Canada and Mexico have asked to be a part of the Trans Pacific Partnership talks. The USTR requested public comment on these issues.
CPA submitted official comments today. We told the Office of the U.S. Trade Representative that they should not proceed without a plan to balance trade. We also pointed out the specific problems of Mexico’s VAT and Canada’s Goods and Services Tax, both of which are unfair to U.S. businesses.
For example, as to Mexico, we said:
The USTR should address the distortionary impact of Mexico’s value added tax on our bilateral trade. Instituted only as Mexico was planning to join NAFTA, this consumption tax now operates as a 15% import tax and thus a trade barrier. Mexico’s VAT rebates also serve as a 15% export subsidy on shipments to the U.S.
The U.S. needs a plan to be a successful producing and trading nation. Our trade negotiators’ goals are (1) more trade agreements; (2) increased two way trade… even if that means trade deficits.