Trade agreements are all about other countries replacing their tariffs with other barriers, and then accessing the U.S. market containing the richest consumers in the world.  NAFTA and CAFTA countries have value added taxes that they charge our goods at the border, and can rebate (subsidize) their goods when exported.  That is part of the reason why the U.S. has a huge trade deficit that subtracts from GDP directly and helped cause the recession.

Canada continues to threaten the U.S. on our "Buy American" provisions in the stimulus bill.  Does anyone at USTR research our northern neighbor's "Buy Canadian" laws which do the same or more than ours?  Are they researching the fact our Buy American laws are explicitly within the WTO Agreement on Government Procurement?  I would think so, but you never know.  See this article.

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Day warns U.S. against protectionism
 
By Sheldon Alberts, Canwest News Service - Canada
April 29, 2009
 
International Trade Minister Stockwell Day on Tuesday warned that rising protectionism in the United States threatens to trigger retaliatory measures in Canada, with "cascading effects" on both economies as North America tries to emerge from recession.
 
Following two days of meetings with senior members of the Obama administration, Day said there are growing fears that Buy American provisions in U.S. economic stimulus legislation will prevent Canadian businesses from the chance to bid on U.S. infrastructure projects.

Public Citizen's Global Trade Watch released a report today entitled "Panama FTA Would Undermine U.S. Efforts to Stop Offshore Tax-Haven Abuse and Regulate Risky Financial Conduct."

Major points are these:

*    Obama campaigned on closing offshore tax loopholes and fair
trade, yet bailed out corporations like AIG and Citigroup are lobbying
for the administration to pass a leftover, Bush-negotiated, NAFTA-style
trade agreement.
*    If the administration bites - and some in the administration are
certainly pushing this - it will be a tremendous waste of political
capital for pushing health care, climate change, and financial
re-regulation.
*    Moreover, the Panama trade deal would actually empower
corporations with subsidiaries in Panama - and Citi and AIG are just two
of the 350,000 foreign-registered corporations there - with new rights
to sue U.S. taxpayers for any financial hit they take from U.S. anti-tax
haven initiatives.

Below the fold is Ron Kirk's speech, in full text, at the Georgetown University Law Center on April 23, 2009.  (Here is the PDF version from the USTR website.)  It reveals that the same old failed trade theory is in vogue at the USTR.  A few throw away lines on labor and environmental standards.  Statements that people "feel" the negatives of trade but are not illuminated enough to see the benefits.

Statements that we need to maintain export markets, without talking about deficits.

Statements that global exports will decline by 9%, without correlating that with the fact that we are in a recession and all commerce is in trouble, whether domestic or international.

The trade deficit is a direct mathematical subtraction from our GDP.  If we resolve the trade deficit, we increase GDP directly, and get a boost from a domestic investment multiplier.

But we seem to be in another battle with garbage rhetoric.  Untrustworty rhetoric.  We want to trust our government officials, but the speech below falls short.

Currency misalignment:  I cannot say strongly enough how pivotal this issue is for trade and the economy.

When foreign nations do not allow their currencies to float in value, i.e. their currencies are continuously undervalued, they can maintain persistent trade surpluses on the backs of the rest of us, including the U.S.  Currency misalignment is inconsistent with free trade.  Free trade cannot exist unless currency values float.  

Representatives Tim Ryan (D-OH-17) and Tim Murphy (R-PA-18), and Senators Debbie Stabenow (D-MI) and Jim Bunning (R-TN), will introduce The Currency Reform for Fair Trade Act of 2009 soon.  They are looking for co-sponsors.  Nearly 200 Representatives have co-sponsored prior versions.

CPA members are working hard to help gain support for the bill.  Special urgency results from the Obama Administration's failure to cite China, Japan and other countries as currency manipulators.  This is not just an Asian region problem, any foreign country can do it.

The bill will define currency misalignment as an unlawful trade subsidy enabling countervailing and antidumping duties to neutralize, not punish, the practice.

The CPA website has a page dedicated to currency issues.  A helpful myth/fact piece cuts through the misleading rhetoric spouted by some that support foreign government intervention in currency values to the detriment of the trading system.

The House Dear Colleague letter, in which the lead sponsors invite support from their colleagues, is here.  

The actual bill is here on the CPA website.

If your Senator or Representative does not sign on as a co-sponsor, he or she is not serious about the economic recovery and/or simply does not understand the issue.