US Presidential Debate on Trade Heats Up Ahead of Party Conventions
Just weeks ahead of the nominating conventions for the US’ two main political parties, the leading presidential candidates continue to escalate their rhetoric on trade, outlining visions which indicate sharply different approaches in policy.
In a speech devoted to trade policy on Tuesday 28 June, Republican presidential candidate Donald Trump issued a blistering attack on decades of US trade policy, promising to undo some existing trade deals and pursue strikingly different approaches on others.
The remarks outlined his most detailed approach on trade yet, and comes shortly ahead of the 18-21 July Republican National Convention in Cleveland, Ohio.
Trump is expected to be confirmed as his party’s nominee at the convention, even as the polarising nature of his candidacy to date has made it difficult for winning unanimous support from fellow high-profile Republicans. The meeting will also confirm the Republican Party platform – a process that is expected to prove difficult, given the diverging views on policy within the party.
Calling for the US to declare its “economic independence once again” and for the country’s citizens to “take back their future,” the real estate mogul criticised a series of trade deals, ranging from the North American Free Trade Agreement (NAFTA), the US-South Korea FTA (KORUS), and the Trans-Pacific Partnership (TPP) Agreement.
Trump also took aim at China, arguing that their 2001 entry into the WTO has also hurt the US economy. When speaking of these trade deals, he also raised the role of either former President Bill Clinton or current presidential candidate Hillary Rodham Clinton in advancing these accords during their respective terms in public office.
The Republican candidate outlined a series of policy steps he would then take on trade, should he win at the polls in November. Among these include insisting with Canada and Mexico on a renegotiation of NAFTA, threatening to withdraw the US from the deal should they disagree.
Various other steps focused specifically on China, ranging from asking the US Treasury Department to name it a “currency manipulator” and pledging to pursue more disputes against the Asian economy at the WTO, along with taking a stronger stance on enforcement of trade rules generally.
On his approach to new trade deals, Trump has also ruled out pursuing multi-country pacts such as the TPP – adding that there was “no way to fix” that deal – and instead insisted that Washington would only pursue bilateral pacts should he become president.
That pledge puts Trump starkly at odds with the policy of current US President Barack Obama of the Democratic Party, who has long maintained – as have his top trade officials – that it is more efficient and impactful to reach deals with country groups. (See Bridges Weekly, 28 April 2016)
Hillary Clinton has also moved away from her previous support of the TPP, arguing that the deal has some notable flaws in its current form.
However, the Democratic presidential candidate, who is slated to be confirmed at her own party’s convention from 25-28 July in Philadelphia, has argued strongly against Trump’s approach, warning that it would set the country far behind and telling a town hall in Hollywood, California, on Tuesday that they should be wary of “misleading promises” from her opponent.
On some areas, however, the two candidates show some similarities. Clinton’s own plan on manufacturing, for instance, also includes pledges on increased trade enforcement, particularly with regards to China. She also refers to tackling alleged currency manipulation and has suggested creating a new “trade prosecutor” post that would report directly to her if she takes office.
On future trade deals, she has mainly indicated that future agreements must meet a high threshold, so that they ensure “good jobs, raise wages, and advance our national security.”
Froman: Lawmakers “increasingly appreciating” TPP
While Clinton and Trump continue to spar on the campaign trail over the direction of future US trade policy, the current Obama Administration is working to build support among lawmakers in the hopes of passing the TPP as soon as possible – ideally before leaving office in January 2017.
“Rejecting TPP would undermine US leadership, not only in the Asia-Pacific region, but around the world,” said US Trade Representative Michael Froman on 27 June, telling the Bretton Woods Committee that the delays to date are already raising worrisome questions with other TPP signatories.
“Our allies around the world could not help but question whether we had the wherewithal to make good on our commitments,” he continued, referring to comments by Lee Hsien Loong, the prime minister of Singapore.
However, US lawmakers to date have been generally reticent to set a timeframe for a vote, at least publicly, and have essentially ruled out raising the TPP in Congress before the November elections. Along with the race for the presidency, all of the House of the Representatives and one-third of the Senate is up for a vote this autumn.
Among the concerns that have been raised by some lawmakers on the final TPP include the terms on data protection periods for biologics, which are drugs derived from a biological background, such as vaccines or anti-toxins. (See Bridges Weekly, 8 October 2015)
Even so, Froman suggested this week that lawmakers are “increasingly appreciating the benefits of the agreement to their constituents – as well as the costs of not ratifying this year.”
While not directly referring to either the presidential campaign or current congressional politics, Froman did generally address TPP “opponents” in asking what alternative they espouse in a rapidly changing trade landscape.
“Do they think we’re better off living in a world where those are the rules of the road? Because the choice isn’t between TPP and the status quo; it’s between TPP and what is likely to evolve in the absence of the TPP,” he warned.
ICTSD reporting; “The Latest: Clinton: Understands fear of foreign trade,” WASHINGTON POST, 28 June 2016; “Read Donald Trumps’ Speech on Trade,” TIME, 28 June 2016; “Hillary Clinton: Agenda for jobs and even trade,” AKRON BEACON JOURNAL, 22 February 2016.