Trump admits some benefits to trade

With help from Adam Behsudi

TRUMP ADMITS SOME BENEFITS TO TRADE: Donald Trump on Monday softened his harsh criticism of free trade when he declared that isolationism is “not an option” and acknowledged some positives of free-trade agreements — but he still wants to get rid of TPP and renegotiate NAFTA.

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“Trade has big benefits, and I am in favor — totally in favor — of trade,” Trump said during a nearly hourlong economic policy speech at the Detroit Economic Club. “But I want trade deals for our country that create more jobs and higher wages for American workers. Isolation is not an option. Only great and well-crafted trade deals, where we as a country for once benefit instead of being taken advantage of.”

The real estate mogul offered few new trade policy specifics in his speech, which also focused on tax, regulatory and energy reform. He criticized Hillary Clinton for her past support of free-trade deals, highlighted the trade in goods deficit without mentioning the services surplus, and promised to make trade enforcement against China “the center” of his trade policy plan.

And despite fewer than 100 days remaining until Election Day, Trump promised more details in the coming weeks. Pros can read the full story here.

IT’S TUESDAY, AUG. 9! Welcome to Morning Trade, where your host didn’t realize we have already made it to the double-digit countdown to Election Day. How much more craziness can we have between now and then — and how many more times will we hear candidates pledge to rip up trade deals? Let me know what you think: mcassella@politico.com or @mmcassella.

CLINTON TO FOLLOW TRUMP WITH ECONOMIC PLAN: Trump’s speech spurred a flurry of reaction from both sides of the aisle, including from Clinton. Her campaign took to Twitter to attack Trump for his business record and refute several of his claims on how he would improve the economy. But on trade, there wasn’t much for Clinton to counter: Trump’s pledge to say yes only to trade deals that benefit American workers sounded much like Clinton’s own criticism of TPP as an attack on working families. Clinton is planning her own economic policy speech for Thursday, also in Detroit.

EXPERTS WEIGH IN ON TRUMP, CLINTON PROPOSALS: As for Trump’s trade policies, “it would have been nice to see him provide some details about what he’s for,” Bill Reinsch, a former undersecretary of commerce under Bill Clinton, said in a statement after the speech. He noted that Trump’s pledge to renegotiate deals like NAFTA would be hard for other countries to swallow and tough to get done.

“[R]emember that renegotiation is never a free lunch. If we want something, we will have to pay for it,” said Reinsch, now a trade policy specialist at the Stimson Center. “Trump has not said very much about what he wants and nothing at all about what he would give up to get it.”

But both Trump and Clinton need to look beyond Election Day and “consider the long-term ramifications of turning inward in a global economy,” Chamber of Commerce President Tom Donohue added in a weekly written commentary released shortly before Trump’s speech. Staking opposition to trade deals may be “politically convenient” this campaign season, but doing so will hamper the economy and harm the country, Donohue wrote.

There are some problems with the TPP, he noted, and some downsides with trade more broadly that need to be addressed, but the answer should be to redouble efforts to provide those hurt by trade with training and support.

“Let’s not forget that trade remains a net winner for our country, and we can’t turn away from it,” he said.

LIBERALS: TRUMP USING TRADE TO OUTFLANK CLINTON: Liberal group Progressive Change Campaign Committee is accusing Trump of trying to “outflank” Clinton on trade to compensate for his lack of any proposal to reform student debt, expand Social Security benefits, hold banks accountable or provide for a public health insurance option. The maneuver is made more effective by the fact that the administration is pushing TPP.

“President Obama is playing into Trump’s hands by keeping the TPP alive, allowing Trump to question Democrats’ commitment — even though Clinton is standing with working families on this key economic issue,” the group said in a statement. “Democrats must maintain the high ground on economic populism issues by being united in saying no to the TPP in lame-duck Congress.”

Trump on Monday said Clinton’s “next betrayal” will be on TPP and argued that the Democratic candidate is being pushed by her corporate donors to pass the deal if she takes office, “guaranteed.”

The group also lauded Sen. Chuck Schumer for telling a reporter at the Democratic National Convention that he would seek a whole new approach to trade if he becomes majority leader. It also urged the Obama administration to again back off its push for a lame-duck TPP vote or risk damaging Clinton’s electoral chances.

“By keeping the TPP on the table, President Obama is throwing into jeopardy Hillary Clinton’s chances with key blue-collar swing voters and sabotaging her first-term agenda before she’s even elected,” PCCC co-founder Adam Green said in a statement.

