sanders by 56 percent to 43 percent.
During a news conference Tuesday night, Trump made clear that he thought trade was a factor in his victory, and said that trade was the one issue where he’s not a conventional conservative.
Trump, who has shown some recent flexibility on some issues, most notably immigration, isn’t backing off his threat of a trade war with China, despite accusations that he’s a hypocrite, since some of his Trump-branded clothing is made in China, and that his policy could tank the economy.
The 2012 GOP nominee, Mitt Romney, declared in his anti-Trump address on March 3 that Trump’s threat to impose anti-dumping duties on China “would instigate a trade war that would raise prices for consumers, kill export jobs, and lead entrepreneurs and businesses to flee America.”
Trump, in his response to Romney’s speech, defended his attacks on China and Mexico, asserting that “Nobody knows more about trade than me,” citing his ownership interest in a Gucci store that he claimed is valued at more than Romney’s net worth.
“China, when they trade with us, come on in, take our jobs, no tax, no nothing. It’s not going to work that way. Mexico the same thing,” Trump said. At another point in the speech, he threatened to impose duties on products that American companies manufacture in Mexico for U.S. import.
In the Democratic race, Sen. Bernie Sanders has forced Hillary Clinton to prove her bona fides as a trade skeptic although she has never gone anywhere near as far as Trump, who threatened to abrogate existing trade agreements and impose tariffs of up to 45 percent on Chinese exports.
During last weekend’s Democratic debate in Flint, Mich., Clinton responded to Sanders by asserting that she has “stood up to corporate America time and time again.” “I understood that these trade agreements were going to destroy the middle class of this country,” she said.
She touted her opposition to the Central American Free Trade Agreement (CAFTA), which Congress approved while she was a senator, and her decision last fall to oppose the Trans-Pacific Partnership.
Lawmakers are paying attention to the campaign rhetoric. “We’ve got too many Americans who see trade as one-sided, where our trading partners violate the rules without repercussions,” Sen. John Thune, R-S.D., said at a recent Senate Finance Committee hearing.
But Bill Reinsch, president of the National Foreign Trade Council, is hopeful that the trade issue will fade during the general election campaign, much as he says it did in 2008. “The Republicans will try to run on national security and small government; Clinton will run on competence, being the adult in the room, and the ideas she has put out so far,” Reinsch says.
Reinsch acknowledges that Trump is a wild card, but notes that while Sanders opposes most, if not all, trade agreements on principle, Trump is claiming that he could get a better deal if he’s in charge.
NMPF raises concerns on TPP and Canada
One of the last farm groups that hadn’t taken a position on the TPP, the National Milk Producers Federation, has now formally endorsed the deal.
“Taken in its entirety, the TPP agreement is positive for the U.S. dairy industry,” NMPF President and CEO Jim Mulhern said after a vote by the group’s board on Tuesday. “Although it achieves less than we wanted in terms of throwing open new markets in Japan and Canada, I am particularly pleased that we did not concede to a huge surge in new imports.”
Still, NMPF has been raising concerns that Canada is already trying to wriggle out of the commitments that it made to increase imports of dairy products.
In addition to setting up subsidy programs for producers, Canada is considering ending duty-free treatment for dairy ingredients that are shipped into Canada for manufacturing products that are subsequently exported. Justin Trudeau’s new government has yet to take a position on a pledge by his predecessor to eliminate the duty-free status, Mulhern said.
“It does give us great pause when we see a good trading partner for the United States … seeking “to circumvent agreements that we think we have with them on paper,” Mulhern told the senators.
The Canadian government didn’t respond to requests from Agri-Pulse for a response to Mulhern’s concerns.
Trudeau will be in Washington on Thursday for the first official visit of a Canadian prime minister in 19 years, and several trade issues could be on the agenda, including the recently repealed country-of-origin labeling rules for meat.
Canada has yet to end its World Trade Organization case that authorized retaliatory tariffs on U.S. exports. “We’re hoping that Canada will formally close out this issue,” said Mark Feierstein, a White House adviser.
The Canadian Cattlemen’s Association argues that Canada should retain its retaliatory rights against U.S. exports as “insurance” against the possibility that COOL could be reinstated. Sen. Heidi Heitkamp, D-N.D., is pushing to set up a voluntary COOL program.
HSUS gives Obama a hand on trade
President Obama is enlisting Wayne Pacelle, president of the Humane Society of the United States, in promoting the benefits of the TPP for wildlife. The White House and HSUS recently released a Q&A with Pacelle playing the part of a journalist - asking Obama about the impact of the trade deal.
In one question, Pacelle asserts that the TPP “reflects a strong commitment to protecting wildlife” and asks Obama to explain how. “The TPP is packed with fully-enforceable provisions that I’m confident will be effective new tools to curb illegal logging, combat illegal fishing, and protect iconic species like the rhino and the lesser-known – but highly-trafficked – pangolin,” Obama says.
Later in the Q&A, Obama thanks Pacelle for his “passion and dedication” to animal stewardship. “When I no longer hold this office, I will be right there next to you in the role of citizen, doing what I can alongside you to help build and protect the world we’re fighting for.”
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