Contact: Michael Stumo, 413-854-2580,
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Coalition for a Prosperous America
www.prosperousamerica.org
March 11, 2010
The Pennsylvania Chapter of the Coalition for a Prosperous America (CPA)
thanked Congressman Jim Gerlach (R-PA-06) for agreeing to co-sponsor
the Currency Reform for Fair Trade Act of 2009 (H.R. 2378). Members of
the Pennsylvania Chapter of CPA who participated in the CPA legislative
fly in last week asked Congressman Gerlach to co-sponsor this important
legislation. CPA received notification yesterday that the Congressman
agreed to do so.
"Currency manipulation is a major problem for the U.S. economy," said
Joe McGlynn, CPA PA Chapter steering committee member and Vice President
of Campbell Fittings in Boyertown, PA. "Some foreign countries,
particularly in Asia, peg their currency to the dollar at an unfairly
low rate. Many people don't realize the impact, which is a huge tariff
on U.S. exports and a major subsidy to their export sales to the United
States."
Rep. Louise M. SlaughterChairwoman, House Committee on Rules
Representing New York’s 28th District
PRESS RELEASE
FOR IMMEDIATE RELEASE
Wednesday, March 10, 2010
MEDIA CONTACT
Victoria Dillon (202) 225-2888
Slaughter Leads “Positive” Discussion with Trade Rep Kirk
WASHINGTON- Reps. Louise M. Slaughter (D-NY) and Michael H. Michaud (D-ME) today led a meeting of the House Trade Working Group’s meeting with United States Trade Representative Ron Kirk regarding continuation of U.S participation in talks for a Trans-Pacific Partnership Free Trade Agreement with Australia, Brunei Darussalam, Chile, New Zealand, Singapore, and Vietnam.
The meeting focused on the House Trade Working Group’s key issues, which include labor and environmental standards, food safety and agricultural terms, procurement rules, democracy clauses, services deregulation, access to medicines, and foreign investor rights.
Contact: Michael Stumo, 413-854-2580,
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Coalition for a Prosperous America
www.prosperousamerica.org
March 10, 2010
CPA Colorado Chapter Achieves State Resolution on Trade
The Colorado Chapter of the Coalition for a Prosperous America (CPA) helped persuade both Houses of the Colorado State Legislature to adopt a resolution supporting new trade policies to balance America's trade deficit. The resolution called change in policies that have handicapped American manufacturing and agricultural producers and resulted in massive job losses and stagnant wages.
"We were stunned by the overwhelming support given by our Colorado political leadership for common sense policies to reduce the U.S. trade deficit," said Tom Neppl, CPA board member and President of Springs Fabrication, Inc. in Colorado Springs. "America cannot recover from the Great Recession unless we balance our trade deficit so that we no longer consume more than we produce."
The resolution was adopted unanimously in the state Senate on March 4, 2010 one day after overwhelming passage in the state House of Representatives. The local chapter of the National Federation of Independent Businesses was instrumental in assisting the process.
If you can't beat China and can't get the U.S. government to understand what you're up against, then you may as well join them.
That is what Evergreen Solar has decided to do, shifting production of solar fabrication and assembly from its factory in Devens, Mass., to Wuhan, China.
Evergreen Solar CEO Rick Feldt went to Washington, D.C., and met with Energy Secretary Steven Chu and Commerce Secretary Gary Locke. He told them Chinese government policies made U.S. production uncompetitive. But the Obama appointees do "not quite [have] the understanding that we think is necessary about what's actually happening in this industry," Feldt told financial analysts on Feb. 9. "The United States keeps talking about keeping jobs. You go to the President's State of the Union Address and he said, 'I want to keep jobs in the United States.' It's easy if you say it, but you've got to do something to do that."
What do folks mean when predicting a W-shaped (or double dip) recession? They mean that our GDP goes down first, which we've already seen. Then our GDP trends back up a bit (though jobs aren't). Then our GDP contracts again (an aftershock recession), presumably before it goes up again (we hope).
China's exports, we learned today, jumped 45% last month in relation to Feb. 2009. What does this have to do with the double dip recession? It has everything to do with it.
We spent too much and produced too little, thereby producing a massive trade deficit. We could not sustain it because we got poor, diving into the Great Recession (a GDP contraction). Then GDP grows a bit (like now), led by government spending and a some inventory spending, among other things. Then we start importing again instead of producing what we need here, widening the trade deficit and worsening the original sin.
That is why CPA says that we must address the structural problems of trade and the economy. We must produce more in relation to consumption. Producing more stuff brings us wealth and jobs. Consuming is fine, but not too much. To do this, we need to fix the trade deficit at all costs.
The trade deficit is not an ancillary statistic. If your program fixes the trade deficit, it has fixed many other important components of our economy. And we grow jobs and wealth.
Obama's "doubling exports" program goal is a strange, probably unattainable goal. We at CPA have not been entirely approving of this plan. But is there a way to use that program to get real change?
Taking the Pollyanna side for a moment... if you have (1) a tradition of "export and innovate" rhetoric (which is the wacko free trader mantra) that caused our trade deficits by talking exports but in reality facilitating excess imports; (2) you currently have an Administration that is internally conflicted on trade and resolves its conundrum through a "doubling of exports" program that does not deal with imports on its face; and (3) some of the biggest export barriers - currency and border adjustable taxes, among others - are also unfair import subsidies...
THEN,
You can have a chance to (1) build consensus to address those export barriers (which are import subsidies); and (2) create a national trade and economic plan to make progress in restructuring the economy. Right now each little agency works on its own little piece of the puzzle without an overarching plan.
