The CPA Colorado Chapter sent candidate questionaires to both the Democratic and Republican candidates in Colorado's Congressional District 5.  Democratic candidate Hal Bidlack responded.  As of yet, Republican incumbent Doug Lamborn has not responded.

Bidlack's response appears below the fold.

1.    Do you support the Colombia, South Korea and/or Panama Free Trade Agreement?  Please explain why or why not. 

Not as currently written, no.  These agreements lack needed labor and environmental standards.

Under our constitution, responsibility for negotiation of trade agreements resides within the Legislative branch of government.  The Colombia, South Korean and Panama Free Trade Agreements were negotiated by the Executive branch, under the now expired Fast Track Authority, which requires Congress to provide an up or down vote – with no opportunity to change content. 

I believe that we need to pause in the process of negotiating Agreements, to examine the performance of Agreements that have been signed to date, and to establish a process by which all proposed Agreements will be evaluated in advance of being brought forward for a vote.  Analysis of Agreements passed since 1994 shows dramatic erosion in the overall trade balance, where import activity has increased at a rate often five times greater than exports.

Many provisions in the so-called Free Trade Agreements benefit special multi-national corporate interests and not the people or the domestically-based businesses in any country.  Trade IS the essential wealth-creation vehicle in every economy.  Trade is to be encouraged as strongly as any economic policy.  Trade must be governed by a set of rules that establish fair balance and permit true comparative advantage to operate.  If the Colombia, South Korea and Panama Agreements were truly Free, they would be brief – not long and complex.

2.    Do you consider currency misalignment a trade problem? Please explain why or why not.

Yes.
 
Currency manipulation and border-adjustable tax policy are the current-day equivalent of tariffs as trade tools.  The United States has no effective trade policy today, to address the way that Asian nations are pegging the external value of their currency to the U.S. dollar, to provide their domestic manufacturing base with artificially low export prices.  Studies show that the Chinese Yuan is undervalued by as much as 40%.  No corporate father serving fiduciary or stakeholder interests and few consumers will be swayed to buy a domestic product when the similar foreign-made product is priced far lower.  No domestically-based producer can compete when foreign-sourced products are landed at prices lower than material costs. 

The United States faced similar problems when the Japanese first devalued the Yen in 1980.  In 1985, President Reagan had our government negotiate the Plaza Accord to address the problem.  President Reagan made number of statements then that remain true today.  I don’t know that I can improve what President Reagan said:

“To make the international trading system work, all must abide by the rules.”

“When governments assist their exporters in ways that violate international laws, then the playing field is no longer level, and there is no longer free trade.”

“When governments subsidize industries for commercial advantage and underwrite costs, placing an unfair burden on competitors, that is not free trade.”
“When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade.”

“I believe that if trade is not fair for all, then trade is free in name only.  I will not stand by and watch American businesses fail because of unfair trading practices abroad.  I will not stand by and watch American workers lose their jobs because other nations do not play by the rules.”

“We will vigorously pursue our policy of promoting free and open markets in this country and around the world.  We will insist that all nations face up to their responsibilities of preserving and enhancing free trade everywhere.  But let no one mistake our resolve to oppose any and all unfair trading practices.  It is wrong for the American worker and the American businessman to continue to bear the burden imposed by those who abuse the world trading system.”

With admission to the World Trade Organization, China was required to stop manipulating its currency.  The U.S. Treasury has been required, each year, to certify to Congress that China is not manipulating its currency.  Although the manipulation is clearly documented, Treasury has willfully stated that there is none.  Were this manipulation to be certified, U.S. law supports countervailing action.  I support that action.  We may not be in position to influence all of global competition, but our government can and should manage our own economy effectively.

3.    Do you believe that balancing the U.S. trade deficit is a top priority? Please explain why or why not.

Warren Buffett’s article in Fortune Magazine in 2003 was titled “Squanderville vs Thriftville.”  It is a parable about two island nations, both capable of self-sufficiency with 8 hours of daily labor.  One nation is industrious and the other is lazy.  One nation runs its national credit card to the limit and the other, the creditor, ends up owning all of the productive assets in the other.  People in the nation that lived beyond its means, that did not effectively utilize its productive resources, end up being indentured.  In his 2005 letter to Berkshire Hathaway shareholders, Mr. Buffett asserted that we are creating a “sharecropper society.”  I couldn’t agree more strongly.

We simply must achieve a balance in trade, and then be in position to generate surpluses that allow our children to avoid indenture.  Tradable goods production, and trade, are the essential wealth-creation vehicles in our economy.  These capabilities are essential elements in our economic and national security future.  This is for me a moral issue. 

The majority of Foreign Direct Investment (FDI) in the United States arrives today to purchase existing businesses.  We are experiencing exactly what Warren Buffett warned us to avoid.  The Bush Administration has promulgated regulation changes to stop tracking the amount of FDI dedicated to purchasing our factors of production, simply because it is so dangerously high.

4.    Do you believe that border adjustable taxes, imposed upon U.S. exports to other countries and rebated by foreign governments to their domestic exporters, is a trade problem? Please explain why or why not.

As the United States has dropped tariffs in each of the Free Trade Agreements, 140 trading nations have imposed Value-Added Tax structures that place U.S. domestically-based producers at a 15% to 30% disadvantage.  There is a direct correlation between our spiraling, negative trade balance and the global imposition of border adjustable taxes.

The U.S. is just about the only trading nation that embeds tax cost in products.  Taxes of all sorts in the United States are effectively taxes on good jobs.  We need to find the right way to get taxes out of product cost, simply to be on the same footing as global competitors.  Otherwise, as with currency manipulation, the rational corporate father or consumer will freely decide to buy products that have do not have domestic content.

5.    Do you believe U.S. trade policy, of which trade agreements are a subset, is on the wrong or right track? Please explain why or why not.

The United States has no effective trade policy.  Free Trade Agreements negotiated in the last three administrations have unbalanced our economy and threaten our national security.  Trade policy on the right track will enhance national income, provide means to create wealth across the whole of the economic spectrum, generate taxes to support the government that we need and provide security, benefits and pensions.  Laissez-faire policy of the present benefits only a few.  While imported product prices are reduced, many product costs are being socialized at the same time that incomes of our people are reduced more dramatically.  America deserves better.  Quoting Teddy Roosevelt from July 4, 1886:

“The Declaration of Independence derived its peculiar importance not on account of what America was, but because of what she was to become; she shared with other nations the present, and she yielded to them the past, but it was felt in return that to her, and to her especially, belonged the future… So it is peculiarly incumbent on us to act throughout our lives as to leave our children a heritage, for which we will receive their blessing and not their curse.”

This will be my objective as the next Congressman from Colorado District 5.