THE TTALK QUOTES
On Global Trade & Investment
Published Three Times a Week By:
The Global Business Dialogue, Inc.
Washington, DC   Tel: 202-463-5074
No. 49 of 2016
FRIDAY, JULY 22, 2016
Filed from Portland, Oregon

Click here for yesterday's quote on Canada's trade with China.  
A TRADE MANIFESTO

"International trade is crucial for all sectors of America's economy.  Massive trade deficits are not."

The Republican Platform 

July  2016 
CONTEXT
Editor's Note:  We had intended to publish this entry yesterday afternoon, in advance of Donald Trump's acceptance speech last night.  There were lots of references to trade in that speech, and next week we shall take a longer look at the speech and what it means for trade.  This, however, is about the trade portion of the Party's platform, though there is one paragraph from the speech in the Comment section below.

On page 2 of the recently released Republican Platform 2016, there is a section with the heading A Winning Trade Strategy.  There are other references to trade throughout the document, but this section is the main entry.  It declares, among other things, that:

1.    "We cannot allow foreign governments to limit American access to their markets while stealing our designs, patents, brands, know-how, and technology.

2.    "We cannot allow China to continue its currency manipulation, exclusion of U.S. products from government purchases, and subsidization of Chinese companies to thwart American imports.

It concludes with the statement that:

3.    "Significant trade agreements should not be rushed or undertaken in a Lame Duck Congress."
COMMENT
The full text of this section of the platform is repeated immediately below.  We share it, not because it is the last word on trade policy.  It isn't.  The trade debate has a long way go in this campaign and has already taken some important turns.  Here we are going to stick to the three points highlighted above (our numbering). 

1.    "Stealing Etc."  The charge that China and others "steal" U.S. technology and otherwise use coercion to achieve commercial advantage is hardly new.  Decades of National Trade Estimate Reports offer testimony to the problem, though they probably understate it. That is because, if a U.S. company makes a deal with a foreign government in order to sell into that country's market - even if under duress, it is more likely to defend the deal than to complain about it.  The simple fact is that, when it comes to trade among nations, there is more to the story than willing buyers and willing sellers, there is government coercion.

2.    Currency Manipulation.  Whatever you may think about this issue - and we doubt there is a reader of these pages who doesn't have a view - it is certainly not a partisan divide.  Many of the champions of going after China and others as currency manipulators are well known Democrats like Senator Chuck Schumer of New York. 

Our own view is that, currency manipulation may be real and may often be very harmful, but it is not something trade policy can effectively address.  The management of currencies involves much more than trade policy, and there is no certeris paribus wand for the trade effect of currency values.  So, this is one area where high-handed meddling will almost certainly make a bad situation worse.  The itch to meddle, however, is bipartisan.

3.    TPP in the Lame Duck.  We argued in an earlier entry that, with both leading candidates on record as opposed to taking up the Trans-Pacific Partnership Agreement in a lame duck session of Congress, it would be a mistake to do so.  At this point, we are inclined to take the argument one step further.  It now seems to us extremely unlikely TPP could be approved in the lame duck. There may be another era of good feelings in America's future, but, whatever happens on November 8, on November 9 that era is likely to appear only as a very distant mirage. 

In short, it is not too soon to start thinking about trade policy in 2017.   And if you make that intellectual leap, you are likely to conclude that, if there is going to be a TPP at all, it is one that will have to follow further negotiations.

***

The one trade line from Donald Trump's speech last night we'll highlight today is this:

"The most important difference between our plan and that of our opponents is that our plan will put America first.  Americanism, not globalism, will be our credo."

We suspect he will take a lot of flak for that.  We are not inclined to be too critical.  We do not see it is a call to isolationism but rather a determination to probe more deeply the question, What is in America's interest?  There are differences on that.  We believe, for example, that TPP is in America's interest, and Donald Trump does not, but that paragraph of his is an introduction to a much larger discussion.

It also brings to mind a comment we heard several weeks ago in a different context.  Just after the June 23 Brexit vote in the UK, we were talking to Don Brasher.  He's a South Carolinian, a trade expert, and someone who lived in Europe for several years.  His reaction to the vote was neither to praise nor to condemn it, but simply to observe, "We have now entered the post-post-World War II era,"  Indeed. 
FROM THE REPUBLICAN PLATFORM:
A Winning Trade Policy
International trade is crucial for all sectors of America's economy. Massive trade deficits are not. We envision a worldwide multilateral agreement among nations committed to the principles of open markets, what has been called a "Reagan Economic Zone," in which free trade will truly be fair trade for all concerned.

We need better negotiated trade agreements that put America first. When trade agreements have been carefully negotiated with friendly democracies, they have resulted in millions of new jobs here at home supported by our exports. When those agreements do not adequately protect U.S. interests, U.S. sovereignty, or when they are violated with impunity, they must be rejected.

We cannot allow foreign governments to limit American access to their markets while stealing our designs, patents, brands, know-how, and technology. We cannot allow China to continue its currency manipulation, exclusion of U.S. products from government purchases, and subsidization of Chinese companies to thwart American imports. The current Administration's way of dealing with these violations of world trade standards has been a virtual surrender.

Republicans understand that you can succeed in a negotiation only if you are willing to walk away from it. A Republican president will insist on parity in trade and stand ready to implement countervailing duties if other countries refuse to cooperate.

At the same time, we look to broaden our trade agreements with countries which share our values and commitment to fairness, along with transparency in our commercial and business practices. In pursuing that objective, the American people demand transparency, full disclosure, protection of our national sovereignty, and tough negotiation on the part of those who are supposed to advance the interests of U.S. workers. Significant trade agreements should not be rushed or undertaken in a Lame Duck Congress.
SOURCES & LINKS
The Platform takes you to the Republican Platform 2016, which was the source for today's featured quote.

The Acceptance Speech takes you one of several available versions of the text of Donald Trump's speech last night, in which he accepted the Republican Party's nomination for president.

TPP and the Lame Duck takes you to the TTALK Quote of May 6, 2016, which dealt with this issue.

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R. K. Morris, Editor