Kevin Kearns in Detroit News on Stabenow’s Manufacturing Support
[Reposted from The Detroit News | Kevin Kearns | May 14, 2015]
For more than a decade, Michigan manufacturers have seen their export competitiveness undercut by countries that engage in currency manipulation. This week, Sen. Debbie Stabenow took a stand against countries that illegally undervalue their currency when she offered an amendment to President Barack Obama’s request for “fast track” trade authority. Specifically, Stabenow wanted to make congressional approval of any new U.S. trade deals contingent on strong action against overseas currency manipulators.
It was an entirely reasonable request, considering that currency manipulation has enabled countries like Japan to artificially lower the cost of their exports and vastly boost their selling power, both in the U.S. and overseas.
Unfortunately, the Obama administration, along with some senators in both parties, denounced the amendment because the countries that engage in currency cheating expressed concern. Treasury Secretary Jack Lew explained that countries could walk away from a pending free trade deal, the Trans-Pacific Partnership (TPP), if it contains currency measures.
Stabenow’s currency amendment lost in committee by a vote of 15-11. The Senate Finance Committee then hurried to pass President Barack Obama’s request for Trade Promotion Authority (TPA) by a vote of 20-6, with the president saying he needs this “fast track” in order to pass the TPP trade deal.
TPP? TPA? Are you getting tired of all these acronyms? Well, you should be. They’re being advocated by the same folks who brought you NAFTA and CAFTA. The U.S. has amassed an $11.5 trillion trade deficit in goods since NAFTA was implemented, and has shed roughly 5 million manufacturing jobs since 2000. Michigan alone has lost 316,000 good-paying factory jobs in that time. These free trade deals signed over the past 20 years simply haven’t helped Michigan manufacturers.
The TPP agreement being pushed by Obama would open the U.S. market to a slew of imports from 11 nations, including Vietnam, Japan, Singapore, and Malaysia. The full agreement now runs to thousands of pages, negotiated by the president behind closed doors, and with the advice of 600 non-governmental organizations including many multinational corporations.
The currency issue matters greatly in the TPP. Japan, Malaysia and Singapore continually engage in currency manipulation, even though it violates world trade law. Japan has intervened in currency markets 376 times since 1991 to boost exports. The U.S. goods trade deficit with Japan reached $78 billion in 2013, costing an estimated 896,000 U.S. jobs.
Obama, however, is insistent on “fast tracking” a completed TPP agreement. Worse, the president’s plan overlooks the concerns of bipartisan majorities in both the House and Senate who have explicitly requested strong provisions on currency manipulation. Unfortunately, Obama has ignored Congress’s instructions, and one result of a signed TPP might well be the surrender of America’s automotive sector to a Japanese car industry strongly aided by currency manipulation.
The TPP represents another step in the industry-by-industry giveaway of American manufacturing. Thankfully, the president’s request for fast-track authority has met with stiff opposition on Capitol Hill, mainly from Democrats, but also from a sizable group of Republicans. All are justifiably troubled because Obama negotiated the TPP without incorporating a congressionally vetted set of instructions.
Sen. Stabenow is correct in standing up for currency provisions. If the past 20 years of “free trade” deals offer any preview, TPP will only increase U.S. trade deficits and put additional strain on Michigan businesses.