The U.S. has the worst trade performance in the history of the world, running trade deficits for forty years in a row. The U.S. trade deficit is a bigger problem than our government budget deficit. In the last decade, the trade deficit reduced U.S. GDP by three to five and a half percent each year. Millions of good paying jobs, tens of thousands of companies and scores of otherwise competitive industry supply chains have been lost as a result. The U.S. needs to produce more of what it consumes, address foreign trade cheating, and eliminate the trade deficit. CPA’s core mission is to do just that.
Forty years of persistent U.S. trade deficits have de-industrialized our country, destroyed hundreds of millions of jobs, undercut our innovation capacity, and created trillions of dollars in foreign debt. Despite this dismal economic record, the federal government ignores the trade deficit and foreign trade cheating as it pursues more of the same trade treaties. Balanced trade over time is the goal of free trade and of fair trade. Balanced trade will re-industrialize our country, enable massive job creation, grow our wealth and effectively neutralize foreign mercantilism. CPA is committed to making Balanced Trade the top national trade goal for the United States.
Trade treaties with foreign countries are one piece of U.S. trade policy. They are business contracts between countries. Businesses negotiate contracts to carry out a business strategy for growth, not to shrink their business. However, the U.S. government continues to negotiate trade treaties that will shrink our economy, offshore our domestic policy and sovereignty, and increase the foreign mercantilism problem. CPA supports trade treaties that increase U.S. growth and job creation while preserving our sovereignty.
Fast Track Trade Authority
Our Founding Fathers gave Congress, not the Executive Branch, the power over trade and commerce with foreign countries. In recent decades, Congress has given away most of this trade authority to the President through something called Fast Track. It empowers the President to negotiate with other countries regarding not only trade, but a large swath of other domestic policies including financial regulation, government procurement, taxation, food and product safety, and intellectual property. The President negotiates in secret, then delivers an agreement to Congress. Congress is prohibited from amending the President’s agreement and must pass or reject it within a short period of time. CPA supports having Congress maintain more control over trade treaties with mandatory goals that the President must follow.
Many foreign governments aggressively manipulate the value of their currency to make their exported products cheaper and to make U.S. products more expensive to buy. It is a foreign tariff and a subsidy. The U.S. market is the target of this modern mercantilism which increases our trade deficit by hundreds of billions of dollars. CPA is committed to neutralizing foreign government currency price fixing to achieve free, fair and balanced trade.
Taxes and trade are closely related. While the U.S. has one of the lowest overall tax burdens among OECD countries, our income tax rates are high and our mix of taxes hampers burdens American trade competitiveness. Over 150 other countries have border adjustable consumption taxes (VATs or GSTs) averaging seventeen percent. They can tax imports at the seventeen percent rate and subsidize exports by rebating the tax without violating WTO rules. These countries lowered tariffs and then replaced them with border taxes. U.S companies’ exports are double taxed, paying our taxes and paying foreign taxes. To be trade competitive and grow our economy, we need to change our tax mix by drastically lowering corporate and individual income taxes and adding a consumption taxes while maintaining the same progressivity and overall tax revenue. CPA is working to increase U.S. trade competitiveness by changing our tax system to eliminate the two-way trade disadvantage caused by foreign consumption taxes.
The U.S. has many trade laws to address unlawful foreign subsidies that distort markets and destroy our domestic industries. Unfortunately, filing and pursuing trade cases costs millions of dollars that many distressed industries cannot afford. Even if they win a trade case and achieve anti-dumping or countervailing duties to remedy the foreign market cheating, the U.S. Customs and Border Patrol agency often does not enforce these duties. CPA is committed to making trade enforcement cheaper and more effective to protect the integrity of markets and opportunities for domestic producers.