WASHINGTON — Even as the Obama administration pushed its case for the Trans-Pacific Partnership agreement on Wednesday by claiming it would represent a massive tax cut for U.S. companies, the scale of its challenge in getting the measure through Congress was made clear when Democratic presidential candidate Hillary Clinton came out against the trade deal.
Clinton, who was Secretary of State under President Obama, said in an interview with Judy Woodruff on PBS that, “I’m not in favor of what I have learned about it [TPP]. Trade agreements don’t happen in a vacuum. In order for us to have a competitive economy in the global marketplace there are things we need to do here at home that help raise wages, and Republicans have blocked everything President Obama has tried do on that front. For the larger issues and what I know — and, again, I don’t have the text and we don’t yet have all of the details — I don’t believe it’s going to meet the high bar I have set.”’
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Clinton said she is concerned that the TPP may not have strong enforcement language in relation to “currency manipulation,” which is market intervention by countries to devalue their currency to be more competitive, which puts U.S. companies at a disadvantage. It is a concern raised by many of her Democratic peers in Congress, as well as several of the presidential candidates on the Republican side.
“I’ve said from the very beginning that we had to have a trade agreement that would create good American jobs, raise wages and advance our national security and I still believe that’s the high bar we have to meet,” Clinton said. “I’ve been trying to learn as much as I can about the agreement but I’m worried about currency manipulation not being part of the agreement. We’ve lost American jobs to the manipulation that countries, particularly in Asia, have engaged in. I’m worried that the pharmaceutical companies may have gotten more benefits, and patients and consumers fewer. I think that there are still a lot of unanswered questions. But for me it really comes down to those three points.”
Clinton’s comments came on the same day the Obama administration issued a new report stating the 12-nation TPP trade pact would reduce and eliminate tariffs imposed on U.S. exports on a state-by-state basis, ranging from leather boots from Texas to yarns from North Carolina and cars from Michigan.
Trade ministers from the U.S., Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Brunei, Australia, New Zealand and Chile clinched a deal on Monday for TPP, which if implemented will encompass 40 percent of the world’s gross domestic product. The report is part of the administration’s full-court press to garner support on Capitol Hill and it was aimed at the benefits each state will derive from its top exports to the TPP countries.
“At its core, TPP is a massive tax cut for American businesses that will help American workers and businesses sell Made in America products around the world,” said Jeff Zients, director of the National Economic Council, on a call with reporters. “It is the largest tax cut on American exports in a generation. The report we are releasing today details these tax cuts that the TPP will bring to Americans in every state, leveling the playing field for hardworking Americans in every state who want to sell what they make, grow and raise into many of the world’s fastest-growing markets.”
U.S. manufacturers sold $639 billion in exports to TPP countries last year, according to the report.
“When our exporters work to sell Made in America goods to other countries, they’re burdened with tariffs over twice as high on average,” the report said. “American-manufactured goods currently face tariffs of up to 100 percent on certain goods in TPP markets and American agriculture exports face tariffs over 700 percent on some products. Our workers are among the most productive in the world, but in cases like these, the deck is stacked against them.”
“TPP provides American businesses and workers with a level playing field by cutting over 18,000 different tariffs or taxes that Asia-Pacific countries currently impose on Made in America exports, ranging from beef to tractors,” Zients said.
Texas exports the most — $156.6 billion — in products to the TPP countries, according to the report, which lists several key product categories for each state. Leather boots from Texas, for example, face tariffs as high as 34 percent, the report said, and those tariffs will be cut under TPP.
New York exports about $24.8 billion in products to the TPP countries and jewelry exports face tariffs as high as 30 percent, which will be reduced or eliminated. North Carolina exports $13 billion to the TPP countries and yarn exports face tariffs as high as 15 percent, which will be eliminated, the report said.
“Every manufactured product made in America will face no more taxes in these TPP countries when it’s fully implemented,” U.S. Trade Representative Michael Froman said on the call.
“We know that when rules are fair, American workers and American businesses can out-compete anyone in world,” Zients said. “But right now the rules aren’t fair. We have one of the most open economies in the world. Our average tariff on imports is only 1.4 percent, but when Americans try to sell their products and services overseas, they are facing taxes more than twice that high and they are forced into navigating many other barriers to doing business.”
“Businesses in every state face unfair barriers that put them at that disadvantage,” Zients added. “That’s what TPP fixes — by writing new rules of the road in the Asia-Pacific. It’s important that we’re writing those rules because if we don’t, China [which is not a part of the TPP] will.”