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Media Coverage: National Farmers convention speaker: Trade deals harm US agriculture and manufacturing

February 13, 2017

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At National Farmers’ Convention 2017 recently, Brian O’Shaughnessy, co-chairman of the Coalition for a Prosperous America and chairman of Revere Copper Products, talked trade, value-added tax and mercantilism to organization members in Springfield, Missouri.

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“Since 2000, more than 30 percent of the manufacturing facilities Revere ships products to domestically have shut down as those companies moved their production offshore,” said O’Shaughnessy. During that same period, a total of 70,000 manufacturing facilities closed in the U.S.

He said he realized he needed to intensively study trade issues, and since then joined the Coalition for a Prosperous America, a nonpartisan coalition of farmers and ranchers, domestic manufacturing and labor, focused on trade and tax policies related to trade.

“The free-trade fever began building in 1995, when tariffs were eliminated by participating countries in the newly formed World Trade Organization,” O’Shaughnessy said. He underscored America was outsmarted when we signed on to WTO because the U.S. has no value-added tax.

He cited an example for a product with a $100 value the U.S. sells to Mexico. Because of the 15 percent VAT tax in Mexico, it costs $115 to get it into the country. But, when a product with a $100 value is sold to the U.S. from Mexico, that same VAT rebates $15 to Mexican producers, which means their cost to sell to the U.S. is only $85.

He pointed out the VAT, which averages 19 percent in the world, was allowed to continue under WTO rules because it was considered a consumption tax and not a tariff. But in reality, VAT is really a tariff on U.S. goods going into a foreign country.

 Countries that operate under mercantile-based economies, including China, Mexico, Germany and France, have used VAT to help subsidize the producers of various products in their countries, he said. That amounts to a barrier on imports and a subsidy on exports for them.


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