Peterson Institute: Trump’s trade proposals ‘horribly destructive’
With help from Doug Palmer, Jason Huffman and Megan Cassella
PETERSON INSTITUTE: TRUMP’S TRADE PROPOSALS ‘HORRIBLY DESTRUCTIVE’: Donald Trump’s threat to raise tariffs on China, Mexico and other countries to force them to negotiate better deals with the United States “could unleash a trade war that would plunge the U.S. economy into recession and cost more than 4 million private sector jobs,” the non-partisan Peterson Institute for International Economics says in a new analysis of both Trump and Hillary Clinton’s trade policy proposals.
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The think tank took both candidates to task over their opposition to the Trans-Pacific Partnership, but said the broader sweep of Trump’s proposals were much more dangerous for the United States. “Clinton’s proposed trade and international economic policies would damage American well-being, primarily but not solely due to her stated opposition to TPP and to further economic integration,” PIIE President Adam Posen said in an introduction to the report that was released overnight. “The policies proposed by Trump are another matter altogether.”
“His stated approach to the global economy of waging trade war and protecting uncompetitive special interests would be disastrous for American economic well-being and national security,” Posen continued. “We call them as we see them: While Clinton’s stated trade policy would be harmful, Trump’s stated trade policy would be horribly destructive.”
Could Trump really carry out his threats? “The answer is yes, PIIE said. “There is ample precedent and scope for a president to unilaterally raise tariffs … Any effort to block Trump’s actions through the courts, or amend the authorizing statutes in Congress, would be difficult and time consuming.” To read more, click here
IT’S MONDAY, SEPT. 19! Welcome to Morning Trade, where we have a feeling a beer pipeline wouldn’t cause as much controversy as other pipelines in the news these days. Got any trade news, tips or gossip to help kick off our week? Let me know: firstname.lastname@example.org or @abehsudi.
OBAMA CONTINUES COURTING GOP ESTABLISHMENT ON TPP: President Barack Obama’s drive to get leading Republican figures to offer public support for the Trans-Pacific Partnership continues this week, when his top trade official visits Texas to discuss the deal with former President George W. Bush and late President Ronald Reagan’s right-hand man.
U.S. Trade Representative Michael Froman will make a stop in Houston today to push for the deal, in an event with James Baker, who served as chief of staff and Treasury secretary under Reagan and was secretary of State under President George H.W. Bush.
Froman moves on to Dallas on Tuesday to meet separately with George W. Bush before talking trade at the institute named after the former president. That engagement, scheduled at the invitation of the George W. Bush Institute, follows a White House meeting on Friday promoting TPP that included Ohio Gov. John Kasich, former New York City Mayor Michael Bloomberg and former Treasury Secretary Henry Paulson.
The administration of Bush 41 negotiated the North American Free Trade Agreement, and Bush 43 continued the family tradition with a slew of trade deals during his eight years in office — and by formally launching the TPP negotiations, which Obama put on hold for a year after taking office and re-launched them in 2010.
“My own personal view is that President Bush doesn’t get enough credit for having got the TPP rolling,” Matt Rooney, economic director at the Bush Institute, told Morning Trade. But “we’re motivated [to invite Froman to Dallas] purely by a desire to see TPP pass and to offer the assistance of the [Bush] center in getting it through the Congress.”
SCHWAB, ROSS PEROT JR. TO JOIN DISCUSSION: Former USTR Susan Schwab, who served under Bush 43, will also take part in the Bush Institute discussion on Tuesday, along with Ross Perot, Jr., whose father famously opposed the North American Free Trade Agreement.
WALLACH BASHES ‘TPP SALES TEAM’: Public Citizen’s Lori Wallach, the leading voice in the anti-TPP movement, commented that the White House “cheerleading event” included “Wall Streeter” Paulson, the “face of the global economic crisis,” and Kasich, a failed GOP presidential candidate who was able to win the Ohio primary only because of a campaign based on “more of the same corporate-boosting economic policies.”
In an email blast, Wallach added pointedly: “Who was notably not part of the TPP sales team: the Democratic and GOP presidential nominees; the congressional leaders of either party; the growing bloc of GOP House members that are coming out against TPP; or the vast majority of congressional Democrats; or anyone representing president Obama’s political base, aka labor, environmental, LGBTQ, consumer, faith, immigration or civil-rights leaders.”
OBAMA TO HEADLINE AFRICA BUSINESS FORUM: Sponsors brag that more than $33 billion in business deals and investment commitments were announced at the first U.S.-Africa Business Forum in 2014. That sets a high bar for the second installment, a joint production of Bloomberg Philanthropies and the Commerce Department slated for Wednesday in New York City.
The all-day event will include speeches by Obama, Nigerian President Muhammadu Buhari, Kenyan President Uhuru Kenyatta and other African leaders and corporate investors. “This forum comes at a pivotal time for Africa and the United States,” the organizers said in a press release. “In the face of a rapidly changing global economy, it will allow U.S. and African companies and leaders to showcase ways in which they are working together to address new opportunities and challenges, as well as highlight the United States’ long-term commitment to Africa’s economic growth and prosperity.” To see the agenda, click here.
TRUMP BACKTRACKS ON CUBA: In case you missed it, Donald Trump promised to take a tougher stance on Cuba, during a rally in Miami Friday. “All the concessions that Barack Obama has granted the Castro regime were done through executive order, which means the next president can reverse them — and that I will do unless the Castro regime meets our demands. Not my demands — our demands,” he told a crowd of 2,500 cheering supporters. “Those demands are religious and political freedom for the Cuban people — and the freeing of political prisoners.”
