Those of us in the trade reform movement have been called anti-trade, protectionists and other demeaning names. The truth is we have been fighting to make free trade work as intended. A trading system where governments intervene on behalf of their exporters via currency exchange rates and block imports via their tax code is not a free trade system. The truth is America is trying to impose “free trade” onto a mercantilist world. Mercantilism and free trade are diametrically opposed concepts and cannot co-exist. One must overcome the other.
“When governments subsidize industries for commercial advantage and underwrite costs, placing an unfair burden on competitors, that is not free trade.” Ronald Reagan, 1985
So far, the protectionist nations are dominating international trade. Until currency manipulation is effectively eliminated, this cannot change. The trade reform movement has been trying for years to put a remedy in place so free trade can truly be free and fair trade as President Reagan insisted on from Japan in the 1980’s.
Last week the Senate sought cloture on S.B. 1314 to give President Obama Trade Promotion Authority (TPA) so he can negotiate a new trade deal. The Senate failed to muster enough votes to close off debate. When they added a remedy for Currency Manipulation which has been distorting international trade flows and providing unethical nations, such as China, the ability to cheat the system, cloture was approved. This should show the way forward for the House if they wish to pass TPA.
This issue has exposed a rift in the Republican Party that can hurt them in future elections. Having just been given the right to govern, the people expect Republicans to govern in their interests, NOT the interests of financial elites and the investor class. When you hear the term “crony capitalism,” think about our trade policy and how it picks winners and losers. Republicans play a dangerous game if they politicize trade policy which is a key to American jobs, national defense and prosperity.
In the 2010 and 2014 elections, American voters gave Republican leaders majorities in first the House and then the Senate so that they could stop President Obama’s agenda. The “wave” election of 2014 turned into a tsunami and swept Republicans into leadership in Nevada and many other state legislatures. This demonstrates the frustration of decades of job losses and small business bankruptcies that have swept across the U.S. because of bad trade deals.
Considering the deep opposition by their base, instead of granting the president more power, Republican leaders should deny Obama’s fast-track request without any currency remedy. According to a recent poll, two-thirds (68%) of Republicans say they are less likely to vote for a Member of Congress who votes to give President Obama fast-track authority. Among more conservative Republicans who dominate many primary electorates, this figure is an extraordinary 74%.
Some Tea Party groups speak for these voters. At a recent Capitol Hill Press Conference, Richard Manning of Americans for Limited Government called on Congress to “not cede any additional authority to a president who has spent the past six years shredding the constitutional separation of powers.” Similarly, Niger Innis of TheTeaParty.net said that Fast Track would be “a monumental failure of congressional Republicans to understand the nature of the president’s fundamental transformation of America.”
Supporters of TPA (fast track) are selling it with the same distortions that were used to sell previous bad deals. In an April 22 commentary, Representative Paul Ryan and Senator Ted Cruz claimed that Fast Track would produce jobs by reducing America’s huge trade deficits. They are wrong, as the history of previous trade agreements shows. Our trade deficits with our Free Trade Agreement partners got worse after every agreement was negotiated. The words “free trade” should not be applied to a document that allows currency manipulation.
By manipulating their currencies to unbalance trade, trade surplus countries have benefitted with more factories, more research and development (R&D often needs to be near factories), and more economic growth. Trade deficit countries, like the U.S., have experienced the opposite effects.
Voting down Fast Track would prevent the president from ignoring the wishes of the American people. If Congress retains its full constitutional authority, then any deal negotiated is much more likely to be good for the American people. And, this would mean that trade agreements would be handled through regular order in Congress with full transparency.
The Republican Party has about 16 candidates who have indicated that they may run for President in 2016. Fast Track could be one of the best ways to determine which ones possess economic understanding. So far Jeb Bush, Marco Rubio, and Ted Cruz have come out in favor of fast-tracking America’s economic destruction, while Mike Huckabee, Lindsey Graham, and Donald Trump have indicated that they are opposed. Additionally, Senator Rand Paul voted to allow cloture on S.B. 1314 without a remedy for currency manipulation.
We need to elect candidates who will keep their focus on the people and businesses on Mesquite Blvd., Pioneer Blvd. and Hardy Way — candidates who will meet our needs, not the needs of transnational CEOs and Wall Street elites who enrich themselves at the expense of struggling small American businesses and workers.
We need leaders who will fight for our children’s economic future, instead of people eager to empower President Obama to destroy more jobs. The American Dream cannot survive without a thriving middle class who build things, grow things and mine things in America, creating wealth.
Frank Shannon served in the U.S. Army, was an engineering/operations manager for AT&T for 27 years, was the owner of a small manufacturing business for 23 years, served as Colorado Chair of the Coalition for a Prosperous America and moved to Mesquite in 2013.