It’s nice to see there’s at least one Republican in the Congress with some common sense. Senator Rob Portman of Ohio is pushing an amendment that would call for tougher currency restrictions on some of our Asian trading partners, all in an attempt to somewhat level the playing field for our domestic manufacturers. The amendment, if attached to the TPP would block our trading partners, like Japan and China, from artificially undervaluing their currency—through market manipulation—to give them an unfair competitive advantage against American made goods. This should be an absolutely necessary part of any trade promotion legislation coming out of the Congress because without restrictions against currency manipulation by certain of our trading partners—notably Japan and China—the rest of the bill is meaningless as far as leveling the playing field and protecting jobs for American workers, and markets for American manufactures. Without the Portman amendment the TPP will do what all other trade bills have done (NAFTA and CAFTA), put American companies employing U.S. workers at a competitive disadvantage. The Economics Policy Institute estimates that roughly 150,000 new jobs might be created in Ohio alone if the currency issue is properly addressed.
Let’s be clear, however, there’s never been a trade bill that hasn’t worked to the disadvantage of U.S. workers and U.S. companies
Let’s be clear, however, there’s never been a trade bill that hasn’t worked to the disadvantage of U.S. workers and U.S. companies, and that’s because the currency issue in past trade agreements has been treated as largely a non-issue for fear of upsetting friendly allies like Japan. You can write all the so-called protective covenants you want into a trade bill, but if there are no restrictions against currency manipulation then it doesn’t make any difference if American workers can produce better cars more cheaply, a country like Japan (or China) can artificially rig the price of its currency, take market share from U.S. companies and cost U.S. workers their jobs. The Portman amendment is critical for a trade agreement that’s fair for the U.S. and fair for American workers. If you really want to advocate free-trade as a national and an international policy, then the value of a country’s currency should be allowed to be freely set by the market, not manipulated by its nation’s central bank. Without any change in the rules governing trade, it’s going to be virtually impossible for the U.S. to reasonably compete in the international arena with countries where workers are paid less than a dollar an hour.
There are a lot of other good reasons not to back this fast-track promotion for TPP. But among the most important would be restrictions on currency manipulation. Any U.S. trade agreement without covenants or language barring our Asian trading partners from manipulating their currencies to gain a competitive advantage against U.S. companies and U.S. workers is not a good agreement. It’s going to be an open door for countries like Japan and China to cheat—like they’ve been doing for the last thirty years—and it won’t help “level the playing field” for U.S. companies and U.S. workers. That’s been the problem with all prior international trade agreements—NAFTA and CAFTA. And that will be the principle problem with the Trans Pacific Partnership if it should be approved without tight currency regulations. America needs fair and balanced trade (with tight currency regulation) to create a “level playing field” between it and its trading partners.
It’s going to be an open door for countries like Japan and China to cheat
This is Donald Trump’s biggest objection to the bill—that you can’t trust our trading partners not to cheat. I don’t often agree with the Donald, but in this he’s right. There will be cheating on the part of our trading partners unless there are careful and specific prohibitions written into the agreement that protect U.S. companies and U.S. workers. Of course conservative Republicans, the U.S. Chamber of Commerce, The Business Roundtable and large multi-national corporations that trade globally are all in support of the TPP. If these groups are all unanimous in support of a trade bill, you know—on its face—it can’t be a good thing for the average American worker. Labor groups are staunchly opposed, and right now there is a lot of ferocious lobbying being done on both sides. The fast-track promotion part of the Trans Pacific Partnership trade bill is critical because the Senate must pass it in order to push the TPP through without any changes. So far the National Association of Manufacturers and other trade related groups have spent millions of dollars in T.V. ads and other media, in addition to Internet and radio, promoting passage of the TPP.
Barack Obama, of course, is a big supporter of the bill. It’s mostly just a legacy thing—just another “bill signing” pen to add to what is so far a rather skinny and less than noteworthy collection. He keeps telling us that Elizabeth Warren is all wrong in her opposition to TPP. But, since the negotiations have all been conducted and shielded in the same aura of secrecy that attended the D-Day invasion, he’s been kind of coy and not exactly upfront about just why he’s so right, and she’s wrong. Frankly, on something so important as matters of trade and the TPP, I think I’d sooner trust Bernie Sanders and Elizabeth Warren over Barack Obama.
So, let’s hope the Portman-Stabenow amendment gets a fair hearing. Other Republican senators like Orrin Hatch (R-Utah) and John Cornyn (R-Texas), the fast-track promotion’s biggest supporters, are opposed to the Portman amendment because they feel it might just out-right kill the fast-track promotion part of TPP, and possibly scuttle the entire agreement. In my mind, that would be the best thing that could happen.
We can only hope!
The Money Trader