In the past, Trump has called Obama’s rapprochement with Cuba “fine” and said that “50 years is enough” for the U.S. embargo, though he would’ve cut a better deal, Marc Caputo reports for POLITICO. Hillary Clinton last year called for lifting the embargo, which was extended and bolstered by a 1996 federal law signed by her husband after the 1996 Cuban shootdown of planes flown by a Miami-based Cuban-rafter-relief group called “Brothers to the Rescue.” Read Caputo’s account of the event here. Watch Trump’s speech, in which he also repeated his promise to renegotiate NAFTA, which he described as “probably the worst trade deal ever agreed to, signed, in the history of the world,” here. (The comments about Cuba begin at 30:00.)
GERMANS PROTEST TRADE IN 7 CITIES: The opening ceremonies for Oktoberfest began in Munich on Saturday, but tens of thousands of people on the streets of seven German cities that day had something else on their minds. — they were protesting the European Union’s trade deals with the U.S. and Canada. In just two weeks the EU negotiating team will head to New York for what could be the last round of Transatlantic Trade and Investment Partnership talks before the end of the Obama administration. Organizers originally expected hundreds of thousands to turn out, but rainy weather may have kept many at home, notes POLITICO Pro Europe’s Emmet Livingstone. Read the BBC account of the protests here. German speakers can check out the Tagesschau account here.
WHITE HOUSE MAKES ANOTHER EX-IM MOVE: The Obama administration late Friday made another play at getting the Export-Import Bank fully operational again by nominating Claudia Slacik, a former senior vice president for export finance at the bank, to the agency’s board of directors.
With the nomination, two officials are now awaiting approval by the Senate Banking Committee to fill open seats on the bank’s board. Committee chairman Richard Shelby (R-Ala.) has so far refused to act on Obama’s previous nomination, Mark McWatters, leaving the bank’s five-member board with only two seats filled. Without a quorum of at least three members, the bank has been unable to approve deals worth more than $10 million. Slacik, who worked at Ex-Im from 2013 until May of this year, previously worked for JPMorgan and Citigroup, the White House said.
CONSERVATIVE GROUPS: KEEP EX-IM OUT OF THE CR: Meanwhile, more than 35 organizations applied pressure on Republican leaders in Congress to oppose using the short-term spending bill as a vehicle for changing the Ex-Im’s quorum rule. A letter sent Friday afternoon to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell asks the lawmakers to stand against an administration-backed effort to put language in the continuing resolution that would change Ex-Im’s governing rules to allow the entire membership of the agency’s board, if less than full capacity, to constitute a quorum.
“This provision would allow the bank to make larger loans with even less oversight — and it would be attached to unrelated legislation providing funds for the government after September 30,” the organizations, including the National Taxpayers Union and the Koch-backed Americans for Prosperity, wrote in the letter. “This would make it easier for the agency to make risky, taxpayer-backed loans to big businesses and foreign corporations.”
But Rep. Charlie Dent, the Pennsylvania Republican who first inserted the language into the House’s foreign operations spending bill, said last week that he believes the Ex-Im rider could help get the appropriations measure passed. “I think that it helps bring Democrats to the table,” Dent told POLITICO.
EVENT ALERT – Morning Money: Join POLITICO’s Chief Economic Correspondent Ben White as he takes Morning Money live for a breakfast briefing with featured guests: Mohamed El-Erian, chief economic adviser, Allianz; Megan Greene, managing director and chief economist, Manulife; Maya MacGuineas, president, committee for a Responsible Federal Budget and member of Fix the Debt; Jim Pethokoukis, fellow, American Enterprise Institute. September 20, 8 a.m. The Liaison Hotel, 415 New Jersey Ave., NW. RSVP: here
SUN SETS ON INDIA SOLAR DISPUTE: The U.S. prevailed once again in a World Trade Organization fight with India over policies New Delhi put in place requiring manufacturers of solar panels and cells to use domestically made content. An Appellate Body report, issued Friday, upheld a February panel decision that faulted the local content requirements as inconsistent with India’s obligations to treat foreign companies the same as domestic firms that provide solar panels to supply electricity to the Indian government.
“This report is a clear victory for American solar manufacturers and workers, and another step forward in the fight against climate change,” U.S. Trade Representative Michael Froman said in a statement.
The Sierra Club condemned the ruling as counterproductive to climate change goals, arguing that it undermines the ability of India’s National Solar Mission to build up a successful domestic industry. In contrast, the National Association of Manufacturers, which represents U.S. solar manufacturers, applauded the decision and urged the country to do away with the domestic content requirements.
But the fight over domestic preferences in renewables is far from over. India decided earlier this month to file a similar case against the U.S. over allegedly discriminatory domestic content and subsidy programs for the renewable energy sector in eight states.
— China will invest more than $450 billion in an attempt to modernize its agricultural sector by 2020, Reuters reports.
— Australian Prime Minister Malcolm Turnbull, in New York City, makes an appeal to Congress to approve the TPP, the Sydney Morning Herald reports.
— Vietnam defers its ratification procedure for TPP until after the U.S. election, Reuters reports.
— Thailand will change its sugar policy to avoid a challenge from Brazil at the WTO, the Bangkok Post reports.
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