U.S., JAPAN TO HOLD TRADE DIALOGUE: For once it’s not all about TPP. The U.S. and Japan take a broader look at their trading relationship today when Hirofumi Katase, the vice minister of international affairs at Japan’s Ministry of Economy, Trade and Industry, sits down with Commerce and USTR officials.

On the agenda are meetings with Deputy USTR Robert Holleyman and Deputy Commerce Secretary Bruce Andrews. The two sides will probably still inevitably talk about the trade deal hanging over everyone’s heads when they hold a commercial dialogue, but the agenda promises to focus on a broader set of issues including discussions about the world economy, digital economy, export controls and industrial competitiveness, according to a Commerce spokesman.

WTO COURTS SILICON VALLEY ON DIGITAL TRADE: The World Trade Organization is calling on Facebook, Google, Alibaba, PayPal and eBay to inject new energy into global efforts to expand digital trade. Further liberalization of e-commerce is shaping up to be one potential outcome for the WTO.

To that end, WTO Director-General Roberto Azevedo traveled to San Francisco last week to meet with Facebook’s Mark Zuckerberg and representatives of other companies to discuss how trade policy can boost e-commerce and the digital economy, the WTO said in a statement Monday.

It still remains to be seen what can actually be accomplished as WTO members are still in the very early stages of formulating a potential e-commerce outcome. Mexico, Indonesia, South Korea, Turkey and Australia are pushing an e-commerce agenda examining how the WTO can ease constraints that developing countries face on digital trade, including the high cost of digital infrastructure, compliance with digital regulations in other markets and underdeveloped e-payment systems. The United States circulated a discussion paper last month describing policies that could be adopted to encourage more digital trade.

PRO-TPA LAWMAKERS BACK ON THE BALLOT: Voters in Wisconsin will head to the polls today to cast ballots for one of the 28 House Democrats who supported fast-track legislation last year and is now up for reelection: Rep. Ron Kind. He’s expected to win his primary against retired high school teacher Myron Buchholz, and will run unopposed in the general if he is successful.

Also in Wisconsin, Republican Sen. Ron Johnson is safe in his primary election today as he faces no challenger, but the race for his seat in November will be one to watch. The pro-free trade Republican, who voted “yes” on fast track, is most likely to face Democratic former Sen. Russ Feingold, whom Johnson defeated in 2010. As the race approaches, Johnson is facing increasing pressure to take a stance on TPP, though he has already said he will continue meeting with constituents and evaluating the pact until it’s time to take a vote. Democrats are beginning to view Johnson’s seat as one of the most vulnerable that they may be able to take back.

House Speaker Paul Ryan is also up for a primary, facing opposition at home from businessman Paul Nehlen. Ryan, who helped Obama win “fast track” authority but has yet to endorse TPP, is expected to win, but Nehlen has made a fair amount of noise — even challenging Ryan to a debate on trade on the floor of a closed manufacturing plant. Ryan, pushed by an opponent who has made trade deals one of his signature issues, told a group of manufacturing employees that TPP is not up to his standards.

THE GREAT USTR MIGRATION: In what will likely be a continuing theme over the next few months, USTR Senior Policy Adviser David Roth said he is moving on from the agency next week to work on global trade and investment issues for Amazon, according to a farewell email obtained by POLITICO. Roth had been with USTR for four years, first serving as adviser to former Deputy USTR Miriam Sapiro. His last two years were spent in USTR Michael Froman’s office, where he advised on EU trade matters and helped formulate U.S. negotiating positions in the Transatlantic Trade and Investment Partnership talks.

INTERNATIONAL OVERNIGHT

— A former ambassador to the WTO says the U.K. could strike a trade deal with the EU within two years, The Guardian reports.

— China’s exports and imports fell more than expected in July, signaling weaker domestic demand, Reuters reports.

— ICYMI: Abandoning trade agreements and adopting protectionist measures do little to maintain jobs or human welfare, GWU professor Susan Ariel Aaronson argues in The Hill.

THAT’S ALL FOR MORNING TRADE! See you again soon! In the meantime, drop the team a line: abehsudi@politico.com and @ABehsudi; mcassella@politico.com and @mmcassella; dpalmer@politico.com and @tradereporter; mkorade@politico.com and @mjkorade; and jhuffman@politico.com and @JsonHuffman. You can also follow @POLITICOPro and @Morning_Trade.

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