Yes. Pollyanna-ish. I'm not convinced. But its a possible way to build consensus between the export-focused advocates and the trade balance advocates.
The Coalition for a Prosperous America (CPA), a non-profit membership organization advocating for trade policy reform, announced that it had an extremely successful legislative fly in this week. CPA members from across the country came to the nation's Capitol to lobby congress for a National Trade and Economic Strategy. On March 3rd and 4th, they visited almost 80 Congressional and Senate offices.
Thursday, the Commerce Department will report the January deficit on international trade in goods and services. Analysts expect it to increase to $41 billion from $40.2 billion in December. My forecast for January is $41.5 billion
The trade deficit, along with the credit and housing bubbles, were the principal causes of the Great Recession. Now, a rising trade deficit and continued weakness among regional banks threatens to stifle the emerging recovery and keep unemployment near 10 percent through 2011.
Export mania hit the agriculture sector in the 1970's. The Soviet Union bought a bunch of U.S. grain shipments, and we had an export bump for a few years. That set the course for agriculture policy for years... i.e. exports are our future. But the 1970's was just a bump. Not a trend.
U.S. farm programs were designed to be export oriented. Ag economists came up with data proving that future years would show large export growth. But the export trend never materialized.
Daryll Ray of the University of Tennessee explains in detail in his column this week.
In 1980, the US sold 1.5 billion bushels of wheat into the world export market (solid red line) for a 45.7 percent share of the worldwide market (Fig.2). Twenty-nine years later, US exports are down to 0.8 billion bushels, while Non-US wheat exports—exports of US wheat-export competitors—jumped to 3.7 billion bushels, up from 1.8 billion bushels in 1980 (dashed blue line).
The whole column is worth a read. Agriculture often does not behave like other markets, for various reasons including supply inelasticity, perishability and the fact that safe and plentiful food is a basic good that a nation needs right now for a government to continue being the government. General economists assume market behaviors from the textbook apply to agriculture, but are often incorrect.
The point is that increased focus upon growing our domestic market share in any national agriculture and food strategy is a must. This point is not so different from other manufacturing sectors. We have the best market here. Let's develop it. Jobs and wealth were built with it.
Alan Tonelson and Kevin Kearns of the U.S. Business and Industry Council were published today on the NY Times op-ed page. They explained why productivity gains in a free trade environment produce wage stagnation. The reason is that productivity increases do not exist. Rather, if we offshore most of a supply chain, but do final assembly here, we have fewer U.S. workers that appear to produce the same finished goods. The Dept. of Labor statistics say that those fewer workers produced the same amount of product, when the reality is that foreign workers did most of the job.
So, if an plant makes 50,000 widgets per year at $100 per widget, the [gross] output [value] is $5,000,000 (50,000 widgets x $100/widget). Assuming it takes
10 workers for a complex widget fully manufactured in the U.S., then
each worker produces $500,000 in value per year.
Conversely, if only widget assembly occurs here, while all other
widget manufacturing is offshored, then "productivity" skyrockets. The [gross output value] of 50,000 widgets at $100 per widget is the same (again $5
million gross output). But for assembly, it only takes one worker per
widget. Thus each worker is now producing $5 million in value each
year, a 10 fold increase.
So Tonelson and Kearns have now made this point to a much wider audience, and used it to knock down one of the fundamental tenets of "free trade." That tenet (basic assumption) is that free trade will cause the U.S. to move from low productivity to high productivity (or low tech to high tech) sectors thus improving our economy and well being. But it simply is not true. Productivity trends published by the government (Dept of Labor) appear to support that "free trade" tenet, but like everything else they promised us... it is and was destructively false.
Written for the Huffington Post by Senator Fritz Hollings.
Washington engages in the grandest fraud on jobs. The people are led to believe that tax
cuts stimulate growth and jobs and that borrowing and spending money stimulates
jobs.
I’ll
never forget as Chairman of the Budget Committee briefing Ronald Reagan with
Alan Greenspan in the Blair House just before Reagan was sworn in as
President. The economy was not
good, and I can hear Reagan exclaiming now: “I promised to balance the budget in a year, and there’s no
way to do it.” I explained it
would take three years, and I would be glad to help in a bi-partisan effort to
try to bring it in balance. The
rest is history. President Reagan launched
the policy of “growth” to stimulate the economy by cutting taxes, giving the
United States its first trillion dollar debt in his first term, with another
trillion dollar growth in debt in his second term. President George W. Bush, bragging that he was a Reaganite, stimulated
the economy by cutting taxes, which increased the national debt $5 trillion. Instead of growth, the economy lost
673,000 private jobs in eight years under President George W. Bush.
The following article by Doug Palmer appeared at Reuters online here.
WASHINGTON (Reuters) - A small group of U.S. lawmakers unveiled legislation on Thursday to withdraw from the North American Free Trade Agreement in the latest sign of congressional disillusionment with free-trade deals.
The bill spearheaded by Rep. Gene Taylor, a Mississippi Democrat, would require President Barack Obama to give Mexico and Canada six months notice that the United States will no longer be part of the 16-year-old trade pact.
The following article by Bill Gertz appeared in The Washington Times here.
Recent statements by Chinese military officials are raising concerns among U.S. analysts that the communist government in Beijing is shifting its oft-stated "peaceful rise" policy toward an aggressive, anti-U.S. posture.
The most recent sign appeared with the publication of a government-approved book by Senior Col. Liu Mingfu that urges China to "sprint" toward becoming the world's most powerful state.
TradeReform.Org is a blog created and sponsored by the Coalition for a Prosperous America that discusses U.S. trade
policy. The posts and commentary are not necessarily the official policy or
views of CPA. We encourage participation and lively debate.
